Enabling Community Energy

Alan Whitehead Excerpts

Thursday 1st July 2021 Westminster Hall

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

I was not going to say that it is a pleasure to serve under your chairmanship this afternoon, Sir David, because everyone has said that already, so please take it as read—well, I have actually said it now, so it is pleasure to serve under your chairmanship this afternoon. [Laughter.]

We have had a powerful debate this afternoon, put forward by a number of hon. Members who clearly know what they are talking about and who have a substantial dedication to the idea that we should be able to get a substantial part of our energy by local means—by local people, in local areas, providing for their own energy needs and taking part in those arrangements. I am not particularly precious about who is to organise those local arrangements, be they co-operatives, collections of individuals, community enterprises, local authorities acting in partnership with those with those bodies or, indeed, a variety of bodies coming together and developing that local energy for local purposes.

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.

However, as hon. Members have said this afternoon, that clear vision has tremendous barriers set in front of it. As has been set out this afternoon, those are manifold, and I could add substantially to that list. In essence, we can say that the barriers are threefold. First, in terms of getting any sort of enterprise going locally, there are tremendous issues with funding and the cost of entering the market. Hon. Members this afternoon have mentioned estimates of about £1 million for getting a local licensed arrangement under way, so it is completely out of the reach of the vast majority of people who want to set up such an enterprise at local level.

Secondly, we have the view taken by Ofgem, and I am afraid the Government, on the nature of electricity, which is that electricity consists of electrons that should travel from John O’Groats to Land’s End and back again, and be taxed and charged as if that is what they had done, when in fact local energy completely overturns that model. Electrons in the case of electricity, or the heat that is produced, is produced locally and consumed just down the road, and the whole loop is closed as far as that local energy is concerned. Yet the arrangements that we have in this country, strengthened by Ofgem’s targeted reviews and various other activities recently, mean that we should be charged as though it were entirely a national endeavour. Indeed, the licensing for local energy makes the same assumption. The Minister might mention moves to put geographically situated licences in place, but in general the licence is assumed to be on a national basis. We saw with some local energy retail companies that the licences they had to operate were as if they were operating on an entirely national basis.

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.

We now have in front of us a Bill that really could cut through the problem of how local energy can be produced, generated, transmitted and consumed locally. It is a Bill that every hon. Member with an interest in this area ought to fully support. Having said that, it really should not be promoted by a group of people hoping to get some traction in Parliament. It has not got support from any of the top 20 people in the private Members’ Bill ballot, and is therefore not likely to make progress in Parliament this year. It should be promoted by the Government, who ought to be putting it forward as their plan for community and local energy.

In that context, I continue to be dismayed that there exists no Government community energy strategy. I will not suggest a guessing game for how many mentions of community and local energy were in the recently published energy White Paper, but if anybody were to guess “one”, they would be roughly right. There is no community energy strategy, and it does not look like there will be one in the near future, but we have had them before. Historically, this country has had community energy strategies, such as the one in 2014, which projected that by 2020—meaning now—with the removal of the barriers to community and local energy that I have mentioned, and by putting in place other arrangements to support it, we could have had about 3 GW of energy being supplied by local projects. As hon. Members have mentioned, only around a tenth of that is supplied by brave and dedicated local community energy projects, such as those mentioned by my hon. Friend the Member for Bristol North West (Darren Jones) and the hon. Member for Clwyd South (Simon Baynes), which have defied the odds and pushed forward their projects in hydro, wind and the various other things that are happening locally.

We can no longer be in the position of hoping that some dedicated community activists try to defeat the odds on community and local energy. It needs to be mainstream in Government, with full support and the breaking down of barriers at Government level on the basis of a strategy to really get that community and local energy going for the good of all of us and our communities, as well as for our local energy resources and our low-carbon future overall. I hope the Minister will tell us that the Government intend to start taking that on board and to give local energy the support, promotion and backing that it really needs for the future.