10 August 2010: Huhne delivers on local power

Early in July 2010, UK Energy and Climate Secretary, Chris Huhne, promised that he would allow local councils to sell renewable electricity. This was widely welcomed, but there was a worry that there would be great delay as the government went through long consideration and yet more consultations (one was launched by the previous Labour government in March 2010). However, yesterday Huhne announced that he has made up his mind and that, from next week, local councils will be allowed to sell renewable electricity. This is fast and impressive work.

Huhne has written to all council leaders encouraging them to lead “a local power revolution”. The press release announcing the new policy says that:

 “At present only 0.01% of electricity in England is generated by local authority-owned renewables, despite the scope that exists to install projects on their land and buildings. In Germany the equivalent figure is 100 times higher. In one of the first energy policy actions of the coalition government, a ban on local authorities selling renewable electricity will end on 18 August. This will open new sources of income including the full benefit of the feed in tariff which incentivises renewable electricity. It could mean up to £100 million a year in income for local authorities across England and Wales.”

The government is also promoting community-owned renewable energy schemes. The press release goes on to say that it is:

“… actively working on proposals to allow communities that host renewable energy projects to keep the additional business rates they generate.  DECC will launch an online portal in the autumn, Community Energy Online, to support the development and deployment of low carbon community-scale energy infrastructure.”

(See DEC: Huhne ends local authority power struggle.)

“Actively working on” suggests that there is some disagreement between government departments. It is likely that the Treasury is nervous about giving up the money from business rates, as it is very short of money and the coalition government has promised to reduce the UK fiscal deficit as fast as possible. As UK local government is mainly financed from the centre, there is a danger that any additional business rate revenue will be linked – explicitly or implicitly – with less money from the centre, in which case there would be no financial incentive for councils to develop renewables. However, Huhne is undoubtedly aware of this and will be working hard to ensure that the financial carrot is real and as large as possible.

Friends of the Earth has welcomed Huhne’s announcement:

“This is great news – at long last councils will be able to earn money by selling green electricity generated from small-scale renewable projects to the grid.  It is a real incentive for them to bring in new clean energy schemes that will benefit everyone in the area, including poorer communities.  With budget cuts looming, the cash raised will be more welcome than ever, and should be used for schemes like making homes energy efficient, which will slash energy bills, tackle fuel poverty and create jobs.”

(See Friends of the Earth: Councils to sell green electricity back to the grid.)

The greatest barrier facing renewable developers in the UK is the land use planning system, and one of the problems in getting planning permission is that those who support proposals often do not speak out, leaving the field clear for the antis. So, all those who support renewables in the UK should become active and vocal, either with Friends of the Earth or with their local council.

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