Councils across Britain will from next week be allowed to sell renewable electricity to the grid, energy and climate change secretary Chris Huhne will say today in a letter to all local authorities.
At present only 0.01% of electricity in England is generated by local authority-owned renewables, despite the scope that exists to install projects on their land and buildings.
In one of the first energy policy actions of the coalition government, a ban on local authorities selling renewable electricity will end on 18 August.
This will open new sources of income including the full benefit of the feed in tariff which incentivises renewable electricity. It could mean up to £100M a year in income for local authorities across England and Wales.
“For too long, Whitehall’s dogmatic reliance on ‘big’ energy has stood in the way of the vast potential role of local authorities in the UK’s green energy revolution,” said Huhne.
“I’ve taken the early step of overturning the ban on local authorities selling renewable electricity to the grid. I’ve today written to all councils urging them to take advantage and lead a local energy revolution.
Currently local authorities are able to put any renewable electricity they generate to local use, and to 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 (other than that generated from combined heat and power) and also from benefiting from the additional export component of the feed in tariff.
The restriction is a 1989 amendment to the Local Government (Miscellaneous Provisions) Act 1976. It was put in place at the time of electricity privatisation to ensure the transfer of the electricity industry to the private sector.
“Lifting this ban will help drive forward essential renewable energy projects in the UK, giving local authorities an incentive to invest in local projects,” said ICE director general Tom Foulkes. “While a focus on large scale energy projects is essential, smaller community projects also have an important role to play in the UK’s future energy mix.”