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Community Energy: The ‘democratisation of energy’

With the launch of the UK’s first Community Energy Strategy, a ray of light has opened in a doorway to what could have a radical impact in the way we generate and use energy.

Not only does it hold out the prospect of a far greater level of local, community engagement in sustainable energy generation – the ‘democratisation of energy’ – there is also a glimmer of hope on local electricity supply. Why is this important?

Rarely a day goes by without the cost of energy and the security of our current supply being in the news. One of the biggest fears is that we are all on a treadmill of ever spiralling energy costs as our generation and supply infrastructure wears out and the market can’t or won’t invest to replace it.

This theme is cropping up regularly.  Our centralised electricity generation and supply system has been an extraordinary achievement which has helped stabilise energy costs for a long time. But the economics of large centralised generation stations – which the National Grid currently operates – are now in doubt and with it the economics of centralised supply.

With the rise of smaller scale, renewable energy technologies, with much lower running costs and free fuel supply, there is a prospect of local generation developing to meet local demand – progressively reducing our dependence on a centralised system that is locked into global fossil fuel prices. And with a much more local approach to energy supply comes the added advantage of much greater awareness – reinforced through our friends and neighbours – of how we can reduce our energy demands.

Also, if local generators could also become retail suppliers, there’s the tantalising prospect of selling power locally at a higher price than present – whilst charging local consumers less than they currently pay. Too good to be true? Just look at the gap between the wholesale and retail price in the Ofgem chart below (for more information on the chart, see https://www.ofgem.gov.uk/gas/retail-market/monitoring-data-and-statistics/electricity-and-gas-supply-market-indicators).

dual fuel bill and wholesale energy priceIt’s just a glimmer of light at the moment. As the strategy alludes to, there are significant regulatory issues to overcome – ‘license lite’ (referred to in section 6.4 of the Strategy) is just an initial step down this road and we hope that the Greater London Authority sets a positive example with its application. There are plenty of technical and commercial challenges too. On the whole, the Strategy represents a step in the right direction, and is one that Community Energy Scotland is actively pursuing through its Local Energy Economies Programme.

Source:

https://www.ofgem.gov.uk/gas/retail-market/monitoring-data-and-statistics/electricity-and-gas-supply-market-indicators

2 Responses to “Community Energy: The ‘democratisation of energy’”

  1. Roger Parker, Com' Energy Assessor says:

    Nicholas
    At last, someone at DECC is talking some sense. I have been blogging about the “democatisation of Energy” for some time now; and also how the energy market was being ‘rigged’ in favour of capital-intensive offshore wind, nuclear and fracking to make those look economically viable. To do so, Energy-efficiency and renewable energy seem to be being played down, given a low profile and support. It is also happening in Australia. These macro-energy production of energy vested interests must be resisted if only on the grounds of its inefficiency – the significant energy distribution loss. Let’s hope this glimmer of light begins to glow bright so we can start to lesson the ‘crime’ being done against the populace and future generations.

  2. Julia Owen says:

    I hope this means renewable energy not fracking due to the immense amount of evidence the government is ignoring of methane effect on climate change, toxic chemical pollution of air water and soil which is irreversible. I and many others will not support any party which is steam rolling these ecocidal policies into our country.

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