Shaun Lowthorpe , Business editor
Thursday, July 24, 2014
Ministers are being urged to act now to open the energy market to community groups – to make it easier for councils, businesses, and community groups to supply power to customers locally.
Norwichy-based Cornwall Energy, an EDP Future50 firm, has produced a manifesto looking at how the government can unlock the potential of ‘community energy supply’
The Department for Energy and Climate Change this year produced a community energy strategy predicting that one million homes could be powered by local suppliers by 2020 using community energy schemes, or up to 5pc of the supply produced by power stations.
However, the UK is still well behind countries such as Denmark and Germany, where half of all power stations are owned by the local community.
The report warned that in most cases the direct supply of electricity to consumers was a not a “realistic option” for local producers.
Barriers to entry included lack of in-house expertise and set up costs, which start from upwards of £500,000.
“Current arrangements tend to support developments designed to be scaled for growth, not to enable small-scale operations matched against local need,” the report said.
Ed Reed, principal consultant at Cornwall Energy, and one of the authors of the report, said while there was an intention to develop community energy, current policy was nationally focused, with energy surpluses or shortages redistributed through the national grid.
However, tweaking these rules to allow that to happen locally would mean that local producers would be able to supply directly to local customers.
“The current market regulations have been defined from the starting point that anyone who wants to sell electricity to a consumer is probably going to be a national scale player,” he said.
“That makes it very difficult for anyone who wants to sell it locally.
“We are just trying to make the case that you don’t have to throw the baby out with the bath water.”
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