Today the Environmental Audit Committee published Kwasi Kwarteng’s 1 page response to their letter of recommendations to government to recognise the importance of community energy to achieving net zero, and to remove barriers and provide "practical support measures to harness the full potential of community energy".
It neither acknowledges the importance of community energy nor reveals concrete plans of how the government will support it. However we welcome the indication that plans will be included in the Net Zero Strategy and funding considered as part of the Comprehensive Spending Review process. We join the Select Committee chair Philip Dunne MP in urging the Secretary of State “to develop an ambitious proposal for further community energy funding in his submission to the forthcoming Spending Review” including a replacement for the Urban Community Energy Fund which was prematurely ended in 2016 with £8m unspent.
The Secretary of State declined to act on one committee recommendation to “swiftly introduce a minimum Smart Export Guarantee floor price above zero, and extend the guarantee on the energy export price” to help give community energy groups longer term income certainty to reassure investors. He argues that the SEG was designed to be a market mechanism to "facilitate a competitive market" and "to level the playing field for small-scale low-carbon generation" and has produced some export prices above the wholesale electricity price and the current export price for projects eligible for the Feed-in Tariff. Unfortunately this price is only fixed for a short time and is still too low to provide either the certainty or the minimal returns that community investors require. Thus as one witness pointed out to the Committee inquiry it is neither smart nor a guarantee and fails to meet a key aim.
The letter makes no reference to the Committee recommendation to “remove the regulatory barriers to allow community energy projects to sell their energy to their local communities.” Or to any BEIS work with Ofgem on the recommendations related to Ofgem.
We are pleased to learn that the Government’s "local energy programme provides support to help local authorities develop local area energy plans" though we see very little evidence of take-up.
On the same day as this response was published a group of cross-party MPs, all sponsors of the Local Electricity Bill, have secured a 90 minute Back Bench Business Debate on Enabling Community Energy, on Thursday 1 July, 1.30-3pm. This shows that there is strong support in parliament for the government to support community energy. We hope that they will be able, before the minister, to rehearse some of the excellent reasons why community energy should be supported by government so eloquently expressed to the Secretary of State in the Environmental Audit Committee letter.