Energy Secretary calls on councils to lead local power revolution

The ban on local authorities selling renewable energy will end next week (18 August), the Energy Secretary has said.

The Department of Energy and Climate Change said that only 0.01% of electricity in England is generated by local authority-owned renewables. The equivalent figures is 100 times higher in Germany.

In a letter to local authorities, Chris Huhne called on councils to “assume their rightful place” in leading a local power revolution.

He said lifting the ban would open new sources of income for local authorities, including access to feed in tariffs that incentivise renewable electricity.

Huhne said: “For too long, Whitehall’s dogmatic reliance on ‘big’ energy has stood in the way of the vast potential role of local authorities in the UK’s green energy revolution.

“Forward-thinking local authorities such as Woking in Surrey have been quietly getting on with it, but against the odds, their efforts frustrated by the law.”

The Energy Secretary added that the lifting of the ban would make community renewable projects commercially viable.

The current arrangements mean that councils can put any renewable electricity they generate to local use, and benefit from the associated feed-in tariff for projects smaller than 5MW. However, they cannot sell any excess into the grid or benefit from the additional export component of the feed-in tariff.

The restriction is contained in a 1989 amendment to the Local Government (Miscellaneous Provisions) Act 1976. The DECC said it was put in place at the time of electricity privatisation to ensure the transfer of the electricity industry to the private sector.

Gary Porter, chairman of the Local Government Association’s environment board, said there was a lot of enthusiasm in town halls to develop green energy.

He said: “Fully realising the benefits of green power will take time and investment, but this has the potential to cut energy bills, reduce emissions and raise millions of pounds in much-needed income to maintain services and keep council tax down in these tough financial times.

“Councils have lots of buildings, from offices and leisure centres to houses and flats, depots and community centres that could be transformed into local green power stations.”