Renewable Energy Projects: Community Benefits

Tuesday 15th October 2024 Westminster Hall

[Dr Rupa Huq in the Chair]

14:30

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

I beg to move,

That this House has considered community benefits from renewable energy projects.

It is an honour to serve under your chairmanship, Dr Huq. In all our careers, we have seen extraordinary changes, such as the advent of the internet, artificial intelligence and mobile phones. Going back 50 years, in the early stages of many of our lives, we had the North sea oil boom. The oil boom was extraordinary for many countries, not least Norway, which has saved US $1.7 trillion from it. Great Britain saved none of that money, however, and I am worried that we will save none of the money from the extraordinary renewables boom that is coming our way.

One of the biggest systemic changes in our life is happening right now: the move from fossil fuels to renewables. Many billions of pounds are being made, a huge number of jobs are being created and cheap electricity is being generated, but it is overseas companies, with overseas ownership of renewables projects, that we are seeing all over the UK. Precious little of the money ends up in the hands of the people who are being impacted by those projects.

The issue I have with these renewables projects, whether solar, wind, pumped storage or whatever, is that they are in rural areas. The locals suffer the visual impact, and we have all seen miles and miles of 200-metre-high wind turbines and field after field, sometimes of prime land, covered in solar panels. Villagers—people—have to face those industrial projects, and we really need to take them with us on this net zero journey.

[Tim Farron (Westmorland and Lonsdale) (LD)]

I congratulate my hon. Friend on securing this important debate. I represent roughly 1,500 farmers in Westmorland. All of them, pretty much, have water flowing through their fields and their land—often very quickly—but few of them take advantage of hydroelectricity, which could be a source of cross-subsidisation for farming, while also creating important renewable energy for our communities as a whole. Does my hon. Friend think that hydro-technology, in particular on farmland, is a great way forward? We can farm and produce renewable energy at the same time.

[Mr MacDonald]

Micro-renewables are the way ahead, and the more micro the better. Whether that is a solar thing on a roof or hydro for a farm, I could not support it more.

In 2023, as part of research in a written submission to Parliament, Octopus Energy showed that 87% of people would support a turbine in their community if it decreased their bills.

Now, I do not blame the landowner; these projects can allow farmers to retain the land in their family for generations to come. In some way, it is like discovering oil or gold on their land, and it is great that our bountiful wind and rain can be such an asset for us, especially in an era when coal is inaccessible and unacceptable, nuclear is being phased out, and gas is often imported from countries with an unacceptable moral standing, while also badly hitting our balance of payments and being environmentally unfriendly to transport to Britain. Renewables are absolutely the future.

The 68 million people in the UK are enormous beneficiaries of our renewables sectors, but the cost is borne by a fraction of that number—by those living in the remotest areas. Those of us in the Chamber represent populations who pay a 50% premium on electricity connection fees compared with those living in cities. The same people are not connected to mains gas, and therefore pay a great deal to have tankers deliver heating oil to their houses.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I congratulate the hon. Member on securing this debate. As he will know, we are talking about fairness to communities. One of the unfair issues in terms of communities and the cost of electricity is standing charges, whereby households in north Wales and Merseyside pay £100 more a year than those in London. Does the hon. Gentleman agree that the present arrangement is fundamentally unfair and that things should be shared more fairly across the nations of the United Kingdom?

[Mr MacDonald]

I absolutely love that—I am going to make the right hon. Lady a dame in my first honours list. It is an absolute disgrace that people in rural Britain pay a premium to get renewables, even though it is us generating the electricity. The standing charge should be the subject of our next discussion.

Those of us in the highlands, and indeed in many other parts of Britain, have long, dark, windy and cold winters. When many people open the curtains in the morning, they look out on to a wind farm selling cheap, green energy to the big cities. The remote highlands and islands, the Scottish Borders, Wales, Cumbria and the west country are among our poorest areas.

[Mr Gideon Amos (Taunton and Wellington) (LD)]

Does my hon. Friend agree that community benefit and compensation for communities is important for not only the communities that experience these projects but the planning system? Take it from a former planning inspector: if we had a sensible and predictable level of community benefit, it would make granting planning permission smoother, with fewer objections.

[Mr MacDonald]

There is a recent change to planning in Scotland—I am unsure whether it extends to England—called national planning framework 4, which makes the economic benefit to the community part of the criteria for getting a plan in, so we are moving towards what my hon. Friend describes.

The areas I mentioned are among our poorest. They suffer from the highest level of fuel poverty, an older population, lack of affordable housing, poor transport infrastructure, struggling market towns, lower wages, and often worse education and health services than cities. Rural people have higher costs and lower incomes.

[Ann Davies (Caerfyrddin) (PC)]

In Caerfyrddin, we have the possibility of four lines of new electricity cables and pylons coming through. Does the hon. Member agree that the best community benefit for Caerfyrddin and our rural communities would be to underground the cables rather than have these pylon lines coming through?

[Mr MacDonald]

Somebody whose opinion I respect greatly told me that undergrounding cables was no more expensive. I was very surprised at that, because I had understood from the transmission line companies in Scotland that it was a great deal more expensive to underground them. I will definitely look into that, because I know that it is a requirement to underground them in Norway. We should explore that issue further.

So we have boom time in renewables, generating trillions of pounds over many decades, and we have a rural population that really needs financial help and investment.

[Claire Young (Thornbury and Yate) (LD)]

In the last decade, my constituency has seen a wide range of solar schemes with different community benefits, ranging from £20,000 a year for the 25 years of the project’s expected life, which is handed over automatically to parish councils, to just a £30,000 pot, which people have to bid into. Does my hon. Friend agree that there should be equity of treatment, and that there are benefits to having an ongoing relationship, beyond the monetary value it brings?

[Mr MacDonald]

I think my hon. Friend will be thrilled with the next part of my speech, which will answer that question. We have a huge financial need, and we have the renewables revenue, which we will talk about in a second. Money and need—bingo, we have a match. Is that not exactly what we are here in Parliament to facilitate?

I am pleased to hear that the Great British Energy Bill is largely here, as it holds the prosperity of much of rural Britain in its hands. It can insist that communities have a stake in local renewables projects and that we legislate to require all renewables projects to pay a significant sum to impacted areas. Amazingly, it made no mention of community ownership of renewables projects or of community benefits.

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

I have been fortunate enough to visit your beautiful constituency, but in my beautiful constituency of Bognor Regis and Littlehampton, we have Rampion 2, a renewable wind farm that is due to go on to the sea closer to land than Rampion 1, with huge environmental and visible impacts. On your point about where the benefits sit, there is currently no requirement for any visitor centre to sit within the constituency impacted by the wind farm. Do you agree that any commercial benefits, such as a visitor centre, which will bring tourism and jobs, should reside in the most impacted constituency?

[Dr Rupa Huq (in the Chair)]

Order. For the benefit of everyone in the room, we avoid the word “you” because it refers to me. I remind all hon. Members that we speak in the third person.

[Mr MacDonald]

It is fair to say that building a visitor centre was not one of my list of key things to do with the money, but I shall add it to my list at around No. 97 —there is a space there. We will talk about this more in a minute, but fuel poverty, affordable housing and so on are probably the key uses for that money at the beginning.

The Lib Dem energy spokesman, my hon. Friend the Member for South Cambridgeshire (Pippa Heylings), has submitted an amendment to the Great British Energy Bill that would allow it to consider community benefits, and I very much hope that her amendment is taken forward.

