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Energy Policy Discussion Notes

At the Kingston and Surbiton CLP Monthly Meeting on Thursday 16th February 2017, Mika Minio from the Labour Energy Forum (https://labourenergy.org/about/) lead a discussion on energy policy at the monthly meeting of all members.

This blog, from Kingston and Surbiton CLP Chair Laurie South, starts to discuss some of the issues.

  1. New energy suppliers.

We are all aware of the “Big 6” providers – owned for the most part by foreign companies -, but it is possible for new providers to come into the market. For example, Robin Hood Energy (https://robinhoodenergy.co.uk/) was created by Nottingham City Council to provide competitively low-cost energy. Similarly, Bristol City Council has developed Bristol Energy (https://bristol-energy.co.uk/).

 The advantage of local authority energy supply schemes is that they are:

(i)            competitively priced as they do not have to pay shareholders and directors and able borrow investment capital at lower rates of interest as they present less risk of defaulting:

(ii)          democratically accountable

(iii)         able to invest surpluses or profits back into the community rather than into shareholder’s and director’s pockets

(iv)         able to encourage and invest in local energy producers, boosting the local economy

(v)          able to access new sources of capital such as pension funds

Those who are ideologically wedded to the nostrum that the private sector is always best, need to realise that Birmingham City Council very successfully pioneered gas supply in the early 20th century.

The Labour Mayor of London, Sadiq Khan, is in the process of developing a pan-London energy supply scheme – potentially a huge supply scheme rivalling the Big 6.

2. Community Energy

We are all aware of the fact that excess energy, created through, for example, individually owned solar panels, can be sold back to the national grid, but we seem less aware of community energy schemes. Plymouth Energy Community (http://www.plymouthenergycommunity.com) was pump-prime funded by Plymouth City Council but was then given independent co-operative status. It was no longer a council run project but belonged to the community. It started by funding solar panels on public buildings like schools and has grown.

 A community hydro scheme in Ham was developed to harness the tidal waters of the Thames and provide cheap energy. It appears the scheme has been scuppered on planning objection grounds by The Lensbury hotel and spa complex sited just across the river. Despite a claimed commitment to reducing its own carbon footprint, it seems the Lensbury did not want a renewable scheme that might spoil the paying patron’s view of Teddington weir.

 But in Kingston there are clear opportunities for community renewable schemes in the Cambridge Road Estate Regeneration, but also in any of the developments taking place in Kingston. It would seem an obvious Council planning proviso that any development should contribute to a community energy scheme by building in solar panels.

3. Investment

It is a fact that part of our off-shore wind renewable energy is financed by Munich local authority – a land-locked city. But German cities are not the only foreign local authorities investing in British renewable energy.

Local government in the UK is in a strong position to find the investment for schemes through its local government superannuation schemes, and this has the support of trade unions. For example, Kingston Council’s superannuation scheme amounts to over £600 million with a large percentage (around 20 per cent it is believed) currently invested in fossil fuels. Switching the investment to community renewables would provide a long-term income to service pensions. How much more powerful if this was invested through a pan-London energy scheme!

4. Fuel poverty

Local schemes such as Robin Hood Energy have put a strong emphasis on reducing fuel poverty not just by keeping down costs but by providing advice, consultancy and help for those in poverty. Now, many of our lowest wage earners are in rented accommodation with energy tariffs that reflect the risk that may have difficulty paying – i.e. their tariffs are higher than those who are better remunerated: heartless, unfair and stupid, or what?

5. Nuclear and Gas

All projections seem to suggest that the UK needs gas fired energy for a further decade before renewables (which are developing their technological base at a rapid rate) can fill the gap. However, this Tory government is committed to private investment and no private investor will want to fund a gas project which will only last a decade.

Nuclear energy can help fill a gap but it is a slow build energy source with guarantees of high prices over several decades. Hardly the competition in the market driving prices down that is the promise and key selling point of private investment in utilities. The key to any nuclear energy is developing the UK skills base so that there are jobs for people in the UK, and the research and development benefits the UK. Currently, there are dangers that the UK is to become the testing ground for foreign companies developing the technology and skills on which they can profit elsewhere. Furthermore, the UK will be left with the clean-up bill for thousands of years to come.

6. Tidal energy

Converting tidal energy into power is still at an early stage of development, but tidal power has many advantages for the UK. We have a big coastline all of which is tidal. Critically tidal energy is predictable and occurs at different times in different places and so, potentially, evens out surges. We do not know what technology has in store but we will probably have to get over our obsession with untrammeled views of nature if we are to harness tide-power. We managed that with electricity pylons.

7. Nationalisation

In selling off the nationally run gas and electricity industries, the Tory government made it very difficult to bring these industries back into UK government control. The costs of doing so would be financially horrendous while a full-scale unremunerated nationalisation grab could have unintended consequences for trade relations.

One way might be to demand that the big energy companies:

(i)           Pay the clean-up costs of their technology

(ii)          Finance the urgent renewal of the crumbling Victorian infra-structure

(iii)         Re-skill the UK work-force

Currently we are allowing the Big 6 to do this over an extended period and pass on the costs to the consumers whilst making profits that are repatriated rather than re-invested. A more strident and aggressive regulator might force the hand of the big companies.

8. Conclusion

Renationalisation is an unlikely scenario, but the development of community providers and local authority schemes could have a large and beneficial impact on energy prices and the monopolistic ploys of the large private utilities. The opportunity for local government to invest in becoming a supplier and generator is now. Central government should be supporting and encouraging these developments. Failure by central government shows either a petty-minded obsession with keeping local government powerless and financially in hoc to central government, or a Tory Party more concerned with financial contributions to Tory coffers that the utilities offer. Commitment to a radical energy policy for communities in the UK by our current Tory government is sadly lacking.

Laurie South

The next CLP Monthly Meeting is on Thursday 16th March 2017 and is open to all local CLP members. 

March's meeting is the AGM and Julie Reay will speak about the NHS.

Further details here.

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