Saturday, 1 November 2014

Local energy can be very profitable: "Seizing the opportunity of decentralised energy generation can provide new income streams for communities and councils."

There have been a lot of scare stories of late about how the national grid is about to collapse:
National Grid: Britain 'at greater risk of blackouts' as power stations close - Telegraph
Britain faces ENERGY BLACKOUTS if this winter is long and cold, warns National Grid | UK | News | Daily Express
Could Plymouth be plunged into darkness thanks to power crisis this winter? | Plymouth Herald

The new economics foundation looks at this a little more closely - and points to the experience in Germany "shows us that by securing the benefits of energy generation locally – through council-run energy companies and community co-operatives – it is possible to have a new debate about the future of energy generation."

Energy round-up: losing power?

Photo credit:   Rachel Melton

Three things you shouldn't miss this week

  1. Chart: Winter spare capacity
  1. Article: National Grid warns of lower winter power capacity - National Grid has warned that its capacity to supply electricity this winter will be at a seven-year low due to generator closures and breakdowns.
  1. Article: Drilling Deeper: New Report Casts Doubt on Fracking Production Numbers - Post Carbon Institute has published a report and multiple related resources calling into question the production statistics touted by promoters of hydraulic fracturing (“fracking”).

Should we be worried about the threat of a cold dark winter? The prospect of gas shortages looked less likely after Russia reached agreement with Ukraine over payments. Closer to home though, a National Grid report has shown that spare electricity generating capacity this winter is at a seven year low.
National Grid’s warning was greeted with the time honoured ‘blackouts’ headlines despite assurances that contingency plans are in place and analysis showing that power cuts are highly unlikely. Yet there was little mention of the role renewables could play in easing supply pressures. Never mind that a major cause of the current low spare capacity is a spate of unplanned outages at coal, gas and nuclear facilities - proof it isn’t only renewables which can suffer from ‘intermittency’. Nor that energy from wind briefly outperformed nuclear last Tuesday – confirmation of its importance in the energy mix. Instead the announcement was treated as another chance to grind political axes about ‘unreliable’ renewable generation.
In fact it isn’t renewable energy that’s unreliable, but energy policy,particularly in the UK, which has utterly failed to cope with the recent slump in fossil fuel prices. The US shale gas glut has led to a surge in American exports of coal, making it far cheaper to burn the dirtiest fossil fuel over here, while European gas fired power stations - with higher fuel costs – are being mothballed. Soon the UK will be paying coal fired stations – which had been due to close – to stay open longer. This shakeup to the UK energy industry sends all the wrong signals and will cause UK emissions to rise.
All this comes as neither the EU Emissions Trading Scheme nor Britain’s Carbon Price Floor – capped by George Osborne in the last budget – is remotely close to achieving the rapid transition to low carbon energy we need. Yet another energy crunch shows that the current system is cracking and renewable technologies can provide not only a low-carbon energy source, but also a promising solution to market disruptions. 
Energy round-up: losing power? | New Economics Foundation

And from the new economic foundation's fortnightly e-mail, here's a link to an article from the the chief executive of the Town and Country Planning Association last month:

Is it time for councils to buy back control of the energy grid?

Brits oppose energy developments, while Germans welcome new plants because they bring local benefits
Old waterfront buildings in Hamburg, Germany
Hamburg, Germany’s second largest city, has taken control of its energy grid back from private ownership. Photograph: Christopher Thomond for the Guardian
If you were asked if you wanted a power station to be built in your town – or even on your street – what would you say? No thanks? Perhaps something stronger.
It is not an unreasonable reaction, especially if you feel there is unlikely to be any benefit to the community through cheaper energy prices or local jobs. You also may not have the time, energy or inclination to engage in the planning process which can often seem complicated, technical and adversarial.
However, this typically British reaction isn’t the case in other countries across mainland Europe. Why? Because communities and councils always directly benefit from new energy generation in the local area.
England’s energy market is dominated by six major international companies and their supply of energy has proved to be a highly profitable enterprise. Energy prices have risen steeply in recent years, partly because of tariffs for renewables, but mainly because of increased wholesale prices of fossil fuels.
As oil reserves diminish prices will increase, with troubling consequences – particularly for those least able to pay. But so far public debate has focused on a vociferous campaign against onshore wind farms and removing the very tariffs we need to transform our energy supply to low carbon sources, rather than looking for examples which can stabilise prices and keep energy profits in the local economy.
Seizing the opportunity of decentralised energy generation can provide new income streams for communities and councils; a particularly welcome source of revenue in an era of local government budget cuts. Re-municipalising energy generation and supply is becoming increasingly common across mainland Europe and it is a significant opportunity for councils in Britain.
Council-run energy plants are certainly not a new idea. Local authorities have pioneered decentralised municipal energy generation for over a century. Today, councils from Aberdeen to Southampton have successfully demonstrated how to establish local energy companies that have levered in long-term investment in projects such as district heating. However, these authorities are still the exception rather than the norm.
I am involved in a pan-European project called SPECIAL, which stands for “spatial planning and energy for communities in all landscapes”. Through this initiative we have had the opportunity to learn how German local authorities now provide locally-generated energy, with the support of the community.
In late 2013 the population of Germany’s second largest city, Hamburg, voted to buy back its energy grid. German federal law requires that municipal authorities invite bids from new companies – including communities – who wish to run the local grid once the fixed-term 20-year contracts come to an end. The population voted to re-communalise electricity, gas and district heating networks currently in the hands of multinational energy companies.
This is just one example of a wider trend: the scale of transformation is truly dramatic. Since 2007, about 170 German municipalities have bought back the grid from private companies. Cities such as Frankfurt and Munich, which always kept their energy companies in public hands, are now showing healthy profits while working towards 100% renewable energy targets.
It is significant that more than 50% of total investments in German renewable energy come from private individuals and farmers. Germany now has 650 energy co-operatives. Much of this change was driven by the right support, including a feed-in tariff from which every citizen, community and region is able to profit, and a robust approach to community participation. This form of participation leads to acceptance, and acceptance leads to investment. The great benefit is that profits drawn from the energy sector are now held in the local economy.
The experience in Germany shows us that by securing the benefits of energy generation locally – through council-run energy companies and community co-operatives – it is possible to have a new debate about the future of energy generation.
Kate Henderson is the chief executive of the Town and Country Planning Association
This article is part of the Guardian’s #bigenergydebate series. Click here to find out more about this project and our partners.

Is it time for councils and co-ops to buy back control of the energy grid? | The big energy debate | theguardian.com

See also:
Germany's Revolution in Small Batch, Artisanal Energy
Toward a networked energy future
Off-grid German village banks on wind, sun, pig manure - Business Insider

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