I have been contacted by constituents about the Local Electricity Bill.
As the Member of Parliament for Milton Keynes South, I have included below my response:
There is no doubt that communities are key to decarbonising the UK economy, and I am glad that the Government is supportive of community energy.
As I am sure you are aware, the Local Electricity Bill is a Private Member's Bill and it seeks to enable electricity generators to become local electricity suppliers.
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 Bill seeks to alter the licensing provisions and Ministers have expressed their concern that changing the licensing framework to suit specific business models risks creating wider distortions elsewhere in the energy system, which could increase costs for other consumers and further unintended consequences.
Ofgem has existing flexibility to award supply licences that are restricted to specified geographies and/or specified types of premises. Furthermore, following a consultation process, Ofgem 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 enable groups to apply for funds to deliver energy-related projects that support energy consumers in vulnerable situations, support decarbonisation and will benefit people in England, Scotland and Wales.
The Energy White Paper, published in December 2020, committed the government to review the overall retail market regulatory framework. Through this review, the Government will assess what changes may be needed to allow for new supply propositions to come forward. I understand the Government will engage with community stakeholders as part of the review.
I will continue to follow the passage of this Bill and monitor the development of the Government's review closely.