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Community Energy Schemes — [Mr Clive Betts in the Chair]
30 November 2021
Lead MP
Wera Hobhouse
Bath
Lib Dem
Responding Minister
Greg Hands
Tags
Energy
Word Count: 13535
Other Contributors: 16
At a Glance
Wera Hobhouse raised concerns about community energy schemes — [mr clive betts in the chair] in Westminster Hall. A government minister responded.
Key Requests to Government:
The member asks the Minister to commit to including the Local Electricity Bill in future energy legislation and to outline any potential distortions or unintended consequences of changing the rules. She also requests a meeting with government officials to work constructively on improving the bill.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
The member is concerned about the lack of progress in community energy schemes, noting that only 278 MW of electricity generation capacity has been achieved since 2016. She highlights that no existing community energy group in the UK can sell its electricity directly to local customers due to outdated licensing rules. The speaker also points out that Licence Lite, established in 2009, has only resulted in three geographically-based energy supply licences being granted.
Alan Brown
SNP
Clyde
He commended the debate's focus on community energy and its benefits for net zero and local empowerment. He highlighted barriers such as high setup costs, outdated regulations, and removed feed-in tariffs hindering projects. He supported the Local Electricity Bill to facilitate alternative solutions and reform grid charging systems. Brown pointed out that community energy currently accounts for less than 0.5% of UK total but has potential for significant growth. He also mentioned Scottish Government progress undermined by UK cuts, urging urgent action.
Alan Whitehead
Lab
Southampton Test
Supports the idea of a local community energy Bill, highlighting that people should be able to sell locally produced energy. Criticizes current barriers such as planning permission costs and grid constraints. Emphasises the need for positive government support and changes to the grid system to facilitate local energy projects.
Alistair Carmichael
Lib Dem
Orkney and Shetland
The difficulty in promoting community energy may lie with Ofgem, which is not enthusiastic about market diversity; Orkney and Shetland have high fuel poverty rates and excess renewable energy that could be better utilised.
Ben Lake
PC
Ceredigion Preseli
The hon. Member for Ceredigion Preseli supported the notion of community buy-in, arguing it could lead to a better understanding among consumers about energy generation and potentially bring about beneficial behavioural changes.
Caroline Lucas
Green
Brighton, Pavilion
Community energy should be seen as a core part of the energy mix rather than an add-on, highlighting Germany's success in fostering community-owned energy companies through rights to sell energy to others. Ms Lucas highlighted the need for community energy generation to decarbonise the UK power system by 2035. She cited a report from the Environmental Audit Committee which stated that the sector could grow up to twenty times by 2030 and power more than two million homes, saving 2.5 million tonnes of CO2 annually. She pointed out that community energy generation currently accounts for less than 0.5% of total UK electricity production and there has been no growth in the past six years due to outdated regulations.
David Johnston
Con
Wantage
The hon. Member for Wantage expressed support for community energy, highlighting its importance in bringing people onboard for the transition to net zero and ensuring that local benefits are reaped from renewable energy projects.
Hilary Benn
Lab
Leeds South
The Government's argument that new suppliers can enter the market is challenged by the fact that only three Licence Lite applications have been granted since 2015 and none has been applied for since 2019, suggesting a need for changes to make it easier for new suppliers. The hon. Member for Leeds South highlighted the difficulties faced by those wishing to contribute to renewable energy generation, citing issues with grid connection and the need for a different model of energy distribution. He suggested that community buy-in could facilitate easier approval for infrastructure projects and referenced examples from Germany as evidence that such models can be successful.
Jeremy Wright
Con
Kenilworth and Southam
While the right to local energy exists, financial obstacles make it difficult for communities to pursue this option, akin to having a legal right to buy a Ferrari but lacking the means to do so.
Jim Shannon
DUP
Strangford
Emphasised the importance of community energy schemes for local electricity strategies and renewable energy provision. Highlighted Northern Ireland's limited number of community energy organisations compared to the rest of the UK, citing cost as a major barrier for investment. Called for a sustainable plan to support community energy projects. The hon. Member for Strangford mentioned a small tidal scheme in Newtownards that helped reduce costs and keep the club running, suggesting this process could be replicated across the UK.
Carmarthen East and Dinefwr
Communities often oppose renewable energy projects, particularly onshore wind. Ownership by the community can help address this concern and bring people along with the transition to net zero.
Clive Betts
Lab
Sheffield South East
Mr Betts, intervening on Ms Lucas, emphasised that reinforcing the grid is crucial for community energy projects and other initiatives to succeed. He stressed that without improvements to the grid infrastructure, efforts in local electricity generation would not materialise.
Local energy generation can enhance resilience against climate change-related power outages and contribute to meeting emissions targets.
Noted that widespread adoption of electric vehicles in Northern Ireland could strain the grid and suggested local generation for charging networks as a solution, referencing successful models in Israel and America.
Peter Aldous
Con
Waveney
The hon. Member for Waveney agreed with the need for more diverse players in the energy market, suggesting that smaller suppliers could be part of a solution to future energy demands. He emphasised the importance of community energy in local contexts. He highlighted the need for regulatory reform to support community energy schemes, suggesting Ofgem should provide guidance and establish a right to supply. He also pointed out that deployment of community energy projects was at a record low last year. Expressed gratitude to the Minister for outlining obstacles and asked if he and the Government are committed to overcoming those obstacles so as to achieve tangible progress when they reconvene in a few months.
Selaine Saxby
Con
North Devon
Local energy supplies could support local jobs, fund new facilities in communities, and contribute to more renewable energy infrastructure. Currently, community energy generates 0.5% of our electricity, but it has the potential to grow by at least 20 times by 2030.
Clause 3 of the Bill, which would require Ofgem to ensure regulation is proportionate to the size of local generators' operations, could significantly increase the percentage of community energy projects that succeed.
Government Response
Greg Hands
Government Response
Let me begin by congratulating the hon. Member for Bath (Wera Hobhouse) on securing this important debate, and for pre-submitting the three questions that I will answer during the course of my speech...I am committed to examining the obstacles and speaking to my hon. Friend; I know his long-standing interest in this, as indeed in all energy questions—he is the Mr Energy of East Anglia. I am very happy to continue to engage with hon. Members, to look at the obstacles and to see what can be overcome, ameliorated or worked around.
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About Westminster Hall Debates
Westminster Hall debates are a chance for MPs to raise important issues affecting their constituents and get a response from a government minister. Unlike Prime Minister's Questions, these debates are more in-depth and collaborative. The MP who secured the debate speaks first, other MPs can contribute, and a minister responds with the government's position.