Energy minister Kwasi Kwarteng has turned down MPs’ requests for immediate reforms to lift curbs on England’s 273 volunteer-run local generators seeking to sell clean power to their communities.
Backbench MPs believe community energy is being held back in its potential to expand up to twentyfold by 2030, selling carbon-free power to 2.2 million homes.
Co-ops in neighbouring countries face no such obstacles, say supporters. 3GW could have flowed from UK community capacity by 2020, according to a 2014 government report cited now by MPs.
Beis’ secretary of state has told a Commons committee Whitehall will provide no immediate reforms to curbs including local sale which MPs and participants say hold back the potential in of locally owned and retailed energy.
As The Energyst exclusively revealed, Parliament’s Environmental Audit Committee wrote in April to Beis’s boss, seeking action on four topics the Conservative-majority group found were impeding community energy.
A ban on Britain’s local groups selling self-made power direct to communities, and fluctuating Smart Export Guarantees’ unreliability in underpinning energy co-ops’ finances, top woes afflicting co-ops, as identified by the EAC.
Now Kwarteng has replied, warning the committee that British energy co-ops must wait until ‘later this year’ for publication of the government’s Net Zero Strategy and the Treasury’s three-year Comprehensive Spending Review, before seeing any improvements.
Under its Conservative chair Philip Dunne MP, the EAC’s demands include more money from the £10 million Rural Community Energy Fund. Though small in size, the minister tells MPs its expansion must ‘be considered as part of (a) wider process’ of the Treasury-led review.
In its enquiry into Britain’s community energy, the EAC had also taken up co-ops’ complaints about Smart Energy Guarantees (SEGs).
Reforms brought in after 2018 to compensate small generators for sale of surplus generation back to giant DNOs, SEGs have been slated by co-ops for volatility and meagre rewards, making them unviable to underpin co-ops’ finances in an unequal market. In testimony to the inquiry, Paul Hallas, recently a senior Centrica director, now among leaders of south London’s SE24 co-op, denounced SEGs as ‘neither smart, nor a guarantee’.
The committee told the minister a floor price in SEGs was needed to assist co-ops in their business. But Kwarteng’s reply implies the market is working.
“We have seen the market respond positively with some tariffs on offer above both the wholesale price of electricity and the current FIT export tariff”, the SoS replies, in a letter believed to have been drafted by Beis’ head of local energy.
Kwarteng offers merely further thought about SEGs: “When we review Ofgem’s SEG report and assess whether small-scale generators are able to effectively sell electricity to the grid, we will consider whether there are any further barriers to deployment that need to be addressed at this scale”.
For Community Energy England, chief executive Emma Bridge said yesterday, “The Secretary of State’s response to the Environmental Audit Committee’s excellent recommendations…to remove barriers and provide ‘practical support measures’, is disappointing”.
“However CEE welcomes the indication that plans will be included in the Net Zero Strategy and funding considered as part of the Comprehensive Spending Review process”.
Bridge went on, “We join the select committee chair Philip Dunne MP is urging the Secretary of State “to develop ambitious proposal for further community energy funding in his submission to the forthcoming Spending Review.”
Representing 20 co-ops, Community Energy London convenor Syed Ahmed, agreed. “An underwhelming response from @KwasiKwarteng @beisgovuk” , Ahmed tweeted. “In run up to #COP26 you would hope govt would want to boost community action on climate”.
This week is the first of Britain’s Community Energy Fortnight, promoting the sector. CE England says its membership has grown by 15% in the past 18 months to 273 organisations. Energy co-operatives across north west Europe, many run by salaried staff, are also increasing in popular participation. Germany’s DGRV claims over 900.
1 July may see MPs pushing back against Beis’ failure to embrace local energy. A cross-party group of MPs is seeking a three-hour debate in Parliament.
“Huge and unrealised potential for more community-scale renewable energy schemes (exists) across the UK”, the group, organised by Conservative Peter Aldous, LibDem Wera Hobhouse & Plaid Cymru’s Ben Lake, tell Commons authorities.
“Establishing a right to local supply would solve this problem…Proposed legislation to establish such a right, in the form of the Local Electricity Bill, is currently supported by 260 MPs from all parties across the House”, they say in their debate application.
The trio claim a government report in 2014 estimated the community energy sector could have delivered 3 Gigawatts of generating capacity by 2020.
They cite the Environment Audit Committee’s belief in the current inquiry that ‘by 2030 the community energy sector could grow by 12 to 20 times, powering 2.2 million homes and saving 2.5 million tonnes of CO2 emissions every year.”
