Renewable Energy Projects: Community Benefits

Rupa Huq Excerpts

Tuesday 15th October 2024 Westminster Hall

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

I have been fortunate enough to visit your beautiful constituency, but in my beautiful constituency of Bognor Regis and Littlehampton, we have Rampion 2, a renewable wind farm that is due to go on to the sea closer to land than Rampion 1, with huge environmental and visible impacts. On your point about where the benefits sit, there is currently no requirement for any visitor centre to sit within the constituency impacted by the wind farm. Do you agree that any commercial benefits, such as a visitor centre, which will bring tourism and jobs, should reside in the most impacted constituency?

[Dr Rupa Huq (in the Chair)]

Order. For the benefit of everyone in the room, we avoid the word “you” because it refers to me. I remind all hon. Members that we speak in the third person.

[Mr MacDonald]

It is fair to say that building a visitor centre was not one of my list of key things to do with the money, but I shall add it to my list at around No. 97 —there is a space there. We will talk about this more in a minute, but fuel poverty, affordable housing and so on are probably the key uses for that money at the beginning.

The Lib Dem energy spokesman, my hon. Friend the Member for South Cambridgeshire (Pippa Heylings), has submitted an amendment to the Great British Energy Bill that would allow it to consider community benefits, and I very much hope that her amendment is taken forward.

I had a motion on community benefits passed in the Highland council. I have consulted the electricity generators and Ofgem. I have met Government Ministers here and in Scotland, discussed the issue with most knowledgeable people in all political parties and generally bored everyone I can find with it. There is consensus that it would be fair to require that the impacted rural people of the highlands and islands, of Scotland and of the UK as a whole benefit from bearing the costs of hosting our energy infrastructure.

The Highland council has done the work. It has a social value charter, which it would be pleased to share. The council and I agree on almost all aspects, except that the amount paid to communities should be a percentage of gross income from the projects, rather than £12,500 per megawatt. A percentage would allow communities to benefit from a soaring electricity price, as happened after Russia invaded Ukraine, and protect the project owners and utilities if the electricity price slumped.

Here is my financial proposal: 5% of revenue from all newly consented renewable energy, generated both onshore and offshore, should be paid to community energy funds. For onshore projects, two thirds of that should be paid to the affected council board, with one third paid to a council strategic fund. For offshore projects, all of that 5% of gross revenue should go to a council strategic fund. An existing renewables project should also pay money; I will explain that in a second.

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[Mr MacDonald]

The absolute sweet spot of this entire discussion would be communities’ ownership of their own renewables, which they could control and distribute as they wanted. Indeed, that is happening in some places. Of course access to funding is the big issue, but that is the perfect solution.

Surely, one of our great injustices is that our poorer people, who provide half the energy to the UK, have the highest level of fuel poverty and the highest electricity bills, and suffer the industrialisation of their nearby countryside. Now is the time to resolve that injustice.

[Dr Rupa Huq (in the Chair)]

Members who wish to make a speech should stand, and then we will be able to calculate the time limit. I will begin calling the Front Benchers at 3.28 pm, so there is not a lot of time left, because we have had a lot of long interventions.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

It is a pleasure to serve under your chairmanship, Dr Huq. I commend the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for raising this important matter. Attendance in the Chamber shows just how important this element of GB Energy and the transformation we are going through will be to many constituencies.

I rushed here—via lunch, of course—from the Committee considering the Bill that will establish GB Energy. The Great British Energy Act will be the first Act to pass into law in this Parliament—Labour delivering change within weeks of coming into office. That Act and this transformation will change not only the way we produce power and the impact we have on a burning planet, but the way we live our lives. It could have a transformative effect for communities such as mine.

I commend the Minister for the way he has seized the agenda on GB Energy and seen the potential that the transition could have for places such as Na h-Eileanan an Iar, and the Isle of Eigg in the constituency of the hon. Member for Inverness, Skye and West Ross-shire, which the Minister visited recently. As we move to renewables, we should not forget that we are transitioning away from carbon, and we have to balance the transition with maintaining jobs in the North sea, which are a vital to many economies, communities and families in Na h-Eileanan an Iar.

