The Climate Change Act 2008 set a national target to reduce greenhouse gas emissions 80 per cent by 2050. The Renewable Energy Directive in 2008 also commits the UK to increase our share of renewables from 1.3 per cent per cent of energy consumption in 2005 to 15 per cent in 2020. Progress in recent years has taken us to 5.2 per cent in 2013 but it is clear that there is still a long way to go. Despite having some of the best renewable energy resources in the European Union, the UK currently ranks 26th out of 28 Member States.
Local authorities have a crucial role to play in achieving carbon reduction goals and are in a strong position to help deliver the required growth in renewables and energy efficiency, through their strategic planning role and a host of other functions – not to mention their own carbon footprint. Examples include the multiple recycling and energy recovery options from waste, LAs’ role as social landlords and the influence they can have on consumer choices in their area.
Most importantly, renewable energy can be a huge win for the local economy. Whether it’s the urban or rural economy, there are multiple opportunities for sustainable development, job creation and enhancement of local quality of life. Since 2013 local authorities retain 100 per cent of the business rates from new renewables development. Renewable energy developments can provide many forms of community benefit, ranging from the funding of local energy efficiency refurbishment to reductions to residents’ energy bills.
Expanding the network
On the heat side there is increasing interest in heat networks, potentially fuelled by a range of renewable sources. The government announced in October that it is offering almost £2.4 million to 32 local authorities across England and Wales to support the development of heat network projects.
The cost of solar PV has more than halved in the last three years and, together with the Feed-in Tariff, solar power has become an increasingly attractive investment for residential and commercial/industrial buildings alike; educational establishments are particularly appropriate. The REA welcomes the government’s aim to install 1,000MW of PV on the Government Estate, including schools – especially if it could be done outside the existing support programmes, which have limited budgets.
Solar and wind power look to be competitive with grid electricity within a decade, upsetting the established order in the energy industry. Together with new storage technologies and electric vehicles, locally produced energy will allow communities to become increasingly independent of centralised power production, whilst generating significant revenue for the local authority.
Energy Secretary Ed Davey wrote to local authority leaders in January outlining the opportunities: “Local government is uniquely well-placed to support, partner and invest, and to provide a positive planning and policy environment to help drive a community energy revolution. Local authorities know the problems, opportunities and stakeholders in their area best and can work as a trusted voice. DECC [the Department of Energy and Climate Change] is committed to a sustainable and significant expansion of the sector in the years ahead and local leadership will be key to helping deliver community energy projects across the country.”
However, there is one area where the benefits of local authority involvement are potentially being missed. The government’s Community Energy Strategy seeks to spread ownership of renewable projects to local people across the country, working in partnership with commercial organisations, but the definition of ‘community energy’ and the given partnership models do not currently include a role for local authorities. The key role local government could play in this area is illustrated by many of the examples below.
‘Blue Sky Peterborough’
Peterborough City Council’s innovative approach is boosting the city’s economy and producing revenue for the Council for decades to come. Amongst a range of initiatives, the Council has been working in partnership with the Mears Group to install solar panels on public buildings and schools. The project’s framework is available to other local authorities, giving them quick and cost-effective access to the same benefits without having to go through an OJEU procurement (Colchester Borough Council is now using it). The Council is also working with Viridor to install a waste-to-energy plant that will provide the Council with power to use or sell.
These projects will support the economic well-being of Peterborough by generating sustainable cost savings and revenues that can be used to protect front-line services and support the ambitions of the Council. Generating assets located in or near Peterborough will inject money into the local economy that would otherwise go elsewhere.
Oxfordshire powers up and down
The OxFutures partnership, comprising Oxford City Council, Oxfordshire County Council and the Low Carbon Hub, is aiming for the River Thames and the roofs of Oxfordshire to be the power stations of the future. Communities, businesses and the public sector will ‘power up’ by developing renewable energy schemes, creating an investment market for low carbon energy generation and leveraging £25 million investment into local energy projects over the next two years.
At the same time, the partnership will implement large-scale energy efficiency retrofitting programmes to encourage local households to ‘power down’ and reduce their energy use. The reputation of the Councils builds trust in the programme and the Low Carbon Hub brings innovation, enterprise and new skills to existing relationships with local communities.
Going for carbon neutral
Eastleigh Borough Council has set a target of reducing CO2 by 50 per cent by 2020 and producing 3.4MW of renewable energy by 2016, focusing on solar and biomass. The council has installed PV on every operational building possible, as well as on a large number of its commercial assets. In the case of one Academy the site is owned by the school but the panels are owned and operated by the Council, setting a precedent for other councils to follow.
In March the Council approved plans for a 1MW solar farm with 3,600 solar panels. The Council is now set to be carbon neutral on its electricity use, saving around 760 tonnes of CO2 per year, without the need for offset. The combined schemes will produce enough electricity to power over 400 homes.
Energy supply options for cities
The Greater London Authority, Nottingham and Bristol intend to engage in the electricity supply market, generating a new source of income. Nottingham City Council is looking to be a fully licensed independent supplier, taking full responsibility for delivery and meeting licence conditions. The GLA is pursuing Licence Lite, in which a city becomes a ‘junior supplier’ with responsibility for some aspects of delivery and licence conditions, while a partner ‘senior supplier’ is responsible for the rest of the business.
Other models include joint ventures, partnerships and licensing the use of the city’s brand to an existing supplier who uses it to market to customers in the local area. These options are all described in a recent IPPR report, City Energy, a New Powerhouse for Britain.
Numerous other examples
Many other local authorities are taking innovative action to boost their local economy. Aberdeen, for example, is planning to become a global pioneer in the use of hydrogen produced using excess power from nearby offshore wind farms. The Bristol Solar City project aims to install 1GW of solar PV by 2020, with opportunities for local community groups to invest in installations on council properties rent-free.
West Sussex County Council and the other Sussex authorities are implementing a pilot community energy model to develop renewable energy projects and sell the completed installations to the community, potentially through a local share issue. Bath & North East Somerset Council is cooperating with the social enterprise Bath & West Community Energy to install PV on six schools via roof-rental agreements and is planning a range of further community solar, wind and hydro projects in the future.
In terms of investment, some leading local authority pension funds have already begun to invest in low-carbon energy. For example, Lancashire County Pension Fund (winner of a 2013 British Renewable Energy Award) has committed approximately £200 million to low-carbon projects, including a £12 million investment in Westmill Solar near Swindon, thought to be the world’s first large-scale solar co-operative.
The examples cited above demonstrate what a boost renewable energy can make to both the local economy and council incomes. Furthermore, DECC’s public opinion polling consistently show that renewables are very popular, with approval ratings for technologies like biomass, wind and solar in the range of 60-82 per cent, much higher than any non-renewable technology. The small but vocal minority that oppose renewable developments should not be allowed to overshadow the views of the silent majority.
I finish with the thoughts of John Harrison, executive director of resources, Peterborough City Council and the main driver behind Blue Sky Peterborough. John stresses the importance of councils investing in technical, financial and legal advisors to gain a better understanding of the often hidden potential of local government schemes to generate income, while also using industry leaders to share their learning to drive income early at minimum risk to councils. He emphasises that an appetite for risk is key in a climate of economic uncertainty, and can lead to ground-breaking measures with unprecedented results.