[Relevant documents: Oral and written evidence taken by the Environmental Audit Committee on Technological innovations and climate change: community energy, HC 1208, Session 2019–21; and correspondence between the Chair of the Environmental Audit Committee and the Secretary of State for Business, Energy and Industrial Strategy on Technological innovations and climate change: community energy, HC 1208, Session 2019–21 and HC 421, Session 2021–22.]
Virtual participation in proceedings commenced (Order, 25 February).
[NB: [V] denotes a Member participating virtually.]
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There has been just one withdrawal, and Wera Hobhouse is opening the debate and closing it. I will not impose a time limit, but everyone other than the Front Benchers, who have 10 minutes each, should take roughly four minutes each. Please share the time.
That this House has considered enabling community energy.
It is a pleasure to serve with you in the Chair, Sir David, and I am looking forward to the Minister’s response. I thank the Backbench Business Committee for granting the debate, which I secured with the hon. Members for Waveney (Peter Aldous) and for Ceredigion (Ben Lake). We want to make the case for enabling community energy by removing the blockage that is preventing its huge potential from being realised.
The evidence that the climate crisis threatens to destroy human civilisation and the natural world is increasingly alarming. We must achieve our emissions reduction targets and get to net zero by 2050 at the latest, as set out in the Climate Change Act 2008 and the Paris accord. The UK is way off track in doing that, as the Climate Change Committee has made clear. Currently, only 12% of our power comes from renewable sources. The only sector that has made reasonable progress is the production of electricity. In all other sectors—heating, transport, agriculture and heavy industry, let alone shipping and aviation—Britain is failing to reach its own targets.
The two big challenges facing householders are heating and transport. How do we rapidly transition from powering our heating and transport with fossil fuels towards doing so with clean energy? A change of this scale can be achieved only through the active involvement of people, because they will have to pay for it through their energy bills, the products they buy, and the taxes they pay. People will need to host the new infrastructure in their neighbourhoods and communities, and they will ultimately need to change their routines and practices. If people do not agree to pay for it, host it or do it, progress to net zero will be more costly and more contested, and it will be less inclusive, equitable and environmentally sustainable. The individual householder or consumer must be at the centre of our transition to net zero, and it seems the Government have not quite understood this; otherwise, they would by now have developed a coherent plan to engage people along the way.
It is a pleasure to serve under your chairmanship, Sir David. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing and leading this debate and the hon. Member for Ceredigion (Ben Lake) on his supporting and campaigning work.
On 10 June last year, I introduced the Local Electricity Bill. Unfortunately, due to the pressures on the Parliamentary timetable, the Bill made no further progress. What it did do was vividly illustrate that there is an enormous appetite from all corners of our four nations for an upsurge in community energy projects.
While credit should go to the campaigning work of Power for People, it is abundantly clear that local councils, cities, towns and villages want to play their part in the transition to net zero. This is not a straightforward journey, and we need to use all the tools in the box to ensure that we reach our destination on time and, hopefully, after a smooth ride. This means removing those regulatory barriers that currently prevent community energy from playing its full role.
The main obstacle prohibiting local communities from getting involved is that the current supply licensing regime is highly complicated, national in scope and has onerous credit requirements. It is a one-size-fits-all approach, heavily skewed in favour of the status quo. There is an exemptions regime for supply of less of 5 MW and a Licence Lite supplier licence, but these are not fit for modern purpose.
There have been recent reviews by both Ofgem and the Department for Business, Energy and Industrial Strategy into the current energy supply licensing arrangements, and there is an acknowledgment that the current regime is opaque and difficult to interpret. However, as yet there is no route map setting out the path to reform. The Government now need to commit to that regulatory reform, reaffirm support for community energy and remove those values. They should start by answering a number of questions, which I will list.
It is a pleasure to serve under your chairmanship as always, Sir David. I congratulate the hon. Members for Bath (Wera Hobhouse) and for Waveney (Peter Aldous) on their work on this matter and on securing the debate this afternoon. They have laid out the huge potential of enabling greater community energy across these islands. The hon. Member for Waveney went into some detail on some of the mechanisms that we believe can realise that potential—namely, a right to local supply.
