The Government has made great strides on the path to Net Zero by 2050, and is investing more and more in renewable energy sources. Since I have been elected, I have been working to bring the benefits and opportunities of the growing renewable energy industry to the south west and North Devon. I established the All Party Parliamentary Group for the Celtic Sea, which is a crucial part of the Government’s goal to generate 50GW of offshore wind by 2030.
I have been working with Power for People on the Local Electricity Bill and raised the Bill both directly with the Climate Minister, Graham Stuart and in the House at the end of last year. The Energy Bill is currently in the Lords and Amendments 237 and 238 support community energy generation in the UK. To support these amendments, and to give them the best chance of coming to the Commons with the rest of the Bill, I wrote to Peers to urge them to speak on the amendments and show the Government the depth of support for community energy.
When the Bill was debated just before Christmas recess, I was delighted to see some of these Peers debate in favour of the amendments. This was a major step to seeing them incorporated into the Bill. I hope that they will make their way down to the Commons, and once the Energy Bill arrives in with us, I will be speaking in support of community energy.
Community energy is currently an untapped form of energy generation, that has huge potential to reform our energy markets. It currently accounts for less than 0.5% of the UK’s electricity generating capacity, it is estimated that given the right regulatory support it could increase ten fold over a six year period. For instance, there are 1000 supply companies in Germany, most of which supply renewable energy. As a result, Germany’s four largest utilities only control 40% of the market.
Alongside being a renewable energy resource community energy brings fantastic opportunities to local communities. They bring significant additional value to local economies and brings more skilled jobs, more viable local businesses and keeps more of the money spent on energy bills in the local community. It would also decrease the UK’s reliance on the global energy market and increase our energy security.
However, the current energy market and licensing rules lead to local supply costs that are insurmountable. As it stands the financial, technical and operational challenges involved in setting up a licensed energy supply company mean that initial costs exceed £1 million. The heart of the problem is that local energy suppliers have to abide by the same process as larger suppliers, there is no proportionate system for smaller suppliers.
Power for People is calling for a ‘Right to Local Supply’, this would give Ofgem the statutory duty of establishing new market rules. These rules would be proportionate, so that the setup and running costs of locally generated for renewable energy are proportionate to the scale of the business.
Amendment 237 to the Energy Bill would provide guaranteed income for electricity generated by small-scale renewable energy generators. This would be set by Ofgem, and ensure that communities are properly remunerated for their energy generation. Amendment 238 would create Electricity Supplier Services Scheme so that companies can sell their electricity directly to the local community. Companies will be able to offer lower tariffs to the local community to incentivise uptake and local investment in the business.