Local councils to sell green energy

Monday, 30 August 2010 15:33

Image: www.freefoto.com

Councils in Britain will from next week be allowed to sell renewable electricity to the grid as part of plans to spur a local power revolution and create income for local areas. From 18 August, the Department for Energy and Climate Change, or DECC, will overturn a ban on local authorities selling renewable electricity. It's hoped this will open up new sources of income for local councils, including the full benefit of the feed in tariff - a payment to anyone who owns a renewable electricity system, for every kilowatt hour they generate. DECC estimates that local authorities across England and Wales could boost their incomes by up to £100 million a year through the scheme. At the moment, local councils can put any renewable electricity they generate to local use, and benefit from the associated feed in tariff for projects smaller than 5MW. But they are restricted from selling any excess renewable electricity into the grid, except power generated from combined heat and power sources, and they can't benefit from the additional export component of the feed in tariff - a bonus payment from any surplus electricity they generate.

Currently local authority-owned renewables generate only 0.01 per cent of all electricity in England, despite the scope that exists to install projects on their land and buildings. In Germany the equivalent figure is 100 times higher. The ban is a 1989 amendment to the Local Government (Miscellaneous Provisions) Act 1976, which was put in place at the time of electricity privatisation. But DECC says the restriction no longer makes sense because small scale renewables need to contribute to the shift in the UK's power sector to low carbon. An online portal, called Community Energy Online, will be launched in the autumn to support the development and deployment of low carbon community-scale energy infrastructure.

For more information about generating and buying green energy, visit the Environment and greener living section on Directgov (link).