In advance of this afternoon’s debate, I have been contacted by supportive Members from all political parties who were unfortunately unable to attend. They include the hon. Member for Gower (Tonia Antoniazzi), the right hon. Member for Preseli Pembrokeshire (Stephen Crabb), the hon. Members for Bristol West (Thangam Debbonaire), for Milton Keynes North (Ben Everitt), for North Down (Stephen Farry), for Brent North (Barry Gardiner) and for Nottingham South (Lilian Greenwood), the right hon. Member for Kingston upon Hull North (Dame Diana Johnson), the hon. Members for Norwich South (Clive Lewis), for Glasgow East (David Linden), for Brighton, Pavilion (Caroline Lucas), for Bristol East (Kerry McCarthy), for Falkirk (John Mc Nally), for Richmond Park (Sarah Olney), for Romford (Andrew Rosindell) and for Lancaster and Fleetwood (Cat Smith), the right hon. Member for East Ham (Stephen Timms) and the hon. Member for Nottingham East (Nadia Whittome). This is an issue that enjoys considerable cross-party support.
I was delighted to be one of a cross-party group of some 250 Members who supported the Local Electricity Bill introduced by the hon. Member for Waveney in the previous Session. That Bill proposed a mechanism to implement a right to local supply. As the hon. Member for Waveney mentioned in his remarks, that proposal has quite an impressive and broad coalition of support behind it. There is a national campaign co-ordinated by Power for People, which is a coalition of 76 national non-governmental organisations, charities and trade associations, and 70 local councils. Impressively, three of the six distribution network operators—the companies that own and run the UK’s regional energy grids—publicly support the campaign and back calls for a right to local supply as enunciated in that Bill.
It is a pleasure to serve under your chairmanship, Sir David. It is also a pleasure to follow the hon. Member for Ceredigion (Ben Lake), my near neighbour in Wales and a doughty champion of community energy.
My own interest in community energy originates from growing up at Lake Vyrnwy, where my father ran a hotel, a few miles south of my constituency of Clwyd South, where the mighty Vyrnwy masonry dam, the largest in Europe when it was completed in 1890, contains a hydroelectric unit that used to supply the surrounding valley with electricity until it moved on to the mains in 1960. I strongly believe that we need to return to that model of community energy. Therefore, in Clwyd South, I have been championing the hydroelectric potential of the River Dee in Llangollen with town councillor Stuart Davies. I warmly welcome the recent decision by members of the town council to set up a task and finish group to investigate the feasibility of using the site of decommissioned hydro-units in the town.
Further up the River Dee in my constituency, in Corwen, is the perfect example of a community energy project—the Corwen community hydro scheme. People came together as a community to build a 55 kW high head hydro scheme in the town. It is 100% owned and run by the community, which raised more than £300,000 for the construction with a share offer five years ago, of which 50% was bought by people in and around Corwen. The success of that first project has led to a second larger project in Bonwm, near Corwen, where work is expected to start this autumn on building a 100 kW hydro scheme, which will be completed ahead of the end of the feed-in tariffs in July 2022.
The Corwen projects have benefited significantly from the support of the local landowner, Lord Newborough, whose Rhug Estate has put sustainability firmly at the heart of its business mission, particularly through its own renewable heat and power generation. That has led to the welcome announcement this week that Rhug has won a net zero award from the North Wales Mersey Dee Business Council.
It is a great pleasure, as others have said, to serve under your chairmanship, Sir David. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing this debate, and the hon. Member for Waveney (Peter Aldous), who has been diving into the detail of this, as we have observed over a period of time. I praise his impressive cross-party work, which is very good indeed. I thank the hon. Member for Ceredigion (Ben Lake) for his cross-party efforts in this area. The list of Members he read out showed that there is a broad feeling that this should happen. It is an idea whose time has come. It is a modern idea, and it needs to happen.
