Councils permitted to sell renewable electricity

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

 
Chris Huhne

Mr Huhne unveiled his plans to change the law on this issue last month after claiming it was “ridiculous” (see letsrecycle.com story).

Today's announcement makes this official and means councils across Britain will from next week (August 18) be allowed to sell renewable electricity to the grid and assume their “rightful place leading a local power revolution”.

The energy secretary has written to all local authorities informing them of the new law, which the government hopes will open up new sources of income, including the full benefit of the Feed-in Tariff (FiT) subsidy, which incentivises the generation of renewable electricity.

Already, councils including Hampshire county council – which has three energy from waste (ERFs) plants at Marchwood, Chineham and Portsmouth which generate enough energy each year to power 50,000 homes – are expecting to benefit.

Councillor Mel Kendal, the council's executive member for environment, said: “We welcome plans to allow local authorities to develop heat and electricity from all forms of renewable sources, and strongly support the power to sell the electricity we produce from all renewable forms of generation.”

According to the Department of Energy and Climate Change (DECC), the rule change could generate up to £100 million a year in income for local authorities across England and Wales.

While this has been broadly seen as a positive move, waste and recycling trade bodies have previously raised concerns over how it will address the issue of council's securing funding for energy from waste plants in the first place (see letsrecycle.com story).

At present, DECC says 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, while in Germany the equivalent figure is 100 times higher.

Potential

Commenting on the benefits to councils such as Hampshire, energy secretary Chris Huhne 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 Hampshire 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 council chief execs 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.”

Restricted

Currently, local authorities are able to put any renewable electricity they generate to local use and to benefit from the associated Feed-in Tariff for projects 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). This also means they are unable to benefit from the additional export component of the FiT.

The restriction is a 1989 amendment to the Local Government (Miscellaneous Provisions) Act 1976 and was put in place at the time of electricity privatisation to ensure the transfer of the electricity industry to the private sector.

DECC claims 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.