Communities should take power into their own hands to build an abundant local clean energy supply to secure our future energy on a national scale, claims Kayla Ente, founder of community energy service co-operative BHESCo……
Consumers have not benefitted from liberalisation of the energy markets. Instead liberalisation has created the current oligopoly of energy suppliers that control 99% of the market and play a dominant role in policymaking.
In an oligopoly, switching is only a temporary fix as all suppliers will basically offer the same price. Switching will not stop the tide of energy prices increases at 8 – 10% every year. Such increases are not sustainable, especially in a recessionary economy where our incomes on the whole have declined. Because we are dependent on energy in every aspect of our lives, energy has become a right, not a privilege.
Tapping into the shale gas reserves using extreme extraction methods has dire consequences on our water supply. Hydraulic fracturing creates millions of litres of waste water, containing hazardous levels of hydrochloric acid. This chemical contaminant must be stored in specially lined ponds. At best, fracking is a five year feed of our fossil fuel addiction before we wake up and realise that we have seriously damaged our environment, like the realisation of bad behaviour after a debauched night out. Increasing worldwide demand will still tenaciously drive prices ever upward over the long term.
Our centralised power stations lose 65% – 75% of the energy generated from unsustainable sources like fossil fuels and uranium in transmission and distribution. Although heat represents about 41% of energy consumed, most of the heat generated by the large stream engines in centralised power stations is wasted in the air.
Unfortunately, unsuspecting taxpayers end up paying for the lack of vision and sound economics in our energy policy. The new Energy Bill including Electricity Market Reform (EMR) means that subsidies will be transferred to the shareholders of large corporate power generators in the form of a guaranteed price for electricity production, regardless of whether that electricity is consumed or not.
Fracking corporations will receive larger tax breaks in the coming years. There is a real danger that the current energy policy will create a continuation of the culture of waste in our society, due to an irrational fear that the lights will go out.
There is little innovation in our nation’s energy strategy because there is painfully little movement in important areas like upgrades to distribution and transmission networks to create smart grids. Investment in energy storage pales in comparison to the money that will be invested in nuclear power and Carbon Capture and Storage technologies. Investment in a smart grid was supposed to be addressed in EMR, however, this has been conspicuously omitted, calling the National Grid “a natural monopoly”. This may have been ok when the grid was nationalised, not now.
Naturally, the current suppliers want to maintain the status quo of centralised systems where the consumer is kept enslaved to the supplier. And naturally, these powerful forces influence policy decision-making and the media. There is a light at the end of this tunnel: community energy suppliers can stimulate investment by creating micro-generation points and then investing in their own micro-grids for local energy distribution, all connected to transmission stations run by the National Grid.
In 2011, there were 19 Community energy co-operatives generating 19.6MW of renewable energy, powering approximately 16,000 homes. Shareholders in these co-operatives are making a steady return on their investment in tangible local energy generation assets. As we transition into our new sustainable way of living, during this ‘Time of the Great Turning’ (as Joanna Macy has named it), a post industrial evolutionary movement, a ‘small is beautiful principle should be applied to local energy generation. Consumption near the source minimises efficiency losses. Combining natural renewable energy sources, like sun, wind and biomass to power our needs, making our buildings more efficient by sealing the leaks coming through the fabric, becoming more conscious of how we use energy in our environment will all contribute to our long term energy security.
According to the Department of Energy and Climate Change, community groups are involved in four main activities: Reduce, Manage, Generate, Purchase. In Brighton, Brighton & Hove Energy Services Co-operative has been launched to stop the tide of rising energy prices. It is a not for profit co-operative dedicated to help people reduce their energy costs now and forever. We do it now, by organising a collective buying initiative where one price is negotiated for our members, like a large corporation would for its energy supply. We can do this by offering thousands of customers, worth about £120 in profit each, to one supplier. Energy suppliers pay millions in marketing costs to encourage the public to switch to their service. We can save these large suppliers money by reducing their marketing spend and pass that savings onto our members.