At the moment—I checked before the debate—the UK is using 35 GW of energy, 38% of which is gas. Being June, there is 18% solar and 6% wind; 8% comes from France and 7% comes from Belgium, Norway and the Netherlands. Surely, when only 250 MW of energy is being produced locally, with the potential of 3 GW, it is time to change. That 3 GW would eclipse the 0.5 GW of coal that is being used this afternoon, according to the energy app.
It is vital that we take this step and move forward. Ofgem, as we know, is a bureaucracy. There is no energy market really in the UK; it is a bureaucracy, and it needs fixing and tinkering with. That is why local energy is an idea whose time has come. In my constituency of Na h-Eileanan an Iar, it is presumed that energy is transmitted towards London, given Ofgem’s bureaucratic models, and then distributed back from somewhere such as London. There is a distortion of reality because of those presumptions.
Stòras Uibhist, a local energy provider in South Uist, has wind farms that generate about 7 MW, and it is quite easy to see in South Uist what is happening, because of the power station at Lochcarnan. In Lochcarnan, it is possible to see when energy is being imported and exported. When energy is being produced in Uist, it is being used in Uist in the main. Some of it is exported, but very little energy is imported, which is why we need to have some sort of change to reflect that. We cannot have the most expensive distribution and transmission charges, when the reality is that we are not transmitting or even receiving energy.
It is a pleasure to serve under your chairmanship, Sir David. I thank the hon. Member for Bath (Wera Hobhouse) for securing this important debate on an issue that could fundamentally change not just the electricity market, but people’s ability to access cheap, sustainable and locally produced energy across the whole of the UK.
I was really pleased to be able to support my hon. Friend the Member for Waveney (Peter Aldous) in his efforts to enact the Local Electricity Bill in the last Session. To my very inexperienced eye, the Bill appeared to be a win-win. It drove the creation of new local electricity markets, lowered prices for consumers and created a path for households and businesses to access renewable and sustainable energy in a new way. A 2014 Department of Energy and Climate Change report on community renewable energy suggested that by last year—2020—3,000 MW of generating capacity could have been in place. Instead, we generate around 278 MW from community renewable energy.
The scale of the opportunity here is absolutely vast, and we need only look across to our neighbours in Europe to see the prize on offer. In Germany, there are over 1,000 community-based supply companies producing renewable energy. In that country, the four large utilities control only 40% of the market, which drives real consumer choice and consumer benefit. Unleashing community energy would enable local economic resilience in communities across the UK. Bypassing the large utilities would allow them to keep significant value and economic returns within their own economies. It would create skilled local jobs, more viable local businesses and stronger local bonds. I would argue that the necessary reforms are not just about cheaper electricity bills; they are about helping us get to net zero too. To be honest, I see them as a form of levelling up in action.
Last year, I was pleased to visit Hobkin Ground Farm in the Lickle valley in my constituency. Megan and Mark want to run a low-impact, sustainable farm, leaving as little mark on the environment as possible in their farming. In pursuit of that, they have installed a hydro generator. They power their own farm and a couple of cottages, largely removing themselves from the electricity grid. They would like to go further, but the cost of connection is prohibitive for them. Across the valley from them in Broughton-in-Furness is another project, which aims to bring together local residents in a co-operative to buy renewable electricity from a hydro plant at Logan Gill, allowing them to benefit from cleaner air and cheaper energy. Potentially 400 customers could benefit, saving about 20% off their electricity bills.
It is a pleasure to serve under your chairmanship, Sir David. I thank the hon. Member for Bath (Wera Hobhouse) for securing this important debate.
The question of energy cannot be separated from the survival of our planet. That is why today’s discussion is so vital and why I welcome the broad cross-party support for community energy and the Local Electricity Bill. Energy production and consumption both lie at the heart of our battle to combat climate change. To win the battle we need to meet the targets we have set for cutting carbon emissions. The UK Government have now set in law a cut in emissions of 78% by 2035, bringing us more than three quarters of the way to net zero by 2050. To help us meet the target we need to put the Local Electricity Bill back on the agenda.
