13:30 Sir David Amess (in the Chair)

The evidence that the climate crisis threatens to destroy human civilisation and the natural world is increasingly alarming. We must achieve our emissions reduction targets and get to net zero by 2050 at the latest, as set out in the Climate Change Act 2008 and the Paris accord. The UK is way off track in doing that, as the Climate Change Committee has made clear. Currently, only 12% of our power comes from renewable sources. The only sector that has made reasonable progress is the production of electricity. In all other sectors—heating, transport, agriculture and heavy industry, let alone shipping and aviation—Britain is failing to reach its own targets.

The two big challenges facing householders are heating and transport. How do we rapidly transition from powering our heating and transport with fossil fuels towards doing so with clean energy? A change of this scale can be achieved only through the active involvement of people, because they will have to pay for it through their energy bills, the products they buy, and the taxes they pay. People will need to host the new infrastructure in their neighbourhoods and communities, and they will ultimately need to change their routines and practices. If people do not agree to pay for it, host it or do it, progress to net zero will be more costly and more contested, and it will be less inclusive, equitable and environmentally sustainable. The individual householder or consumer must be at the centre of our transition to net zero, and it seems the Government have not quite understood this; otherwise, they would by now have developed a coherent plan to engage people along the way.

Let us imagine a future in which we can all buy clean electricity directly from a local supply company or co-operative and in which every pound spent powering our homes, workplaces and transport supports local jobs and helps to fund new facilities and services in our communities and in turn contributes to the building of more renewable energy infrastructure. Right now, UK community energy generation is just 319 MW—just 0.5% of our total energy generation. That is a great failure of potential.

Let us imagine setting up a microbrewery. We plan to deliver our beers to local pubs, off-licences and homes, but then we are told that we have to pay £1 million in road tax for our delivery van. These businesses would never be started, and the savings in transport costs, greenhouse gas emissions and prices would never be realised. That is the reality that the community energy sector faces.

“The right to local energy supply already exists under the Electricity Act 1989. One of Ofgem’s key strategic priorities is increasing flexibility across the electricity system to support the delivery of net zero and ensuring that consumers benefit from these innovative changes.”

The need to get to net zero is becoming more and more urgent. We will not get there without the consent and active engagement of the people who have to pay for it, host any infrastructure and change their habits. Community energy could make a large contribution, not only to produce the clean power we need but to bring people with us in our ambition to get to net zero before it is too late.

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13:40 Peter Aldous (Waveney) (Con)

While credit should go to the campaigning work of Power for People, it is abundantly clear that local councils, cities, towns and villages want to play their part in the transition to net zero. This is not a straightforward journey, and we need to use all the tools in the box to ensure that we reach our destination on time and, hopefully, after a smooth ride. This means removing those regulatory barriers that currently prevent community energy from playing its full role.

Fifthly and finally, are the Government proposing to consult more generally on community energy and local supply in advance of the net zero strategy?

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13:45 Ben Lake (Plaid Cymru)

In Wales, we have the highest number of community energy organisations per head of population relative to the rest of these islands, but if a right to local supply was established, even more people and communities could become electricity customers of local enterprises—communities such as Cardigan and Ceredigion, which has a budding local energy club and ample local generation of renewable energy, but where local demand is not currently being catered for by local supply. A right to local supply would help connect consumers with locally generated electricity and the knock-on effect would be seen in communities across these islands.

This measure is not just about addressing the climate crisis, as important as that is. It is also about supporting more local skilled jobs, and it is about cheaper energy bills. It is very much a win-win-win. It can be done. While we welcome the Government’s support of the principle, we believe that, if we work together with the Minister and the Department, we can get the detail right and enact a local electricity Bill that enshrines the right to local supply. I hope the Minister will be open to such a meeting.

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13:49 Simon Baynes (Clwyd South) (Con)

The Corwen projects have benefited significantly from the support of the local landowner, Lord Newborough, whose Rhug Estate has put sustainability firmly at the heart of its business mission, particularly through its own renewable heat and power generation. That has led to the welcome announcement this week that Rhug has won a net zero award from the North Wales Mersey Dee Business Council.

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13:57 Simon Fell (Barrow and Furness) (Con) [V]

I was really pleased to be able to support my hon. Friend the Member for Waveney (Peter Aldous) in his efforts to enact the Local Electricity Bill in the last Session. To my very inexperienced eye, the Bill appeared to be a win-win. It drove the creation of new local electricity markets, lowered prices for consumers and created a path for households and businesses to access renewable and sustainable energy in a new way. A 2014 Department of Energy and Climate Change report on community renewable energy suggested that by last year—2020—3,000 MW of generating capacity could have been in place. Instead, we generate around 278 MW from community renewable energy.

