I believe distributed generation may have a role to play a part in a smarter, more efficient energy system and small scale low-carbon technologies should have a level playing field as the market for smarter services evolves.

The Local Electricity Bill was a Private Members' Bill (PMB) introduced by Peter Aldous MP in the 2019-21 session. The Bill failed to complete its passage before the end of the session. I understand David Johnston MP has introduced his own PMB in this Parliamentary session on local electricity. The Bill has not been published yet and it is awaiting a date for its Second Reading.

Community energy is a key part of clean growth and can decarbonise energy in local areas while bringing other economic or social benefits. However, there are other considerations which must be taken into account. For example, the Bill sought to alter the licensing provisions and Ministers have expressed their concern that changing the licensing framework would create wider distortions elsewhere in the energy system. I understand that, instead, the Government encourages stakeholders to engage with the ongoing work that the Government is undertaking with Ofgem to support flexibility and innovation more generally. This can help identify how a local element can play a part in the solution. 

Furthermore, there is flexibility in the existing provisions. As you may know, electricity and gas supply licences are usually awarded on a GB-wide basis. However, Ofgem has powers to award supply licences for specified areas and specified types of premises, and that can allow licensees, to specialise and offer more targeted and potentially innovative products and services. The holder of such a licence could supply customers only in the specified geographical area and specified types of premises, with the full terms and conditions of the licence applying otherwise. Therefore, electricity suppliers can apply to Ofgem for a derogation from a particular provision of the supply licence, and if it is granted, provisions of the supply licence will not apply to them. 

I understand that Ofgem is reviewing the use of supply licences that are restricted by geographic location, and Ofgem's Access & Forward-Looking Charges Review aims to improve the signals sent to all network users, which could support more localised supply.  

With increased electrification of heat and transport, I am encouraged the Government and Ofgem continue to work to ensure that the systems and markets that will support this remain flexible, secure, competitive and that they meet the needs of consumers.

I am encouraged that the Government is supporting the delivery of renewable energy projects within rural communities in England through the £10 million rural community energy fund programme. 

More broadly, I am pleased that the Government has acknowledged that local community participation has to be on the agenda. I look forward to further work between BEIS, Ofgem and stakeholders to identify how the UK can adapt its energy framework to modern circumstances.