In this instalment of our series on community energy in the UK, we take a look at the recent announcement of a £10 million government community energy fund and talk to the shadow minister for energy security, Dr Alan Whitehead MP, about Labour’s Local Energy Plan.
Whitehead has been an MP since 1997 for the constituency of Southampton Test. He has long campaigned against new nuclear power stations and has been a supporter of microgeneration schemes since 2006. In 2022, he announced that he would be retiring from parliament at the next election, and earlier this year gave a keynote address at the UK Solar Summit.
Labour’s policy roadmap, ‘5 Missions for a Better Britain’, was published in February 2023, with one of these missions being to ‘Make Britain a Clean Energy Superpower’.
A key component of this plan is a national energy company called Great British Energy, headquartered in Scotland, which would invest in the UK’s energy infrastructure like Sweden’s Vattenfall or France’s EDF. Less well reported is the Local Power Plan, which Labour says will be supported by investment from GB Energy, which “will provide finance and organisational capacity to support local government in delivering clean energy projects”.
The scale of funding Labour hope to achieve in local energy generation is much more ambitious than anything the current government have done: “GB Energy will make available up to £600 million in funding for local authorities and up to £400 million low-interest loans each year for communities.”
Community Energy England (CEE) have welcomed the plans, saying “this unprecedented pledge of support for the community and cooperative sector from Labour will genuinely “turbocharge community energy”, as recommended by Chris Skidmore MP in his Net Zero Review. Community energy will now have the potential to be a powerhouse for energy transformation in every community.”
“Community Energy England welcomes the emphasis on local initiatives, planning and ownership, rather than centralised, big business focussed investment (eg carbon capture, usage and storage) that we have seen from government in recent years. This will engage people and communities actively in the transformation, without which, as the Climate Change Committee makes clear, ‘it will not be possible to get close to meeting a net zero target.’”
Community energy groups have also been trying to persuade the government to pass the Local Electricity Bill, and include some of its clauses in the Energy Bill, which is due to become law soon. However, the government doesn’t like the idea of letting community energy groups set up as power companies and sell the electricity they produce locally, saying this would put a financial burden on electricity grid operators whose infrastructure they would be using.
Instead, the government has announced the launch of a £10 million Community Energy Fund, and promised to publish an annual report to parliament on community energy and barriers to the sector’s progress. Power for People, the advocacy group supporting the Local Electricity Bill, welcomed the fund but said market reform was still needed.
Steve Shaw, director of Power for People, told Current± that there was also “real annoyance” in Scotland and Wales that the fund only applies to England. Shaw adds: “There has been nothing from the UK government to help community energy for over six years… this is a complete U-turn. So we’re really pleased about that.” The fund will begin this autumn, and be administered by the five regional Net Zero Hubs.
The fund is seen as a useful funding bridge before the next election, but many are looking ahead to see how a Labour government could treat the sector.
#ICYMI: Yesterday in Parliament, Shadow Energy Minister @alanwhiteheadmp reiterated @UKLabour‘s commitment to turbocharge community energy with the Local Power Plan.
— Co-operative Party (@CoopParty) September 6, 2023
A Labour and Co-operative government will empower communities to become owners of the clean power revolution. pic.twitter.com/jqhnGvz0t2
Dr Alan Whitehead MP tells Current±: “I noticed that the government has put in, frankly, a very small amount of money for community energy. The government has just effectively ignored the role that community energy can play, I think because it hasn’t got big numbers attached to it individually, i.e. this is a lot of smallish work in various places.”
Whitehead says: “What Labour is proposing in this area is that you use very large institutions and bodies to assist place by place, area by area, scheme by scheme, things which themselves will be fairly small but collectively add up to a very large input to UK renewable energy.”
The ambition to create three times as much solar as we currently have in the UK “can actually be achieved in a variety of different ways, not by everything on rooftops, or everything in large fields, but actually a variety of different approaches, according to different communities and different areas,” Whitehead says.
