House of Lords Briefing: Great British Energy Bill Committee Stage – Remediating the Absence of Community Energy
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.
Community energy schemes currently generate around 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 thus drive the public’s appetite for the transition to a sustainable economy.
Yet, despite all this, the Great British Energy Bill has no mention of community energy. Critically this means that the company it sets up will have no legislative requirement to support community energy’s growth. Ministers have reassured both the House of Commons and the House of Lords (at Second Reading) of their support for communities taking greater ownership of energy generation, and said that they anticipate that Great British Energy will provide additional support for the sector.
However, there are precedents for Ministers setting up arms-length bodies they say will provide support for a particular area of policy, only for the body itself to fail to do so. The community energy sector has also faced years of stop-start policy that has made it difficult to grow at the rates seen in other countries.
Strengthening the Bill with an amendment to include community energy would give much-needed confidence to the community energy sector and those considering investing in it.
We ask Peers to please support amendments to include community energy in the Bill at Committee Stage on Tuesday 3rd December.
Lord Russell has tabled a number of amendments to Clauses 3 and 5 which would specifically include community energy in the Bill. Baroness Young has tabled an amendment to Clause 5. For your convenience, we have copied these amendments at the end of this briefing.
These amendments all seek to strengthen the Bill in line with the Parliamentary consensus of supporting growth in a highly promising green energy sector. We urge Peers to support them as they see fit, or encourage the Minister to find a workable alternative.
Rationale for Including Community Energy in the Bill
The community energy sector has had a very rough ride over the past six years or so having faced the end of the Feed-in Tariffs that had led to the growth seen during the early 2010s, and thus seeing almost no growth since those tariffs ceased. Whilst other nations have seen community-led renewable energy schemes surge over the last decade, in the UK its total generating capacity has stayed at a tiny 300 megawatts. Ministers saying that Great British Energy will support community energy, but then refusing to put anything in the Bill to ensure that support happens, risks undermining the confidence of the staff and volunteers of the sector and of potential investors.
Unless community energy is in the Bill, future ministers, governments or chief executives of Great British Energy may decide not to pursue it and the full benefits of local energy may not be realised. There is precedent for this, as detailed later in this briefing.
Further to the argument directly above, it was concerning that, when giving evidence to the House of Commons Committee, Great British Energy’s Chair, Juergen Maier, stated that community energy does not have the potential to become gigawatts of renewable generation.[3] This directly contradicts studies that say the exact opposite, including one by the Parliamentary Environmental Audit Committee from the last Parliament, that said community energy generation could increase by around twentyfold over ten years with the right enabling policies, i.e. to around 6 gigawatts. Such comments from the Chair of the company the Bill is setting up show how vital it is that community energy is made a priority for that company in the legislation.
Public and Parliamentary Support
Clear cross-party support for including community energy in the Bill was shown during its Second Reading in the House of Lords on 18th November. Baroness Young (Labour), Lord Russell (Liberal Democrats), Baroness Hayman (Crossbench) and Lord Cameron (Crossbench) spoke in favour. This built on cross-party backing during the Bill’s House of Commons debates. Over 80 MPs signed amendments at Committee stage[4] and Report stage[5] that aimed to ensure one of Great British Energy’s priorities would be supporting community energy’s growth. This was a result of a public campaign, organised by Power for People, and supported by dozens of national charities and NGOs and thousands of local groups.
The Government’s Position
The Labour Party’s election manifesto committed to enabling community energy, saying:
“Great British Energy will partner with industry and trade unions to deliver clean power by co-investing in leading technologies; will help support capital-intensive projects; and will deploy local energy production to benefit communities across the country. … We will invite communities to come forward with projects, and work with local leaders and devolved governments to ensure local people benefit directly from this energy production.”[6]
At the Bill’s House of Lords Second Reading, Lord Hunt of Kings Heath, Minister of State (Department for Energy Security and Net Zero), said:
“One must be very careful not to constrain the ability of GBE in its operational independence and its ability to spot the technologies that need supporting. I do accept, with my noble friend Lady Young, that community energy has huge potential in itself and as a way to leverage public support generally for the kinds of changes that we need to see happen. We certainly believe that GBE will deliver a step change in investment in local community energy projects and will work strongly in partnership with local authorities and community groups to deliver this. I know that local authorities would welcome a much stronger partnership to enable this to happen.”[7]
At the Bill’s House of Commons Report stage, Parliamentary Under Secretary of State for Energy Security and Net Zero, Michael Shanks, responded to the debate and community energy amendment with:
“We have been advocating for community energy for decades—this is not a new idea for us—and empowering communities is critical. The hon. Lady [Pippa Heylings MP] and I share that passion and a commitment to community energy. I can assure the House that the Department is looking to take a cross-government approach—not just through Great British Energy but, crucially, on a number of the points that have been made—to ensuring that community energy projects can be delivered, with all the changes to planning and governance that are required to make that happen.”[8]
This was a welcome shift from the Minister’s stated position during the Bill’s House of Commons Committee, at which he said that he did not think including community energy in the Bill was appropriate.
