Community benefits for residence in proximity to renewable energy generation

‘The Secretary of State may by regulations make a scheme to make provision for—

(a) cheaper tariffs for households in proximity to a renewable energy generation facility; and

(b) shared ownership in renewable energy generation facilities for households in proximity to the facility.’.—(Charles Hendry.)

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

I thank the hon. Member for Halton for giving guidance to the hon. Member for North-East Derbyshire, in respect of her momentary aberration during the Division.

New clause 14 is about how we try to change attitudes in communities around the country towards developments such as wind farms. Our approach is to do that through partnership. We are passionately committed to localism and believe that local communities should be empowered  to make the decisions about what is right for them. We also completely accept that certain sizes of project—the Government’s threshold of 50 MW is broadly right—should be considered national schemes, and that decisions on them should be made in the wider interest, which requires a separate decision-making body. We part company with the Government on how decisions on those national schemes should be made, but nevertheless accept the need to decide such matters in a different way.

For projects below 50 MW, the decision will stay with local communities. Our concern is that often when a community learns that a wind farm is proposed in its area, it sees downsides, such as visual intrusion, noise and construction work, but cannot see the benefits of having a local wind farm. The Government’s approach has moved through different phases. Initially they were saying, “You should have it because it is generally good for us all.” That approach has not won round local communities. The Government went through a phase of saying, “If you don’t have it, you are really rather a bad person”, and the present Secretary of State likened such communities to people who drive across pedestrian crossings without stopping. That was not going to win hearts and minds either. We need a different approach to how we win people round to the idea that such developments may have benefits for their communities, not just downsides.

Other aspects of our proposals should be taken into account. Elsewhere, we have proposed that, for the first six years, the business rates from a new plant be kept within the local community. A wind turbine brings in, on average, £7,000 or £8,000 a year in business rates per megawatt, so a 3 MW turbine would bring in more than £20,000 a year in business rates. A few turbines paying that money into the local community would mean a significant financial gain.

The new clause is about finding ways to bring more direct benefits to the communities that decide to host such facilities. Looking at how the applications have worked in different parts of the country, one can see a clear pattern emerging. In areas where projects were seen to have been imposed with no benefit to the community, there was significant opposition and people argued strongly against them. There are examples—particularly in Scotland, where there has been a much more constructive approach—of communities seeing real benefits, financially and otherwise, and actively supporting the applications, rather than seeking to block them. We want to move people to a more balanced situation, in which they can see both sides of the equation and make decisions based on those values.

The hon. Gentleman will have seen that my hon. Friend the Member for Harrogate and Knaresborough and I support the new clause, and I am encouraged by his argument. Will he, however, concede that people find it difficult to buy into supporting local renewable energy projects? That is the case with people in our party, the Labour party, and certainly the Tory party; I do not know about the Scottish National party. Will he explain why, for example, it was impossible for the Conservatives in the Isle of Wight to see that if they were so opposed to wind farms they would lose the manufacturer that provided jobs for the community? Sometimes I do not understand how people just do not see the upside and can see only the downside, when the implications are so obvious.

If one looks at the facts of the decision to close the factory, one finds that the decision was in part based on the nature of the turbines being manufactured, which were for offshore facilities. The company had to decide whether to build a new facility in the United States to meet demand there as a result of the changes being made by President Obama, and it had to consider the implications for its factory in Denmark. The choice was very much to do with internal decisions; it was not simply because the Isle of Wight did not want the facilities. I have to recognise, however, that a proactive approach by a local authority may influence investment decisions.

I just want to put on the record that the turbine factory was not producing turbines that were being used in this country. It did, however, comment that it saw a difficult future, and therefore had to consider whether it was worth investing in turbines for the UK when it had people on its doorstep saying, “We don’t want turbines”.

That makes the case for a different approach. The approach up to now has been one of antagonism and entrenched opposition. We need to find people who can be persuaded to look at the merits of both sides of the case. The new clause states that there should be a change to regulations, so that people living close to a renewable energy facility benefit from cheaper electricity. That has long been the approach in France. Someone living near a nuclear power station there gets cheaper electricity as part of the deal for that community. Some people say, “Is that not bribery?”, but I think that it is saying, “We recognise the fact that you have this facility nearby that is of greater benefit than to just your community”. We are keen to see that issue addressed.

