9 August 2010
Local authorities will be able to sell renewable energy to the National Grid from next week, following reforms that the government claims will enable councils to generate £100m a year.
Energy and Climate Change Secretary Chris Huhne, announced today that from August 18 he would lift restrictions preventing local authorities from selling any surplus they produce.
He hopes the incentive will be enough to usher in a new age of ‘municipal energy’, with forward-thinking councils investing in wind turbines, solar panels, biomass generators and waste incinerators. Authorities could earn £100m from selling power to the national grid, he predicted.
Huhne outlined the policy at last month’s Local GovernmentAssociation conference, but no date had been announced for the reforms until now.
Gary Porter, chair of the LGA environment board, said town halls were enthusiastic to transform public buildings into ‘green power stations’.
‘Fully realising the benefits of green power will take time and investment,’ he said. ‘But this has the potential to cut energy bills, reduce emissions and raise millions of pounds to maintain services and keep council tax down’.
Huhne is confident that councils will be able to finance renewable energy through private investment. ‘What we will see is a number of financial institutions will increasingly be beating a path to the door of financial officers at local authorities,’ he said.
He added that electricity production would not be the sole preserve of the bigger, well-resourced councils, and said authorities would be free to set up their own financing arrangements under the general power of competence to be brought in later this year.
Andy Johnston, head of the centre for sustainability at the Local GovernmentInformation Unit, said councils would be able to invest in renewables without borrowing, by entering into partnership arrangements with suppliers.
The arrangements could involve profit sharing, or renting out council roof space to a solar panel supplier.
However, Johnston warned that the feed-in tariffs, which determine how much councils can be paid for the energy they sell, could be re-set in this year’s comprehensive spending review.
Local authorities had been restricted from selling any excess electricity into the National Grid due to a 1989 amendment to the 1976 Local Government (Miscellaneous Provisions) Act.
