Community Energy Schemes

Jim Shannon Excerpts

Tuesday 30th November 2021 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

Thank you, Mr Betts, for giving me the chance to speak. I thank the hon. Member for Bath (Wera Hobhouse) for setting the scene for us all, and I praise the hon. Lady for her sterling efforts in bringing the community energy debate to the Hall. The fact that so many have turned up is an indication of the interest in the topic. I spoke in the Westminster Hall debate on enabling community energy that she secured in July, which was chaired by the late Sir David Amess, and I am pleased to be back here to reiterate the benefits of community energy schemes. I thank all right hon. and hon. Members for their contributions, whether interventions or speeches. I am also particularly pleased to see the hon. Member for Ceredigion (Ben Lake) in his place. He had an Adjournment debate on this very issue, which was well attended as well. If he is going to make a contribution, I look forward to it. I hope to be, as we often are, on the same page.

I want to emphasise the importance of allowing local communities the opportunity to advance their own electricity strategies. Perhaps those come at a cost, but a community approach should be at the forefront of any decarbonisation effort. That is where the initiative and inventiveness comes from, and a community approach has the potential to drastically increase renewable energy provision. It may be of interest that currently there is no strategy to target the enabling of community energy. Brief overviews have been discussed, but if we want to focus our efforts on empowering community energy, surely we must have a sustainable plan to do so. I look forward to the Minister’s response, because he always gives us something to hang on to—we look forward to that contribution.

I mentioned in the previous debate that the United Kingdom has witnessed the emergence of 424 community energy organisations. It saddens me to say that Northern Ireland has only two, which is very disappointing. The opportunity for that simply has not been within our reach. There is a reason for that. Community Energy NI and the Fermanagh Trust do much-needed work raising awareness of the benefits of community energy. Their website states:

“Community energy projects also offer an opportunity to help secure the long term financial sustainability of community organisations.”

That is crucial, given that many community organisations have a high dependency on grant funding.

In my office, and I am sure those of all Members, there is massive interest in clean energy, net-zero carbon targets and the need for a better future for our children and grandchildren. Those are the things that motivate us. My mailbag and email accounts are full of such requests and suggestions. We need to have a sustainable plan in place, so that we can move forward. It is safe to say that cost is a huge factor in putting energy companies off investing in localised schemes. Green Alliance has stated that the number of new community energy projects in England, Wales and Northern Ireland has fallen dramatically since 2015, with only one in 2017. I think the right hon. Member for Leeds Central (Hilary Benn) said that there were none at all in 2019.

We are also falling behind most European countries in terms of community energy. If our colleagues and friends in the rest of Europe are doing it there may be something that we can learn from that, and perhaps we can add that expertise to our process. A recent survey showed that 11 million households could be producing or storing their own energy in the UK by 2030, compared with only 1 million today. That is a big target to meet, but it is achievable. Returning to my earlier point, that cannot be done without support from our Government and the Minister, and the availability of grants, to get the idea brought together—the kernel of thought—and make it physically happen.

On regulation, the Local Electricity Bill establishes a right to local supply, ensuring that local energy is financially viable and creates local economic resilience across the United Kingdom of Great Britain and Northern Ireland. However, the Bill, as I mentioned in July, does not extend to Northern Ireland. I know that the Minister is always keen to encourage us in Northern Ireland, so perhaps he could give us some idea of what we can do to make that happen. I encourage him to engage with his counterparts in Northern Ireland—the Economy Minister, Gordon Lyons, and in more rural instances the Minister in the Department of Agriculture, Environment and Rural Affairs, Edwin Poots, both of whom represented Northern Ireland in the recent COP26 talks, where they made a significant contribution. It is important that we are part of that.

I am encouraged that more elected representatives are being lobbied by their constituents to get involved in the energy debate. That is exactly what has happened in my mailbag and the contacts that I have had. I welcome the opening remarks of the hon. Member for Bath. We must ensure that the correct funding for community energy schemes is allocated accordingly, and that all regions of the United Kingdom of Great Britain and Northern Ireland can benefit. Such strategies ultimately pave our way to future economic success. Not only do they inspire organisations and individuals to engage with smaller localised companies as opposed to larger and more populated financial and energy firms, but they have a role to play, which we need to encourage, and I look to the Minister to do just that.

--- Later in debate ---

[Alan Brown]

I completely agree. Actually, that touches on the point made by the hon. Member for Leeds Central that we have a grid system and a grid charging system still fundamentally based on where coal-fired power stations or nuclear power stations are sited. That needs a complete overhaul. I may touch on that a wee bit later.

