My Lords, I take this opportunity again to thank all noble Lords for their excellent contributions. In addressing this rather large group of amendments, I hope that I can respond to many of the points the noble Baroness raised. If I do not do so, I undertake to write to her.
Amendment 94AA seeks to extend the scope of the community electricity right to include all electricity generation facilities. While the Government strongly support community engagement in relation to the development of all energy projects, we are clear that these provisions should apply only to renewable electricity generation facilities. I would like to set out the reasons for this.
First, this measure is part of our broader approach for increasing community investment in renewables, as set out in the Community Energy Strategy. The policy was developed specifically to tackle the imbalance between national and local benefits that characterises renewable schemes. In general, there tends to be
widespread support for renewable electricity developments at a national level, but this is not always reflected at a local level where the impacts are felt directly by communities. Enabling communities to invest in their local renewable electricity schemes will mean that they can gain a greater share of the financial benefits and, more importantly, feel a greater sense of ownership of schemes being developed on their doorstep. This will help to increase public engagement, acceptance and support for renewable projects at a local level. What is more, developers will also stand to gain. Experience in this country and abroad has shown that where communities have a financial stake in a local renewable development—the noble Baroness cited Germany in this regard—this often translates into less opposition and a quicker, cheaper development process.
There is already a voluntary approach that is currently developing a framework for increasing shared ownership. Only if this is not successful would we consider exercising the backstop powers. It would therefore make no sense to expand the scope to include all electricity generation projects when both the policy objective and the voluntary approach are focused solely on renewables.
On Amendment 94AB, I remind noble Lords of the importance of reporting on actions to reduce energy demand and carbon emissions. I recognise that there are many forms of community action that can make a difference to reducing our country’s carbon emissions and managing the demand of energy. The Community Energy Strategy that we published recognises the benefits of putting communities in control of the energy they use. Furthermore, it sets out how communities can get involved in reducing, generating, managing and purchasing energy.
In addition, through the Community Energy Call for Evidence, the department committed to commissioning an external research project specifically focused on energy demand and distributed energy. This research project has now concluded, and we will publish the findings shortly. While these are very important elements of growing the community energy sector and tackling climate change, they are not directly connected with the implementation of the community electricity right regulations.
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Clause 26(3) is concerned with the supply of information in connection with the community electricity right. More specifically, it enables the Secretary of State to make further regulations about the supply of information on the right to buy process, the ownership structures of qualifying facilities and stakes in those facilities, and ongoing monitoring and assessment. As the amendment is not directly linked with the implementation of the community electricity right regulations, it would not be appropriate to make provision in respect of the supply of information on these other matters, as proposed by the noble Baroness.
Amendment 94AC raises the important question of the inclusion of offshore technologies within these provisions. The Government are clear that the powers would apply in the first instance to those onshore renewable technologies that currently form part of the
voluntary process, and only if the voluntary process is not successful. There is scope within these provisions to include offshore renewable projects. However, it is our intention that this would be on a longer timescale, which would provide us with the flexibility to include these technologies further down the line without needing new primary legislation. However, if the powers were ever to be extended to offshore renewables, I reassure noble Lords that that decision would be subject to a formal consultation and would be informed by experiences drawn from other technologies as well as the views of relevant stakeholders in respect of offshore renewables.
Amendment 94AD proposes to remove provision for certain renewable electricity facilities, defined as excepted facilities, to be exempt from the community electricity right regulations. It is important that the Secretary of State retains the flexibility to specify that certain facilities may be excluded from any future regulations. This is to ensure that where renewable electricity generators are already providing a community stake or other form of benefit to the community in a way that is specified in regulations as an acceptable alternative, they are not also then required to comply with these regulations.
Schedule 5 gives an indication of what may qualify as an excepted facility. Let me explain in further detail. First, we may wish to exclude facilities that are wholly owned by the community. In these cases, community members will typically already have had the opportunity to invest in these schemes. Secondly, we may wish to exclude facilities where generators may be offering innovative approaches to shared ownership. For example, this may include generators offering certain revenue-sharing arrangements to local residents that are passed on in the form of electricity bill discounts that are in addition to any community benefit payments. Finally, it may be that generators not taking part in statutory energy schemes, such as feed-in tariffs, contracts for difference or the renewables obligation, should also be exempt as there may be a higher risk profile for community investors in such projects.
Amendment 94AE seeks to remove the age of individuals from the eligibility criteria determining who may exercise the right to buy. The provisions as drafted provide future flexibility to include age as an eligibility criterion. A decision on this would be made following a formal consultation, and further details would then be set out in any secondary legislation. This approach makes sense. There are different risk profiles attached to different forms of stakeholders. It may therefore be appropriate to define eligibility to invest by the age of an individual, specifically to provide that certain investments are available only to adults. This is one way to ensure that individuals are fully aware of the risks associated with the investment and that they are able to take this into consideration in their decision on whether to invest. This reflects the approach taken by the Danish legislation, which mandates that an offer of shared ownership is made in relation to certain wind schemes with a requirement that those investing must be over the age of 18.
Finally, Amendment 94AF seeks to specify that charities must be included among the community groups eligible to exercise the right to buy. Schedule 5
provides flexibility to define the criteria for eligible community groups in further detail at a later date. This would follow any formal consultation, taking on board the views of stakeholders and models coming forward through the voluntary approach.
Much work is currently taking place to consider the appropriate eligible community groups. For example, the Shared Ownership Taskforce, which is leading the voluntary approach, is seeking views on the appropriate legal forms of eligible community groups as part of its draft framework. At present, the task force intends to include a community interest company, development trust, co-operative society, community benefit society or limited company. The final framework will be launched at the end of the summer.
Furthermore, my department has recently undertaken a consultation on the community feed-in tariff. As part of this, the definition of community groups for the purpose of the feed-in tariff is being considered. The findings are expected to be reported in the autumn. I do not want to prejudice the outcome of the voluntary approach or any formal consultation by specifying at this point that the eligible groups must include charities. It is right to wait and make definitions at a later stage in any regulations, if they are made.
The noble Baroness should lessen her cynicism and should not look at this as a political activity. This is something we take very seriously across the coalition. The coalition is very much together on ensuring outreach to communities, which I know the noble Baroness is really interested in, so that they understand what is happening on their doorstep rather than feeling, as they have often felt, that they have been excluded from the debate. Being able to buy in allows communities to feel that they are part of the wider debate on energy security and all the benefits that go with being stakeholders in local energy sources.
That was rather a long speaking note, but I hope that I have explained why the Government’s approach is the right one and that the noble Baroness will withdraw her amendment.