The focus of the debate, community benefit, is one element of that transition. I prefer to describe and define it as “community share”. When people hear “benefit”, they think they are getting crumbs; when they have a share, they own it and control it. As it happens, my community has become the epicentre for community-owned wind farms in the UK. Community-owned turbines stretch from Barra in the south, to Galson in the north of Lewis. Those community-owned assets bring in millions of pounds each year to the communities that own them. Something like 23.5 MW is produced each year, which is a modest amount, but one that brings £3 million a year to small rural communities. Scotland’s community-owned wind farms provide on average 34 times more benefit payments to local communities than the equivalent privately-owned wind farms. If we do the maths, we can see the potential that community-owned energy schemes have to transform the whole of the UK. What is not to like about them?

Community-owned schemes, which in my community support everything from warm home grants to native tree planting, are a template for what could happen in constituencies across the whole of the UK. For renewal and expansion, these schemes need funding, yes, but primarily access to the grid. For us in the Western Isles, that means getting reserved space, by regulation or legislation, on a planned interconnector—a 1.8 GW subsea cable that will connect us to the mainland and enable turbines swinging in the Atlantic to turn on lightbulbs in Birmingham, the City and many other places.

[Dr Rupa Huq (in the Chair)]

Order. The time limit for speeches will be two and a half minutes, but since the hon. Member did not know that when he began his speech, I cannot hold him to it. However, if he concludes soon, that will be ideal, because there are 15 people yet to speak.

[Torcuil Crichton]

Yes, I will wind up quickly.

There has been an apparent breakthrough, in that three community-owned estates have come together with a plan for a 43 MW wind farm and have been given a connection on the grid. That grid connection is crucial, but so is the massive funding gap that these communities face between getting from concept, through environmental regulation and planning, to connection. That is where GB Energy has a role. I have advocated for a community energy unit within GB Energy to help communities tackle the minefield of financial and regulatory complexities. The Minister cannot snap his fingers and bring GB Energy or a community energy unit into being, but if officials from GB Energy were to shadow and assist those three estates in their efforts over the next two years, we would learn an enormous amount about community energy and create a template that other communities across the UK could follow.

[Several hon. Members rose—]

[Dr Rupa Huq (in the Chair)]

Order. I remind hon. Members to bob, because we are still working out who wants to make a speech and who wants to intervene. There will be a two and a half-minute limit from now on. I call Sarah Dyke.

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[John Cooper]

I resist the invitation to back a land grab, but the hon. Gentleman makes a valid point.

We have a chance now to bake in greater benefits for our communities, and they should be seen, not as bribery to buy off opposition, but as the power giants entering partnership with communities. I still say that our communities need a far greater say over wind farm consents, but the urban-obsessed SNP in Edinburgh and Labour here in this place will not shift.

There is an undeniable whirlwind of change on wind power. We have the chance to reap a positive harvest from that whirlwind for the people living in the shadow of giant turbines and pylons. Let us seize that chance.

[Dr Rupa Huq (in the Chair)]

I am going to keep the time limit at two and a half minutes. If everyone is kind to each other, everyone will get in. A brilliant example will be Polly Billington.

[Ms Polly Billington (East Thanet) (Lab)]

It is a pleasure to serve under your chairmanship, Dr Huq. I was not planning on speaking in this debate, but I am moved to by comments that have been made. I think it is worth while, even in the short amount of time that I have, to remind people that our economy and Britain’s success over decades and centuries has been because of our securing an industrial revolution based on fossil fuels. I welcome the opportunity that we have here to establish a political consensus not to repeat the mistakes of the past, where the poorest end up bearing the brunt of any transformation and the wealth is concentrated in the hands of a few.

