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Our response to potential cuts at GB Energy
Ethex response to UK Treasury announcing potential spending cuts at GB Energy.
Today The Financial Times reported that the UK Treasury is drawing up plans to cut the funding for GB Energy in June’s spending review.
At Ethex, we’ve seen firsthand how community-driven energy projects can transform lives, delivering clean, affordable power while building local resilience. The UK government’s initial vision for GB Energy promised a real shift towards a decentralised, fairer, and more sustainable energy system. Cutting funding at this critical juncture risks slowing down the momentum the entire community energy sector has worked so hard to build.
What’s at stake?
For over a decade, Ethex has been at the forefront of impact investing, providing a way for UK investors to invest directly in community energy projects. But to be able to scale, the community energy sector needs more than grass-roots-driven finance to accelerate delivery for this sector. It needs institutions and government to share in the responsibility of a clean energy transition. This combined effort would provide a fair and inclusive path to net zero that benefits everyone, and for us all as a nation to be able to urgently and effectively combat climate change together.
Along with our peers, we celebrated the government’s GB Energy initiative when it was announced because it has the chance to provide high-risk development funding to kick start projects. The initiative gives communities a way to take a share in larger commercial renewable energy projects. This is by bringing upfront bridge capital that can be replaced with longer term community shares over time. We urge for the plans to cut funding to be revisited.
At Ethex, almost three-quarters of our £120m funds raised to date has been invested by everyday people into community and renewable energy in the UK. To truly scale the impact, we need the type of institutional investment that GB Energy proposes to offer as a match to the commitment of grassroots investors. A bolder, joined-up approach—one that brings together public, private, and community funding—is the only way to transform our energy system, create local resilience, and put shared power back into the hands of people.
What needs to happen?
Instead of scaling back ambition, policymakers should be joining forces to invest in community-led renewables.
We need to ensure capital is accessible and affordable. It is reported only 1% of UK renewable energy is community-owned compared to, say, Germany, which is around 55%. We must change this. One of the barriers to growth is access to capital.
We need to ensure capital is accessible and affordable. It is reported only 1% of UK renewable energy is community-owned compared to, say, Germany, which is around 55%. We must change this. One of the barriers to growth is access to capital.
Where possible, every commercial renewable energy project has a community stake. According to a YouGov poll, 62 percent of the public would support a community-owned renewable energy project in their area, compared to 40 percent support for a privately owned project.
There is a shift to local ownership which strengthens resilience and democratises finance by keeping profits within communities. Community energy goes beyond just CO2 reduction too. In terms of addressing fuel poverty, it delivers at least £9 of social benefit for every £1 spent. It is not unattainable to make this benefit even higher.
Finance needs to be flexible, blended and impact-driven. UK investors moving their money cannot be underestimated in the potential scale and effect that we enable at Ethex, but we need a mix of grants, patient capital, and mission-aligned funding. We can work together to leverage government and institutional money, so it goes further.
Ethex stands ready to support a people-powered energy future
There have been big wins to date. Community organisations have added a cumulative 398 megawatts (MW) of clean energy capacity in the UK on turnover of £43.2m. This was a £12.9m injection to local economies across the UK, according to data published by Community Energy England (CEE), a body representing the industry that periodically collects data.
But this just proves the scale of what can be achieved with government support. If it is reduced, Ethex will keep working with investors, local leaders, and mission-driven organisations to ensure community-led energy still thrives and do all we can to provide the rails for delivery. But we call on policymakers to think big, act boldly, and prioritise community-owned energy as a key pillar of the UK’s clean energy future.
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