The Bill could establish a vital local supply that would give the energy market regulator, the Office of Gas and Electricity Markets, the legal duty of establishing new market rules that could help community energy growth. The cost of setting up organisations that sell locally generated renewable energy to local people, together with their running costs, should be proportionate to the size of the business. That reform would make local projects financially viable, unleashing the huge potential of community renewable energy. This has been shown to work in other countries. In Germany, there are 1,000 such supply companies, most of which are local community-owned suppliers, and almost all provide renewable energy.
In the UK, the slow but steady growth of the community energy sector has brought tangible results, with local organisations now serving more than 358,000 people. But further growth is blocked because of cost. A report by the Institute for Public Policy Research stated that the financial, technical and operational challenges involved in setting up a licensed energy supply company mean that the initial costs exceed £1 million. Most community energy companies cannot afford that. Yet providing community energy organisations with the right financial and legislative support could result in a huge expansion of renewable electricity generation.
It is a pleasure to serve under your chairmanship, Sir David.
I thank my hon. Friend the Member for Bath (Wera Hobhouse) for securing this important debate, and I also recognise the work of the hon. Members for Waveney (Peter Aldous) and for Ceredigion (Ben Lake); indeed, the hon. Member for Ceredigion allowed a number of interventions during his recent Adjournment debate on this subject.
We know that we face a global climate crisis, which will require significant shifts in how we go about our day-to-day lives. Supporting such changes clearly requires Government direction and support, and many communities recognise the importance of proactively transitioning to green living. I am proud to have examples of that in my constituency of North East Fife.
For instance, Sustainable Cupar is a charity that was set up 10 years ago to focus on the protection of the local environment and on supporting local residents in transitioning to a low-carbon, sustainable and ethical future. Since its formation, it has engaged with the local council and the Scottish Government on programmes for fewer road emissions, better public transport and walking routes, and the building of more sustainable homes, as well as exploring issues around direct heat schemes.
Also in my constituency is the University of Saint Andrews, which is North East Fife’s largest employer. The university is led in this regard by its environmental sustainability board, which is chaired by Professor Sir Ian Boyd, previously chief scientific adviser to the Department for Environment, Food and Rural Affairs and now the professor of biology at the university. The university is taking on the net zero challenge, alongside community organisations and businesses, and I attended the first meeting of the outreach group back in May.
Under complementary environmental, sustainability and carbon management plans, the scope of the group’s approach encompasses procurement activities and the travel of international students coming to the university to study. The aim is to reach net zero by 2035. A new biomass plant and a potential onshore wind farm development will deliver energy to meet the university’s needs and potentially those of the wider community, too.
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Community energy is one of the few existing tried-and-tested means of engaging people in the energy system. Indeed, the strength of community energy comes from its connection to people and places, because people make community energy. Community energy means smaller-scale, renewable power generation that is owned and run, at least in part, by local community companies or co-operatives. The individual providers might be small or medium-sized, but when taken together, community energy could be done on a very large scale. A 2014 Government report stated that we could have had 3,000 MW of clean community energy generation by 2020. The Environmental Audit Committee’s recent community energy inquiry said that
“by 2030 the community energy sector could grow by 12-20 times, powering 2.2 million homes and saving 2.5 million tonnes of CO2 emissions every year.”
Let us imagine a future in which we can all buy clean electricity directly from a local supply company or co-operative and in which every pound spent powering our homes, workplaces and transport supports local jobs and helps to fund new facilities and services in our communities and in turn contributes to the building of more renewable energy infrastructure. Right now, UK community energy generation is just 319 MW—just 0.5% of our total energy generation. That is a great failure of potential.
The huge potential of community energy is being blocked by our energy market and licensing rules, which are largely unchanged from when they were designed in the 1990s. They make the cost faced by community energy groups insurmountable. A report by the Institute for Public Policy Research states that the financial, technical and operational challenges involved in setting up a licensed energy supply company mean that initial costs exceed £1 million.