I had a motion on community benefits passed in the Highland council. I have consulted the electricity generators and Ofgem. I have met Government Ministers here and in Scotland, discussed the issue with most knowledgeable people in all political parties and generally bored everyone I can find with it. There is consensus that it would be fair to require that the impacted rural people of the highlands and islands, of Scotland and of the UK as a whole benefit from bearing the costs of hosting our energy infrastructure.

The Highland council has done the work. It has a social value charter, which it would be pleased to share. The council and I agree on almost all aspects, except that the amount paid to communities should be a percentage of gross income from the projects, rather than £12,500 per megawatt. A percentage would allow communities to benefit from a soaring electricity price, as happened after Russia invaded Ukraine, and protect the project owners and utilities if the electricity price slumped.

Here is my financial proposal: 5% of revenue from all newly consented renewable energy, generated both onshore and offshore, should be paid to community energy funds. For onshore projects, two thirds of that should be paid to the affected council board, with one third paid to a council strategic fund. For offshore projects, all of that 5% of gross revenue should go to a council strategic fund. An existing renewables project should also pay money; I will explain that in a second.

[Anna Dixon (Shipley) (Lab)]

I am sure the hon. Gentleman will agree that the ownership of energy production is really important. The inaction of the last Government left the country reliant on energy produced and owned abroad, so I am proud of the work that this Government have done to found the publicly owned GB Energy, which will give us long-term energy security. I welcome this debate on the community benefits of renewable energy projects. I was reassured in the House just last week about communities such as Cullingworth in my constituency, where we are looking at proposals to host associated infrastructure—basically battery storage. Does the hon. Gentleman agree that those sorts of benefits should be for not just energy generation, but the associated infrastructure, such as battery storage? Community benefits should also come locally from those projects.

[Mr MacDonald]

I wholeheartedly agree. It should be the same for the transmission lines and the interceptors, for pumped storage and battery—really, the whole infra- structure of producing renewables.

So where is the 5% going to come from? It is really important that investors do not suffer from swings in British policy, and that they continue to invest in UK energy infrastructure. It is key that this increase is passed on to all consumers in the UK as part of a green tariff. My informed opinion is that paying that 5% to impacted communities would translate to about a 1.25% increase in electricity prices in Britain.

What should a council that receives that substantial amount of money use it for? Here are three examples of what has been happening already. One community fund near me gives £1,000 to each of the properties in the community. If 1,000 properties were given £1,000 each, that would be £1 million. Perhaps the locals managing the fund would allocate it to households that earn less than the UK median household income of £34,500. In any case, at a time of winter fuel allowance cuts, that would be most welcome. A second option is for the community to use the money to build affordable housing, and I know of a third community that injects money into its local care sector, for care homes.

Let me plagiarise the Highland council report in order to provide some context. In 2023, in the highlands, local communities received approximately £9 million. That is below the expected commitment based on Crown Estate Scotland’s guidelines, which suggest that developers should contribute £5,000 per megawatt, equating to £13.9 million. The total income from wind generation in the highlands for 2023 was estimated to be around £590 million. That calculation is based on a potential production of 11.8 GW. If all renewables—including hydro, offshore wind and pumped storage—were included, the benefit increased to 5%, and the amount of renewable energy doubled by 2030 to 22 GW, which is likely, then the community benefit would rise well above £50 million per year. That is a heck of a lot of money to highland rural communities. What would that be across the UK? £500 million a year? £1 billion? £5 billion over 10 years? This is a proper levelling-up fund for rural communities.

It was recently announced that two cancer wards on the island of Lewis in the Hebrides will share £4.5 million from a single offshore wind farm. That shows what can be achieved.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

Does the hon. Member agree that when we are looking at scaling up wind—floating offshore wind, for example, which will benefit Scotland and Cornwall, where I am from—we could look more closely at contracts for difference, and the licences and leases with the Crown Estate, in order to embed social value in them on a large scale and generate benefits such as apprenticeships or the building up of local supply chains? There are exemptions to the World Trade Organisation rules and so on, and we could manage to do that in quite a substantial way.

[Mr MacDonald]

I was a Highland councillor for quite a few years and sat on the planning committee. We heard application after application promising a large number of jobs and a large amount of local buying, yet we did not see that, but I do think we need to tighten up a great deal what is being offered in all the different aspects of renewables.

I have been looking at the situation overseas. In Denmark, new renewables projects must offer at least 20% ownership of their overall venture to local residents. In Germany, there is a local tax on renewables. In Heligoland, an archipelago in the North sea, three offshore wind farms were built in the mid-2010s, and the tax revenue taken in by the municipality was €22 million in 2016 alone. In Ireland, the contribution to community benefit fund is to be set at €2 per megawatt-hour of generation.

[David Chadwick (Brecon, Radnor and Cwm Tawe) (LD)]

I thank my hon. Friend for securing this terribly important debate on the fact that rural communities are not being paid sufficiently to host the infrastructure that we need to get to net zero. Earlier this month I visited Awel Aman Tawe, a community energy charity based in my constituency that uses the revenue that it gets from a turbine that it erected itself to pay for regeneration in that deprived area of Wales. Does he think that is a preferable or more desirable outcome in comparison with other projects, such as Bute Energy’s project in Powys, where the developer is hiding the community energy funds behind layers of bureaucracy that might make them inaccessible to local residents?

[Mr MacDonald]

The absolute sweet spot of this entire discussion would be communities’ ownership of their own renewables, which they could control and distribute as they wanted. Indeed, that is happening in some places. Of course access to funding is the big issue, but that is the perfect solution.

Surely, one of our great injustices is that our poorer people, who provide half the energy to the UK, have the highest level of fuel poverty and the highest electricity bills, and suffer the industrialisation of their nearby countryside. Now is the time to resolve that injustice.

[Dr Rupa Huq (in the Chair)]

Members who wish to make a speech should stand, and then we will be able to calculate the time limit. I will begin calling the Front Benchers at 3.28 pm, so there is not a lot of time left, because we have had a lot of long interventions.

14:51

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

It is a pleasure to serve under your chairmanship, Dr Huq. I commend the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for raising this important matter. Attendance in the Chamber shows just how important this element of GB Energy and the transformation we are going through will be to many constituencies.

I rushed here—via lunch, of course—from the Committee considering the Bill that will establish GB Energy. The Great British Energy Act will be the first Act to pass into law in this Parliament—Labour delivering change within weeks of coming into office. That Act and this transformation will change not only the way we produce power and the impact we have on a burning planet, but the way we live our lives. It could have a transformative effect for communities such as mine.

I commend the Minister for the way he has seized the agenda on GB Energy and seen the potential that the transition could have for places such as Na h-Eileanan an Iar, and the Isle of Eigg in the constituency of the hon. Member for Inverness, Skye and West Ross-shire, which the Minister visited recently. As we move to renewables, we should not forget that we are transitioning away from carbon, and we have to balance the transition with maintaining jobs in the North sea, which are a vital to many economies, communities and families in Na h-Eileanan an Iar.

The focus of the debate, community benefit, is one element of that transition. I prefer to describe and define it as “community share”. When people hear “benefit”, they think they are getting crumbs; when they have a share, they own it and control it. As it happens, my community has become the epicentre for community-owned wind farms in the UK. Community-owned turbines stretch from Barra in the south, to Galson in the north of Lewis. Those community-owned assets bring in millions of pounds each year to the communities that own them. Something like 23.5 MW is produced each year, which is a modest amount, but one that brings £3 million a year to small rural communities. Scotland’s community-owned wind farms provide on average 34 times more benefit payments to local communities than the equivalent privately-owned wind farms. If we do the maths, we can see the potential that community-owned energy schemes have to transform the whole of the UK. What is not to like about them?