I share the sentiments of the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald), who secured the debate, that we need to see an increase in community ownership of our renewables—for very good reasons. He says the major problem is access to funding, but I would say it is only a problem unless we change the rules. I would like us to establish a political consensus on the transformation of the energy market reform so that we can harness what is an endless amount of renewable energy in our communities across the country. His suggestion of a green tariff would need to be in the context of energy market reform because, as has been pointed out by others, there are significant standing charges on people’s energy bills that militate against the kind of transformation we need in our energy sector.

When we have that community benefit, we also need to think very carefully about what powers we give and the governance structures around it, so that communities can choose how they spend the money. There is a clear argument for ensuring that energy revenue is spent on energy challenges in communities—which are often, as has been said, off grid and often some of the most fuel poor in our country. As a representative of three small towns on a very windy coast, I make the observation that there are poor people living in towns and cities, too, and we would not want to establish an energy market that did not recognise that. We should tackle those challenges as well.

I want to make a point about the ways of dealing with or mitigating the impact on our communities. Inevitably—

[Dr Rupa Huq (in the Chair)]

Order. We are finishing at 3.28 pm and there are still loads of people wishing to speak. I call Alistair Carmichael.

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[Several hon. Members rose—]

[Dr Rupa Huq (in the Chair)]

Order. The time limit will now be reduced to two minutes.

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[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Dr Huq. I thank the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) for securing the debate.

The greatest community benefit for people across the north of Scotland, in my constituency and neighbouring constituencies, would be paying less for their energy, along with the investment in jobs that comes with renewable energy. People are reliant on cars, are off grid, are on lower wages and have inefficient housing—that is a fact across the highlands and islands of Scotland. The impact on them of high energy prices is significant: for many, it is a choice whether to heat and eat. We hear that frequently, but it is a fact.

This winter, many communities in my constituency will experience temperatures in negative double figures for many days, which is quite normal. Communities such as Aviemore and Newtonmore are right up in the Cairngorms, where thousands of people live with those temperatures every single year. They understand what it is like to live in a cold, harsh winter climate.

I agree with many points that have been made today. The hon. Member for Na h-Eileanan an Iar (Torcuil Crichton) mentioned community ownership; we have examples of that being progressed in my constituency, which provides huge benefit.

I have a question for the Minister about transmission charges, which have a huge impact on the investment pipeline of these projects. If we do not get investment in these projects, we will miss out on significant community investment and significant community benefit. It cannot be right that people pay more for their energy when it is being bought hundreds of miles away at a cheaper price than they can buy it. That is unacceptable and discriminatory. The rug has also been pulled out from under those communities with the removal of the winter fuel payment for so many people.

[Dr Rupa Huq (in the Chair)]

I call the first of our three Front Benchers: Roz Savage, for the Liberal Democrats.

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[Mark Garnier]

I see; I might have misunderstood what the hon. Member for Inverness, Skye and West Ross-shire said. It is an engineering challenge, but we need to listen to the experts who know what they are talking about. I am not entirely certain that I understand the point that the hon. Gentlemen are trying to make, but if we can underground cables it would be better for communities, certainly if it is cheaper and better for the environment. If that means taking a bit of extra time, we need to get together to think carefully about that.

I will get back to my point about the University of Oxford and Oxford PV. Using that kind of technology, together with community-based power generation, has the potential to reduce strain on the national grid and limit the need for large-scale projects that can disrupt our landscape and our communities.

Through the Energy Act 2023, the previous Government committed to removing barriers to community energy projects by launching a call for evidence. I am interested to hear from the Minister whether the new Labour Government will honour that commitment—perhaps he will share that information with us in his remarks later.

The challenges that we face in transmitting renewable energy, particularly wind power, from areas of generation to areas of demand underscore the urgent need for grid upgrades. The current limitations in grid capacity, most notably the B6 boundary between Scotland and England, have become a major constraint on our energy system. The B6 boundary is the largest single network bottleneck, preventing vast amounts of wind power generated in Scotland from reaching higher-demand areas in England. As a result, we are facing enormous constraint payments, whereby wind turbines are shut down despite being able to generate clean and affordable energy.

