Cities and local authorities could provide a cleaner, cheaper alternative to the Big Six by generating their own energy, according to a new report from the think tank IPPR.

The report, City Energy: a new powerhouse for Britain, urges cities and local authorities to become more active in the energy market by investing in local generation. Specifically, the think tank is recommending that authorities pursue three course of action to bolster their energy experience:

  • Cities should create a collective agency for the issuance of local authority bonds, including green municipal bonds.
  • Local authority pension funds should take into account environmental, social and corporate governance factors and proactively seek low carbon investments.
  • Cities should work with the Green Investment Bank on discrete low-carbon infrastructure projects where there is a clear rate of return on investment.

Commenting on the report, Nick Pearce director IPPR said: “Local generation technologies like solar and medium-scale wind are radically transforming how energy systems operate, bringing to an end the dominance of centralised generation and distribution. This will create a system which is much more diverse and competitive. Cities should grasp the opportunity this presents to support local job creation and growth and enhance the resilience of local electricity supply. This will ensure that more low carbon subsidies directly benefit British communities.”

The report highlights Bristol’s efforts to install 1GW of solar by 2020 which offers local community groups the opportunity to invest in green infrastructure, directly benefitting locals.

Speaking to Solar Power Portal, Stephen Cirell an independent consultant to the public sector explained that local authorities began to recognise the potential of entering the energy market after the government cleared the way for local authorities to sell electricity from renewables.

Cirell explained: “Local authorities have all the power they need to start selling energy now. It’s not something that has been within their normal range of activities for decades, so they have taken a little while to get comfortable with what’s involved in it, what the risks are, and how they might take it forward. But over the last five years huge strides have been made and as a result you are getting some realistic and quite ambitious schemes coming forward for renewable energy.”

Cirell pointed to a number of progressive council projects that have turned to renewables. He added: “There is a leading vanguard of authorities that are pushing it forward but a lot of council are yet to get their house in order. It’s definitely taking root now and I think we will see a lot more in the future.”  

The IPPR report also notes the UK is someway behind some other European nations in this respect. “Around the world cities are spearheading the transformation that must occur in the energy sector”, explained Pearce. “ In Germany, for example, the city of Munich has already invested €900 million in renewable energy projects and it has plans to invest a total of €9 billion which will enable it to supply the entire municipality of 1 million people with renewable electricity by 2025.In the UK, Lancashire County Pension Fund is investing at least £193 million in low carbon projects.”