Great British Energy Bill Consideration of Amendments, 25th March 2025: The Government’s Community Energy Amendment and the Community Energy Fund
The Great British Energy Bill will enable the Government to establish a Great British Energy company to facilitate more clean energy generation and other measures to reduce greenhouse gas emissions.
During the Bill’s passage through the House of Lords, the Minister, Lord Hunt of Kings Heath, introduced an amendment to ensure the new Great British Energy company facilitates, encourages and participates in local community energy projects. We welcomed this and thank the Government for it. It follows months of public and cross-party advocacy – in both Houses – for the Bill to include support for community energy.
Whilst the amendment aimed to support community energy’s growth in the medium to long term, the sector faces an urgent short term problem: uncertainty over the future of the Community Energy Fund.
Since the fund began in January 2024 it has been a great success and heavily oversubscribed. Around 150 community energy projects have been awarded grants, and yet over 100 more projects fully eligible for funding will not receive it. This is because the initial £10 million allocated is expected to run out by May.
The fund is currently the only substantive mechanism helping community energy grow, yet it has no certainty beyond this year. Clarity over its future is needed to avoid the danger that growth in the community energy sector will go back to the damaging stop-start situation it was in prior to the fund.
When asked by Members of both Houses, Ministers have avoided giving clarity about the future of the fund.
We therefore ask MPs to please attend the debate on Tuesday 25th March and call on Ministers to back up the support shown via their amendment with:
A clear statement addressing the uncertainty over the Community Energy Fund’s future,
Early action to deal with the enthusiasm that the fund has not been able to match, and
Clear instructions on the above in the statement of strategic priorities for Great British Energy, as required by Clause 5 of the Bill.
We ask MPs unable to attend the debate to please write to the Minister for Energy, Michael Shanks, and ask the above questions.
Community Energy and its Huge Potential
In the midst of an energy price crisis when cheap, clean, home-produced energy has never been more vital, there is huge potential nationwide for growth in small-scale renewable energy generation – especially by community groups that organise to provide cheaper, greener power and distribute the benefits locally.
These groups, whose clean renewable generation schemes are referred to collectively as ‘community energy’, present a remarkable opportunity because of the many knock-on local benefits they create.
Community energy schemes currently generate a mere 0.5% of the UK’s electricity. This could grow twentyfold in ten years, according to studies by the Environmental Audit Committee and others. This would power 2.2 million homes, save 2.5 million tonnes of CO2 emissions a year [1], create over 30,000 jobs [2], reduce dependence on energy imports, boost local infrastructure investment, reduce people’s bills, reduce electricity system wastage and drive the public’s appetite for the transition to a sustainable economy.
Furthermore, if done right, Government enablement of community energy’s growth potential will generate Treasury income, due to the widespread possibilities for the professionalisation of the sector.
The Community Energy Fund
The Community Energy Fund was announced by the Department for Energy Security and Net Zero on 11th August 2023 [3] and commenced in January 2024 with £10 million to distribute in grants over two years. It awards modest sized grants to eligible community groups in England for the development of community energy projects, most of them for new renewable energy generation and some for energy efficiency.
It has seen high levels of enthusiasm and engagement. The number of community energy groups applying to it far exceeds its capacity, demonstrating the widespread enthusiasm for community energy projects.
Over 150 community energy projects have been awarded grants, representing over 100 megawatts of new renewable energy generation. However, because the fund’s money is projected to be all gone by May, over 100 additional eligible applications from community groups have had to be turned down.
Because of the above, we are calling for the Government to
ensure the fund continues,
ensure it is able to match the enthusiasm shown by communities for clean energy projects, and
work with the devolved nations to encourage similar support for communities in Scotland and Wales.
The Government’s Position
Despite promising early success, a big question mark hangs over the Community Energy Fund’s future. In response to recent Written and Oral Questions, Ministers have not given the clarity that is needed.
At Topical Questions in the House of Commons on 4th February, when asked by Pippa Heylings MP to clarify the fund’s future, the Secretary of State for Energy Security and Net Zero, Ed Miliband, replied with,
“We are absolutely determined that, as part of Great British Energy, community energy will be massively expanded. That was our manifesto commitment, and that is what we will deliver. Hon. Members around the Chamber have asked how their community can benefit, and community energy will be an essential part.”
At the Great British Energy Bill’s Report stage on 11th February, when asked by several Peers to clarify the fund’s future, the Minister for Energy Security and Net Zero, Lord Hunt of Kings Heath, said,
“Great British Energy will build on the Community Energy Fund by partnering with and providing funding and support to community energy groups to roll out renewable energy projects and develop, as noble Lords have said, up to 8 gigawatts of power. Further details will be set out shortly, but that is as far as I can go tonight.”
And at the Bill’s Third Reading on 25th February, when asked again by Peers, Lord Hunt of Kings Heath said,
“I am afraid I cannot give any more details at the moment, but I understand and take note of what noble Lords have said about the companies concerned. I take this seriously and will ensure that it is considered, and we will set out further details in due course.”
Further details have not yet been forthcoming.
Contact for Further Information
Steve Shaw, Director of Power for People
steve.shaw@powerforpeople.org.uk
[1] Environmental Audit Committee; 2021 – https://committees.parliament.uk/call-for-evidence/406/
[2] The Poverty and Environment Trust, ‘The Call for A Level Playing Field’; https://povertyandenvironmenttrust.org/current-projects