Overview

The Local Electricity (No. 2) Bill aims to support small-scale, low-carbon electricity generators, particularly community groups, by guaranteeing a minimum price for their exported electricity and enabling them to sell directly to local consumers.

Description

This bill establishes two key schemes:

• Community Electricity Export Guarantee Scheme: This scheme mandates that large energy suppliers (over 150,000 customers) purchase electricity from low-carbon generators under 5MW, including community energy groups. The Gas and Electricity Markets Authority (GEMA) will set a minimum annual export price, based on market rates and inflation, and oversee a registration system for these generators. Suppliers must offer at least a five-year contract, with an option for the generator to terminate after one year. GEMA will produce annual reports on the scheme's performance.
• Community Electricity Supplier Services Scheme: This scheme requires large energy suppliers to offer registered community energy sites the opportunity to sell their electricity to local consumers via a specific tariff. This tariff will reflect the export price, and suppliers can limit the number of consumers to roughly match the generator’s output. Suppliers will handle billing and metering, charging a reasonable fee (guided by GEMA) and returning any remaining revenue to the community group. GEMA will provide guidance on tariffs and fees and also produce annual reports on the scheme.

The bill also defines "low carbon electricity" and specifies how the schemes will be regulated and reported upon. It applies to England and Wales, and Scotland pending approval from their respective Parliaments.

Government Spending

The bill does not directly allocate specific government funds. Instead, it imposes obligations on large energy suppliers and GEMA to implement and oversee the schemes. The ultimate financial impact will depend on the electricity prices set by GEMA and the volume of electricity traded under the schemes. No figures are provided in the bill text itself.

Groups Affected

• Small-scale, low-carbon electricity generators (under 5MW): These generators, including community energy groups, will benefit from guaranteed minimum prices for their electricity and potentially increased revenue from direct sales to local consumers.
• Large energy suppliers (over 150,000 customers): These suppliers will face new obligations to purchase electricity from small generators and to provide services to facilitate local sales, potentially impacting their operating costs and profitability.
• Local consumers: Consumers near participating community energy projects could have access to locally generated, potentially lower-cost electricity.
• Gas and Electricity Markets Authority (GEMA): GEMA will have increased responsibilities in setting prices, overseeing registration, providing guidance, and reporting on both schemes.

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