Energy Bill [HL]

Baroness Boycott Excerpts

Report stage
Monday 17th April 2023 Lords Chamber

[Lord Ravensdale (CB)]

My Lords, I declare my interests set out earlier and add my interest as a director of Peers for the Planet. I also thank the noble Baroness, Lady Bennett, for her support on Amendment 94. I will keep my remarks brief, but first I thank the Minister and his Bill team for meeting me and for all of the engagement on this important issue over the last few months.

I feel that one of the key missing pieces in the net-zero puzzle before us is in better defining the role of local authorities within the whole governance structure. We all know that local authorities have a vital role to play, but there is limited definition of this. I think that local area energy plans are at the core of fixing this. Local area energy planning is a data-driven and whole-energy-system evidence-based approach, which sets out to identify the most effective route for a local area to contribute towards meeting the national net-zero target, as well as meeting its local net-zero target. Its proven methodology is a well-trodden path which has been effectively used in a number of other countries.

I wanted to return to this issue on Report as I strongly feel that there is a missed opportunity within the Bill to set out the role of local authorities more clearly. There have been some developments since Committee. In particular, the Skidmore Mission Zero report was published, which recognised the issue and aligns with what I am asking for in this local area energy planning amendment. This was brought out strongly in the report, as one of the 25 key actions for 2025 was for the Government to provide guidance on local area energy planning. The Committee on Climate Change also recognises the need for this.

The amendment does not ask for much; it asks only for guidance to be published, and it does not mandate the approach in any way. It simply asks for the Government to publish guidance for local authorities to use in local area energy planning—this step has already been taken by the devolved Governments in Scotland and Wales. So it will provide much-needed clarity to local authorities on how they should approach energy planning, and it will also send the important signal that the Government are behind the approach to help to increase the rollout of these plans. So I look forward to the Minister’s response, and I hope he can provide me some reassurance on this point. I beg to move.

[Baroness Boycott (CB)]

My Lords, I will speak to Amendments 134 and 135, about community energy. In the midst of an energy crisis, when cheap and clean home-produced energy has never been more vital, as we have heard in this debate, we are far behind where we could be with the amount of small-scale renewable energy, especially community energy schemes, which are simply community-owned and community-run renewable energy projects. Our limited number of schemes has been massively welcomed by politicians of all parties because they provide cheaper and greener power, and they distribute benefits locally, rather than up to the big power companies.

The feed-in tariff briefly created rapid growth in these schemes, but that has dwindled to almost nothing—despite renewable technologies being cheaper than ever. The lack of growth is largely the result of the prohibitive cost that the small-scale generators face. The problem is well recognised, and 318 MPs from all major parties back the Local Electricity Bill, which would enable community energy schemes to sell electricity they generate to their local customers.

The potential is enormous. According to the Environmental Audit Committee, community energy could grow by 12 to 20 times by 2030, power 2.2 million homes and save 2.5 million tonnes of CO² emissions every year. This would take our renewable energy generation from community schemes to almost 10% of our entire needs, and the substantial benefits of enabling this can barely be overstated. However, community energy has seen a trickle of minimal growth, amounting to less than half a per cent.

The problem can be solved without subsidy, and this seems to be the key point. Small-scale renewable energy generators need to receive only a guaranteed fair price for the electricity they contribute to an energy system in desperate need of homegrown energy, as we have heard. Amendment 134 establishes a

“Community and Smaller-scale Electricity Export Guarantee Scheme”.


It would provide a guaranteed income for the electricity from small-scale low-carbon energy generators, with “small” defined as “a capacity below 5MW”. This would mean that communities get properly remunerated for their contribution to the system, and they can therefore go to their banks and raise the funds to expand or establish. This guaranteed price could be set by regulations, revised annually by Ofgem, with the initial contract guaranteed for at least five years—not that long.

Amendment 135 establishes a

“Community and Smaller-scale Electricity Supplier Services Scheme”.


This, again, would allow community schemes that registered under the electricity export guarantee scheme also to sell the electricity they generate locally. No requirement is placed on community schemes to do this, so, if they wish, they could operate simply using the proceeds of the export guarantee. For some, such returns would be sufficient to encourage local people to invest in new energy schemes—such was the case when we had a feed-in tariff.

