Community Energy Schemes — [Mr Clive Betts in the Chair]

Part of the debate – in Westminster Hall at 2:50 pm on 30 November 2021.

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Photo of Selaine Saxby Selaine Saxby Conservative, North Devon 2:50, 30 November 2021

I agree entirely with the hon. Gentleman’s point. It is an opportunity to bring our communities with us on this journey, which is so vital to the whole purpose of the Bill and its objectives. In the face of soaring international gas prices and global energy pressures, surely we should be welcoming that challenge.

There is remarkable potential for community energy and renewables schemes owned and run by local people in helping us reach net zero on time. As the hon. Member for Bath said, currently community energy generates around 0.5% of our electricity. As the Environmental Audit Committee showed in its recent community energy inquiry, by 2030 community energy could grow by at least 20 times, powering 2.2 million homes and saving 2.5 million tonnes of CO2 emissions every year. Other countries such as Germany already have more than 1,000 supply companies, compared with just 50 here in the UK. One does wonder what is stopping us doing that already.

Currently, the energy market rules lead to costs—the Ferrari costs—that make doing that impossible. The financial, technical and operational burdens involved in setting up a licensed energy supply company mean that initial costs exceed £1 million. It is like setting up a micro-brewery, planning to deliver beers to local pubs, restaurants and homes, and then being told to pay £1 million in road tax for a delivery van because it is using the national road network. The business would never be started. To realise community energy’s huge potential, we need to enable current and future schemes to sell their power direct to local consumers. That requires making the cost faced in selling power proportionate to the size of an energy business. New community energy schemes would then be financially viable and their enormous potential would be realised.

The Local Electricity Bill, which I am proud to co-sponsor, and which enjoys the support of 282 MPs—another joined this weekend—would do that. The Bill would improve the market rules to allow community energy schemes to flourish alongside larger suppliers. I look forward to working on the Bill, so that it can be another proud stride in our decarbonisation journey and quite literally deliver local power to the people.