The Energy Secretary, Chris Huhne, announced recently that he is
to press ahead with plans to lift the restriction on local
authorities selling their own electricity, an idea introduced by
the outgoing Labour Government earlier this year. It is thought the
restriction will be lifted by the end of the year.
The restriction, which is contained in the 1976 Local Government
(Miscellaneous Provisions) Act, was introduced during the
privatisation of the energy sector. It is hoped that its repeal
will help in the move towards a low-carbon economy.
The move has been welcomed by those in the waste and renewables
industries but doubts have been expressed by some over whether
councils have the skills necessary to sell their own power.
The move will not address the issue of capital funding for projects
either. Finding the necessary funding is a serious impediment to
most private sector schemes and one that the public sector, facing
years of cutbacks, is likely to share.
The generous incentives available to those selling renewable energy
to the grid, through feed-in-tariffs and the Renewable Obligation
Certificates, mean that those councils, or groups of councils, who
are able to secure funding are likely to benefit from a significant
new revenue stream.
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