But, if a community wants, it can sell the electricity it generates directly to households and businesses in its community. It can do so, for example, as an additional incentive for local people to invest or because it believes it can offer a lower tariff to the less well off in the community—this point was made on previous amendments this afternoon. This means that the community, which knows its people and what is going on, can flex its tariffs, and everyone can buy in to the project.

As with the clause created by Amendment 134, this would all be monitored by Ofgem and reported on annually. This is a nationwide campaign backed by a coalition of over 80 organisations—the Church of England, the CPRE, the Energy Saving Trust et cetera; I will not name them all—and 100 councils have already stated their support. Four of the six major distribution network operators—basically, our regional energy grid monopolies: Electricity North West, SP Energy, UK Power and Western Power—are supportive. As has been mentioned before, the Skidmore review supports all such organisations and ideas that will help green renewable energy, so I am completely puzzled as to why Ministers are not falling over themselves to make this thing happen.

In Committee, the Minister, the noble Lord, Lord Callanan, said that the amendments would create a subsidy to community energy schemes. However, we need to be really clear—in saying this, I want to pre-empt a response from the Minister—that the amendments do not establish subsidies for community energy schemes. Renewable energy can stand on its own two feet now; it has been successful in cutting costs over the last two decades and is now completely viable without the need for feed-in tariffs. We just need to set up the right market system for the energy for people to buy it and for people to be responsible for it. I will be completely puzzled if the Minister does not accept that, and I warn him now that I intend to test the opinion of the House later.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the three amendments have been extremely ably introduced by the noble Lord, Lord Ravensdale, and the noble Baroness, Lady Boycott. It is a pleasure to speak after them, having attached my name to all three amendments.

I will briefly sum up what they seek to achieve. Amendments 134 and 135 are about community energy, which is where people can get together as a community, decide what they want their local energy system to look like and deliver it. There is no need for any involvement from Westminster or big multinational companies; it is a chance for communities to get together. Surely, as the noble Lord, Lord Lucas, has signed both Amendments 134 and 135, this would be seen to be utterly in line with Conservative approaches. I note that, in the other place, among the hundreds of signatories is Sir Graham Brady, so if you want a full political spread, perhaps from me to Sir Graham Brady will pretty well cover the breadth of support for community energy.

On Amendment 94, we know that there is huge concentration of power and resources, and that the reins are held very tightly by Westminster. As the noble Lord, Lord Ravensdale, set out, Wales and Scotland have already seen the importance of local decision-making to solve local problems to ensure that they are able to deliver renewables, with local people making the decisions about where they go, what they look like and how they are distributed. Indeed, as the noble Baroness, Lady Boycott, said, this could be a local poverty alleviation issue and a levelling-up type of approach.

I acknowledge that the Minister has very kindly had meetings with us to discuss the amendments. We keep being told that this is something that the Government would like to do eventually but it is all too difficult. However, I think it is all worked out and set out in the amendments. Clearly, many people in the other place and here have been convinced that now is the time to go for community energy.

I will offer a final reflection. I happened to be in a bed and breakfast in Norfolk this morning, chatting across the table to some residents of Herefordshire who had just driven across the country and were about to drive back. They asked me, “Where are all the solar panels? We can’t see solar panels where we know we should see solar panels.” I said that the answer to scale this up quickly could be community energy.

--- Later in debate ---

[Lord Callanan (Con)]

If organisations take advantage of community-minded individuals prepared to contribute work to their local community, that is something that we welcome. However, what will be critical to those communities is the ultimate tariff that they pay, irrespective of how much voluntary effort goes in. Our concern is that these amendments are being slightly oversold to many communities; they may think that they are somehow going to get a favourable tariff compared to what they would get in the wider market. As currently structured, we do not believe that the amendments would produce that.

[Baroness Boycott (CB)]

Before the Minister sits down, I think that that is slightly unfair on local communities. A lot of people enjoy being involved in local community schemes and, as the noble Baroness, Lady Bennett, just said, a lot of volunteering work goes into this. It is not just about getting lower prices; it is also about reducing our carbon emissions and being part of the campaign to get to net zero. You cannot just quantify everything in pounds, shillings and pence.

[Lord Callanan (Con)]

I agree with the noble Baroness, and we are supporting a number of community energy partnerships at the moment. As I say, we are not against the idea in principle, but we need to work through the proper policy implications and ensure that some of these very worthwhile schemes are not piggybacking on to the costs that everybody else pays into the system.