Wherever possible in such developments, we are keen to ensure a degree of shared ownership. Perhaps that could even be obligatory. A turbine could be erected free of charge but be owned by the local community, or there could be a shareholding within the overall development. Money would then come into the community on a continuing basis, and the community could spend it on improvements and the things about which it cared most.

We are trying to find a way through the entrenched opposition that so often causes blockages. We want to leave it to local authorities to decide what is right for their communities, but we want to ensure that when they say to their people, “This is the application,” people can say, “Okay, I understand that there may be some downsides, but I can see that there is a real benefit for us as well.” There can then be a much more balanced and constructive debate about what is right for the community. That is an important way of encouraging the development of renewable facilities on land in Britain. We are grateful for the Liberal Democrats’ support. The new clause could start to make a real difference, and I hope that the Minister will be supportive.

I have a lot of sympathy with the hon. Gentleman’s argument. As he said, there is some experience of such developments in Scotland. However, community benefit does not always work in the way that he outlined. A community can be split between those who want a community benefit—a new sports centre, for example—and  those whose main concern is the view, or whatever. My concern, however, is not so much about that but about the road that the approach takes us down.

If we decide that we will give cheaper energy to those who are close to a wind farm, why not give it to those close to a nuclear power station or a power line, too? We know about the huge opposition to the Beauly-Denny power line because of the impact on views and the alleged impact on property values. The new clause will open up a can of worms that could be very dangerous and very expensive.

I understand what the hon. Gentleman is saying. However, there are proposals for two significant wind farms off the coast of my constituency. One is at Bell Rock, which is a national monument, but it will have turbines around it. I strongly support those applications; not only will they provide energy for our future, but they will bring huge economic benefit to the community. They will provide work in the area and will benefit local ports and firms. That is my argument in favour of the Bell Rock and Inchcape wind farms. The idea of seeing the economic benefit of a wind farm is a much stronger argument with which to try to win over the local community.

The trouble with smaller applications is that relatively small numbers of people get involved in the argument, but both sides are extremely passionate. I do not think that it is a question of money. It is a question of the passions that wind farms arouse. Sometimes it is difficult to see the rational argument. People have real concerns about views and amenities. I can understand that.

May I tell the hon. Gentleman that his comment about it being a small number of people who get involved flies in the face of all that I know about the matter? There is nothing that stirs a community up more than a proposal to site eight or 10 great windmills above them. There is a problem here that we need to deal with. I understand the point that he is making about benefit, but such proposals involve a great many people in a given community.

I understand what the hon. Gentleman is saying. The number of people involved varies from application to application. Sometimes it is small. I accept that in some cases it may be large. Again, that would depend, I suspect, on the size of the application. I was speaking from my experience in my constituency. None the less, my principal point is that the new clause opens up a huge can of worms. If we go down the route proposed in the new clause, we will have to give compensation to anybody who lives near any massive, disruptive development. Any such development is disruptive. I mentioned nuclear power stations, but coal stations, carbon capture and storage, power lines and even motorways can come into it. I am happy to go along with community ownership, but the cheaper tariffs would be a step too far. That would be a very dangerous road to go down.

The Committee will see from the amendment paper that my hon. Friend the Member for Harrogate and Knaresborough and I support the new clause. As the hon. Member for Angus has made clear, the proposal is not without its difficulties, but on balance, we all have an obligation to try to do something to increase public acceptance of renewable power.

The most important point to make, particularly to the hon. Member for Angus, is that the new clause is specifically drafted to apply to renewable energy generation facilities. I understand that it can be argued that once we have something in legislation or regulations that incentivises people to think that they might support such facilities, it could be used as an example to show that the approach could be extended to nuclear power stations and other things. He knows that our party, like his party, opposes nuclear power as an answer to the question of the UK’s energy needs.

I understand what the hon. Gentleman is saying but my point is that in the Bill we are setting up a levy for CCS demonstration projects. Presumably we are going to have some new coal-powered stations as a result of that. That raises an immediate problem, because it is not something that may happen in the future; it is something that is going to come over the hill within the next few years.

