The speech made by Wera Hobhouse, the Liberal Democrat MP for Bath, in the House of Commons on 14 May 2026.
It is an honour and a pleasure to take part in this King’s Speech debate. I am a member of the Energy Security and Net Zero Committee, and I look to grow our economy and get Britain working, with a special focus on the green economy and its many opportunities and challenges.
The regulating for growth Bill promises a framework that supports innovation, yet current proposals from the Department for Energy Security and Net Zero risk doing the opposite. Under the plans for the new home energy model, any technology other than a heat pump or heat battery could automatically receive an energy performance certificate rating of D. In practice, that means that innovative zero-emissions systems would be treated the same as fossil-fuel heating. That would make many new technologies commercially unviable and leave consumers without practical alternatives where heat pumps are not suitable. The plans are already affecting innovative businesses in Bath, including Luthmore, which has developed a pioneering, zero-emission alternative to the gas combi boiler. Combined with exclusion from support schemes, VAT barriers and delays in the assessment process, such policies risk pushing Britain’s clean tech innovators overseas instead of backing them at home.
I am encouraged by the announcement of an energy independence Bill in the King’s Speech. Russia’s invasion of Ukraine and now the war in the middle east have laid bare the need to go much further and faster to secure our energy supply, which means getting off the rollercoaster of global prices. In the midst of an energy price crisis, cheap, home-produced energy has never been more vital. There is huge nationwide potential for growth in small-scale renewable energy generation, especially by community groups that can distribute the benefits locally. Nobody in the House will be surprised to hear me say that we Liberal Democrats are the greatest champions of community energy.
Community energy puts people at the heart of their energy future by allowing them to generate, manage and own their own local renewable energy projects. These are projects run by the community, for the community. One of many pioneering projects is Bath and West Community Energy in my constituency, which, because of surplus income from renewable energy projects, has been able to donate to more than 100 community projects across Bath in the past decade.
What really worries me, when hearing in the ESNZ Committee about proposals for community energy and the way the Government look at that, is that it is only about an ownership model, rather than a beneficiary model. Community energy should also benefit consumers of energy, not just the energy producers. I get it—it is about both. It is not one or the other, but we must focus on ensuring that the community benefits from community-generated energy.
Community energy projects also strengthen energy security by diversifying sources of energy, reducing reliance on imported fossil fuels. In 2025, community energy groups saved people almost £2 million on their fuel bills due to energy efficiency upgrades. However, community energy schemes currently generate less than 0.5% of the UK’s electricity. With the right support, that could increase by 20 times, powering more than 2 million homes and saving more than 2 million tonnes of CO2 emissions per year.
However, there are two main blockers to the rapid expansion of community energy projects. The first major barrier is a shortfall in Government funding to scale up energy generation projects. While the £15 million Great British community energy fund is welcome, it has led to minimal growth. I hope that through the energy independence Bill more funding will be allocated to these projects so that their potential can be realised.
Another major barrier facing community energy projects is the prohibitive cost of accessing energy markets to sell the electricity that they generate. This is what I mean: there are now more than 600 community energy groups operating across the UK, yet not a single one is able to sell power directly to local customers. Although it is legally possible, the various regulatory burdens and obligations associated with energy licensing rules make the cost of selling power to local people impossibly high.
In the 2022-23 Session, legislation was brought forward to unlock the potential of community energy and selling directly to local people. The proposal was supported by the current Secretary of State and more than 320 MPs across the House. We have a Secretary of State for Energy who supports reform of local energy supply, but we are still waiting for the legislation to make that reform a reality.
We Liberal Democrats welcome the regulatory changes promised in the local power plan, in particular the commitments from the Department for Energy Security and Net Zero to establish a route to market for unlocking a smart local energy system. However, if community energy initiatives want to plan ahead with confidence, the Government must provide clear detail on how and when these reforms will be implemented. One option is to untangle completely the licensed supplier model that we currently have and to ask Ofgem to establish a local supply licence. The proportioned costs could create the ability for community schemes to sell to local customers if they wish and make a viable business model. The other option is to have current licensed suppliers offering contracts for the export of community energy to local residents.
Whichever route the Government choose, we need to see action. We must see the necessary regulatory changes in the energy independence Bill to establish a workable model for local energy supply so that community energy products can scale up, become commercially viable and play their full part in delivering a cleaner and more resilient energy system.