Community-owned schemes, which in my community support everything from warm home grants to native tree planting, are a template for what could happen in constituencies across the whole of the UK. For renewal and expansion, these schemes need funding, yes, but primarily access to the grid. For us in the Western Isles, that means getting reserved space, by regulation or legislation, on a planned interconnector—a 1.8 GW subsea cable that will connect us to the mainland and enable turbines swinging in the Atlantic to turn on lightbulbs in Birmingham, the City and many other places.

[Dr Rupa Huq (in the Chair)]

Order. The time limit for speeches will be two and a half minutes, but since the hon. Member did not know that when he began his speech, I cannot hold him to it. However, if he concludes soon, that will be ideal, because there are 15 people yet to speak.

[Torcuil Crichton]

Yes, I will wind up quickly.

There has been an apparent breakthrough, in that three community-owned estates have come together with a plan for a 43 MW wind farm and have been given a connection on the grid. That grid connection is crucial, but so is the massive funding gap that these communities face between getting from concept, through environmental regulation and planning, to connection. That is where GB Energy has a role. I have advocated for a community energy unit within GB Energy to help communities tackle the minefield of financial and regulatory complexities. The Minister cannot snap his fingers and bring GB Energy or a community energy unit into being, but if officials from GB Energy were to shadow and assist those three estates in their efforts over the next two years, we would learn an enormous amount about community energy and create a template that other communities across the UK could follow.

[Several hon. Members rose—]

[Dr Rupa Huq (in the Chair)]

Order. I remind hon. Members to bob, because we are still working out who wants to make a speech and who wants to intervene. There will be a two and a half-minute limit from now on. I call Sarah Dyke.

14:54

[Sarah Dyke (Glastonbury and Somerton) (LD)]

It is a pleasure to serve with you in the Chair, Dr Huq. I congratulate my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) on securing this important debate.

I commend the new Government’s aspiration to increase our renewable energy infrastructure. The previous Conservative Government’s failure to invest in renewable energy and insulate our homes led directly to the energy crisis, pushing up energy bills for everyone and squeezing personal finances. In Somerset we are investing in and expanding our renewable energy infrastructure. Under the net zero pathway, the equivalent of 45% of Somerset’s future expected electricity demand will be met by local renewable energy generation by 2050.

However, I believe that when communities host renewable energy infrastructure such as solar farms, they should benefit from it. When I asked the Secretary of State about this recently, he agreed—he was clear that when communities take on the responsibility of hosting clean energy infrastructure, they should benefit from it—yet when I wrote to the Minister for Energy, the response stated blankly that the Government have no formal role in ensuring community benefits in solar. That is not the case with onshore wind power, which the Government are taking action to ensure is covered. That leaves communities in Somerset that host solar infrastructure totally reliant on developers to offer tangible benefits. Developments are also ineligible for community infrastructure levy obligations in the way that new housing is. The lack of obligations on developers means that communities are unlikely to benefit from hosting installations, leading to ongoing tensions within communities.

That begs further questions about the Government’s development of Great British Energy, to which I hope the Minister might respond today. If GB Energy is going to invest in new ground-mounted solar farms, will it ensure that local communities benefit from hosting the infrastructure, as the Government have claimed is their aim? I look forward to hearing the Minister’s comments. I hope that we can continue to move forward and increase clean, green energy production.

14:59

[Ben Goldsborough (South Norfolk) (Lab)]

It is a pleasure to serve under your chairship, Dr Huq. I have quite a bit of energy infrastructure going on in my constituency, be it the proposed Norwich to Tilbury line, the East Pye solar farm that has just been announced or the Ørsted battery energy storage site to the north of my constituency. To say that this debate is not hypothetical for my residents—it is very much a reality—would be underselling the matter. We have talked about community benefit and community wealth-building, but that is not something my constituents are happy to hear. They want to hear the word “compensation”. They do not want to hear the word “hosting”, because, at the end of the day, a pylon is not being hosted; it is being placed in their back garden.

It is important to remember in this debate that we live in a wasteland of regulatory framework for compensation. Individual businesses that take on such projects to grow their own enterprises—don’t get me wrong; they are private enterprises and there to make a profit—must work within a regulatory framework to make sure they are held to account and made to pay for the local people who have to face those developments in their area.

We have seen locally that the National Grid, for example, provides its own funding and grant-based system, but funding is not granted to individuals; it is only general. It takes into account such things as social, economic and environmental benefit, but those are judged by the National Grid’s own criteria. That is not something for which the National Grid is held to account, and it does not ensure that local people have a say over what is coming back to them.

The situation becomes even direr when we talk about solar farms. The industry body is responsible for setting out guidance on what should happen to all member bodies within it. Again, that creates an issue where those residents in areas considering having infrastructure in their back garden do not feel heard. They do not feel that they are being listened to in terms of what they want and where they need it. We want to drive towards net zero and we need to drive forward with the industrial upgrade to our national grid, but we end up in a situation where we are throwing the baby out with the bathwater, putting people off our future development towards being a green superpower for the rest of the world to follow.

15:01

[John Cooper (Dumfries and Galloway) (Con)]

It is a pleasure to serve under your chairship, Dr Huq. I congratulate the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) on securing this a vital debate.

“Wha but lo’e the bonnie hills”,

the very first line of the song “Bonnie Galloway”—I will spare you by not singing it, Dr Huq—extols the virtues of the rolling uplands of the south-west of Scotland. Yet the tranquillity of the moors, farms and forests has been disturbed these last few years by the relentless march of wind turbines. Now Dumfries and Galloway is festooned with them and we have many more on the way. We are in the foothills of a renewables revolution.

Arguments for or against wind farms are not for today. I feel that battle has been lost, but we must fight a rearguard action against ever-bigger turbines. Giants of over 650 feet from base to rotor tip are the fashion, and they are moving ever closer to our towns and villages. I feel that we will see Governments happily trample local opposition to wind farms and turn a deaf ear to forcing power cables underground.

Whether we welcome wind farms or have them foisted upon us, we must wrest from them what community benefit we can. Communities already see little enough of the supply chain benefits. It is to be hoped that the previous UK Government’s efforts to create freeports in Scotland might see more of the manufacturing based here in Britain. I have hopes, too, that Labour will make good on a Northern Ireland enhanced investment zone, as mapped out by the previous Conservative Government, that included the western end of my constituency. That would be a game changer: imagine the jobs created if we could build those giant turbines in Stranraer and ship them out via the deep-water port of Cairnryan.

On renewables, we in rural Scotland have had much of the pain and little of the gain.

[Torcuil Crichton]

Will the hon. Gentleman agree that the difference between Dumfries and Galloway and many parts of the highlands and islands that have benefited from community or commercially-owned wind farms is community ownership of land and that, were that pattern to be repeated in his part of the world, communities would benefit not only from community land ownership, but from owning the turbines that spin?

[John Cooper]

I resist the invitation to back a land grab, but the hon. Gentleman makes a valid point.

We have a chance now to bake in greater benefits for our communities, and they should be seen, not as bribery to buy off opposition, but as the power giants entering partnership with communities. I still say that our communities need a far greater say over wind farm consents, but the urban-obsessed SNP in Edinburgh and Labour here in this place will not shift.

There is an undeniable whirlwind of change on wind power. We have the chance to reap a positive harvest from that whirlwind for the people living in the shadow of giant turbines and pylons. Let us seize that chance.

[Dr Rupa Huq (in the Chair)]

I am going to keep the time limit at two and a half minutes. If everyone is kind to each other, everyone will get in. A brilliant example will be Polly Billington.