Local government has been “systematically denigrated and downgraded and bypassed as a partner as far as low carbon energy is concerned,” Whitehead believes. “Getting through all the processes that need to happen – a local authority at the heart of it is likely to be far more successful in terms of local projects than actually trying to determine everything by either the market or from the centre.”
Local authority support can also help community energy groups to “mount the various hurdles that are put in their way as far as getting to the point where they’re actually producing energy in the end.” Labour had been pushing for reform to local trading so that community energy groups can get better value for their energy. This is important for groups when going through the planning and development process, which can cost millions of pounds.
Whitehead says that Labour supports the Local Electricity Bill which would allow smaller energy suppliers like community energy groups to sell their electricity locally. However, Whitehead doesn’t agree with the argument forwarded by DESNZ minister Graham Stuart, that it would be unfair on electricity grid companies to use their infrastructure without paying.
Whitehead counters this by explaining that local energy companies selling their energy locally means less of a burden on energy infrastructure as it would require less spending on transmission cables to take energy from offshore windfarms to urban centres where there is demand.
Whitehead says: “I think Graham Stuart is just not right about how that would impact companies. He is right to the extent that some of the ways that the systems are developed at the moment with the way DNOs work could be seen to provide that additional burden. But that’s not the way we want the grid system to develop overall in the future.
“The mission of GB Energy is very much to come in and make sure that where there are difficulties with investment or getting things going or crowding in the capital that’s needed from the private sector, that’s where GB Energy will be. And although I can’t say that is definitely going to happen, as far as growth is concerned, it seems to me that with the sheer scale of the task that’s in front of us, it’s very likely that that sort of approach will become necessary.”
Delighted by yesterday’s announcements by @UKLabour about the Local Power Plan. This is a huge vote of confidence for #communityenergy in Kent and a massive boost for our planned share offer later in the summer. #CommunityEnergy is the future. pic.twitter.com/6TRAkTzD4Z
— Kent Community Energy (@kent_commenergy) June 19, 2023
The community energy sector is understandably enthusiastic about Labour’s policy in this area, but with the party’s record of watering down or abandoning pledges, especially those Sir Keir Starmer made when campaigning for the Labour leadership, Current± asked Whitehead whether he could provide reassurances that these policies would make it into the election manifesto.
“Well, certainly, if I’m there, then you can say yes, that’s going in,” Whitehead says. The “fundamental idea” in Labour’s plan is a national wealth fund of “about £280 billion, which will be used proactively to invest in just pulling our energy system up by its bootstraps into a 100% renewable low carbon system. And that fund is at least partly allocated and mediated through GB Energy, which is an investment company arm [like] other European, national, nationally owned state owned companies like Equinor and Statkraft and Vattenfall.”
This overall idea, Whitehead says, is: “Certainly going to land solidly in the middle of the manifesto. What may be the question [is] how exactly that happens over what period and what sums of money at what time of year and doing what, isn’t really a manifesto issue. That’s a detail issue. So, what we what we need to be concerned about is, is that commitment going to be there in our manifesto? And the answer is yes, it will be.”
“So the question is how quickly you can raise that spending up to a certain point and what the problems are likely to be in terms of how you can match that with other forms of investment, to what extent you need the fund to go first and other people to come second, all those sorts of things. They’re details within the plan that’s already been announced, and certainly will go forward.
Current± asks Whitehead if it frustrates him that some sections of the media are making net zero goals into a culture war to polarise voters around. He says that what really frustrates him is that while he has argued consistently for low carbon energy and emissions reductions, he has always been met by those who wish to delay and undermine the problem of climate change, either by arguing it is not real, or saying that doing anything about it would be too expensive.
“That’s what really annoys me just at the point where we are at maximum urgency, we won’t get a second go at this. And that’s why it’s so important we hold our nerve on all this right now and go full steam ahead.”
