The Energy Bill
This week, the Energy Bill returned to Parliament. Despite enjoying cross-party support, Amendments that would allow community energy schemes to supply electricity directly to local people were opposed by the government and will not make it into law. Instead of enabling local electricity supply, the government announced a £10m Community Energy Fund, promised to publish an annual report to Parliament on community energy and to consult on barriers the sector faces.
These represent good first steps and would not have happened without a large cross section of MPs engaging on community energy. The sector was raised time and time again in the Parliamentary debate, which shows the interest politicians are taking in our sector. We are very grateful to all community energy practitioners who have written to their MPs asking for their support. It has made a big difference and will continue to do so.
The Community Energy Fund
Following the closure of the Rural Community Energy Fund (RCEF) last year, there has been no dedicated funding from central government available to community energy projects. The new Community Energy Fund (CEF), which will go live at some time this Autumn, is seeking to allocate £10m over two years to projects based in England. No new funding has been offered to Scotland or Wales. Half of the fund may have to be spent before the end of the financial year in March 2024, so the sector could face a challenge to apply for the funding on offer in time. CEE will be providing some support to community energy organisations looking to apply to the fund over the coming months.
Several Amendments backing community energy were proposed by MPs including the author of the Net Zero Review Chris Skidmore (CON), the Shadow Climate Secretary Ed Miliband (LAB), the Lib Dem Climate Spokesperson Wera Hobhouse (LD) and Caroline Lucas (GREEN).
Following pressure from some of its own MPs, the government announced a partial u-turn on its effective ban of new onshore wind projects. The requirement for ‘unanimous community consent’, meaning that just one local objection could derail a whole scheme, has stalled the sector’s growth since its introduction under David Cameron.
25 Conservative MPs, fronted by former COP26 President Sir Alok Sharma, have campaigned to lift the ban. However, the government’s compromise offer in reality amounts to very little.
Onshore wind will only be permitted in “suitable locations” which can now be identified, not just in the Local Plan but in Local Development Orders, Neighbourhood Development Orders and Community Right to Build Orders as well as through Supplementary Planning Documents. These, especially the latter, are easier and quicker than changing the Local Plan but still represent a hurdle no other infrastructure has to clear. An onshore wind project can only be approved after its impacts have been “appropriately addressed”.
In reality a group of local councillors opposed to new wind projects will still be able to block them in their area and deter developers and investors from risking onshore wind in England. Determined communities that firmly support onshore wind may now be able to proceed with projects if they have a sympathetic Local Authority, but these changes will not shift the dial for the sector in a significant way.
By contrast, the Shadow Climate Secretary Ed Miliband put forward an Amendment that would bring onshore wind planning policy into line with other local infrastructure. While it will not form a part of the final Energy Bill, we will continue to campaign for the provision to make it into Labour’s general election manifesto.
The Energy Bill does not address a crucial gap in government policy. Energy efficiency has been a neglected policy area since the collapse of the government’s Green Homes Grant scheme, which offered funding for home insulation upgrades. Efficiency is a vital part of the UK’s energy transformation and it will not be possible to meet our climate targets without more action in this area.
The most recent Contracts for Difference (CfD) allocation round funded no new offshore wind projects. CfDs are the government’s main funding mechanism for renewable energy. Despite warnings that the costs associated with constructing offshore wind farms have increased substantially with inflation, the price offered remained static and for the first time no bids for new offshore wind were made.
CEE is lobbying the government to expand and adapt its mechanisms for funding renewable energy infrastructure. We have met with the CfD team in DESNZ and officials working on the Review of Energy Market Arrangements (REMA) to make the case for a fair playing field for the organisations involved in the energy market, not just the big commercial developers.
Following the departure of the Defense Secretary Ben Wallance, the Energy Secretary Grant Shapps was appointed to his role last week. Claire Coutinho, an MP first elected in 2019, took his place. In 2021, she praised the community action seen since the start of the Covid-19 pandemic, saying that where community groups came across problems, they found their own solutions: “They innovated, they collaborated, they self-organised.” We have written to her to congratulate her on her appointment and will continue to work with her department to secure more support for community energy over the coming months.
Labour have also conducted a reshuffle, although senior ministers in energy policy, such as Ed Miliband, remain in post. Sarah Jones, MP for Croydon Central has been appointed Shadow Minister for Industry Decarbonisation.