Lib Dem spokesperson for climate change Wera Hobhouse sets out her support for the cross-party Local Electricity Bill, which aims to empower community energy projects to sell directly to local customers
Transitioning to a sustainable world is urgent and critical for the survival of civilisation. But it presents UK business with an opportunity to flourish and community energy should be at the centre of this.
We are still very much at the beginning of this transition. Whilst impressive early gains have been made, largely due to shutting down most of the UK’s coal power stations, renewable electricity only provides around 10 per cent of all our energy needs today. UK transport and heating must be transitioned to run on clean electricity and this means building more renewable generation infrastructure.
Community energy – i.e. renewable generation projects owned and run by local people – can play a major role. Currently the sector is small, with a few hundred volunteer-run groups generating around half a percent of UK electricity.
With the right policy and regulatory changes community energy could grow twentyfold in less than ten years, according to a recent Parliamentary Environmental Audit Committee inquiry. Such growth would revolutionise the energy sector and professionalise community energy, leading to thousands of smaller-scale energy companies and co-operatives and tens of thousands of new, skilled local jobs.
The principle is simple – if money that we put towards energy goes to a local or regional supplier, it will circulate back the local economy which will boost local employment and business activity. This is a reality in places like Germany and Denmark, where local supply rules have existed for decades.
The rules governing the UK’s energy system are outdated and were devised following privatisation in the 1990s. They made sense back then when the system was dominated by large power stations. But given the new potential for distributed, renewable generation, the rules are antiquated and no longer fit-for-purpose.
These obsolete rules create impossible barriers for community energy schemes who want to sell their power directly to local customers. It is simply too expensive for them. This limits community schemes of today as they can only sell directly to an existing national utility for a fraction of the price that utility charges customers.
Here’s an analogy: imagine you plan to set up a local bakery, planning to deliver bread to local homes, cafes and restaurants and being told that you must pay £1m for your delivery van as it will be using the nationwide road network. Your business would be unviable.
The solution is proportionality: the costs faced by a supplier of energy should be proportional to the size of the energy business. This would then make local and regional scale energy utilities viable and unlock the potential for more community projects, with the result being more renewable generation infrastructure being built. More solar panels, more wind turbines, more hydro units – owned and run by local business and co-operatives.
I am, therefore, proud to be one of the cross-party sponsors of the Local Electricity Bill, which would empower community energy projects to sell directly to local customers by establishing a right to local supply. The Bill would ensure that the costs faced by energy companies are proportionate to the size of their business.
But what about energy companies struggling and failing in recent months? Yes – precisely because of reliance on international gas, which has seen prices soar, and the disproportionate cost problems that the Local Electricity Bill targets. By reducing our reliance on imported fossil fuels, the Bill will lead to a more secure and robust energy system.
I am pleased that 290 MPs, from all parties, now support the Bill. This number is growing steadily, meaning we are approaching over half the House of Commons. The government agrees with the Bill but are concerned about the potential unintended consequences. We want to work with them on the details, to ensure these consequences are avoided.
To this end, I initiated a Parliamentary Debate on November 30, where I and many supportive MPs, from all parties, urged the Energy Minister to meet with us. He agreed to do so.
This progress has only been possible because of the coalition campaign organised by Power for People. Please sign up to the campaign. Let’s create a sustainable future together.
Wera Hobhouse is the MP for Bath and the Liberal Democrat spokesperson climate change.