15:04

[Ms Polly Billington (East Thanet) (Lab)]

It is a pleasure to serve under your chairmanship, Dr Huq. I was not planning on speaking in this debate, but I am moved to by comments that have been made. I think it is worth while, even in the short amount of time that I have, to remind people that our economy and Britain’s success over decades and centuries has been because of our securing an industrial revolution based on fossil fuels. I welcome the opportunity that we have here to establish a political consensus not to repeat the mistakes of the past, where the poorest end up bearing the brunt of any transformation and the wealth is concentrated in the hands of a few.

I share the sentiments of the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald), who secured the debate, that we need to see an increase in community ownership of our renewables—for very good reasons. He says the major problem is access to funding, but I would say it is only a problem unless we change the rules. I would like us to establish a political consensus on the transformation of the energy market reform so that we can harness what is an endless amount of renewable energy in our communities across the country. His suggestion of a green tariff would need to be in the context of energy market reform because, as has been pointed out by others, there are significant standing charges on people’s energy bills that militate against the kind of transformation we need in our energy sector.

When we have that community benefit, we also need to think very carefully about what powers we give and the governance structures around it, so that communities can choose how they spend the money. There is a clear argument for ensuring that energy revenue is spent on energy challenges in communities—which are often, as has been said, off grid and often some of the most fuel poor in our country. As a representative of three small towns on a very windy coast, I make the observation that there are poor people living in towns and cities, too, and we would not want to establish an energy market that did not recognise that. We should tackle those challenges as well.

I want to make a point about the ways of dealing with or mitigating the impact on our communities. Inevitably—

[Dr Rupa Huq (in the Chair)]

Order. We are finishing at 3.28 pm and there are still loads of people wishing to speak. I call Alistair Carmichael.

15:07

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

It is a pleasure to serve with you in the Chair, Dr Huq. I commend my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for securing this debate. Once the Backbench Business Committee is up and running, this is a subject that deserves longer and more careful scrutiny.

Speaking from the perspective of Orkney and Shetland, I will keep things simple. Time is short and simple is what I do best. There are two things that I want people to understand about Orkney and Shetland. First, we have the highest level of fuel poverty of any community in the country. I hear what the hon. Member for East Thanet (Ms Billington) says about poor people in all communities, and she is correct, but the truth is that the further north we go, the more we are likely to find people enduring poor housing standards with long, dark, cold winters. That has an impact and it is felt most acutely in Orkney and Shetland.

The second thing I want people to understand is that when we talk about needing to find a template for making these things work, in Orkney and Shetland we have already done that. We have done it since the mid-1970s on our relationship to our oil and gas industry, which we have hosted. We have the two largest onshore terminals for oil and gas in western Europe—now coming perhaps into the autumn, if not quite to the end, of their existence. The reason there is such support for the oil and gas industry in Orkney and Shetland is that for the last few decades it has been a tremendous source of community benefit for us.

If there is an energy generation source, or whatever it is, in a community and the community sees the benefit of it—in a direct financial sense of money going into a trust or just in the availability and reliability of good-quality, high-skilled, well-paid jobs—people will be much more accepting. When, as is the case at the moment, we see Scottish and Southern Electricity Networks turning on the Viking wind farm in Shetland and being paid £2 million in August alone not to generate any electricity, that is where we see a disconnect. Dr Huq, there is a great deal more I could say about this subject—and I hope we will return to it—but just remember this: whatever the question is, the answer is to get yourself to Orkney and Shetland.

15:09

[Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)]

It is a pleasure to serve under your chairship, Dr Huq. I thank the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for bringing forward this important debate.

Communities have suffered the impact of more than a decade of botched energy policies and soaring bills, while our reliance on imported energy has put our energy security at risk. Many of our constituents will pay their monthly energy bills to a company based 600 miles and an ocean away. We know that our energy system is broken, but for too long it has felt far too distant to fix.

This Labour Government are already doing things differently with GB Energy, owned by the British people, which will invest in clean energy and ensure that our communities reap the benefits. At its heart is a commitment to support and expand community-owned energy projects, which are owned by the local people that use the energy.

That is not new, however. Local people already benefit from community-owned projects that exist and thrive across the country. The hon. Member for Dumfries and Galloway (John Cooper) spoke earlier about wind turbines. I know of many initiatives in my constituency that contribute to projects in local communities to deliver benefits for them. With community ownership we can deliver even more.

Let us be clear about this. Community ownership is a Labour party value, and it is not just a concept; it is about delivering benefits and value to our cities, towns and villages. The local power plan is a product of years of campaigning by the Co-operative party, and as a Labour and Co-operative MP I am proud that the Labour Government are going to deliver on this. At a fundamental level, community power is about giving people a say and a stake in the things that impact their daily life, such as those mentioned by the right hon. Member for Orkney and Shetland (Mr Carmichael): local jobs, lower prices and supporting local projects to deliver according to local priorities.

15:12

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairship, Dr Huq. I congratulate my neighbour, my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald), on securing this debate—the first of what I am sure will be many debates in years to come. He has talked about what Norway has done, and he is correct to say that my constituents look out of the window when it is cold and see the turbines going round and round, but the money heading south. That is not a good thing at all. The coldest community in the whole of the British Isles is a village called Altnaharra in central Sutherland, where on 30 December 1995 temperatures hit an astonishing -27.2°. If that is not cold, I do not know what is.

My hon. Friend has talked about taking people along with us, and that is incredibly sensible advice, because they are paying a 50% premium above other buyers of electricity. If we can take people along with us on the Orkney and Shetland model, it will work—but the key is how we go about it. He also rightly mentioned affordable housing and how such a fund could be used to address this issue. I was recently in the village of Achiltibuie in Wester Ross, speaking to young people who had summer jobs there. I asked what they did in winter when the hotel closes. The answer was, “We have to head south.” Why? Because there is no housing in a place like Achiltibuie. There is absolutely no affordable housing. That is a dagger at the heart of the viability of communities in the highlands, because it leads to school rolls falling and so on.

My hon. Friend is quite correct to place this issue before us, and I hope he will be encouraged—though I am sure he will need no encouragement—to bring it forward again. It could have been tackled some years ago, but a perceived inertia at all levels of Government to actually do something about this issue meant it never was. There is a great opportunity here. Knowing the Minister, whom I congratulate on his appointment, and knowing my next-door neighbour and hon. Friend the Member for Inverness, Skye and West Ross-shire, I have every confidence that this will be the start of a discussion that, if we are positive about it, can achieve a fruitful outcome.

15:15

[Calum Miller (Bicester and Woodstock) (LD)]

It is an honour to serve under your chairship, Dr Huq. I commend my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for securing this debate.

My constituency of Bicester and Woodstock has had multiple applications for solar farms, but they are dwarfed by the enormous proposal by the Blenheim estate and its development partners for an 840 MW solar plant, the so-called Botley West proposal. We need to make the transition to more renewables in our energy mix. The Liberal Democrats support that transition—we want to see 90% of our energy coming from renewables by 2030—but that high ambition makes steps to increase community benefit from any new scheme essential.

We must bring people with us on this journey by sharing the benefits. As with other aspects of renewable energy policy, the current framework is incomplete and hands too much control to the landowners and developers, often at the cost of local communities. We urgently need an approach to renewables that has a strong presumption in favour of meaningful community engagement and sustained community benefit.

Botley West has not met that standard. That is one of the many reasons why I and many of my constituents object to the current proposal. Originally, the developers offered the community a benefit fund of £50,000, amounting to £59.50 per megawatt of annual capacity. It is derisory. The £5,000 per megawatt of capacity recommended by the community benefits protocol would instead deliver £4.2 million each year to the local community if the scheme goes ahead as currently proposed.