[Jim Shannon]

Strangford Lough Wildfowlers and Conservation Association in Newtownards came up with a small tidal scheme, which, with a small grant, generated some electricity for its use. The scheme has allowed the club to reduce its costs and keep running. That same process could be used in many cases across the whole of the United Kingdom. Has the hon. Gentleman got any similar examples?

[Alan Brown]

The hon. Member gives a good example. I do not have any specific ones to hand, although I will touch later on how some community energy projects have been held back because of the removal of the feed-in tariff.

It is clear that hon. Members are agreed on the importance of community energy generation, and I am sure that the Minister will stand up and say that he agrees with it as well. The key thing is not just agreeing with the principle but taking action to facilitate the growth of community energy projects.

I, too, am a signatory to the Local Electricity Bill, and I pay tribute to Steve Shaw for his campaigning, dedication and ability to get so many local authorities on board behind the Bill, as well as 282 MPs and 77 national organisations, including the Energy Saving Trust, Good Energy, Forum for the Future, the New Economics Foundation, ResPublica, Solar Energy UK, the British Hydropower Association, Triodos bank, the Transition Network, the Royal Society for the Protection of Birds, Friends of the Earth, the Wildlife Fund for Nature, Greenpeace and ClientEarth. That in itself suggests that the Bill is a good thing and should be implemented.

If we look at the energy retail market, we see how badly it is struggling. We just saw Bulb—the seventh largest company, with 1.7 million customers—go bust, so it is clear that we need alternative solutions for the provision of electricity. Clearly, local powering will not replace an organisation such as Bulb overnight, but, as I say, it is logical to try to facilitate local community-based renewable energy where possible.

Changing the regulations to make new community renewable energy businesses viable allows communities to bypass the large utility companies. It means significant additional value for local economies and, as we have heard already from other hon. Members, more money will then circulate in the local economy, leading to more skilled jobs, more viable local businesses and stronger local economies. As I touched on earlier, it empowers local people and companies to be part of the green revolution and part of the pathway to net zero. That can only help to focus minds and create the general buy-in for the need for collective action to tackle climate change.

Evidence suggests that community energy generation currently accounts for less than 0.5% of the UK total. It has been suggested that it has the potential to increase tenfold over a six-year period. As we have heard, figures from the Environmental Audit Committee suggest it could be a twentyfold increase by 2030. That would more than offset the need for new nuclear power generation, and it is something that the Government need to consider.

The Scottish Government have made strong progress towards community energy, but their efforts have been undermined by UK Government cuts. The Scottish Government had a target for 500 MW of community and locally-owned energy by 2020, which was exceeded and then increased to 1 GW by 2020. They have now doubled the target to 2 GW for 2030. Progress towards the bigger target has been positive, but, as I touched on in response to the intervention from the hon. Member for Strangford, the removal of feed-in tariffs has hindered the growth of those projects. There is a project in my constituency that never got off the ground because of the removal of the feed-in tariffs. By taking away those tariffs, the Government are blocking community energy projects, and they are not doing enough to help facilitate them in a different way so as to allow the sale of energy. That is why urgent action is needed.

The Scottish Government published an updated local energy policy statement in January. Of course, community energy projects in Scotland are further hampered at the moment by Scotland having the highest grid charges in Europe. Lucy Whitford, managing director of Renewable Energy Systems UK and Ireland, has said that

“it doesn’t feel as if charging is fit for purpose anymore for us to deliver net zero. We have worked up some examples of network costs. The additional cost per annum of a 22 MW wind farm in Argyll versus one in Essex could be £500,000. Continuing in the current direction of travel on charging reforms could add another £120,000 per year to a project, so it is very significant.”

That is why I have been calling for reform of the grid charging system.

At the moment we have the cost of living crisis, and the energy cap will increase by between £400 and £600 in April. We have the retail energy market in crisis, with 23 companies going bust since August. In 2018 there were more than 70 companies in the market, but now there are fewer than 30, so Government action is needed to reform the sector.

Meanwhile, the Tories have managed to find £1.7 billion to further develop proposals at Sizewell C, and they want to commit bill payers to a regulated asset base payment contract that will last for 60 years on top of the 10 to 15-year construction period. That is madness. The money would be much better spent on community energy growth, as we have discussed. The Local Electricity Bill is an alternative that will not cost the taxpayer or the consumer any money. In fact, it is intended to help create lower local energy costs. Like other hon. Members, I urge the Government to consider supporting the Local Electricity Bill and, if need be, work on a cross-party basis to improve the Bill and get it to a place where everybody is happy with it.