Community Energy Schemes

Alan Whitehead Excerpts

Tuesday 30th November 2021 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

I congratulate the hon. Member for Bath (Wera Hobhouse) on obtaining the debate this afternoon and on putting forward the case for local energy, particularly for a community energy Bill, in such a succinct and complete way. That means I do not have to say all the things that I was going to say about a local community energy Bill, other than to say that we on the Opposition Benches thoroughly support such a Bill. We think it would make a tremendous difference to the way that local energy can move forward.

At its heart, it has a simple proposition, which is that people should be able to sell the energy they produce to their neighbours, their friends, the people down the road, their local industry and shops. As we can envisage, that sort of environment would not only make a tremendous change in how people relate to their own energy, but would potentially be a great step forward in the appreciation of what we need to do, as far as energy is concerned, in the low carbon environment we will have in the future. Energy is something that people do, rather than something they simply receive. That seems to be the essence behind the idea that people can sell the energy they produce to their local community.

It is a simple proposition and we know what a difference it would make, so why not just do it tomorrow? What are the barriers in the face of the proposal? To go to the point made by the hon. Member for Waveney (Peter Aldous), we seem to have been here on a number of occasions. He has a similarly long pedigree in talking about the same issues that I have raised, both on the Environmental Audit Committee and elsewhere. He is right that we seem to turn up in the House talking about this issue on a fairly regular basis, and nothing whatsoever changes.

My particular involvement in the issue goes back to a 2013 Energy and Climate Change Committee inquiry on local energy, which I chaired, that looked at the barriers to how local energy can go forward, remarked that there was not a great deal of local energy going on and talked about the potential for local energy. We have heard this afternoon about the potential from now on, but at the time we were saying we could have perhaps 3 GW of local energy overall in this country by 2020. What have we got today? About 270 MW, something like that.

If we look at the various projects have contributed to that 278 MW, we have heard mention of a number of the co-operatives and organisations that have actually produced local energy, but pretty much to a project—I have seen a lot of projects in my time—they have been carried out with heroic dedication, overcoming tremendous obstacles and, in some instances, have failed at great cost to themselves and other people. It would be so easy just to make it possible for those schemes to happen. I congratulate and commend all those people who have generated the 278 MW of local energy that we have so far. The fact that we have any at all is a remarkable tribute to them, not to the system we have.

That is where we need to be very clear. The obstacles in the way of local energy are very much about the question of local supply, but there are a lot of other obstacles as well, which hon. Members have mentioned this afternoon. The idea is that people are trying to set up a local scheme to produce a pretty modest amount of energy for local consumption, important though all those local schemes are in terms of aggregation across the country. However, people have many obstacles to overcome and are required by the planning system to get permission in place. They need to spend perhaps a million pounds per project just to get a modest scheme going. If the rules were different, people would be able to put that million pounds into the development of the project and not throw it away on a possibly unsuccessful scheme in the first instance.

         The hon. Member for North Devon (Selaine Saxby) gave the example of the local brewery getting its cars on the road. People might think that is a fanciful example, but it is absolutely how the grid system works at the moment. There is an assumption that every single electron that is produced goes literally from Land’s End to John O’Groats and back again before going into a lightbulb and that it is charged as such, even if it had come from two doors down the road. That is the assumption. The introduction of local energy into the system is often regarded as a tremendous nuisance and loss of load. We cannot actually see where it is, and it is not easy to balance in the grid. That means that the last to get connections into the distributing grid are the local energy schemes. The charging regime for those schemes, once in operation, assumes that they are national schemes, just locally based.

[Wera Hobhouse]

I listened very carefully to the hon. Gentleman’s explanations about the complexities of the grid. Does he agree that, when thinking about licensing for a new devolved scheme, we need to look at things such as liabilities when there are outages, for example? It is not impossible to overcome these difficulties.

[Dr Whitehead]

The hon. Member is absolutely right. It is not particularly difficult to overcome these problems. I am emphasising this deep mindset of how the grid works that has been with us for a long time. The hon. Members for Strangford (Jim Shannon) and for Kilmarnock and Loudoun (Alan Brown) mentioned the fact that the grid was designed for a bunch of providers to produce x amount of energy, which would go through the grid until it got to a lightbulb. The world is completely different these days, but the grid still operates as if that were the case. That is inimical to the success of local energy projects.

As the hon. Member for Bath says, it would not be difficult to fix that, but there is a problem. Ofgem and, to some extent, the Department are particularly concerned that if we start dismantling the grid in its old system and localise it to enable the development of local energy in the way we have discussed, there could be distortions in that original system. I suspect the Minister will talk about some of those distortions, but let us be clear: they are distortions to an old system that does not work. We actually need those distortions to come into place to make the new, low-carbon overall renewable system work in the first instance. Making local energy work in that context is a very important change we need to make.

We need to make these changes to the system as a whole. We need to get the grid on to a much more friendly basis for local energy. We need to make the possibility of local energy much more real in terms of the hurdles it needs to overcome before it can get going. We need to have positive Government support for the development of expertise and the assistance and support that local energy schemes need to go ahead. That particular area, with the preponderance of volunteers in the local energy system, would be really good to have as a draw-down arrangement for local energy for the future.

Yet again we are meeting with the idea that the future for local energy could be really bright, but I fear that we will be here in a few months’ time talking about the bright future that has not quite emerged, but may in the future. We have not got time any more to keep going round the houses before we get to a decent settlement that will allow local energy to proceed. Local energy is so important, as we have heard this afternoon, for the future of low-carbon renewable energy.

I was delighted that the Local Electricity Bill has been amended to ensure that local energy is low carbon and renewable, so that we do not have diesel reciprocators coming in and providing local energy as a result of the ability to get a local licence. That is a very good amendment, and adds further to the Bill’s force.

I have questions for the Minister that are similar to the three questions asked by the hon. Member for Bath. I hope that he can give us some reassurances about the Government’s earnestness to bring about changes to the grid arrangements that can underpin local energy, and that they will be treated as a move forward as opposed to a distortion of the system. The answer to one of the questions posed by my right hon. Friend the Member for Leeds Central (Hilary Benn) about the German system is that cities in Germany, in many instances, own their own grids—and are doing so in increasing numbers. Germany does not have the grid system, a system that is regarded as just common sense in the UK. We have to turn that common sense around and start from the bottom up, with grid and district-grid management, rather than assuming that we should work from the top down. If we do that, then there will be a fundamental turning of the tide in favour of local energy for the future. I look forward to what the Minister has to say. I hope he will be fully supportive of the local community energy Bill, but I hope he will also be understanding of what differences need to be made to the system to allow local energy to come into its own.