I urge the Government to put in place a framework for new renewables that will place renewables schemes at the heart of community discussions and place our communities at the heart of debates on renewables schemes.

15:16

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

I am pleased to serve under your chairmanship, Dr Huq. I thank the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for calling this important debate.

Aberdeenshire North and Moray East, which I represent, and the constituency of my hon. Friend the Member for Moray West, Nairn and Strathspey (Graham Leadbitter) are the two constituencies most affected by these developments; I do not think anyone would contradict me on that point, which the Minister well understands. How are they affected? Well, the fisher folk are having to move among the pylons, the farmers are having to deal with the pylons and the underground cabling, and these are areas of outstanding natural beauty.

Those are important points to take on board, but I want to speak primarily about community benefit. The principles that guide us are early engagement, flexibility of approach, transparency and the recognition of community needs, but they are not statutory, which is part of the problem. They need to be put on a statutory footing.

In his maiden speech, the hon. Member for Inverness, Skye and West Ross-shire proposed

“that 5% of revenue from all newly consented renewable energy generated both onshore and offshore should be paid to community benefit funds.”—[Official Report, 5 September 2024; Vol. 753, c. 510.]

I find it very difficult to disagree with him on that point.

I also want to give a little bit of perspective. On 2022 figures, UK investment in new wind farms was €500 million; in Scotland it was €2.6 billion. That gives a sense of proportion. In the Highland area at the moment, 301 turbines have been approved under planning rules but not yet built, which far outstrips any other area of Scotland, including the constituency that I represent. In the midst of all this fuel poverty, Scotland’s people—particularly in my area, which is one of the coldest parts of the UK—are paying the highest standing charges in the UK. That has to change.

There are great benefits associated with community benefits given by these companies. I have an excellent example in Fraserburgh in my constituency, where the Moray East project made a substantial donation. I look forward to similar developments in the near future.

[Several hon. Members rose—]

[Dr Rupa Huq (in the Chair)]

Order. The time limit will now be reduced to two minutes.

15:19

[Olly Glover (Didcot and Wantage) (LD)]

It is a pleasure to serve under your chairship, Dr Huq. I commend my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for securing this important debate.

It is important that we remember the context and seriousness of the climate change challenge, but as hon. Members have said, we need to bring people and communities with us, particularly where there are changes to their local landscape and area and where land is given over to solar generation before opportunities to use building roofs have been fully explored and exploited.

Renewable energy is essential to the decarbonisation of our electricity grid. My hon. Friend’s proposal of a 5% levy on gross revenue for community benefit would go a long way towards ensuring that communities, as well as businesses and investors, enjoy the advantages of investment in renewables. Revenue from such schemes could benefit my constituents in so many ways, not least by helping to plug the gap that our planning system has caused between the housing that has gone into the area and the supporting infrastructure. Such benefits would include more youth service provision—in some cases that means any youth service provision—in the largest communities of Grove, Wantage, Didcot and Wallingford; local road, walking and cycling improvements; a contribution to the proposed new railway station serving Grove and Wantage; the realisation of more opportunities for local healthcare improvements; and home insulation projects.

When we consider how best to combat climate change, the policies that most resonate with people are those that benefit planet, people and economy. Local electricity generation is one of the best examples. The proposed levy would ensure that people, as well as planet and economy, will benefit.

15:21

[Priti Patel (Witham) (Con)]

It is a pleasure to serve under your chairmanship, Dr Huq. I commend the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for securing this debate. As the Minister will be well aware, my constituency of Witham is at the forefront of National Grid’s proposal for the Norwich-to-Tilbury upgrade of the national grid. I would like to put a number of concerns to him that my constituents and people across that part of mid-Essex have raised.

This debate is about community benefit, but with the pylon development scheme there is very little dialogue about community benefit. Guidance on the community benefits of the scheme is still under development; there are therefore no cost estimates or any details of what it will actually mean for my constituents or even for those affected by the proposal. I would welcome the Minister saying more about that when he winds up.

Alongside that, reports now indicate that there may be a cheaper option than pylons: tunnelling. Countries such as Germany have been at the forefront of that, along with innovation and technology. I would welcome more information from the Minister and the Department about whether that will be factored into the community discussion about wider benefits from the upgrade to the grid, and into the work that he will be undertaking. I do not think that it is deliverable by 2030, but clearly we need to make some progress.

The community benefit discussion is clearly live within the Government. May I ask when the Minister will meet Members who represent Essex and the east of England for dialogue and discussion, so we can go back to our constituents and give them some assurance about what this will mean for them?

15:23

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) on setting the scene so well. He high- lighted the importance of a good relationship in respect of renewable energy and the benefits for constituents. In two minutes, it is impossible to say all I need to, so I will not hang about. As we approach the conference of the parties, it is important to remember the benefits that these projects have for the local communities that we represent.

I always give a Northern Ireland perspective in these debates. Community Energy NI has revealed that community benefit is often associated with large-scale energy, and there are numerous wind farms across Northern Ireland. Many developments now offer community funding to a level of £5,000 per megawatt per annum over their lifetime. The energy strategy for Northern Ireland was published by the Department for the Economy in December 2021. For this action plan, the Government focused on potential energy schemes with regard to the consideration of onshore wind, solar and hydrogen.

There is fantastic potential across the United Kingdom for shared ownership options whereby a developer enters into a financial partnership with a community group or local residents. We are doing these things in Northern Ireland and we wish to do more. At present, community benefit packages are provided on a voluntary basis and there is no legal requirement in the UK for developers of energy infrastructure to provide community benefits.

I want to highlight one issue to the Minister. Legislation on energy is a reserved matter, but if we in Northern Ireland want to go ahead with a scheme, we need the planning Department; planning is a devolved matter. It is a case of marrying the two. How can we and how can the Minister work better with the planning Department in Northern Ireland to ensure that when we have projects that we want to expedite, we are not held up? I look forward to seeing how we can expand the possibility of better community renewables projects across the United Kingdom of Great Britain and Northern Ireland, especially to allow the devolved nations to play a part in that success.

15:25

[Llinos Medi (Ynys Môn) (PC)]

Ynys Môn, my constituency, is known as “energy island” and has a community-owned project in marine energy at Morlais, which is an example to all. Now there is a proposed large development for solar, covering 3,700 acres, around 2% of the island. The bigger of the two proposals, Maen Hir Energy, is five times the size of the UK’s largest active solar farm. The local corner shop would offer more jobs than this development on the island, which will have a detrimental effect on the economy by affecting agriculture and tourism. What assessment has the Minister made of the impact on our food security of the loss of good quality agricultural land?

The debate motion includes the phrase “community benefits”, but far too often it is a case of large developers offering tokenistic gestures and small sums of money. The community benefits should be renamed “community compensation”, because large developers often give a small amount of money to communities, which are then burdened by the economic and social cost of the project. With the other development on Ynys Môn, Alaw Môn, I have seen at first hand the developer changing the offer to the local community within a matter of days, offering one amount on a Thursday night and a reduced amount on a Tuesday night. That behaviour is totally unacceptable in our communities. It is shocking that developers are required only to make voluntary commitments to compensation, which can seemingly be changed at a whim.

To address the issue, we must move beyond compensation and look at meaningful ownership. Community-owned and led renewable projects could provide lots of local benefits such as cheaper energy bills, could increase resource efficiency and could help to meet our carbon reduction targets without compromising Ynys Môn’s landscape and economy. We need a step change in our energy system to ensure that real community benefit is felt by those who host clean technologies. I hope that the Government listen to the calls for change and take forward proposals that will bring meaningful benefits to local communities.

15:27

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Dr Huq. I thank the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for securing the debate.