The scale of the opportunity here is absolutely vast, and we need only look across to our neighbours in Europe to see the prize on offer. In Germany, there are over 1,000 community-based supply companies producing renewable energy. In that country, the four large utilities control only 40% of the market, which drives real consumer choice and consumer benefit. Unleashing community energy would enable local economic resilience in communities across the UK. Bypassing the large utilities would allow them to keep significant value and economic returns within their own economies. It would create skilled local jobs, more viable local businesses and stronger local bonds. I would argue that the necessary reforms are not just about cheaper electricity bills; they are about helping us get to net zero too. To be honest, I see them as a form of levelling up in action.

Reforming market rules so that local and regional-sized renewable energy generators could sell their electricity direct to local customers would mean that my constituents in Broughton would no longer be reliant on having to choose from a few large national suppliers. They could go local and go sustainable. If we can achieve that, the effect will be to take community energy schemes, such as that one, from being a smattering of projects across the country to thousands. They currently generate only around 0.5% of the UK’s electricity, but let us think of the scale we could generate. With a few small changes, a thousand flowers could bloom. That will happen only if local community-owned interests are given a route to market.

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14:01 Mick Whitley (Birkenhead) (Lab) [V]

The question of energy cannot be separated from the survival of our planet. That is why today’s discussion is so vital and why I welcome the broad cross-party support for community energy and the Local Electricity Bill. Energy production and consumption both lie at the heart of our battle to combat climate change. To win the battle we need to meet the targets we have set for cutting carbon emissions. The UK Government have now set in law a cut in emissions of 78% by 2035, bringing us more than three quarters of the way to net zero by 2050. To help us meet the target we need to put the Local Electricity Bill back on the agenda.

The Bill could establish a vital local supply that would give the energy market regulator, the Office of Gas and Electricity Markets, the legal duty of establishing new market rules that could help community energy growth. The cost of setting up organisations that sell locally generated renewable energy to local people, together with their running costs, should be proportionate to the size of the business. That reform would make local projects financially viable, unleashing the huge potential of community renewable energy. This has been shown to work in other countries. In Germany, there are 1,000 such supply companies, most of which are local community-owned suppliers, and almost all provide renewable energy.

The Community Energy 2030 Vision estimates that with such support the growth of the community sector could power more than 2 million homes, create up to 9,000 well-paid and highly skilled jobs, shave millions off the cost of domestic bills, and contribute almost £2 billion to the economy every year. We need to unleash that potential. The Committee on Climate Change states that the UK is way off track to reach its greenhouse gas emissions reduction targets. Renewable energy generation currently accounts for only 11% of all UK energy use. That must change. The extension of community energy production can help us move faster to our goals.

I want to end by supporting the recommendations of the April 2021 Environmental Audit Committee, which outlined a positive way forward: remove the barriers to the development of community energy by passing the Local Electricity Bill into law; support the vital role that community energy plays in achieving net zero carbon emissions; and give practical support to the community organisations that help us achieve our targets.

As COP26 moves ever closer, let us ensure that the UK catches up with our neighbours, such as Germany. Let us help community energy to generate electricity for our children and grandchildren. If we miss our target, we are putting those future generations at grave risk of a climate breakdown.

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14:05 Wendy Chamberlain (Liberal Democrat)

We know that we face a global climate crisis, which will require significant shifts in how we go about our day-to-day lives. Supporting such changes clearly requires Government direction and support, and many communities recognise the importance of proactively transitioning to green living. I am proud to have examples of that in my constituency of North East Fife.

Also in my constituency is the University of Saint Andrews, which is North East Fife’s largest employer. The university is led in this regard by its environmental sustainability board, which is chaired by Professor Sir Ian Boyd, previously chief scientific adviser to the Department for Environment, Food and Rural Affairs and now the professor of biology at the university. The university is taking on the net zero challenge, alongside community organisations and businesses, and I attended the first meeting of the outreach group back in May.

Under complementary environmental, sustainability and carbon management plans, the scope of the group’s approach encompasses procurement activities and the travel of international students coming to the university to study. The aim is to reach net zero by 2035. A new biomass plant and a potential onshore wind farm development will deliver energy to meet the university’s needs and potentially those of the wider community, too.

Communities are clearly vital in the move to net zero; they are best placed to know what changes work best for them. Where communities are ahead of the Government’s policies, which we are hearing today, they should be enabled to act, not blocked from acting.

