Financing Community Energy, Heat, Networks and Municipal Deals – Investment Summit Write Up

The Clean Industrial Growth Investment Summit continued the day with a panel focused on the role of local authorities and communities in delivering the UK’s clean energy transition. 

This session explored how new financing models, including blended finance (a combination of public and private funding), municipal partnerships, and local energy funds, can help to unlock community energy, heat networks, and distributed assets at scale. 

Chaired by Phil Witcherley, Director of Economic Growth and Innovation at the North East Combined Authority, this panel discussion brought up the topics of opportunities but also challenges facing place-based clean energy delivery. 

Panellists included: 

• David Tudgey, Project Development Manager, Community and Development Director and Co-Founder of Community Powered Solutions 

• Kuda Anderson-Chinyani, Solicitor at Energyz Black 

• Jonny Page, Clean Energy Infrastructure Lead at Green Finance Institute 

• Hugh Goulbourne, Head of Finance and Funding at Great British Energy 

 

Local power and regional opportunity 

Opening the session, Phil Witcherley set the context by talking about the growing demand for energy and the importance of energy security, particularly because of rising global pressures and increasing electrification. 

He emphasised the role that heat networks and local energy systems play in supporting both economic growth and social outcomes, including the delivery of warm, affordable homes. 

Drawing on examples from the North East, where he is based, Phil shared some examples of innovation in the region, from mine water heating networks in Gateshead to wider clean energy cluster development, positioning local areas as key drivers of the UK’s clean power ambitions. 

 

Unlocking investment through new models 

Hugh Goulbourne outlined the role of Great British Energy (also known as GB Energy) in supporting local power projects, positioning the organisation as an “expert development partner” rather than solely a funding body. 

He highlighted several key mechanisms currently in development, as outlined in the recently delivered Local Power Plan, including: 

• A one-stop shop for local authorities and community groups 

• A local energy platform to support supply chain aggregation 

• A future capital toolkit, designed to deploy funding and attract private investment 

A central theme to this part of the discussion was the need to crowd in private capital, with Hugh noting that public funding alone will not be sufficient. Instead, having blended finance models will be needed to unlock greater levels of investment into community and local energy projects.  

 

Structural barriers to financing local energy 

Jonny Page spoke about the structural challenges preventing capital from flowing into community energy and heat networks at scale. 

He highlighted that, while policy frameworks are evolving, there are still market barriers that limit investment, particularly in smaller or more complex projects. 

Using heat networks as an example, he described how blended finance models can help reduce risk and lower the cost of capital. These approaches allow public funds to be recycled, rather than deployed as one-off grants, creating a more sustainable funding model over time. 

However, Jonny did note that the challenge is not singular. Instead, policy, pipeline and financial product issues play a huge part, requiring coordinated solutions across all three areas to create a functioning market. 

 

Community participation and equity 

Kuda Anderson-Chinyani brought a legal and regulatory perspective to the discussion, focusing on the barriers to community participation in energy projects. 

While existing legislation enables community ownership, Kuda highlighted that the current system is voluntary and market-driven, with no strategy obligation for developers to engage communities or offer investment opportunities. 

This in turn creates a structural imbalance, where community participation is often viewed as a financial or regulatory setback, rather than it adding value. 

She also spoke about the importance of integrating community engagement earlier on in the process and prioritising it, particularly through regional energy planning frameworks, which will ensure that communities are not just hosting these energy projects, but benefiting from them too. 

 

Scaling community energy in practice 

From a delivery perspective, David Tudgey shared insights from developing wholly community-owned energy projects, which are subsidy-free. 

He commented that while there is a strong appetite for these projects, the process stays fragmented and difficult to navigate. 

David also highlighted that the key barrier in this is the lack of early-stage and development finance, particularly at initial points such as planning and financial due diligence.  

He spoke about: 

• Access to technical expertise early in the process 

• Development finance that bridges the gap between concept and final investment decision 

• A co-ordinated, pipeline-based approach, rather than piecemeal funding 

Importance of community engagement from the beginning was a point that David touched upon, saying how projects are more successful when they respond directly to local needs and priorities, rather than imposing them on residents of these communities. 

 

The challenge of scale and financial visibility 

Following a question from the audience, the panel addressed the difficulties in financing mid-sized community projects, which often fall outside traditional funding “sweet spots.” 

Jonny explained that projects in the £10 million mark are often too large for small-scale funding but too small for the larger investors, creating a financial gap. 

To address this, he highlighted the need for: 

• New financial products, such as bridging loans 

• Greater engagement with existing financial institutions to understand risk barriers 

• Scalable models that can be replicated across regions 

Hugh added to Jonny’s point by explaining that GB Energy is actively working to address those challenges, encouraging community groups to engage through its expression of interest process. 

 

Grid constraints and system challenges 

A recurring theme that was brought up in the audience Q&A was the impact of grid capacity and connection delays on project delivery. 

While acknowledging the issue, Hugh pointed that GB Energy operates as a pure stakeholder rather than a system operator, meaning it does not have direct control over grid infrastructure. 

David added to this by reinforcing the importance of this challenge, saying that “there is no transition without transmission,” highlighting the need for coordinated action across the energy system to enable delivery at scale. 

 

Final reflections 

The panel concluded the session by agreeing that local authorities and communities do have a critical role to play in delivering the UK’s clean energy transition, but structural barriers will always be present. 

From financing gaps and regulatory frameworks to grid constraints and capacity challenges, unlocking lower power will require new models, stronger collaboration, and long-term policy alignment. 

This session reinforced that although progress is being made, scaling community energy across the UK will depend on creating a system that is not only investable but also inclusive, ensuring that the benefits are shared at a local level.

 

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