The message that communities can come up with the answers to our looming energy supply crisis, which I promoted last week, is reinforced today by a report that urges the Government to radically overhaul the ‘closed shop’ energy market by unleashing the community energy sector.
ResPublica, a think tank founded by Phillip Blond, whom David Cameron has described as being "at the cutting edge of progressive thinking about public services", is warning that failure to recognise and back the community sector will have serious consequences on the Government’s climate change, emissions and fuel poverty targets.
They're calling for local people to be empowered to move beyond the status of passive users and consumers and instead become producers and distributors of their own energy supplies.
The report, Re-energising our Communities: Transforming the energy market through local energy production, which is backed by Friends of the Earth, recommends opening up the energy market, and highlights examples of best practice elsewhere, citing Germany where one-quarter of all renewable energy is community owned.
In the UK, it points to successful schemes in the Isle of Eigg 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 country.
Ed Mayo, ResPublica Fellow and Director General of Co-operatives UK, 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".
The report’s authors say the Government wants to reform the market and increase community production, but that its current approach is doomed to fail.
And they criticise the regulator Ofgem, because its rationale "largely ignores the social and economic potential of the community energy".
They say that Ofgem's proposal in its Retail Market Review for suppliers to auction off 20% of power generation in order to help new suppliers enter the market "will not help community organisations" because they can't afford to buy bulk supplies, and this approach "will not change the type of energy that is generated”.
They are recommending that instead, a new hybrid company structure should be included in the upcoming consolidated Co-operatives Bill, launched last month by the Prime Minister, and that the policy should build upon existing coalitions, such as the Low Carbon Communities Network, or the recently established ‘coalition for community energy’ spearheaded by Co-operatives UK, Friends of the Earth, Forum for the Future and others.
Local authorities have a role, too, to work with communities, local asset holders and the energy industry to highlight underused assets and space that could be utilised for community energy projects, they add.
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