We do not have to be left behind. Just this week, I visited Orkney with the Scottish Affairs Committee, as part of our inquiry into renewable energy in Scotland. Orkney has long been home to renewable energy and it is now expanding its scope into marine renewables. It recently became the home of the European Marine Energy Centre’s orbital tidal turbine, a prototype that is the world’s most powerful marine turbine.

The Government say they are committed to reaching net zero, in order to avert the worst impacts of the climate crisis. This is not the time to be stuck in the old ways of doing things; those ways will not work now. We must embrace new ways of working with and for our communities without delay, and community energy is part of that process.

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14:09 Jeremy Wright (Conservative)

I join the consensus that locally generated energy has huge, partly technical, advantages. We can, if we make use of this method, increase the volume of energy generated and, more importantly, the volume of sustainable and renewable energy generated. If energy has to travel less far from where it is generated to where it is consumed, we lose less in transit, and of course, we know from the examples of community energy that we can already see, that it brings huge broader decarbonisation benefits and educational advantages, too, so there is technically very much to commend it. There are also psychological advantages. As others have said, if we enhance our capacity to generate energy locally, we help people to participate in the combating of climate change, and we make that effort local, rather than distant from them.

There is so much growing local enthusiasm to assist the Government in delivering their climate goals. Everybody wants to help, and this is a practical way of doing so. I can think of examples in my constituency, such as the Napton Environmental Action Team, or the Harbury Energy Initiative, which has been in receipt of Government financial assistance in environmental pursuits and is keen to do more. The Government need to help them to help the Government deliver our collective climate goals. The Government can look at tax incentives and at the role of local authorities, and they should look at ways of ensuring access to the cable network at a fair price, but if we cannot ensure that local enterprises producing locally generated energy can sell their product locally, we will still have a fundamental object to the way that we want to deliver locally generated energy.

As I understand it, the Government will produce their net zero strategy refresh this year. I hope that my hon. Friend the Minister will say that as part of that exercise, the Government will look carefully at how they can deliver the fundamental objects of the Bill introduced by my hon. Friend for Waveney, and make sure that we can assist others to assist us in delivering those climate objectives on time.

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14:13 Darren Jones (Labour)

Their latest project—the wind turbine—is community-owned and will be built on land owned by Bristol City Council in the industrial estate adjacent to Lawrence Weston. Standing 150 metres tall, it is estimated that this one turbine alone will generate enough low-carbon energy to power 3,500 homes, reducing carbon dioxide emissions associated with the generation of that power by nearly 2,000 tonnes each year.

The Minister will know that, as part of our net zero target and the pathways to net zero set out by the Climate Change Committee, we need to double the size of our electricity system. As with heat, we are increasingly talking about the right technology in the right place, with some areas better suited to heat networks or hydrogen pumps more generally. The same is true with electricity. With a more flexible distribution network comes the opportunity for more decentralised, local sources of power; it is a great opportunity for community energy to fulfil that need.

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14:17 Duncan Baker (North Norfolk) (Con) [V]

There is no doubt that we are world leaders in decarbonising. Our target to go further and faster by cutting carbon emissions by 78% by 2035 is now enshrined in law. To get to that target, we all have to play a part. That is why I support enabling community energy. Giving powers to local communities to play their role is vital for many reasons—we have already heard some of them.

At the top level, we want total buy-in from the community, not just in contributing to decarbonising with innovative and imaginative schemes such as those we have heard about, but also so local communities can create their own income streams by selling green power to the grid. The role is even bigger than that, because I wonder what part they can play in helping to fill the energy gap. Local sourcing and generation can play a significant role—its potential is vast.

I sit on the Environmental Audit Select Committee. Our technological innovations and climate change inquiry has examined the subject, and our report clearly suggests that, with greater public engagement on net zero, more financing, local authority engagement and a reduction of regulatory barriers, community energy has enormous potential for real growth. That enormous potential gives us the opportunity to fill the energy gap.

If Germany can get community energy schemes to work and the complexity of market obstacles can be overcome, why can we not do that here? The benefits of local employment, greater awareness and a drive to give licensing power to local authorities so that local communities can play their role will all add to the notion that we can continue to drive the cost of production of power down and continue to hit our net zero targets. It is really heartening to see cross-party support for this. I hope the Government can really begin to embrace the situation and bring community energy to the fore.

