Enabling Community Energy

Mick Whitley Excerpts

Thursday 1st July 2021 Westminster Hall

[Mick Whitley (Birkenhead) (Lab) [V]]

It is a pleasure to serve under your chairmanship, Sir David. I thank the hon. Member for Bath (Wera Hobhouse) for securing this important debate.

The question of energy cannot be separated from the survival of our planet. That is why today’s discussion is so vital and why I welcome the broad cross-party support for community energy and the Local Electricity Bill. Energy production and consumption both lie at the heart of our battle to combat climate change. To win the battle we need to meet the targets we have set for cutting carbon emissions. The UK Government have now set in law a cut in emissions of 78% by 2035, bringing us more than three quarters of the way to net zero by 2050. To help us meet the target we need to put the Local Electricity Bill back on the agenda.

The Bill could establish a vital local supply that would give the energy market regulator, the Office of Gas and Electricity Markets, the legal duty of establishing new market rules that could help community energy growth. The cost of setting up organisations that sell locally generated renewable energy to local people, together with their running costs, should be proportionate to the size of the business. That reform would make local projects financially viable, unleashing the huge potential of community renewable energy. This has been shown to work in other countries. In Germany, there are 1,000 such supply companies, most of which are local community-owned suppliers, and almost all provide renewable energy.

In the UK, the slow but steady growth of the community energy sector has brought tangible results, with local organisations now serving more than 358,000 people. But further growth is blocked because of cost. A report by the Institute for Public Policy Research stated that the financial, technical and operational challenges involved in setting up a licensed energy supply company mean that the initial costs exceed £1 million. Most community energy companies cannot afford that. Yet providing community energy organisations with the right financial and legislative support could result in a huge expansion of renewable electricity generation.

The Community Energy 2030 Vision estimates that with such support the growth of the community sector could power more than 2 million homes, create up to 9,000 well-paid and highly skilled jobs, shave millions off the cost of domestic bills, and contribute almost £2 billion to the economy every year. We need to unleash that potential. The Committee on Climate Change states that the UK is way off track to reach its greenhouse gas emissions reduction targets. Renewable energy generation currently accounts for only 11% of all UK energy use. That must change. The extension of community energy production can help us move faster to our goals.

I want to end by supporting the recommendations of the April 2021 Environmental Audit Committee, which outlined a positive way forward: remove the barriers to the development of community energy by passing the Local Electricity Bill into law; support the vital role that community energy plays in achieving net zero carbon emissions; and give practical support to the community organisations that help us achieve our targets.

As COP26 moves ever closer, let us ensure that the UK catches up with our neighbours, such as Germany. Let us help community energy to generate electricity for our children and grandchildren. If we miss our target, we are putting those future generations at grave risk of a climate breakdown.