A think tank has called on the Government to instigate a radical rehaul of the ‘closed shop’ energy market by unleashing the community energy sector.
ResPublica, an independent, non-partisan organisation, warns that failure to recognise and back the community sector will have serious consequences for climate change, emissions and fuel poverty targets.
Backed by Friends of the Earth, the report is launched in response to the Government’s feed-in tariff consultation which saw industry groups and green charities unite to oppose the cuts to renewable energy subsidies. It sets out a series of recommendations designed to open up the energy market which is dominated by the Big Six energy companies and which it claims produce and supply 99% of the UK’s energy needs.
The study highlights examples of best practice in Europe, citing the success of community generation in Germany which contributes one-quarter of all renewable energy. In the UK, the figure is below 1%, the report adds.
It points to successful schemes in the UK including the Isle of Eigg Heritage Trust off the west coast of Scotland, Torrs Hydro Ltd in New Mills, Sheffield and Fintry Renewable Energy Enterprise in Stirling, which is it says could be replicated across the UK.
ResPublica spokesman Ed Mayo said: “The beauty of renewable energy that is co-operatively owned and community-level is that it solves the twin issues of social acceptance and economic efficiency. This report is right to call for intelligent nudges to make it easier for people to come together, reversing decades of energy policies limited to ‘big is beautiful’. Everyone benefits if we can draw community energy production into the centre of the new energy economy.”
The report’s authors, Caroline Julian, senior researcher at ResPublica, and Julian Dobson, a research associate at the think tank, acknowledge the Government’s desire to reform current market and increase community production but argue the current approach to market reform is “piecemeal and doomed to fail”.
They went on: “There is currently no coherent mechanism for applying this aspiration within the energy sector. Instead DECC relies on ad-hoc announcements of support for community renewable scheme.”
The pair are equally critical of regulator Ofgem whose approach to regulation, they contend, largely ignores the social and economic potential of the community energy. “Its review of the retail energy market recommended simplifying tariffs to make pricing clearer to consumers, and proposed that suppliers should auction off 20% of power generation in order to help new suppliers enter the market. This will not help community organisations, which are not in a position to buy bulk supplies, and will not change the type of energy that is generated.”