The Co-operative Party and SERA have set out their plans for Britain to develop a ‘Big Six Thousand’ of community-owned energy suppliers to challenge the dominance of the ‘Big Six’ in the energy market – providing a fairer deal for consumers and reducing their carbon footprint.
In a new publication titled ‘The Next Generation,‘ they set out a vision for community energy in the UK. Drawing on lessons and examples from community owned renewable energy projects across the country, the pamphlet provides recommendations on how policymakers can facilitate a community energy revolution, unlocking the sector’s huge potential.
It sets out plans for the creation of a national community-owned renewable energy fund, community feed-in tariffs and renewable heat incentives as well as allowing community-owned energy groups to be able to supply energy direct to residents for the very first time.
Caroline Flint, Shadow Secretary of State for Energy and Climate Change, said:
“Community energy has huge potential for the future of our energy mix, building a more open, democratic and sustainable energy market. I am determined to support its development so that we can replace a market dominated by the Big Six to one with thousands of generators and suppliers.
“This pamphlet makes an important and timely contribution to the debate. In the coming months I will be working with the Co-operative Party and SERA to develop proposals which will bring this vision into reality.
“This will include exploring the potential for direct delivery of community owned generation into homes and businesses, ensuring the regulatory environment supports the development of this sector, and championing local innovation and best practice.”
Karin Christiansen, General Secretary of the Co-operative Party said:
“With the cost of living crisis currently gripping the UK, consumers are increasingly unable to shield themselves from rising energy costs. There is a growing disparity between the daily struggle to keep homes warm and lit and the huge increase in profits per customer being realised by the ‘Big Six.’
Community energy is a movement rooted in capturing social, financial and environmental returns for local people. With the right support, community owned renewable energy projects can offer a truly viable alternative – a ‘Big Six Thousand’ to provide a fairer deal for consumers and help to tackle climate change.’
The pamphlet’s vision is inspired by the example of Germany, where the right to generate has become the power to transform – providing the platform for constructing a more open, democratic and sustainable energy market. Over the course of a decade, renewable energy has become the largest supplier of electricity, providing for 28% of the country’s electricity needs. More than 50% of this supply is owned by households, communities and farmers, with less than 13% owned by the utility companies.
This transformed energy market now operates without subsidy, having delivered 400,000 jobs and lower energy prices than five years ago. For Britain to undergo a German style energy revolution, all the evidence from pioneering energy markets suggests that renewable technologies are best deployed where policies and measures are directed at bringing together communities of households and businesses.
As it stands, community energy projects are not currently able to supply energy directly to residents, as they are not set up as energy companies and it is prohibitively expensive to put in individual meters or set up as a supply company. Energy generated is currently sold cheaply to the existing energy utilities (often at 4.5p/kWh), which is then sold to local residents at a multiple of what the energy company pays for it (often at 34p/kWh).
It makes the case for a future Labour Government to pilot the direct supply of community owned renewable energy to local residents – with a view to making it a mainstream form of energy supply by 2020. This would allow community energy companies to supply discounted energy to residents, reducing bills and tackling fuel poverty.
In addition, the Co-operative Party and SERA are also calling for:
- A level playing field – The Government should introduce a community-feed-in tariff and a community renewable heat incentive so that community owned energy groups can benefit from tariff uplifts. It should also encourage the growth of the market through instructing the Green Investment Bank to provide loans for medium scale community projects.
- An end to the cap on ambition – Community owned renewable projects should be defined by motivation rather than size. The Government should remove the Coalition Government’s 5 MW threshold for community energy projects, as it is a brake on ambition and a limit to the scale and number of projects that community enterprises undertake.
- A National Community-owned Renewable Energy Fund – The Government should use existing levies including section 106, the Community Infrastructure Levy (CIL) and the Energy Company Obligation (ECO) to create a 4 year National Community-owned Renewable Energy Fund