That must be the greatest source of frustration for people living in areas of natural beauty such as the highlands and the Shetland Islands. Not only have those people had their landscape blighted but, if the equipment is not working at full capacity, bill payers will be paying for constraint payments in order for the equipment not to generate electricity. For instance, Orkney has some of the most powerful wind turbines in the UK, yet they often have to be turned off simply because the grid cannot handle the energy they produce. That is a glaring example of how our infrastructure is failing to keep up with the energy transition. The highlands and islands are energy-rich regions, but their potential is being stifled by inadequate transmission networks.

I turn to the biggest concern for many residents, which is how the Government will deliver the infrastructure required for a decarbonised energy grid by 2030. I must say to new Labour MPs that at the next general election in just four or five years’ time, all constituents—Labour MPs’ constituents in particular—will ask, “Did you meet your 2030 target?”, “What did you do to my energy bills?”, and “What did you do to the countryside?” Labour Members claim that their plans will save households £300 a year on energy bills, but it seems incredible that that saving will ever be achieved.

I asked in the House when we might receive a full systems cost analysis of Labour’s net zero plans by 2030, but we still have not had a proper answer—the answer given was, “In due course.” We need an answer to the question of how much this will all cost.

Although the Government’s pledge to cut everyone’s energy bills by £300 remains on their website, curiously no Ministers can bring themselves to repeat it. I have no doubt that the Minister would be delighted to do so if he gets the chance—he will have many chances, because I will wind up in a minute. Despite that promise, the actual price of the proposal will put a huge strain on taxpayers.

I have a number of questions for the Government, which I will put to the Minister. What are the full system costs associated with a net zero power grid by 2030? Will the Government confirm that they still plan to save households £300 a year on their energy bills? What baseline are they using—is it from the election? How do they plan to balance the urgent need for rapid decarbonisation with the development of emerging energy technologies? Will they support some of the innovative technologies that I mentioned or ones with longer lead times, such as nuclear? Will they explore alternatives to large-scale pylon construction, such as under- grounding and undersea cables, to protect communities and landscapes? Will they commit at the very least to match the community benefit regime set out by the previous Conservative Government of up to £10,000 off energy bills over 10 years for families in areas that have new energy infrastructure?

How we achieve this transition matters to all our constituents as it affects our natural world, our energy security and everybody’s energy bills. It is essential that it delivers real benefits to the communities most affected by renewable energy projects. We need to ensure that those communities are not just sites for energy generation but true beneficiaries, most importantly through lower energy bills. The Government’s rushed approach risks sacrificing long-term gains for short-term targets, leaving rural communities to bear the brunt of the costs without the promised savings.

The Opposition believe in a balanced approach in which the latest technologies are harnessed, communities are listened to and grid capacity is strengthened without degrading our natural landscape. We should support innovative solutions and new technology while focusing on lower energy bills and decarbonising the energy grid. I look forward to hearing from the Minister, who campaigned like a stalwart in opposition but now finds himself on the Front Bench in government—I congratulate him on his post, by the way.

[Dr Rupa Huq (in the Chair)]

For the second time in the same day, I call the Minister.

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[Mr Angus MacDonald]

I did forget to disclose that I may have a potential conflict of interest, the details of which are on the parliamentary website. I apologise for not saying so before, but I do not think anyone would find it a major such conflict. You did mention—

[Dr Rupa Huq (in the Chair)]

Order. The Minister did; not me.

[Mr MacDonald]

Sorry. The Minister mentioned community benefits, but in rather a weak way. The Members in this room—I think there have been 60-plus of us here—represent the majority of the land mass of Britain. I think the message we are sending loud and clear to the Minister is that we all feel very strongly about the community benefits, and we very much hope they will be significant. Thank you very much for allowing me to host this debate.

Question put and agreed to.

Resolved,

That this House has considered community benefits from renewable energy projects.