Magazine article Public Finance

They've Got the Power

Magazine article Public Finance

They've Got the Power

Article excerpt

IT IS TEMPTING for local authorities to take a narrow view of energy, to treat it merely as something they consume, much like any other utility.

But many councils are rethinking this attitude. They want to be generators and suppliers of heat and power, not just consumers. By identifying and developing their own local sustainable sources, they can not only secure their own supply, but boost the local economy, attract investment and maybe even earn some extra income.

Whichever way you look at it, the UK is facing an energy crisis. Its ageing coal plants are being closed, the nuclear newbuild programme has not progressed at the pace necessary to ensure an uninterrupted supply, and there is continued uncertainty about the government's commitment to renewables.

The Electricity market reform white paper of July 2011 estimated that it would cost some £110bn to meet the UK's energy needs and hit carbon reduction targets by 2020. That is double the current rate of investment, and comes when finances in both the public and private sectors are stretched.

Indeed, the established players in the UK energy market seem reluctant to invest in new energy sources, while smaller companies do not have the financial clout, even if they have the will.

Local authority investment in energy generation is unlikely to solve this problem in itself. But it could be part of the solution, as well as providing benefits locally. For example, energy investment is a pump-primer for the economy, and a way for councils to offset the effects of further funding cuts.

What is more, many councils see participation in the local energy market as a social good, because it can help reduce fuel poverty in their communities while creating a fairer energy price for all.

Take the Blue Sky Peterborough energy service company. Through BSP, Peterborough City Council is investing in renewable energy-generating assets and improving the energy efficiency of its properties. …

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