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

Part of the debate – in Westminster Hall at 3:29 pm on 30 November 2021.

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Photo of Alan Whitehead Alan Whitehead Shadow Minister (Department for Business, Energy and Industrial Strategy) (Energy and Climate Change), Shadow Minister (Business, Energy and Industrial Strategy) 3:29, 30 November 2021

The hon. Member is absolutely right. It is not particularly difficult to overcome these problems. I am emphasising this deep mindset of how the grid works that has been with us for a long time. The hon. Members for Strangford (Jim Shannon) and for Kilmarnock and Loudoun (Alan Brown) mentioned the fact that the grid was designed for a bunch of providers to produce x amount of energy, which would go through the grid until it got to a lightbulb. The world is completely different these days, but the grid still operates as if that were the case. That is inimical to the success of local energy projects.

As the hon. Member for Bath says, it would not be difficult to fix that, but there is a problem. Ofgem and, to some extent, the Department are particularly concerned that if we start dismantling the grid in its old system and localise it to enable the development of local energy in the way we have discussed, there could be distortions in that original system. I suspect the Minister will talk about some of those distortions, but let us be clear: they are distortions to an old system that does not work. We actually need those distortions to come into place to make the new, low-carbon overall renewable system work in the first instance. Making local energy work in that context is a very important change we need to make.

We need to make these changes to the system as a whole. We need to get the grid on to a much more friendly basis for local energy. We need to make the possibility of local energy much more real in terms of the hurdles it needs to overcome before it can get going. We need to have positive Government support for the development of expertise and the assistance and support that local energy schemes need to go ahead. That particular area, with the preponderance of volunteers in the local energy system, would be really good to have as a draw-down arrangement for local energy for the future.

Yet again we are meeting with the idea that the future for local energy could be really bright, but I fear that we will be here in a few months’ time talking about the bright future that has not quite emerged, but may in the future. We have not got time any more to keep going round the houses before we get to a decent settlement that will allow local energy to proceed. Local energy is so important, as we have heard this afternoon, for the future of low-carbon renewable energy.

I was delighted that the Local Electricity Bill has been amended to ensure that local energy is low carbon and renewable, so that we do not have diesel reciprocators coming in and providing local energy as a result of the ability to get a local licence. That is a very good amendment, and adds further to the Bill’s force.

I have questions for the Minister that are similar to the three questions asked by the hon. Member for Bath. I hope that he can give us some reassurances about the Government’s earnestness to bring about changes to the grid arrangements that can underpin local energy, and that they will be treated as a move forward as opposed to a distortion of the system. The answer to one of the questions posed by my right hon. Friend Hilary Benn about the German system is that cities in Germany, in many instances, own their own grids—and are doing so in increasing numbers. Germany does not have the grid system, a system that is regarded as just common sense in the UK. We have to turn that common sense around and start from the bottom up, with grid and district-grid management, rather than assuming that we should work from the top down. If we do that, then there will be a fundamental turning of the tide in favour of local energy for the future. I look forward to what the Minister has to say. I hope he will be fully supportive of the local community energy Bill, but I hope he will also be understanding of what differences need to be made to the system to allow local energy to come into its own.