To fix our broken energy market, we need Help to Supply

The government should do more to help communities, local authorities and businesses not only produce but supply their own power.

The Help to Buy scheme has so far attracted 6,000 applicants in just two months, and has already enabled nearly 750 people to climb onto the property ladder: another step towards encouraging a "property-owning democracy" and securing assets for individuals and families. Great. But there is a much more radical shift waiting to happen in the energy retail market, and a far greater opportunity to facilitate widespread ownership, not only among individuals, but communities and businesses too. We have heard so much about the need to encourage diversity and competition beyond the "big six", yet seen little by way of policies to put this into action.

In fact, we’ve seen the reverse taking place. The reduction in the Energy Company Obligation (ECO) levy will aid to bring down costs, but only for the larger energy companies, giving them an even greater advantage in winning over customers. And according to a recent report, the 20 month price freeze advocated by Ed Miliband will see smaller utilities lose out. We desperately need policies that will not seek to disadvantage start-ups and smaller players within this sector. The party manifestos - if they are serious about tackling high energy bills – must include measures that encourage innovation, competition and widespread ownership, not stifle it.

Markets overseas show that an entirely different picture can be painted. Germany has 1,100 electricity suppliers, and the average household has a choice of around 72 of these. The four major energy companies operating in Germany (E.ON, RWE, EnBW and Vattenfall) take up 43.8 per cent of the retail market. Most other suppliers are owned by the municipality or the community, and the rate of "bottom-up" ownership of such services and assets is growing. At the end of 2012, 190 communities had been successful in bidding to run – yes, own and run – their local distribution grid (at least nine of these are co-operatives) and 70 municipal utilities had been founded.

This is not renationalisation or even remunicipalisation, but a move toward a much more constructive, locally-governed infrastructure in which communities ensure transparency, efficiency and good competition. Many of these emerging community-owned suppliers, such as Feldheim Energie and EWS Schönau, are not only offering cheaper tariffs than their competitors, but are seeking and fuelling the prosperity of their locality. In contrast, the UK has 30 licensed suppliers and the largest six take up 98 per cent of this market. No community has yet set themselves up as a competitor.

True, we cannot lift the infamous successes of Germany’s market and immediately apply them to the UK, and neither for this reason can we directly duplicate policies from overseas. But what we can do is not do nothing: we need a strong policy infrastructure, backed by government, that will catalyse new start-ups and new competition.

The Community Energy Strategy, published today, recognises that many of the UK’s communities, local authorities and businesses have an ambition to not only produce, but supply their own power. Ofgem’s "Licence Lite", which was introduced five years ago to make this possible, has so far seen only one application progress. The GLA, the largest governing authority in the UK, has the facility, scope and financial backing to take advantage of this scheme, but many institutions and civic groups don’t. The London Authority’s application is still pending final approval, so we are unsure as to whether even this will be successful.

What we need is a "Help to Supply" scheme. Government, working with the Department for Energy and Climate Change and Ofgem, should set up a series of pilots to work with a range of partners – communities, generators, local authorities, supermarkets, business hubs, Local Enterprise Partnerships – to help them establish a licensed supply company. Along the way, risks, costs and barriers should be noted and policies – perhaps even an alternative to Licence Lite – should be implemented as a result of this learning. This way, we may move from the paltry 30 suppliers we currently have to doubling or trebling this number in the next couple of years, and perhaps even more as the momentum builds.

Our ambitions are right, but our policies are wrong. If we are to take rising bills, competition and transparency seriously, we simply cannot let this opportunity pass us by.

Caroline Julian (@carolinejulian) is Head of Research at ResPublica and undertook a Winston Churchill Memorial Trust travel fellowship to Germany last year to explore the ownership structures of local distribution grids and utilities. The report based on this trip will be published through ResPublica this year.

Lightbulbs on display in an electrical retailer in Soho in London. Photograph: Getty Images.

Caroline Julian is Deputy Director, Head of Policy and Strategy at the thinktank ResPublica.

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The Brexit select committee walkout is an ominous sign of things to come

Leavers walked out of a meeting of Hilary Benn's "gloomy" committee yesterday. Their inability to accept criticism could have disastrous consequences

“Hilary Benn isn’t managing a select committee. He’s managing an ecosystem.” That was the stark verdict of one member of the Commons' Brexit committee on its fitness for purpose yesterday. If its meeting on the eve of Article 50 is anything to go by, then Benn’s fragile biome might already be damaged beyond repair.

Unhappy with the content of its “gloomy” provisional 155-page report into the government’s Brexit white paper, leavers on the committee walked out of its meeting yesterday. The committee is a necessarily unwieldy creation and it would probably be unreasonable to expect it to agree unanimously on anything: it has 21 members where others have 11, so as to adequately represent Leavers, Remainers and the nations.

Disagreements are one thing. Debate and scrutiny, after all, are why select committees exist. But the Brexiteers’ ceremonial exodus augurs terribly for the already grim-looking trajectory of the negotiations to come. “As I understand it, they don’t like analysing the evidence that they have,” another pro-Remain member of the committee told me.

Therein lies the fundamental weakness of the Brexiteers’ position: they cannot change the evidence. As was the case with the 70 MPs who wrote to Lord Hall last week to accuse the BBC of anti-Brexit bias, they assume a pernicious selectivity on the part of Remainers and their approach to the inconvenient facts at hand. None exists.

On the contrary, there is a sense of resignation among some Remainers on the Brexit committee that their reports will turn out to be pretty weak beer as a consequence of the accommodations made by Benn to their Eurosceptic colleagues. Some grumble that high-profile Brexiteers lack detailed understanding of the grittier issues at play – such as the Good Friday Agreement – and only value the committee insofar as it gives them the opportunity to grandstand to big audiences.

The Tory awkward squad’s inability to accept anything less than the studied neutrality that plagued the Brexit discourse in the run-up to the referendum – or, indeed, any critical analysis whatsoever – could yet make an already inauspicious scenario unsalvageable. If they cannot accept even a watered-down assessment of the risks ahead, then what happens when those risks are made real? Will they ever accept the possibility that it could be reality, and not the Remain heretics, doing Britain down? How bad will things have to get before saving face isn’t their primary imperative?

Yesterday's pantomime exit might have been, as one committee member told me, “hysterically funny”. What’s less amusing is that these are the only people the prime minister deigns to listen to.

Patrick Maguire writes about politics and is the 2016 winner of the Anthony Howard Award.