The greatest community benefit for people across the north of Scotland, in my constituency and neighbouring constituencies, would be paying less for their energy, along with the investment in jobs that comes with renewable energy. People are reliant on cars, are off grid, are on lower wages and have inefficient housing—that is a fact across the highlands and islands of Scotland. The impact on them of high energy prices is significant: for many, it is a choice whether to heat and eat. We hear that frequently, but it is a fact.

This winter, many communities in my constituency will experience temperatures in negative double figures for many days, which is quite normal. Communities such as Aviemore and Newtonmore are right up in the Cairngorms, where thousands of people live with those temperatures every single year. They understand what it is like to live in a cold, harsh winter climate.

I agree with many points that have been made today. The hon. Member for Na h-Eileanan an Iar (Torcuil Crichton) mentioned community ownership; we have examples of that being progressed in my constituency, which provides huge benefit.

I have a question for the Minister about transmission charges, which have a huge impact on the investment pipeline of these projects. If we do not get investment in these projects, we will miss out on significant community investment and significant community benefit. It cannot be right that people pay more for their energy when it is being bought hundreds of miles away at a cheaper price than they can buy it. That is unacceptable and discriminatory. The rug has also been pulled out from under those communities with the removal of the winter fuel payment for so many people.

[Dr Rupa Huq (in the Chair)]

I call the first of our three Front Benchers: Roz Savage, for the Liberal Democrats.

15:29

[Dr Roz Savage (South Cotswolds) (LD)]

It is a pleasure to serve under your chairship, Dr Huq. I thank my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for bringing this debate to Westminster Hall, and hon. Members for their fascinating contributions. I rise to speak on an issue that is very dear to my heart, as an environmental campaigner rowing alone across three oceans to raise awareness of the ecological crisis and now as the Member for South Cotswolds about to present the climate and nature Bill—my private Member’s Bill—in the House tomorrow.

There is both promise and peril in renewable energy. The Liberal Democrats wholeheartedly welcome the steps being taken to revitalise British investment in renewables, which will start to rectify the missed opportunities of the previous Conservative Government, who never seemed to grasp the scale, scope and speed required to avoid environmental disaster. These new initiatives hold the promise of lower energy bills, high-quality jobs, greater energy security and the chance of actually meeting our net zero targets, but we must proceed with caution and wisdom.

The proposal for an excessively large solar farm in my constituency serves as a stark reminder of how renewable energy projects can backfire when poorly conceived. The solar development has provoked a visceral negative response from local communities, because it is the wrong size, in the wrong place and has the wrong ownership—foreign ownership. By allowing unsympathetic developments to mar our beautiful countryside, we risk alienating the very public whose support we need.

We need only look to the cautionary tale of our water companies to understand the perils of allowing foreign profit-driven entities to monopolise our essential utilities. The owners of companies such as Thames Water have prioritised profits over the needs of customers and the health of our natural environment, resulting in higher bills for customers, a lack of investment in infrastructure, and toxic pollution that is killing our precious waterways. We cannot afford to repeat those mistakes in our renewable energy sector; the transition to clean energy must prioritise the needs of our communities and the protection of our environments over the profits of distant shareholders.

Communities have to be involved, and it is clear that there is a significant gap in the GB Energy Bill around community energy. The Liberal Democrats firmly believe that communities living near large-scale energy infrastructure should receive tangible benefits. We are ready and willing to work collaboratively with the Minister and his Government to ensure that those benefits are guaranteed in the Bill. Our vision includes large energy suppliers working with community schemes to sell locally generated power to local customers at discounted rates; guaranteeing that community benefit funds receive a fair share of the wealth generated by local renewables infrastructure; empowering local authorities to develop renewable electricity generation and storage strategies; and giving small, low-carbon generators the right to export their electricity to existing suppliers on fair terms.

The success of our clean-energy economy, our ability to tackle the cost of living crisis, and the realisation of our climate targets all hinge on community buy-in. We need to win hearts and minds and persuade people that net zero projects are good for their communities, their pockets and our future national economy and security. To that end, we urge the Government to enact the necessary regulatory changes to truly support community energy. Community benefits for energy schemes should be guaranteed and community energy schemes should receive discounted rates for the clean electricity they contribute.

I will end on a personal note. As someone who has witnessed at first hand the beauty and fragility of our natural world during my ocean rowing expeditions, I am deeply committed to ensuring that our transition to renewable energy does not, in the process, destroy the beauty of the natural countryside we are working so hard to preserve for future generations. We need to get the balance right, and people have to be part of that equation.

15:34

[Mark Garnier (Wyre Forest) (Con)]

It is a great pleasure, as ever, to serve under your chairmanship, Dr Huq. I congratulate the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) on bringing forward this important debate. He raised this subject in his maiden speech, so he is clearly passionate about it. As someone who has been here for 14 years, it is a great pleasure to hear so many newly elected MPs bringing fresh perspectives to the House. Parliament is a better place for new MPs coming in and sharing their experiences; two minutes is not enough for some of these speeches.

In his maiden speech, the hon. Member raised valid concerns about the industrialisation of the countryside, which is an issue that all of us, certainly on the Conservative Benches, have consistently guarded against. Our belief is that the need for renewable energy must be balanced with the preservation of rural landscapes, ensuring that development is sustainable and respectful of local communities. Aside from his desire to see money flow back into communities, that is the only way we will get the public to support any plans for net zero and a decarbonised energy grid, as we heard from the Liberal Democrat spokesperson, the hon. Member for South Cotswolds (Dr Savage).

Unfortunately, the new Government immediately began to torment rural communities in their crusade for carbon neutrality by 2030 by removing key protections from the national planning policy framework just days after the election. Those provisions required developers to demonstrate that onshore wind projects had community support and that local planning impacts were properly addressed. In the new Secretary of State’s first week, he disregarded the previous Secretary of State’s legal planning guidance, which stated that the best and most versatile agricultural land must be avoided for new solar farm applications and that the cumulative impact of many solar farm applications must be considered together. Those decisions by the new Labour Government undermine the very communities that bear the burden of hosting new energy infrastructure while ensuring minimal benefit.

Even more concerningly, we understand that the Government intend to consult on bringing large onshore wind proposals into the nationally significant infrastructure project regime, which would further centralise decision making and diminish local input. It is vital that the Government listen to the views and concerns of local communities about onshore wind. Residents should have a say in projects that directly affect their environment and not be sidelined by top-down diktats from Westminster. We must ensure that local voices are heard and that community consent remains central to the planning process for renewable energy projects.

I also note the previous Government’s approach to community benefits and our commitment to ensuring that communities hosting vital energy projects were directly rewarded. We announced plans that people living near transmission infrastructure could receive up to £1,000 per year in electricity bill discounts—I am not sure it was per year, actually—providing meaningful financial relief to local households. In addition to those savings, we announced that funds would be available for local projects, empowering communities to invest in the initiatives that matter most to them, whether that is improving local parks, enhancing energy efficiency or supporting education programmes for young people. We had intended to publish guidance this year on making that a reality, so this debate is timely in allowing the Minister to give an update on all those plans.

When it comes to the impact of new grid infrastructure, pylons across much of our countryside will concern our residents most, and Labour’s accelerated push for pylons across rural landscapes threatens to blight our countryside. The rush to meet unrealistic targets will impose unnecessary visual and environmental costs on rural Britain, with little regard for the long-term impact on our natural beauty. The National Energy System Operator, formerly known as the National Grid, recently published a report that says that while grid enlargement by 2030 means pylons, grid enlargement by 2034 allows enough time to underground those connections and, at the same time, provide £600 million of savings in grid delivery.

