THE PROBLEM The potential for community renewable energy to benefit local economies is being blocked by unfair regulations and hugely disproportionate costs.
THE SOLUTION We have drafted the Local Electricity Bill and are campaigning for it to be made law. This would give community-scale renewable energy a massive boost by empowering communities to sell their energy directly to local people.
OUR CAMPAIGN So far, we have brought a cross-party group of 229 MPs on board in support. But we need many more and to achieve this we need your help.
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Peter Aldous, MP for Waveney, Conservative Party
Sir Graham Brady, MP for Altrincham and Sale West, Conservative Party
Rosie Duffield, MP for Canterbury, Labour Party
Wera Hobhouse, MP for Bath, Liberal Democrat Party
Dame Diana Johnson, MP for Kingston upon Hull North, Labour Party
David Johnston, MP for Wantage, Conservative Party
Ben Lake, MP for Ceredigion, Plaid Cymru
Caroline Lucas, MP for Brighton, Pavilion, Green Party
John McNally, MP for Falkirk, Scottish National Party
John Penrose, MP for Weston-super-Mare, Conservative Party
Selaine Saxby, MP for North Devon, Conservative Party
Barry Sheerman, MP for Huddersfield, Labour and Co-operative Party
THE PROBLEM We are not meeting our climate change targets – the UK is way off track to meet the fourth and fifth carbon emissions budgets of the Climate Change Act. Community-scale renewable energy has huge potential to help solve this problem and benefit local economies, but it is currently blocked from doing so.
If you want to buy your electricity from local renewable sources, such as the local school or sports hall that have solar panels on their roofs, you cannot. We all buy our electricity from a utility company that sources it from anything connected to the National Grid, be it a field of solar panels in Wiltshire or a gas fired power station in Yorkshire.
Putting it the other way around – a community with local renewable generation, e.g. housing estates with solar panels or a local wind farm – cannot sell the energy they generate directly to local people, but must sell it to a utility who sells it on to customers. This is happening because becoming a supplier of energy to customers involves set-up and running costs of millions of pounds. These costs are due to things like having to grapple with the highly complex grid balancing codes and network agreements that are controlled by the largest six utilities.
The heart of the problem is disproportionate costs. It would be like you wanting to set up a business baking cupcakes in your kitchen and delivering them to people in your local area, but instead of just paying the road tax for your delivery van you had to pay hundreds of thousands of pounds to use the roads, no matter how few cupcakes you delivered. You could never start your business – this is the reality for community-scale renewable energy in the UK.
THE SOLUTION The costs and complexity of being able to sell locally generated energy to local people need to be made proportionate to the size of the local energy co-operative’s or business’s operation. We have drafted the Local Electricity Bill which lays out a mechanism that will do this. If made law, it would give electricity generators the right to become local suppliers – i.e. sell their energy directly to local people – and make it financially viable to do so.
The Bill gives the task of setting this new mechanism up to OFGEM, the energy market regulator. Critically, it requires that OFGEM ensures local suppliers face costs and complexity proportionate to the scale of their business. The Bill also requires that OFGEM engages appropriate experts and stakeholders in the formulation of the new process.
Some have suggested that the Bill could be improved by adding certain new clauses, for example a requirement that only co-operatives and not-for-profit companies could become local energy suppliers. There will be opportunities for redrafting and we are actively seeking input from community groups, experts and academics.
THE BENEFITS If the Local Electricity Bill became law, it would give a huge boost to community renewable energy.
- Communities would benefit from selling local renewable energy Significant additional value would remain within local economies, meaning more investment in things like local services and more efficient homes.
- Communities could raise funds to build more renewable energy Communities would have a viable business model to build new renewable energy schemes, meaning they could help ensure the UK meets its climate change targets.
- Communities would see knock-on local economic benefits There would be greater acceptance of the transition to 100% renewable energy, local economies would be more resilient, local skilled jobs would be created and our energy supply would be more secure due to less imports of fossil fuels.
OUR CAMPAIGN To see the Local Electricity Bill made law, we need the support of around 400 MPs (which is well over half the House of Commons). So far, the Bill has gained the support of a cross-party group of 229 MPs.
We are mobilising people at constituency level to call on their MP to back the Bill. Every additional supportive MP increases the chance it will become law. We need your help with this so please sign up.
www.parliament.uk Local Electricity Bill 2019-21
The next stage for this Bill, Second reading, is scheduled to take place on Friday 26 February 2021.
This is a Private Members' Bill and was introduced to Parliament on Wednesday 10 June 2020 under the Ten Minute Rule.
If you would like to know more about the Bill, please contact its sponsor, Peter Aldous MP, for more information.