The Local Electricity Bill: An Appeal to Councillors for Support
This Bill is currently before Parliament. 79 Local Authorities support it. Here’s why we are asking yours to join them. Will you help please?
The Potential for Local Energy
A 2014 government report[1] stated that community energy could deliver 3,000 megawatts (MW) of power generating capacity by 2020 and that the potential for growth beyond this was even more substantial.
The House of Commons Environmental Audit Committee (EAC) says “by 2030 the community energy sector could grow by 12-20 times, powering 2.2 million homes and saving 2.5 million tonnes of CO2 every year.”[2]
A recent report by WIP Economics[3] shows how community energy schemes could provide up to 2.2 million homes with 5.3 gigawatts of renewable energy by 2030; help families by cutting up to £150 million a year off household energy bills and concludes that by 2030 the number of community energy organisations could rise from several hundred today to around four thousand. That could help bring about a £1.8 billion boost to local economies across the UK, as well as creating around 8,700 jobs.
The Actuality
As the EAC says, ‘as of 2020, community energy contributes 278 MW of renewable energy and heat to the energy system.’ It would be hard to imagine a greater failure of potential.
Why?
This potential is being blocked because current energy market and licensing rules lead to insurmountable local supply costs. Let’s illustrate this in lay terms: imagine someone setting up a micro-brewery, planning to deliver their beers to local pubs, and offices (thus cutting down transport costs, CO2 emissions and price charged to consumers) and then being told that they must pay £1 million in road tax for their delivery van because it will use the national road network. The business would never be started. This is the reality for community renewable energy.
An in-depth report by the Institute for Public Policy Research states that the financial, technical, and operational challenges involved in setting up a licensed energy supply company mean that initial costs exceed £1 million.[4]
The Solution
This can be stated very simply: Parliament should enact the cross-party Local Electricity Bill which is supported by over 260 MPs. It creates a right to local supply. The Bill is a first attempt to lay out a mechanism that will fix the UK’s local supply problem. It is accepted that there may be scope for improvement and refinement, and new ideas are welcome for how that can be done.
The Bill can be viewed here and the MPs, Councils and organisations support it are listed here.
Income for Local Authorities & Other Community Benefits
There are other community benefits. Local economies benefitting from local energy has happened before – local facilities across the UK such as parks, swimming baths and libraries were built from revenues of municipal energy companies in the 19th and early 20th centuries.[5]
This is happening today, albeit to a limited extent (because of the hurdles to local supply indicated above): In 2019, the small number of community energy groups across England, Northern Ireland and Wales generated £4.6 million for local projects.[6] This figure will multiply if the Bill is enacted and communities across the country will be revitalised.
Image courtesy of Visual Stories
But didn’t Robin Hood Energy go bust, leaving the council with a massive debt?
Yes – precisely because of the problems that the Local Electricity Bill aims to fix. Robin Hood Energy failed, and similar energy companies set up by councils are struggling, because of fundamental flaws in the energy market rules.
Specifically, the setup and running costs involved in becoming a licensed supplier of electricity are extremely high and, crucially, not proportionate to the size of the supply business. If the costs were made proportionate – which is what the Local Electricity Bill would do – then Robin Hood Energy and similar others would have been empowered to create sustainable and viable local energy supply businesses.
How you can help please
It is accepted that the Bill may not be perfectly drafted: we want to work with experts and the Government on improvements. A motion of support from your Council calling on the Government to support the Bill and engage with us to improve the wording would help.
Will you help please?
[1] The Department for Energy and Climate Change; Community Renewable Electricity Generation; January 2014
[2] Environmental Audit Committee website
[3] WPI Economics; The Future of Community Energy - http://wpieconomics.com/publications/future-community-energy/
[4] Institute for Public Policy Research; Community and local energy: Challenges and opportunities, June 2016
[5] Professor Robert Millward; The Cambridge Economic History of Modern Britain, Volume 2, 1870 to the Present; Chapter 15 – The Growth of the Public Sector
[6] Community Energy England; Community Energy: State of the Sector 2020 - https://communityenergyengland.org/files/document/484/1615989181_CommunityEnergy-StateoftheSector2020Report.pdf