The shadow Secretary of State, my right hon. Friend the Member for East Surrey (Claire Coutinho), highlighted during the election campaign that our party remains committed to protecting our landscapes. We propose learning from Germany where underground power lines have become the default presumption in designated areas such as national parks. That approach not only preserves the character of those unique places, but respects the wishes of local communities. Crucially, it could save bill payers money in the long term.

Over the last decade, technological advances have made it increasingly feasible to bury power lines, especially in sensitive areas. Unlike the new Government, we would have undertaken a rapid review to assess the advantages of alternative network technologies compared with overhead pylons. By exploring options such as underground cables and other innovative technologies, we can achieve energy grid decarbonisation without the impact on our countryside that Labour is apparently prepared to accept.

It is vital that we approach the energy transition with a clear vision that balances that transition with the need to protect our countryside and safeguard community interests. Labour’s plans seem short-sighted and fail to strike that balance.

Although we have real concerns regarding the Government’s plans for the countryside, I am extremely supportive of technologies that could have real community benefits—those that are innovative and easy to deliver, and that produce cheaper clean energy. I recently met experts from the University of Oxford and Oxford Photovoltaics, or Oxford PV, to discuss breakthroughs in solar power generation. They are working incredibly hard to produce lightweight solar panels so that the roofs of factories and warehouses can be used for solar panels without having to reinforce the building underneath.

[Seamus Logan]

Is the hon. Gentleman aware that the National Farmers Union of Scotland accepts the arguments and the case for pylons as opposed to underground cabling?

[Mark Garnier]

That is great. If people accept pylons, that is absolutely fine, but there are an awful lot of people who do not and we can look at where the alternatives could be cheaper.

[Jamie Stone]

Will the hon. Member give way?

[Mark Garnier]

I am mindful of time, but I will take one more intervention.

[Jamie Stone]

Does it not strike the hon. Member as strange that SSE proposed to underground the cable in the highlands from Dundonald to Beauly, yet says that it is impossible to do so in other parts? That is a very mountainous part of the highlands, so I think there is something in what my hon. Friend the Member for Inverness, Skye and West Ross-shire (Mr MacDonald), my constituency neighbour, said about it being possible.

[Mark Garnier]

I see; I might have misunderstood what the hon. Member for Inverness, Skye and West Ross-shire said. It is an engineering challenge, but we need to listen to the experts who know what they are talking about. I am not entirely certain that I understand the point that the hon. Gentlemen are trying to make, but if we can underground cables it would be better for communities, certainly if it is cheaper and better for the environment. If that means taking a bit of extra time, we need to get together to think carefully about that.

I will get back to my point about the University of Oxford and Oxford PV. Using that kind of technology, together with community-based power generation, has the potential to reduce strain on the national grid and limit the need for large-scale projects that can disrupt our landscape and our communities.

Through the Energy Act 2023, the previous Government committed to removing barriers to community energy projects by launching a call for evidence. I am interested to hear from the Minister whether the new Labour Government will honour that commitment—perhaps he will share that information with us in his remarks later.

The challenges that we face in transmitting renewable energy, particularly wind power, from areas of generation to areas of demand underscore the urgent need for grid upgrades. The current limitations in grid capacity, most notably the B6 boundary between Scotland and England, have become a major constraint on our energy system. The B6 boundary is the largest single network bottleneck, preventing vast amounts of wind power generated in Scotland from reaching higher-demand areas in England. As a result, we are facing enormous constraint payments, whereby wind turbines are shut down despite being able to generate clean and affordable energy.

That must be the greatest source of frustration for people living in areas of natural beauty such as the highlands and the Shetland Islands. Not only have those people had their landscape blighted but, if the equipment is not working at full capacity, bill payers will be paying for constraint payments in order for the equipment not to generate electricity. For instance, Orkney has some of the most powerful wind turbines in the UK, yet they often have to be turned off simply because the grid cannot handle the energy they produce. That is a glaring example of how our infrastructure is failing to keep up with the energy transition. The highlands and islands are energy-rich regions, but their potential is being stifled by inadequate transmission networks.

I turn to the biggest concern for many residents, which is how the Government will deliver the infrastructure required for a decarbonised energy grid by 2030. I must say to new Labour MPs that at the next general election in just four or five years’ time, all constituents—Labour MPs’ constituents in particular—will ask, “Did you meet your 2030 target?”, “What did you do to my energy bills?”, and “What did you do to the countryside?” Labour Members claim that their plans will save households £300 a year on energy bills, but it seems incredible that that saving will ever be achieved.

I asked in the House when we might receive a full systems cost analysis of Labour’s net zero plans by 2030, but we still have not had a proper answer—the answer given was, “In due course.” We need an answer to the question of how much this will all cost.

Although the Government’s pledge to cut everyone’s energy bills by £300 remains on their website, curiously no Ministers can bring themselves to repeat it. I have no doubt that the Minister would be delighted to do so if he gets the chance—he will have many chances, because I will wind up in a minute. Despite that promise, the actual price of the proposal will put a huge strain on taxpayers.

I have a number of questions for the Government, which I will put to the Minister. What are the full system costs associated with a net zero power grid by 2030? Will the Government confirm that they still plan to save households £300 a year on their energy bills? What baseline are they using—is it from the election? How do they plan to balance the urgent need for rapid decarbonisation with the development of emerging energy technologies? Will they support some of the innovative technologies that I mentioned or ones with longer lead times, such as nuclear? Will they explore alternatives to large-scale pylon construction, such as under- grounding and undersea cables, to protect communities and landscapes? Will they commit at the very least to match the community benefit regime set out by the previous Conservative Government of up to £10,000 off energy bills over 10 years for families in areas that have new energy infrastructure?

How we achieve this transition matters to all our constituents as it affects our natural world, our energy security and everybody’s energy bills. It is essential that it delivers real benefits to the communities most affected by renewable energy projects. We need to ensure that those communities are not just sites for energy generation but true beneficiaries, most importantly through lower energy bills. The Government’s rushed approach risks sacrificing long-term gains for short-term targets, leaving rural communities to bear the brunt of the costs without the promised savings.

The Opposition believe in a balanced approach in which the latest technologies are harnessed, communities are listened to and grid capacity is strengthened without degrading our natural landscape. We should support innovative solutions and new technology while focusing on lower energy bills and decarbonising the energy grid. I look forward to hearing from the Minister, who campaigned like a stalwart in opposition but now finds himself on the Front Bench in government—I congratulate him on his post, by the way.

[Dr Rupa Huq (in the Chair)]

For the second time in the same day, I call the Minister.

15:43

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Michael Shanks)]

It is a pleasure to serve under your chairmanship again today, Dr Huq. It is good to look out and see so many of my colleagues from the Great British Energy Bill Committee here to discuss energy again. I am glad we got the Bill through Committee quickly enough for us to be here—we did not need our afternoon session.

I do not have a huge amount of time, and I want to get to as many hon. Members’ contributions as possible. Of course, I want to leave the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) time to conclude this important debate—I congratulate him on securing it. Hopefully he will see from the enthusiasm and the level of participation how important others find this subject. I know from his maiden speech and other contributions how important it is for him and his constituents.

Just a few weeks ago, I had the real pleasure of visiting the hon. Gentleman’s constituency; I went to the Isle of Eigg to spend a day learning about the community energy project there. Although in some ways that project is unique, it is a very good example of how a whole community can benefit from such projects. The community genuinely has the power in its own hands—it has its own micro-generation grid—and it has received other benefits as people have upskilled themselves so that they can understand how the grid works and manage it.

