By this evening (August 9), Energy and Climate Change Secretary, Chris Huhne, should have ended the quarrel over whether or not councils across Britain will be allowed to sell renewable electricity back to the national grid.

At present only 0.01% of electricity in England is generated by local authority-owned renewables, despite the scope that exists to install projects on their land and buildings. In Germany the equivalent figure is 100 times higher. At present there is a ban on these buildings selling ‘green’ energy back to the grid, a ban Huhne has labeled “ridiculous”.

In one of the first energy policy actions of the coalition government, this ban is expected to end on 18 August. This will open new sources of income including the full benefit of the feed in tariff (FiT). This could mean up to £100 million a year in income for local authorities across England and Wales.

In advance of a visit to Woking Borough Council’s clean energy projects, the Energy and Climate Change Secretary said:

“For too long, Whitehall’s dogmatic reliance on ‘big’ energy has stood in the way of the vast potential role of local authorities in the UK’s green energy revolution.

“Forward thinking local authorities such as Woking in Surrey have been quietly getting on with it, but against the odds, their efforts frustrated by the law.

“I’ve taken the early step of overturning the ban on local authorities selling renewable electricity to the grid.

“I’ve today written to all councils urging them to take advantage and lead a local energy revolution.

“This is a vital step to making community renewable projects commercially viable, to bring in long-term income to benefit local areas, and to secure local acceptance for low carbon energy projects.”

Ray Morgan, Woking Borough Council’s Chief Executive, said:

“The Council welcomes the announcement by the Energy Secretary, and the commitment shown by the Coalition Government, to enabling local authorities to provide and support low or zero carbon energy production.

“Woking has made strenuous efforts over the years to produce energy locally and hopes that this strong signal from the Government will be supported by the regulator, Ofgem, to remove other barriers which frustrate the delivery of local energy solutions.”

At present local authorities are able to put any renewable electricity they generate to local use, and to benefit from the associated FiT for projects which are smaller than 5MW. However, they are restricted from selling any excess renewable electricity into the grid (other than that generated from combined heat and power), and also from benefitting from the additional export component of the FiT.

The restriction is a 1989 amendment to the Local Government (Miscellaneous Provisions) Act 1976. It was put in place at the time of electricity privatization to ensure the transfer of the electricity industry to the private sector. It no longer makes sense given the acute need to shift the UK’s power sector to low carbon, and the potential contribution that small scale renewables can make.

Other steps being taken to support local green power:

  • The Government is committed to encouraging community-owned renewable energy schemes where local people benefit from the power produced. It is actively working on proposals to allow communities that host renewable energy projects to keep the additional business rates they generate. 
  • DECC will launch an online portal in the autumn, Community Energy Online, to support the development and deployment of low carbon community-scale energy infrastructure.