MP Briefing: Great British Energy Bill Second Reading - Enabling Community Energy
Below is our briefing on why the Government’s new Great British Energy Bill should include community energy, requesting that MPs call on energy ministers to commit to this change.
Community Energy’s 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 provide cheaper, greener power and distribute the benefits locally.
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.
The Blockage
Community energy schemes could grow rapidly if enabled to sell power that they generate directly to local customers. But, although legally allowed, they face insurmountable costs when trying to do so. Estimates of financial, technical and operational requirements involved put initial costs in excess of £1 million.[3]
The barriers mean that not one single community energy scheme sells their power directly to local customers. Previously, schemes could plan knowing the income they would receive from OFGEM’s Feed-in Tariffs. When that scheme closed to new applicants in April 2019, many planned community energy generation projects were scrapped and there has since been a collapse in growth.
The Solution
Community energy schemes need to receive a guaranteed, fair price for the clean electricity that they contribute to the energy system. If the costs of selling their power to local households and businesses were made proportionate many more community energy schemes would be financial viable, ensuring that they remarkable growth potential, as stated above, would be realised. The Great British Energy Bill is the ideal place to ensure this by adding community energy to as one of GB Energy’s objects in Clause 3.
We therefore ask Members to please attend the debate on Thursday 5th September
and call on the Minister to commit to including community energy in the Bill.
Public Support
A public campaign for the above solution received support from over 320 MPs in the last Parliament and is backed by 105 Local Authorities and 101 national organisations including the National Trust, the Church of England, CPRE, the Energy Saving Trust, RSPB, WWF, Greenpeace and Friends of the Earth.[4] In addition, four of the six Distribution Network Operators (the UK’s regional energy grid monopolies) – Electricity North West, SP Energy Networks, UK Power Networks and Western Power Distribution – are supportive.
The Government’s Stance
The new Government have already said repeatedly that they want to enable growth in community energy – see below – which we welcome. This Bill provides the opportunity to ensure it happens.
Michael Shanks MP, Parliamentary Under-Secretary of State at the Department for Energy Security and Net Zero, ‘Making Britain a Clean Energy Superpower’ debate, House of Commons, Friday 26 July 2024:
“One of the missions of GB Energy will be around the idea of community-owned power. We have to bring two things together: we want communities to be in the driving seat of much of this in the future, but also to have some sense of ownership of the assets. … There is real appetite for that, and it is some of the early work that GB Energy will do.”
Great British Energy founding statement, 25th July 2024
“And we will be investing in community-owned energy generation, reducing the pressures on the transmission grid while giving local people a stake in their transition to net zero. … the Local Power Plan will roll out small and medium-scale renewable energy projects, using established technologies, to develop up to 8 GW of cheaper, cleaner power…
“The Local Power Plan will help crowd in investment while ensuring benefits flow directly back into local communities. This increased investment will create thousands of skilled, clean energy jobs across the country and change communities for the better. To support local and combined authorities, and community energy groups in accessing funding, the Local Power Plan will also provide commercial, technical and project-planning assistance, increasing their capability and capacity to build a pipeline of successful projects in their local areas.”[5]
Great British Energy's three initial priorities
“Great British Energy will have three initial priorities working alongside private partners … 3. Scale up municipal and community energy: GB Energy will partner with energy companies, local authorities and cooperatives to develop 8GWs small-scale and medium-scale community energy projects. Profits will flow directly back into local communities to cut bills, not to the shareholders of foreign companies. This will help to create a more decentralised energy system, with more local generation and ownership, and will help to create a more resilient energy system.”[6]
For Further Information
For a more detailed briefing, or to discuss any of the above contact:
Steve Shaw, Director of Power for People
steve.shaw@powerforpeople.org.uk
07788 646 933
[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] IPPR, ‘Community and Local Energy’; https://www.ippr.org/files/publications/pdf/community-energy_June2016.pdf
[4] full list at www.powerforpeople.org.uk