I thank all right hon. and hon. Members for their contributions. I will try to respond to as many as I can, but I will briefly start with the context. This Government have come to power facing three interlinked challenges—ensuring energy security, displaying climate leadership and bringing down bills for people across the country—to which our response is our clean power by 2030 mission. Clean power is the only way to protect our constituents from the rollercoaster of price spikes that we have faced over the past few years, and to deliver the climate leadership that we need. That is why we introduced the Great British Energy Bill within our first 100 days, and why it is progressing through Parliament as quickly as possible. Great British Energy, which will have its headquarters in Aberdeen, is an important part of our plan to increase the delivery speed of renewables projects and, crucially—I will come back to this point—to ensure that the British people have a stake in that energy future. The Conservative party has for many years accepted the premise of publicly owned energy companies, but it does not support the premise of the British people being part of a publicly owned energy company—just ownership by companies from beyond our shores. Of course, we welcome their investment in this country, but with Great British Energy, we are saying that we would also like the British public to have a part to play.

A number of hon. Members made points about community ownership. Although this debate is about community benefits, I think, as some hon. Members have said, there are links between them. The Great British Energy Bill is about setting up the company, but there is a wider context in the Government’s local power plan, which commits to much more community ownership of energy, and ensuring that communities large and small have the funding and, crucially, the capacity to take forward some of those projects themselves.

Delivering on our clean energy mission, which is undoubtedly ambitious, will require action on a number of fronts. I want to touch on infrastructure, which many hon. Members have mentioned. There is at the heart of the current Conservative party’s rhetoric on that subject a fundamental contradiction. We heard it from the shadow Minister, the hon. Member for Wyre Forest (Mark Garnier), but I also heard almost exactly the same words from the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) on the shadow Front Bench in the Committee earlier today, where on the one hand, there is a recognition that we need significant upgrades to the grid, and yet on the other hand, there is no desire to make a commitment to building any new infrastructure to deliver it. Both those things cannot be true at the same time.

I gently point out to Opposition Members that after 14 years of government, that is not a new problem. The grid did not suddenly fall apart in July 2024, with the Labour Government. That challenge has been facing the country for a long time. Indeed, I would meet Conservative Members halfway and say that even beyond the 14 years they were in government, there has been a challenge on the grid. However, they had 14 years to take action and did not. This Government are now moving forward.

If we want to see the connections issue resolved, and community projects able to connect into the grid, as hon. Members have mentioned, we do need to build some of that infrastructure. That requires communities to host the infrastructure, so I turn to a number of points that were raised about how we work in partnership with communities—using collaboration, not coercion. It is important that the entire mission is a national one—for Government, but also to ensure that every member of the public is part of our achieving clean power by 2030. Key to that will be reforms to planning regulations. To deliver the critical infrastructure that this country needs, nationally significant infrastructure must be built; our planning system is holding that back.

The planning and infrastructure Bill, which we will introduce shortly, will speed up and streamline the planning process. We will also be updating relevant national policy statements within the next year, in order to provide certainty to industry. In Scotland, the current electricity infrastructure consenting regime is from the Electricity Act 1989 and has not been updated in line with other legislation across the UK. The regime is too slow and is holding back investment. I am working closely with my Scottish Government counterparts on how we develop a set of proposals to reform that and speed up the new infrastructure development that we need.

I come back to the point that hon. Members have rightly made—that as much as we need to streamline the planning process because we need to build the infrastructure, communities must be at the heart of it. Public engagement and consultation will continue to be incredibly important, but so also will be a more holistic approach to planning energy infrastructure in the first place. That has been the root cause of many of the challenges that hon. Members have raised today. The lack of strategic planning for some of our energy infrastructure in the past has led to bottlenecks, which we want to avoid in future.

Finally, I turn to the point about communities living near clean energy infrastructure, including the transmission infrastructure that we need to build. Let us be clear: communities, by hosting that infrastructure, are providing a service to the country. It is essential that we build that infrastructure; it must be built somewhere. The challenge I have with some of the discussion on that subject is that we fall into the trap sometimes of saying, “Yes, we agree we need to upgrade the grid, but not anywhere near my constituency, please.” That will not work, unfortunately. We want to ensure that those communities that do host this infrastructure, on behalf of us all as a country, directly benefit from it. Communities are important, not just in terms of hosting infrastructure but in terms of the wider acceptance of the direction of travel that we are taking. We need communities to be with us if we are to achieve the necessary pace. At the moment, as has been raised, such community benefits are voluntary arrangements. They could be monetary or non-monetary schemes; there are a variety of different options across the country, some that work extremely well and others that, as many here know, do not work so well. The voluntary nature of arrangements for delivery of community benefits does lead to these significant variations.

[Jim Shannon]

As I outlined in my submission to this debate, infrastructure is a reserved matter, but back home in Northern Ireland it is a planning matter, which is devolved. The question is how the two combine. It is a very simple question. It might require a much more difficult answer, but I would really appreciate it if the Minister could answer, please.

[Michael Shanks]

That is a very important question and I was going to come to the hon. Gentleman’s specific point in a moment. He is absolutely right. Since I came into post, I have been working with my counterpart Ministers in the Scottish, Welsh and Northern Ireland Governments on how we can work together. Clearly, in Northern Ireland that is slightly different because energy is transferred, so the policy levers are slightly different. However, we do have the same outcomes in mind throughout the UK, which is really important. I will continue to work with Conor Murphy and the wider Executive to bring us together as much as possible, because the hon. Member makes a very important point.

On community benefits in particular, we are continuing—at pace—the work started by the previous Government to review how we can effectively deliver benefits for communities living near this infrastructure. We are looking at examples across Europe—we are not on this journey on our own; there are other countries that have been doing this for a very long time, and we are learning from that—and developing clear guidance on community benefits for both the infrastructure and the transmission networks. We will publish that in due course. Great British Energy’s role will be to build upon existing community energy schemes under way across England, Scotland, Wales and Northern Ireland. It will build on that experience to contribute more where it can.

I shall now respond to a few of the specific points raised by hon. Members. The point on solar projects, raised by the hon. Member for Glastonbury and Somerton (Sarah Dyke)—who is not in her place, but I will write to her on this—is an incredibly important one. Part of the aim of the solar taskforce set up by the previous Government and reconvened by this Government is to set out a very clear pathway for these projects.

Several hon. Members mentioned standing charges. The Government are looking at that issue right now. We accept that far too much of a burden and too much of bills comes from standing charges and we are working with the regulator to do much more about that.

Although I listed 12 other points from hon. Members, I am conscious that I have eight minutes in which to cover them. To allow the hon. Member for Inverness, Skye and West Ross-shire time to wind up the debate, I will close by saying that as a Government we take this issue very seriously. Our ambition is to bring communities with us on this journey. We want to do that through a collaborative approach, with all hon. Members, but also with communities at the heart of this. We will have much more to say on that in the weeks and months ahead.

15:59

[Mr Angus MacDonald]

I did forget to disclose that I may have a potential conflict of interest, the details of which are on the parliamentary website. I apologise for not saying so before, but I do not think anyone would find it a major such conflict. You did mention—

[Dr Rupa Huq (in the Chair)]

Order. The Minister did; not me.

[Mr MacDonald]

Sorry. The Minister mentioned community benefits, but in rather a weak way. The Members in this room—I think there have been 60-plus of us here—represent the majority of the land mass of Britain. I think the message we are sending loud and clear to the Minister is that we all feel very strongly about the community benefits, and we very much hope they will be significant. Thank you very much for allowing me to host this debate.

Question put and agreed to.

Resolved,

That this House has considered community benefits from renewable energy projects.

15:59

Sitting suspended.