Community Energy Schemes

Debate between Jonathan Edwards and Selaine Saxby

Tuesday 30th November 2021 Westminster Hall

[Selaine Saxby (North Devon) (Con)]

It is a pleasure to serve under your chairmanship, Mr Betts. Congratulations to the hon. Member for Bath (Wera Hobhouse) on securing today’s important debate.

I want hon. Members to imagine a future where they can purchase clean electricity directly from a local supplier that is owned and run by local people. Storm Arwen this weekend certainly demonstrated the power of the elements back home in North Devon. As we transition to net zero, we need to harness more of our renewable energy resources as efficiently and rapidly as possible. Local energy supplies have the additional community benefits that every pound spent powering our homes or cars could support local jobs, help fund new facilities in our communities and contribute to more renewable energy infrastructure. That future is within reach and realising it is vital if we are to ensure that the British public welcome and benefit from our transition to net zero.

We have made great strides in decarbonising our economy. Our greenhouse gas output is 51% lower today than it was in 1990. Currently, renewable electricity accounts for 14% of our total energy use and that is set to rise significantly as we further decarbonise and build up our energy security. I very much hope that floating offshore wind generated in the Celtic sea will be part of that in the not-too-distant future. Achieving net zero presents the serious challenge of growing our electricity generation at least twofold, so that transport and heating can be decarbonised, and building the renewable generation infrastructure to power it.

[Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)]

Is that not the key point? We need to increase our renewable generation of electricity, but the reality is that where there are projects, especially in rural areas, there is often a fair bit of opposition, above all when it comes to onshore wind. One way of addressing that concern is that if communities believe they will have ownership of and the benefit from that development, that will bring people with us. To achieve our ambitious targets, we must take people with us, and that is one way of doing so.

[Selaine Saxby]

I agree entirely with the hon. Gentleman’s point. It is an opportunity to bring our communities with us on this journey, which is so vital to the whole purpose of the Bill and its objectives. In the face of soaring international gas prices and global energy pressures, surely we should be welcoming that challenge.

There is remarkable potential for community energy and renewables schemes owned and run by local people in helping us reach net zero on time. As the hon. Member for Bath said, currently community energy generates around 0.5% of our electricity. As the Environmental Audit Committee showed in its recent community energy inquiry, by 2030 community energy could grow by at least 20 times, powering 2.2 million homes and saving 2.5 million tonnes of CO₂ emissions every year. Other countries such as Germany already have more than 1,000 supply companies, compared with just 50 here in the UK. One does wonder what is stopping us doing that already.

Currently, the energy market rules lead to costs—the Ferrari costs—that make doing that impossible. The financial, technical and operational burdens involved in setting up a licensed energy supply company mean that initial costs exceed £1 million. It is like setting up a micro-brewery, planning to deliver beers to local pubs, restaurants and homes, and then being told to pay £1 million in road tax for a delivery van because it is using the national road network. The business would never be started. To realise community energy’s huge potential, we need to enable current and future schemes to sell their power direct to local consumers. That requires making the cost faced in selling power proportionate to the size of an energy business. New community energy schemes would then be financially viable and their enormous potential would be realised.

The Local Electricity Bill, which I am proud to co-sponsor, and which enjoys the support of 282 MPs—another joined this weekend—would do that. The Bill would improve the market rules to allow community energy schemes to flourish alongside larger suppliers. I look forward to working on the Bill, so that it can be another proud stride in our decarbonisation journey and quite literally deliver local power to the people.