Let us imagine setting up a microbrewery. We plan to deliver our beers to local pubs, off-licences and homes, but then we are told that we have to pay £1 million in road tax for our delivery van. These businesses would never be started, and the savings in transport costs, greenhouse gas emissions and prices would never be realised. That is the reality that the community energy sector faces.
The 319 MW of installed community energy capacity exists because of the dedicated efforts of the people who make up the UK’s few hundred community energy groups—groups such as Bath and West Community Energy, which is in my constituency and which uses its revenues to support energy efficiency in homes, fuel-poverty programmes and low-carbon transport. Often, these groups reach those who are traditionally left behind. They are staffed largely by volunteers, who work hard to survive in an unnecessarily harsh regulatory environment.
Our outdated energy market rules mean that the groups must sell their power to large utilities, which sell it on to customers. That makes it impossible for community energy to scale up. The market structure does not recognise and incentivise the efficiencies and savings that community energy’s distributed generation creates by enabling power to be consumed closer to where it is physically generated.
The Government say that there is no problem. In answer to a parliamentary written question on 1 March, they said:
“The right to local energy supply already exists under the Electricity Act 1989. One of Ofgem’s key strategic priorities is increasing flexibility across the electricity system to support the delivery of net zero and ensuring that consumers benefit from these innovative changes.”
That misses the point: the fact that the right exists does not mean that it is practically possible. In answer to a written question on 2 November 2020, the former Minister of State, who is now Secretary of State, said:
“Ofgem can award supply licences that are restricted to a geographical area and has just consulted on how to use this facility more effectively to bring forward innovation. Ofgem’s Licence Lite regime also aims to reduce the cost and complexity of entering and operating in the market for suppliers.”
Clearly, neither has been able to achieve the potential of at least 3,000 MW of community energy generation that was identified in the 2014 Government report.
The intention behind Licence Lite was commendable, but it has not delivered what was intended. Its key flaw is the need for local renewable generators to partner with a willing licensed energy utility. None of the existing community energy groups in the UK is licensed to sell its electricity directly to local customers. That is why community energy has hardly grown for more than a decade when it should have been multiplying many times over. The flexibilities and allowances for local supply that Ministers referred to have not delivered. As the call for evidence for the Environmental Audit Committee’s recently launched community energy inquiry put it so well,
“the ability of communities to sell the energy produced locally is limited in the UK’s centralised regulatory system, meaning that projects often have to sell energy directly to the grid, then buy it back at additional cost.”
The solution is a right to local supply that enables community energy schemes to sell their power directly to local customers. That would make it viable to expand existing schemes and to construct many new ones. The Local Electricity Bill proposed by the hon. Member for Waveney in the last Session would do that. Think of it—a surge in clean energy and a surge in public buy-in for climate solutions, because people would see the local economic benefits happening in their own communities.
The Government have said they want to enable community energy. They have agreed in principle with the need for a right to local supply, but they have not agreed to look at the detail of how the true potential of community energy could be unleashed and why there are persistent barriers. Words must now become actions. I therefore ask the Minister to engage with me and other lead Members supporting this reform, and the campaigners and experts behind it. Together, we can get the detail right and implement it quickly and effectively.
The need to get to net zero is becoming more and more urgent. We will not get there without the consent and active engagement of the people who have to pay for it, host any infrastructure and change their habits. Community energy could make a large contribution, not only to produce the clean power we need but to bring people with us in our ambition to get to net zero before it is too late.
First, what has happened to follow up on Ofgem’s derogation policy review and other calls for evidence on aspects of the energy supply market? Does Ofgem intend to progress its consideration of a local licence?
Secondly, as indicated in the energy White Paper, does BEIS intend to ask Ofgem to provide latitude in the supply licensing regime for local suppliers?
Thirdly, as part of its ongoing review of the licensing derogation review, will BEIS consider widening the exemptions regime to enable local supply?
Fourthly, when is Ofgem planning to issue its review of the smart export guarantee and come to a conclusion on potential enhancements to provide a more certain route to market for community providers?
Fifthly and finally, are the Government proposing to consult more generally on community energy and local supply in advance of the net zero strategy?
