Green Power for the People
A new bill aims to boost Britain's production of renewable energy while keeping the money consumers spend ring-fenced in their communities – but it faces stiff opposition from the Big Six companies who dominate the market.
A lot of attention has fallen on how the impact of coronavirus represents a public health emergency from which the climate movement can draw lessons. Demanding total mobilisation of the state’s resources in ways normally declared impossible, the pandemic shares the basic personality trait of climate change as an opportunity hiding inside of a potential catastrophe.
But whatever the overlaps, and there are many, in the shadows of the crisis, an little-known piece of legislation, the Local Electricity Bill, is making its way to parliament. The bill carries with it the potential to speed the UK towards its green energy targets, taking local communities with it, but has yet to garner widespread attention, particularly on the parliamentary Left.
The Local Electricity Bill, put simply, prioritises exactly what it sounds like it should. For energy producers, and despite the UK having an abundance of potential renewable energy generation, the current situation sets unrealistically high barriers of legalism, bureaucracy and – in turn – costs that stop small producers becoming recognised electricity suppliers.
The bill, if made law, would instruct the Office for Gas and Energy Markets, more commonly known as OFGEM, to simplify procedures so as to lower these barriers for small, local suppliers, in the same way that – in order to improve competition – it’s been made easier over the years to change your bank or home energy supplier.
Community Resilience
At the heart of the bill’s vision are the twin goods of renewable energy towards net zero on the one hand, and improved social funding on the other. In the ideal scenario the bill envisages, you could buy your electricity from your local library, football club, food bank or the solar array on the roof of a local newspaper, with profits ploughed back into these concerns.
On the heels of an election defeat, and with so many invaluable grassroots community groups now generationally defunded, if done right, renewable energy offers an opportunity to shape material change and direct money into, and not away from, struggling communities and the groups that hold them together.
In many ways, the problem the LEB can help to address is systemic. Support for renewable energy since the turn of the millennium has steadily dried up, replaced by the Conservative ban on our cheapest energy source (onshore wind), and the ceasing of feed-in tariffs to subsidise solar panel installations.
Large corporations, including Germany’s Siemens and Danish offshore wind giant, Ørsted, continue to make handsome profits, but small energy suppliers, many of them at local level, are stuck in a harsh regulatory environment, without meaningful state support, but debarred from entering the market on fair terms. By using renewables to create independent revenue at local level, communities can deepen their resilience against the whims of Conservative ministers in Westminster, particularly in an era of ongoing austerity.
Covid-19 has already shown this principle in action. As the pandemic hit, Scottish community wind operators created an immediate £40k hardship fund for the local community. A Sussex solar cooperative followed suit soon after, with renewables generators producing an availability of funds that shamed the slow response from Westminster.
Although these and other successful community energy projects continue to thrive, as government support has been eroded, those that are able to make the maths work are often confined to more affluent communities. A hydro power project on the Thames recently closed in Reading, with residents selling £700k of shares to deliver their vision of sustainable energy and revenue.
These businesses might well turn a healthy profit that stays in the community, but often require levels of local funding impossible in many of the UK’s most deprived communities. The Local Electricity Bill would require OFGEM to institute a Right to Local Supply for electricity, removing the administrative hurdles that stop small producers gaining a fair price for their energy.
Under this scenario the UK would see an acceleration in the roll-out of community energy projects, simultaneously helping the country to meet binding climate targets while becoming a global green energy hub.
If that sounds good then it’s no less than the current renewable energy situation demands. Since the climate momentum of the last Labour government, and even the coalition years, have ebbed away, consecutive Conservative governments have allowed renewable energy, and particularly community energy, to fall into a dark state of affairs.
Despite narrow success stories such as offshore wind, their policies and actions have, according to the Committee on Climate Change, meant we are way off track in meeting our emissions reduction targets. In a final self-harming act of Osbornomics, 2015 saw the removal of the Climate Change Levy exemption for renewables, a decision an energy analyst told me at the time was like putting alcohol duty on orange juice.
In Scotland in 2018, community energy projects reversed a global trend of increasing renewables and recorded an actual decrease in renewable generation from the previous year. 2019 then witnessed the bizarre peak of the mishandling of the renewables sector, when small solar owners faced the temporary suspension of the feed-in tariff originally designed to incentivise uptake of solar, and since cut-at aggressively by consecutive Tory budgets.
In a lapse between one deal and the next, owners of solar panels were obliged to export their energy into the grid for free, a scenario – of literally giving away your product – that would be unthinkable in just about any industry imaginable.
Corporate Resistance
The advantage of the LEB is that, as an elegant solution to a number of problems, it is easy to like. The disadvantage is that not enough people know about it. Among those MPs who have heard about it, the bill has made friends in all parties, and like Universal Basic Income has proven to be that rare thing capable of uniting those on the Left who value building grassroots resilience, and the more sincere members of the libertarian Right with an affection for market solutions and the notion – in this case accurate – of regulation holding back local potential.
In the last Parliament, the bill was offered support by George Freeman, the MP responsible for creating the so-called “Tory Glastonbury” festival of ideas. As the bill hopefully grows in prominence, with its first virtual outing in parliament, it will be crucial to see the extent to which his colleagues in the Conservative Party, some of whom are dogmatically opposed to renewable energy sources like onshore wind, try to throw a spanner in the works.
Within the Lib Dems, leadership candidate, Layla Moran, who has also taken the Covid-19 crisis to demand the introduction of a basic income, also gave early backing to the Bill. Support within the Labour Party has come from quarters as diverse as Lloyd Russell-Moyle and Harriet Harman, but in Labour too, as with the country at large, the obstacle to the LEB so far remains a lack of awareness.
In terms of the material changes required to make the Bill law, some resistance may be presented from DNOs – Distribution Network Operators – who control the UK grid infrastructure regionally. A mostly centralised grid with large power plants and fewer connections into it is cheaper and easier to maintain if you are a DNO, but is an obstacle to deploying smaller scale renewables en masse.
The more centralised grid currently in operation is also more carbon intensive and less resilient in the face of power outages at large plants, of the sort that caused nationwide blackouts in summer 2019. With electricity being shunted longer distances around the country, lots of it effectively ‘leaks’ out of the power lines along the way, wasting energy and driving up bills as it goes. One of the more forward-thinking DNOs, Electricity North West, has already put its name to the LEB, but in general these companies make large profits from the grid as it stands, and have little incentive to pursue change.
Other opponents could be waiting up ahead. Done at scale, the LEB has the potential to see a rollout of power generation that could create thousands of small power plants across the UK. This model could generate valuable funding where it is needed most, but collectively supplying significant volumes of electricity to the UK grid. At-scale this could eat into the profits of the so-called “Big Six” energy companies, which are used to enjoying the profits of a near-captive power market, at the expense of local communities who could be prospering through renewables deployment.
Like any seriously and genuinely necessary piece of legislation, the LEB is disruptive in the true sense of the word, with communities across the country standing to benefit at the expense of big business. With that sort of profile, it is inevitable that at some point the Local Electricity Bill will attract powerful opponents. When they come, it will need friends.