Solar panels
Solar panels

Many of you have written to me about the importance of a comprehensive community energy strategy by the government. Local and community-owned renewable energy supply can play a major role in meeting our climate change targets. However today, there are many challenges to producing energy at the local level.

I was disappointed that the government did not support the Local Electricity Bill, a bill I felt would have made a significant positive impact on the future of local energy in the country.

I wrote to the Secretary of State, at the Department for Business, Energy & Industrial Strategy raising these points, and urging him to harness the potential of community-based renewable energy schemes.

My letter is reproduced below.

Letter to Secretary of State
Letter to Secretary of State


Please find below a response to my letter from the Minister of State for Energy, Clean Growth and Climate Change.


Dear Thangam,

Thank you for your letter dated 17 December, to the Rt Hon Kwasi Kwarteng MP, regarding the Local Electricity Bill and community energy. The Secretary of State is grateful to you for having taken the time to write. I am responding on behalf of the Department as this matter falls under my Ministerial portfolio.

I am grateful to you for raising this matter. We set out the Government’s approach to community energy in the Net Zero Strategy, which will act in lieu of a specific strategy on community energy. In the Strategy we recognised that communities are key to the Department’s efforts to decarbonise the economy and there is already some excellent work happening in communities to support the transition to net zero.

To support community energy projects, the Government currently funds the Rural Community Energy Fund. The £10 million scheme supports rural communities in England to develop renewable energy projects. Ofgem also supports community energy projects and has announced that from February 2022 it plans to welcome applications from community interest groups, co-operative societies, and community benefit societies to the Industry Voluntary Redress Scheme. This will allow groups to apply for funds to deliver energy related projects that support energy consumers in vulnerable situations, support decarbonisation, and benefit people in England, Scotland, and Wales.

The Net Zero Strategy announced that my Department plans to reintroduce the Community Energy Contact Group to further support community energy groups. Since 2017, this group has been merged in a wider Local Energy Contact Group but given the scale and pace of work being taken forward, we believe that it makes sense to strengthen our engagement with the sector still further by reintroducing a dedicated forum for community groups to engage across Government. We hope this will build on the aims of the Net Zero Strategy, helping to develop community energy schemes, as you describe in your letter.

You also asked about the Local Electricity Bill. While the Government agrees with the broad intentions of what the Local Electricity Bill seeks to achieve and wants to see more local energy schemes as part of delivering a net zero energy system, it does not support the Bill as the means to enable local energy supply. The right to local energy supply already exists under the Electricity Act 1989 and Ofgem has existing flexibility to award supply licences that are restricted to specified geographies and/or specified types of premises. Changing the licensing framework to suit business models identified by the campaign risks creating wider distortions elsewhere in the energy system.

To support the establishment of more local energy schemes, we continue to look at a full range of other options to support local involvement in tackling climate change. In response to the unprecedented rise in energy prices this year, we are working with Ofgem to consider broader reforms to the overall energy retail market regulatory framework. It will be important to consider how we can create a retail market to support the transition to net-zero as part of this broader reform.

Thank you again for taking the time to write. I hope you will find this reply helpful.

Yours ever

Minister of State for Energy, Clean Growth and Climate Change

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