The Labour Party is planning to renationalise the National Grid if elected, in a bid to tackle energy prices and combat climate change – and has also set out plans for local energy communities, including co-ops.
Leader Jeremy Corbyn and shadow energy secretary Rebecca Long Bailey set out the proposals in the document Bringing Energy Home, which promises to usher in a ”green industrial revolution”.
“The energy sector is central to the UK’s decarbonisation process,” wrote Ms Long Bailey in her introduction to the report.
“Yet energy networks are poorly placed to respond to the task at hand. Since Thatcher’s wave of privatisations, energy network companies have been able to post huge profit margins, overcharging customers to the order of billions of pounds, and failing to invest properly in infrastructure needed to accommodate the transition to renewable energy.”
She added: “In public hands, we can begin to address what is referred to as a ‘trilemma’ – providing energy that is low carbon, that is affordable, and that is secure.”
The party has set targets of a 60% reduction in carbon emissions by 2030, with zero emissions by 2050, and its pledges include plans to put solar panels on nearly two million homes.
The report also pledges to democratise the energy system, to take into account its expected decentralisation and the increasing use of personal data.
“It is imperative that energy networks be run transparently, in the public interest with democratic control and oversight,” it says. “This is inconsistent with current ownership structures, in which electricity and gas distribution companies are owned and controlled by largely international investors including private investment banks, private equity funds, international pension funds and sovereign wealth funds.”
Under these plans, Labour says it will “enable and support the creation of Local Energy Communities (LECs), vertically integrated bodies that can engage in supply, distribution and/or generation of energy at the micro level”.
It adds: “There are significant advantages to community energy. By optimising the system at the level of a street, housing estate or small village, community energy can reduce strain on the overall grid, increasing efficiency and reducing the need for grid reinforcements.
“Community energy can be a means to untap the resources and enthusiasm of residents that want to decarbonise their energy supply further and faster than the local distribution network. Increasing local control and participation in the energy system is also a powerful tool to build public support for the energy transition, and to foster a genuine community stake in publicly owned networks that is needed to lock-in the benefits of public ownership in the long term.”
The report says LECs would operate at the scale of 100 to 200 homes, and could apply for licences generate, supply and store energy for members, aggregate energy demand, and look after distribution infrastructure.”
But in another reference to local energy ventures – echoing concerns made by the government’s head of local energy Patrick Allcorn at last years’s Community Energy Conference – it warns: “There is a risk of creating gated energy communities or ‘local energy islands’, where communities with the financial and physical resources to generate and supply electricity opt out of energy networks, leaving poorer communities with the disproportionate burden of financing wider infrastructure.”
In response to this, it would establish “a National Energy Agency (NEA) to provide an overall strategic compass for the energy transition, to guide public, collective and private forms of energy ownership”, and “Regional Energy Agencies (REAs) to own, maintain and run system operation of the distribution networks”.
Duties of the REAs would include rolling out electric vehicle technology, tackling energy poverty and promoting energy democracy.
Labour also plans to offer devolved powers to Municipal Energy Authorities, which could operate from county council level to parish council.
Responding to the proposals, Emma Bridge, chief executive of sector body Community Energy England, said: “Community Energy England is pleased that Labour notes the value of community energy in its energy strategy and that it pledges to support communities to take an active role in the supply, distribution and generation of energy.
“Communities have long been striving to ensure that local people receive additional social and environmental benefits from energy as well as lower bills. There are excellent examples from around the UK that can be used as a foundation. However, community energy can play a much greater role than just at a micro-level and we ask Labour to increase their ambition to enable community-led energy at all scales and for public sector-led energy to be opened up to part-community ownership.”
She added: “While this strategy is being discussed today, hundreds of community energy groups across the country are already generating clean, green energy, sharing their knowledge and passion for a low carbon future and putting money back into community projects – many focused on energy efficiency.
“The current government can do more to support this, including the reinstatement of social investment tax relief for community energy investors. Business can play its role too, offering a route to market and fair rates for energy generated by community schemes.”