Community energy has become a popular concept in the UK in recent years, with the public taking activities such as setting up renewable energy co-operatives to their stride, while politicians and ministers have embraced the opportunities that this sector could potential offer in the transition towards a more sustainable energy system. The UK government has been proactive in terms of creating a strategy for a more sustainable future. In 2008, the UK became the first country in the world to introduce a legally binding target for climate change, with the passing of Climate Change Act 2008, while the first Community Energy Strategy was published in 2014. Under the Climate Change Act 2008, the UK has a target to reduce greenhouse gas emissions by 34% by 2020 and at least 80% (from 1990 baseline level) by 2050. Furthermore, the UK is bound by EU targets to reduce emissions by 20% by 2020 and by 40% by 2030, while the share of renewable energy is set to increase to 20% by 2020 and 27% by 2030 respectively . Nevertheless, despite the government action on climate change, people in communities are taking energy issues to their hearts and developing projects which are often challenging and require a great deal of dedication, time and volunteer work. This chapter approaches community energy as a grassroots innovation and seeks to explain what its role could potentially be in a wider sustainable energy transition. At first the chapter looks at the concepts of grassroots innovations and sustainability transitions, reflecting on strategic niche management literature. Secondly, the chapter explains the concept of community energy within the UK context. The chapter then outlines motivations for community energy projects, highlighting the types of activities that have taken place in the UK. Finally, the chapter concludes with looking at the future challenges, prospects and opportunities for community energy in the UK.