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14:20 Mohammad Yasin (Labour)

In March 2019, Bedford Borough Council declared a climate emergency, and it has pledged to become carbon neutral by 2030. I know that many other local authorities have done so too. It has committed:

Many of my constituents are deeply concerned about climate change. They want to make a difference, despite how overwhelming the task feels. They can make a difference, however big or small, with initiatives such as community energy projects. The Government must do all they can to support and encourage such projects.

Bedford Borough Council was awarded more than £1.8 million from the South East Midlands local enterprise partnership’s Getting Building Fund last year, enabling plans for the all-new Bedford Green Technology and Innovation Park to become a reality. A former landfill site is being transformed into a green energy innovation park, and work is now under way at Elstow in Bedfordshire. Work to cap the closed 30-hectare site with clay began last year, and the site is soon set to become home to more than 1,800 solar panels, which will generate and supply on-site buildings and local businesses with low-carbon, clean energy.

There is a huge consensus of support for initiatives such as solar panels in schools. What better way to show the generation that is most going to have to deal with the consequences of the rampant abuse of fossil fuels that we mean business than to have their schools run on green energy? Although the Government talk the talk on such initiatives, they are not walking the walk. We need urgent and early action, not words.

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14:24 Jim Shannon (DUP)

Community energy paves the way for wider decarbonisation goals and drastic improvements in localised renewable energy, making electricity services more sustainable in our communities. We should be trying to grasp the principle of what we are trying to achieve.

The Local Electricity Bill seeks to change the Electricity Act 1989 in England, so that Ofgem is permitted to grant local electricity supply licences to local generators that are not designated in existing legislation. With five local energy hubs in England, it is clear that they are leading the pack, as they are in football. Reports show that as of 2020, community energy contributed 278 MW of renewable energy. If we take it to what we can do, there is hope that by 2030 2.2 million homes will save over 2 million tonnes of carbon emissions every year. The challenge is there. I believe that the Government are committed to that, and all the regions of the UK should try to their best to achieve it.

Let me make a quick comment about Northern Ireland. Communities across the United Kingdom are starting to recognise the increasing popularity of localised energy organisations, including in Northern Ireland, despite there only being two electricity corporations there, and in Strangford in particular. The first, Northern Ireland Community Energy, was the first solar community-owned energy co-operative in Northern Ireland. To finance its recent innovations, £150,000 was raised and this was the first time Northern Ireland was able to buy into a community energy benefit society. Its continuing aim is to increase awareness of community electrical shares in Northern Ireland. The second, Strangford Lough tidal turbine, is the world’s first commercial-scale tidal energy project. I am very pleased to say that it is in my home constituency. I have visited the site and seen what it can do, and the possibilities, and I am pleased to see that this wonderful landmark can be used to promote the use of sustainable energy.

I believe we have an opportunity, given that in 2020 358,000 people were engaged with energy and climate change. I would like to think these numbers will be on the increase. I welcome the content of the Local Electricity Bill, introduced by the hon. Member for Waveney. I hope that it progresses as it has real potential to succeed. It encourages energy organisations to engage with local authorities as opposed to largely populated and financed firms. The debate is about local communities, and I certainly encourage that.

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14:28 Patrick Grady (Glasgow North) (SNP)

“For us ‘community energy’ has a double meaning. Glasgow Community Energy aims to connect and empower local people through community-ownership and democratic involvement in our renewable energy co-operative, as well as by inspiring and sustaining community activism through our Community Benefit Fund.”

Of course, behind that are the long-standing pressures for reform of the electricity market, or the electricity bureaucracy as my hon. Friend the Member for Na h-Eileanan an Iar said. There is a need for energy production and supply to be reformed, particularly in the face of rapid climate change. The need to get to net zero, as we heard right at the start of the debate from the hon. Member for Bath, requires low-carbon production and transmission. In the year of COP—the year when the UK is supposed to show global leadership—this is an incredibly important opportunity.

The Scottish Government fully back and fully reflect all of those positions, particularly the importance of decarbonising the entire energy system. Their most recent local energy strategy was published in January 2021 and says that the Scottish Government

“recognises that local energy cannot be delivered in isolation. It is not a standalone policy, but one that integrates and aligns with other key policies, including energy efficiency, eradicating fuel poverty, heat decarbonisation, local heat and energy efficiency strategies, and consumer protection. It will develop alongside and within a vibrant national energy network.”

“We support Carbon Neutral Islands which would be in the vanguard of reaching net zero emissions targets by 2045. This will include pilots for some islands to run on 100% renewable energy, to create circular economies tackling and processing waste, and exploring more sustainable transport options. We will work with at least 3 islands over this Parliament to enable them to become fully carbon neutral by 2040.”

