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 a senior researcher and project manager at the think-tank ResPublica.

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How will British science survive Brexit?

What the future of science and tech looks like in the UK, without the European Union.

Science and tech are two industries most likely to be affected by Brexit. British science and tech companies were overwhelmingly in favour of remaining. A Brexit survey run in March by Nature found that of the 907 UK researchers who were polled, around 83 per cent believed the UK should remain in the EU.

UK scientists receive close to £1bn annually for research from the EU – a testament to the quality and influence of the work done on British soil. Between 2007 and 2013, the UK sector supported EU projects by spending €5.4bn, and was rewarded in return with funds of around €8.8bn; it’s a give and take relationship that has seen growth for both.

The combined science and tech sector has laid down the framework and investment for some of the most important research projects in the world. To date, the brightest minds in the UK and Europe have combined to work on highly influential projects: the Large Hadron Collider headed by CERN discovered the Higgs Boson particle, the Human Brain Project set itself the gargantuan goal of unravelling the mysteries of the human brain, and the European Space Agency has helped expand space exploration as European and British astronauts have headed into the ether.

In May 2016, chairman of the Science and Technology Facilities Council Sir Michael Sterling announced that UK scientist Professor John Womersley will lead Europe's next major science project – the European Spallation Source  which is a "multi-disciplinary research centre based on the world's most powerful neutron source." It's the type of project that creates openings and opportunities for researchers, in all fields of science, to really materialise their most ingenious ideas.

The organisation techUK, which according to their website represents more than 900 companies, said in a statement that the result has created many uncertainties but has attempted to appease concerns by declaring that the UK tech sector “will play its part in helping the UK to prepare, adapt and thrive in a future outside the European Union.”

BCS, the Chartered Institute for IT, has reinforced techUK’s concerns surrounding uncertainty, highlighting areas which need to be addressed as soon as possible. The institute believes that discussions with the EU should focus on ensuring access to digital markets, freedom to innovate and growth of “our academic research base and industrial collaborations in computing . . . to shore up and build on a major driver of UK economic success and international influence in the digital sphere”.

Confusion over the UK’s position in the EU single market has prompted questions about the freedom of movement of labour, raising concerns among researchers from Europe about their future role in UK-based projects. The naturally collaborative nature of STEM research, the cross-breeding of ideas which foster scientific and technological advancement, could be severely hampered if limitations are imposed as a result the UK’s separation from the single market.

Speaking to the BBC, Sir Paul Nurse, Nobel Prize winner and director of The Francis Crick Institute said: “Being in the EU gives us access to ideas, people and to investment in science." The Royal Society reports that researchers at UK universities house more than 31,000 researchers of EU origin. The danger of losing much of that support is now imminent.

Many other leading voices in the community chimed in too. Paul Drayson, former Minister of Science in the Department for Business, told Scientific American: “The very idea that a country would voluntarily withdraw from Europe seems anathema to scientists.” Remain advocate Jo Johnson, the Minister of State for universities and science (and brother to the leave campaign’s front man, Boris Johnson), stated his concerns to a House of Lords committee of there being very little means to make up for severed EU finances. The referendum result means that a solution to replace that money from a different source must now be sought. He also tweeted:

Despite the science and tech sector favouring a Remain vote, there were some who were leaning towards Brexit pre-referendum. Scientists for Britain, a group of UK scientists who, according to their website were “concerned that pro-EU campaigners are misusing science for political gain”, issued a statement after the referendum. They thanked leave voters for sharing their vision of the UK “outside the political structures of the European Union.”

Though there are many new policies which will need to be drawn up, it is evident that the UK’s requirement to prop itself up once outside the EU will only serve to hinder science and tech growth. The industries best served through European and global outreach are now at risk of being marginalised.

Currently in place is “Horizon 2020” – an enterprise touted as “the biggest EU Research and Innovation programme ever” as almost €80 million is available to researchers seeking to take their ideas “from the lab to the market”. Once Article 50 is invoked, it is crucial that any negotiations that take place ensure the UK’s spot within the programme is maintained.

There are options to maintain some European integration; gaining an “associated country” status like Switzerland could continue to strengthen the STEM sector, for example. But prioritisation of science and tech seems bleaker by the day. As a new landscape takes shape post-Brexit, we must work tirelessly to prevent our most progressive and forward-thinking frontiers caving in.