This is a highly technical and complicated subject. I shall be writing to the Government and asking those questions. It would be easy to put this whole matter into the “too difficult to do” tray, but that would be a dereliction of duty. We would be letting down those thousands of communities who want to play their part and get involved. The Government, parliamentarians and Ofgem need to work together to get over those barriers. I hope that the Minister will indicate a willingness to do so.
It is worth reiterating that a right to local supply was specifically recommended by the Environmental Audit Committee in its welcome and thorough investigation into how to enable more community energy generation. The possible benefits, although they may sound too good to be true, are very real. The “Community Energy State of the Sector 2021” report states that the existing community energy groups operating across these islands reduced energy bills by £2.9 million last year and created £3.1 million-worth of community benefit expenditure. We should just imagine what those figures could be if community energy was fully enabled and grew from its current 319 MW to more than 3,000 MW.
In Wales, we have the highest number of community energy organisations per head of population relative to the rest of these islands, but if a right to local supply was established, even more people and communities could become electricity customers of local enterprises—communities such as Cardigan and Ceredigion, which has a budding local energy club and ample local generation of renewable energy, but where local demand is not currently being catered for by local supply. A right to local supply would help connect consumers with locally generated electricity and the knock-on effect would be seen in communities across these islands.
This measure is not just about addressing the climate crisis, as important as that is. It is also about supporting more local skilled jobs, and it is about cheaper energy bills. It is very much a win-win-win. It can be done. While we welcome the Government’s support of the principle, we believe that, if we work together with the Minister and the Department, we can get the detail right and enact a local electricity Bill that enshrines the right to local supply. I hope the Minister will be open to such a meeting.
The Local Electricity Bill lies at the heart of this debate, and I, like many other Members, have put its key points to the UK Government. I know that the Minister and the other BEIS Ministers are keen to take as constructive an approach as possible on what I appreciate is a highly complex issue. While we debate these matters, the Corwen community hydro scheme is actually putting into practice the aims set by the Local Electricity Bill—namely by creating a market between the local generators and the local householders directly. It is doing that by using its electricity to benefit homes in Corwen via the model developed and run by Energy Local, the community interest company that is transforming the electricity market for communities with small-scale renewable generators, which was referenced in the Government’s energy White Paper. The Energy Local model enables consumers to benefit from cheaper electricity if they use power when Corwen’s hyro is generating. The participants pay only 7.5p per kWh, compared with the average market price of 11p to 15p. Of course, that is facilitated by the arrival of smart meters and Energy Local clubs.
I strongly support community energy schemes, as proposed by the hon. Member for Bath (Wera Hobhouse), my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Member for Ceredigion. I am proud that Corwen is the second Energy Local scheme in the UK. The first was also in Wales—in Bethesda, in north Wales. I wish every success to similar schemes that are in the pipeline in England and elsewhere in the UK.
The Scottish Government are trying to do something—they say it will be in the next Parliament—about working with Scottish islands to demonstrate the idea of carbon neutrality within islands. It is possibly already there within Uist and other islands, but it works well in the demonstration at Lochcarnan power station. I hope that this moves forward in the way that has been suggested cross-party. As our islands are 40% closer to the Arctic circle than London is, we have very long days at the moment—17 hours and 46 minutes. Some people in London might be surprised that solar power can be used. The former First Minister Alex Salmond said we are sitting on the “Saudi Arabia of renewables”. Unfortunately with wind, that is particularly true when it comes to ferries and travel, but when it comes to energy, we have huge potential. It is something that we can use, so I would like to see the efforts coming forward.
I would like to see the UK Government accept the reality. They have power over this issue at the moment, and they really should listen to the cross-party voices—from the Conservatives, the Labour party, the Liberal Democrats, the Scottish National party, Plaid Cymru and elsewhere—and make the change to enable the potentially huge increase. As I said, 35 GW of energy are being used this afternoon. Three of those gigawatts—10%—could be coming from local energy production, which would also be a stimulus economically for many local communities. With that I will stop, because I do not want to take too much time and I know a lot of Members want to come in.