I understand that. My view and that of my hon. Friend is that we support this on the basis that it is only for renewable energy projects. That is how it is drafted and that is as far as we go, because we think they are in a different category. They are entirely about using the elements to increase our energy supply. It is true that at the moment we struggle in our communities to tell people of the benefits of renewable energy facilities. It is often paradoxical because, as Scotland in particular knows from recent experience, the alternative has often been great big transmission lines across the country, which are far uglier and less pleasant neighbours than wind turbines, either on or offshore.

Wind turbines are often not visible to most of the people who complain or, when they are visible, are not audible, even though people think they will be. When they are visible and even sometimes audible, they add to rather than detract from the countryside. There are different views; beauty is in the eye of the beholder. Going around Europe, one sees many turbines; people do not find them offensive and they see the benefit.

Two points follow. Proximity is an issue. My Friends and I opposed a ten-minute Bill introduced by the hon. Member for Mid-Worcestershire (Peter Luff) because it seemed a nimby-ish proposal. This is a less nimby-ish proposal, because it realises that the best way to develop renewable energy, certainly on a small scale, is for the community to see the direct benefit. We have always argued for that; that the energy should power the supply for the village, local community hospital or school. We believe that is the way energy should go.

That is why nuclear power is so hopeless as an alternative. There is no community ownership proposed for the nuclear industry—that is beyond imagining. It is the least susceptible to community involvement of any industry in the world, unless the Tories or Labour were to espouse it as a new policy, to get them off the hook at the election. I cannot see that coming. Renewable energy is best linked to communities—as it has been in the past, can be in the future and is in many countries. If communities—villages, town and cities—see themselves as linked to their project, they are far more likely to be supportive. So this probing new clause is a good idea to  put to Government and we look forward to their response. We need to do something so that all the people who at the moment are still reluctant can be encouraged to realise that renewable energy is the future. It is the future of this country and of many other countries in the world. If we cannot show the way in this country, we cannot expect many other countries to do the same.

I have to say I have rarely heard the hon. Member for Angus say anything with which I agree, but on this occasion—[Hon. Members: “Oh!”] I am being completely honest. I do think he showed a degree of common sense on the issue that has not been demonstrated elsewhere.

My constituency, being in the inner city, is unlikely to host wind farms.

They could put them on the river bank.

It is not impossible, as my hon. Friend says. Places such as hostels for the homeless or the mentally ill attract the strongest objections. The corollary would be a rebate on the council tax if someone lived next to something they thought was objectionable and was taking the value from their home. My hon. Friend asked earlier what would happen if someone were living next to where a new prison about to be built. What would be the compensation? If enacted, this proposal would set a precedent that would lead us into an immense number of difficulties. Frankly, the way it is written does not make sense. What we are trying to do, as I understand from the hon. Member for Wealden, is win people round. I do not believe that we can do that by saying, “You will have this, but you or the community will get a bit of money in compensation.” I do not think that that is the way. There are many other arguments, and the Government try to engage people in thinking about what is beneficial overall and what can be beneficial to their communities. I shall say a little in a moment about how we are doing that.

As the hon. Gentleman said, the new clause would introduce powers to make a scheme to make provision for the community local to a renewable energy development to benefit directly, either through cheaper energy bills or through part-ownership of the development. Community involvement in renewable energy projects is a key element of our renewable energy strategy. As well as helping to deliver renewable energy projects, effective engagement of communities that will be hosting such projects is recognised as playing a vital part in gaining public acceptance of renewable energy sources.

In our view, the most effective way of promoting and encouraging the provision of community benefits by developers is on the basis of a voluntary rather than prescriptive approach. We believe that that will engender effective joint working and proactive partnerships in a way that imposing a statutory obligation would not. Renewable energy projects vary widely, as they depend on many factors. Any prescriptive scheme would need to be carefully developed so that it would fit the specific circumstances of a large variety of projects.

In addition, due to the way in which the grid is set up, it is not clear that those living near a wind farm would obtain their electricity from that wind farm. A better  way to ensure that people benefit from lower electricity prices is by ensuring a competitive market, while making sure that the necessary investment can be made to reduce greenhouse gas emissions and to ensure long-term security of supply.

