Why local councils should become energy suppliers

Freeing local authorities to compete in the energy market would reduce prices, attract green industry and create jobs.

Since Ed Milliband unveiled his plan at the Labour Party conference to freeze energy bills until 2017, the price of energy has rarely been out of the news. The problem with the narrow debate around the size of household bills is that it fails to address the issue of diversifying energy generation. The key to lower prices is, ultimately, a more competitive market. Local government has its roots in energy generation – modern Birmingham was built on the revenue from the local gasworks. It’s time we got councils back into the energy game.

The benefits of a new generation of local authority energy provision will not just be felt in terms of greater competition and lower bills. Councils can sell energy to raise money to pay for public services and, if this is positioned smartly, spur green economic development, creating a new generation of good jobs in the sustainability sector. The low carbon economy already accounts for 8% of GDP. With support from councils, it could grow significantly.

Some councils are already using green energy capture to cut their own fuel bills locally. Birmingham, Islington and Woking are all experimenting with energy generation and redistribution. Islington’s Bunhill Energy Centre, for instance, captures wasted heat to provide cheaper energy to estates in the local area – but these initiative tend to be on the periphery of activity. Scaling this up, generating energy on a much larger scale and linking it to local economic growth strategies could completely transform how we control and use energy at a very local level.

Local authorities have a huge role in economic development. If councils were freed up to compete in the energy market on a local basis, to generate and provide energy, this could attract green industry, create jobs and, crucially, underpin communities with green infrastructure. Local authorities are best placed to shape local markets and skills to align to the green energy agenda.

Generating and recycling energy at a local level would also have a huge benefit to local people in a way that the Big Six just can’t achieve. Local authorities would be able to provide cheaper energy directly to their residents, which should take advantage of local resources in the process. Communities would also become much more directly involved in the energy market by working with local authorities through energy co-operatives for instance, to capture and recycle energy to use themselves and sell back to councils for cheaper redistribution locally. Giving this power directly to communities would both incentivise behaviour change locally whilst helping to reduce the cost of living.

Some will question why councils should return to energy. Why not instead partner with energy suppliers and set up joint ventures to distribute cheaper energy? The problem is that attracting this sort of investment is a real challenge. Local authorities have the financial muscle to invest in this sort of infrastructure development that could accelerate projects quickly, whilst linking it to economic growth strategies.

But the real answer to this question lies with community ownership of resources, which would transform how councils and residents interact with the energy market. Given the current direction of energy bills and how powerless people feel to control it, recycling and generating energy using local resources will become more, not less important, in addressing this problem. Behavioural change will only come alongside ownership of these resources and local authorities, as guardians of localities, are ideally placed to lead this.

Laura Wilkes is Head of Policy and Research at the New Local Government Network

A photo illustration of the filament inside a lightbulb on October 17, 2013 in London. Photograph: Getty Images.

Laura Wilkes is Head of Policy and Research at the New Local Government Network

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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