The model is great, and I praise local residents Jennifer Sanderson, Rob Dunphy and others, Cumbria Action for Sustainability, and Ellergreen Hydro for working together to deliver it. However, for the project to succeed, it is reliant on the benevolence of Octopus Energy, a nationally licensed and huge utility company, to turn the taps and get them going. If we enable the right to local supply, that ceases to be a problem.
Reforming market rules so that local and regional-sized renewable energy generators could sell their electricity direct to local customers would mean that my constituents in Broughton would no longer be reliant on having to choose from a few large national suppliers. They could go local and go sustainable. If we can achieve that, the effect will be to take community energy schemes, such as that one, from being a smattering of projects across the country to thousands. They currently generate only around 0.5% of the UK’s electricity, but let us think of the scale we could generate. With a few small changes, a thousand flowers could bloom. That will happen only if local community-owned interests are given a route to market.
I very much hope that my hon. Friend the Minister will see the opportunity in community energy to be a tool in levelling up our local communities. I look forward to hearing her response.
The Community Energy 2030 Vision estimates that with such support the growth of the community sector could power more than 2 million homes, create up to 9,000 well-paid and highly skilled jobs, shave millions off the cost of domestic bills, and contribute almost £2 billion to the economy every year. We need to unleash that potential. The Committee on Climate Change states that the UK is way off track to reach its greenhouse gas emissions reduction targets. Renewable energy generation currently accounts for only 11% of all UK energy use. That must change. The extension of community energy production can help us move faster to our goals.
I want to end by supporting the recommendations of the April 2021 Environmental Audit Committee, which outlined a positive way forward: remove the barriers to the development of community energy by passing the Local Electricity Bill into law; support the vital role that community energy plays in achieving net zero carbon emissions; and give practical support to the community organisations that help us achieve our targets.
As COP26 moves ever closer, let us ensure that the UK catches up with our neighbours, such as Germany. Let us help community energy to generate electricity for our children and grandchildren. If we miss our target, we are putting those future generations at grave risk of a climate breakdown.
Communities are clearly vital in the move to net zero; they are best placed to know what changes work best for them. Where communities are ahead of the Government’s policies, which we are hearing today, they should be enabled to act, not blocked from acting.
I look to the success of wind power energy in Denmark and Germany, and I see systems that empower such citizen engagement. It is achieved through the formation of wind guilds in Denmark, which are forms of partnerships or co-operatives that own or part-own wind farms. Indeed, so ingrained is this idea of citizen ownership that there is now a law in Denmark requiring that the local population must be afforded the ability to purchase up to 20% of the value of any new wind installation.
Although no system is without faults, we see that countries such as Germany and Denmark lead the way on clean energy through community energy programmes, while the UK, which arguably was initially an early-market entrant in relation to wind, is sadly being left behind.
We do not have to be left behind. Just this week, I visited Orkney with the Scottish Affairs Committee, as part of our inquiry into renewable energy in Scotland. Orkney has long been home to renewable energy and it is now expanding its scope into marine renewables. It recently became the home of the European Marine Energy Centre’s orbital tidal turbine, a prototype that is the world’s most powerful marine turbine.
Altogether, Orkney produces 120% of its own energy needs, and again community engagement and collaboration with local authorities are vital. Orkney Islands Council’s Responsive Flexibility, or ReFLEX, project is a £28.5 million scheme, aiming to create an integrated energy system for the islands, with the communities in those islands at its heart.
Those developments should be applauded, but on my trip to Orkney we spoke to a local community news outlet that highlighted some of the issues around fuel poverty on the islands. As other Members have already said, it is clear that issues such as transmission charges need to be addressed and that all Governments need to provide a focus on ensuring that such innovative energy sources are used to heat energy-efficient homes. Communities must be put front and centre in the shift to clean energy, and given a stake in this change.
The Government say they are committed to reaching net zero, in order to avert the worst impacts of the climate crisis. This is not the time to be stuck in the old ways of doing things; those ways will not work now. We must embrace new ways of working with and for our communities without delay, and community energy is part of that process.