We are already taking forward several measures that will provide benefits to communities. Those include developing and demonstrating models of community engagement through the low-carbon communities challenge and setting effective financial subsidy levels through feed-in tariffs and the renewable heat incentive, all of which will benefit communities. We have also provided capital grants to community renewables projects through initiatives such as the low-carbon buildings programme. The low-carbon communities challenge is a two-year programme to provide financial and advisory support to 20 test-bed communities in England, Wales and Northern Ireland that are seeking to cut carbon emissions.

I have already been involved in considering the programmes of those who have come forward. The scheme is incredibly popular. Those who have won the first places in the low-carbon communities challenge have produced the most remarkable plans, involving whole communities working together to introduce a complete range of renewables—not just turbines but, for example, solar photovoltaics on small businesses, a turbine in a school and even, in the case of one project that I have seen, including further micro-hydro in a local weir. There is enormous enthusiasm in many communities, and we must harness that and ensure that they can engage and develop renewable energy facilities in their communities.

I share the hon. Lady’s enthusiasm about the schemes that she is describing and the winners, many of which, I understand, are in constituencies that my hon. Friends represent. The schemes are very good. Can she tell us the date on which we will have the announcement about the feed-in tariffs to which she alluded?

I was about to say that FITs will provide increased certainty. The hon. Gentleman is asking me—

When the announcement will be made about what the rate will be.

I was getting confused with the fact that we have said when FITs will start, clearly. The hon. Gentleman is asking about the rate. I am not in a position to tell him the date on which that announcement will take place.

The increased certainty that FITs will provide is intended to encourage communities and community organisations, as well as businesses and householders, to consider installing small-scale, low-carbon electricity generation technologies. Switching to greener sources of heat will also help consumers lower their overall energy bills year on year and the renewable heat incentive will apply to the generation of renewable heat at all scales, whether that is on a household, community or industrial scale.

In addition, the renewables advisory board republished an updated toolkit alongside the renewable energy strategy in July last year. The toolkit is intended to help developers and communities as it provides details of how to deliver community benefits from wind energy developments. It also includes case studies showing a variety of ways in which community benefits have been provided for different wind energy developments across the UK. It is hoped that the toolkit will encourage communities to become directly involved in renewable energy projects, as they will be able to see what is possible from the examples provided and use the information to start considering what could be practical for their particular circumstances.

In conclusion, we very much recognise the important role community energy installations have to play in promoting renewable energy and gaining public acceptance. We think that it is through these routes, which are voluntary and which the Government are doing everything possible to incentivise, that there will be greater public acceptance and, as I have already said, in some areas there is real enthusiasm for moving in this direction. We are taking many steps to encourage such projects to come forward and I am therefore not persuaded of the need for the new clause. I also think that it has real problems on practicality and I urge the hon. Member for Wealden to withdraw it.

I am grateful to the Minister for her response and the tone in which she gave it, although I think it was disappointing in its content. I am surprised by the opposition from the hon. Member for Angus. People in Scotland would be some of the prime beneficiaries of the new clause. It is suggested that Scotland could have 60 GW of renewable energy. That would overwhelmingly have to be exported. There could be a sense of anger among many people living in rural areas in Scotland that they live where England’s electricity is being generated. They get the disadvantages, in terms of the visual intrusion, but they do not get the benefit from it, apart from the initial, short-term job creation. I thought that the new clause could be very popular indeed in Scotland, but it may be a case that we need to put to the Scottish people as the Opposition to the Scottish National party.

We are very keen to encourage methods of community engagement. There is a strong case for saying that we should be going a stage further. There is a difference between the hostel and the homes for the mentally ill, to which the Minister referred. There is local authority provision for people within that borough—that community. Therefore, one recognises that they need to go somewhere in their local community, whereas with a renewable energy facility one is potentially generating electricity for people many hundreds of miles away. One therefore wants to do more to encourage them to see the case for doing it.

There is a separate debate to be had about other installations. For example, I always felt that people living in the shadow of Drax, one of the biggest coal-fired plants in Europe, had a strong case for receiving cheaper electricity for putting up with that near their homes, while the benefit of the power plant goes elsewhere. That is a different debate for a different time, but this debate is about how we make communities more accepting of the idea of having renewable energy facilities.

I accept that the Minister is not prepared to accept the new clause. Therefore, I will not put it to the vote. It might be an issue to come back to in another place. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.