There are other things the Government could be doing as well. They could look at a replacement for the feed-in tariff that was so important in bringing so much renewable energy to the market in the first place. They could also help to stimulate demand for better local, greener energy by diverting funding away from damaging new nuclear technologies.

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14:36 Dr Alan Whitehead (Southampton, Test) (Lab)

The benefits of that are pretty self-evident. Not only is there a completely different stream for developing the renewable and low-carbon energy that we need, but that method of providing for our energy future does wonders for the ownership of that low-carbon energy, in terms of the close relationship that it provides between people consuming energy and providing for their energy at the same time. The notion of community energy really does fulfil one of the central things that the Climate Change Committee has been talking about recently, which is the need for behavioural changes as far as low-carbon living is concerned. Surely, an arrangement whereby people are producing, owning and consuming their own low-carbon energy is, or should be, a prime example of that behavioural change in action as far as our climate change targets are concerned.

Then we have the central issue that it is not possible in this country simply to produce electricity and sell it to a next-door neighbour, the person down the road or collectively for the local good. We cannot do that at the moment, and this is where the Local Electricity Bill, mentioned by various hon. Members, comes to the fore. I had concerns about the Bill’s previous iteration—about the problem that might arise within the arrangements in it for unleashing high-carbon energy into a local environment, rather than the low-carbon energy that we need to produce. So I would not like to see any local energy Bill enable local diesel reciprocating engines to come forward as a local energy supply when what we want is to decarbonise our electricity supply. I am delighted to see that the promoters of the Bill have now put a carbon intensity clause into it, which resolves that problem.

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14:47 The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway) [V]

I reassure the House that this Government absolutely recognise the valuable role that community and local renewable energy projects can and do play in supporting the UK’s national net zero targets. I know that all Members will agree that excellent work is already under way in the community energy sector. We have heard about a number of such projects from several hon. Members, including my right hon. and learned Friend the Member for Kenilworth and Southam (Jeremy Wright), my hon. Friends the Members for Clwyd South (Simon Baynes) and for Barrow and Furness (Simon Fell), and the hon. Members for Bristol North West (Darren Jones) and for North East Fife (Wendy Chamberlain).

We need only look at the recent state of the sector report by Community Energy England, which identified 424 active community energy organisations across the United Kingdom run by 396 volunteers, to note that community energy projects can contribute to achieving net zero, not only by stimulating clean growth, but by acting as catalysts for raising awareness. As the hon. Member for Bath and my hon. Friend for Barrow and Furness pointed out, the promotion of behaviour change and the ability to build communities is a key outcome for us to achieve our 2050 goals. [Official Report, 12 July 2021, Vol. 699, c. 1MC.]

To support community energy projects, the Government currently fund the rural community energy fund. The £10 million scheme supports rural communities in England to develop renewable energy projects, which provide economic and social benefits to the community. Since the fund’s launch in 2019, it has received 1,214 inquiries and 188 applications, and it has awarded more than £4.5 million in grants to projects focusing on a variety of technologies, including solar, wind, low-carbon heating and electric vehicle charging.

Many Members spoke about the recent Environmental Audit Committee inquiry into community energy and its several recommendations. As many Members will be aware, the Secretary of State published a response last month—it can be viewed on the EAC website—and stated that we are considering future plans for community energy in the net zero strategy, which will be published later this year. As my right hon. and learned Friend the Member for Kenilworth and Southam mentioned, we will draw on evidence from this country and around the world when assessing the most effective way of meeting our net zero goals.

The Government support the development of new business models to supply energy consumers and to help achieve our net zero ambition. The 2020 energy White Paper committed the Government to review the overall energy retail market regulatory framework. That review will assess the changes that may be needed to ensure that the framework is fit for purpose and allows new business models to come forward. We will engage closely with community energy stakeholders as part of the review, and I welcome the various offers from Members today.

To support the establishment of more local energy schemes, we will also continue to look at a full range of other options to support local involvement in tackling climate change in the net zero strategy, which will set out how we will meet our net zero goals overall. My hon. Friend the Member for Waveney raised several additional points, and I look forward to receiving and responding to his letter.

This debate is testament to the fact that there is clear cross-party support and a growing appetite for community energy. I close by reiterating that this Government are supportive of community energy. We absolutely understand that communities are key to the Department’s wider efforts to decarbonise the country and create a cleaner, greener future for us all. I thank the hon. Member for Bath once again for securing this important debate.

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