Furthermore, at the same debate, Secretary of State for Energy Security and Net Zero, Rt Hon Ed Miliband said the following in his closing words,
“I know that many Members of the House are passionate about the issue of local power, so let me reassure them that the Government are committed to delivering the biggest expansion of support for community-owned energy in history.”
Pertinent Precedent – OFGAS Director General’s Refusal to Follow Ministerial Intentions
Clare Spottiswoode was the Director General of OFGAS from 1993-1998. After the Rio Summit in 1992, Michael Heseltine set out Government policy to reduce carbon emissions, called "Climate Change: the UK Programme". It contained a number of proposals to cut carbon emissions, with the largest share of the cuts to be delivered by a new public-private body called the "Energy Saving Trust" (EST), which was tasked with 25% of the required cuts (2.5 million tonnes of carbon).
EST programmes were to be funded in equal parts by the electricity and gas regulators, and the head of the EST – ex-Conservative Minister, Lord Moore – said the EST would need £1.5 billion to deliver the cuts.
After a seven month delay in looking at the proposal, Clare Spottiswoode announced in February 1995 that the EST would not fund the vast majority of it. She told a Parliamentary Committee that her predecessor, James McKinnon, who had funded some programmes, did not have legal authority to have done so and that nor did she. Much public disagreement ensued, eventually leading to Ms Spottiswoode apologising to Mr McKinnon and a Parliamentary Committee, but she never backed down. The EST never received the funding required to make the carbon reductions Ministers wanted from it.
The episode shows the clear risk of the law not containing a requirement for Great British Energy to consider how different models of ownership – including community energy – can help deliver a clean energy system. While we welcome Ministers’ repeated reassurances that GBE will promote the community energy sector, we want to avoid any risk of an arms-length body similarly frustrating the Government's policy aims.
We of course hope that Great British Energy will take community energy seriously and we fully accept the Government's argument that the terms of reference it is being set up under allow it to do so. But history shows that an arms-length body being "allowed" to do something is not the same as it being required to. This, added to the comments from the company’s Chair, Juergen Maier, on community energy not being a substantial part of the solution, clearly shows that the Government needs to be more robust.
Amendments Tabled by Lord Russell at the Time of this Briefing
Clause 3, page 2, line 14
at end insert “including from schemes owned, or part owned, by community organisations,”
Member's explanatory statement
This amendment includes community energy in the objects that the Great British Energy company will be restricted to facilitating, encouraging and participating in.
Clause 3, page 2, line 18
at end insert—
“(e)measures to increase low carbon and renewable energy schemes owned, or part owned, by community organisations.”
Member's explanatory statement
This amendment includes community energy schemes in the objects that the Great British Energy company will be restricted to facilitating, encouraging and participating in.
Clause 5, page 3, line 8
at end insert—
“(1A)The statement of strategic priorities under subsection (1) must include a priority to advance the production of clean energy from schemes owned, or part owned, by community organisations.”
Member's explanatory statement
This amendment requires the advancement of community energy to be included in the strategic priorities.
Amendment Tabled by Baroness Young at the Time of this Briefing
Clause 5, page 3, line 8
at end insert "which in his or her opinion will assist the reduction of greenhouse gas emissions, improvements in energy efficiency, the security of energy supplies and a more diverse ownership of energy facilities (including community ownership) that benefit people and communities.”
[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
[3] https://parliamentlive.tv/event/index/50e500a7-c82d-4742-9745-3d731f366373
[4] https://publications.parliament.uk/pa/bills/cbill/59-01/0005/amend/gb_energy_day_pbc_1010.pdf (top of page 2)
[5] https://publications.parliament.uk/pa/bills/cbill/59-01/0005/amend/gb_energy_day_rep_1029.pdf (top of page 4)
[6] Labour Manifesto, pages 53-54 https://labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-2024.pdf