BHESCo is working with neighbourhood groups and our local council to map out neighbourhood energy plans, offering a way to implement low cost energy savings and local renewable energy programmes. We are a link between the large energy suppliers and the local consumer. Suppliers are required by the government to identify super priority customers, people living in hard to treat properties that leak massive amounts of heat through their walls, ceilings and floors. The path to these people, many of them vulnerable, is arduous as they are difficult to find, do not trust the large suppliers and do not want to enter into any loan commitment with them at a high cost.
BHESCo is launching a programme of low energy, durable lighting retrofits to small and medium sized businesses in Brighton & Hove which presents a way to quickly reduce electricity consumption as many office buildings have old fluorescent lighting that is hard on the eye and on the pocket. We can go some way to helping these businesses reduce their operating costs and lower their carbon footprint, just by upgrading their lighting to longer lasting LED (low emission diode) lights. These are mercury free, unlike other low energy lighting that is for sale in some supermarkets.
We believe in that by working together, we can continually create wins for members of our community. We invite all people who want to make a difference in their community within the Sussex area to contact us. Together we can help bring about the Great Turning.
Kayla Ente is founder of BHESCo, a community energy service co-operative. She is a qualified accountant, MBA and environmental economist. Kayla lives and works in Brighton, UK.
02 Jun 2013
The Energy Bill will receive its third reading in the House of Commons today. Included in this bill is Retail Market Reform, creating a fairer market for the consumer by reducing the number of tariffs to four. Except for the special switching tariffs that can be created for any number of collective switching campaigns. Unfortunately, for the consumer, reform will not bring more value for money, because 6 energy suppliers control 99% of the market, which technically is an oligopoly. The cost of implementing the new Retail Market Reform will be passed onto the consumer by the energy suppliers at an estimated one off cost of £2.18 and £2.52 per year per customer.
Simplifying the tariffs won’t lead to empowering consumer choice nor will it lead to sustainable, long term reductions in consumer prices. This is confirmed by DECC and OFGEM who have conceded that prices will rise to finance new nuclear power stations. On a more positive note, long suffering Britons, the 80% of us who don’t switch suppliers and are paying old tariffs, may save around £158 per year by switching supplier. As a whole though, temporary price differences will not release the stranglehold that the energy suppliers have on us. OFGEM is also proposing that the White Label suppliers, like M&S Energy and Co-op Energy, adopt the same pricing as the Big Six, basically eliminating any capability of using operating efficiency and sustainability strategies to lower energy prices for good.
The Energy bill is primarily informed by the Big Six (oligopoly) and the National Grid (monopoly), seven powerful corporations owned by private shareholders, run by captains of industry that wield the most power over the politicans that set our energy future. Energy is a necessity, it should be a national right. However, the allure of privatisation, money to prop up State coffers, was too strong. Liberalisation of energy markets is now paving a bleak pathway to our clean energy future.
Further solidifying their dominant position, a two pronged tour de force in underway against competition in the market at OFGEM in their Retail Market Reform. We are facing the prospect of the legislative death of micro-generation – the source of freedom for the people and our greatest source of energy security – by killing off communities energy suppliers ability to enter into the market. It is very expensive to retain a centralised power generation system. It is essential that we have them, for large industry and for back up power. However, this old method of delivering energy is greatly impacting our real security, which is our right to clean land, clean air and a moderate climate. The Energy Bill includes unproven and low value for money generation technologies, like the new EPR nuclear power stations and Carbon Capture and Storage (CCS) technologies. CCS doesn’t generate any energy at all, it’s just an add-on cost to an existing generation method. With centralised power stations, the energy supplier has complete control over our energy costs.
The Energy Bill contains new mechanisms for financing these costly technologies, basically removing transparency by transferring the generation cost from your energy bill to your tax bill. In an age of austerity, this means that more social benefits will be cut as the public is squeezed to finance the liability for nuclear waste storage and the cost of maintaining national security around nuclear power plant sites and the transport of nuclear waste (depleted uranium from spent fuel rods is used to develop nuclear weapons). Plus the support that will inevitably be required when construction is started on power stations using unproven technologies.
Last year DECC gave us a chance to look at our energy pathway to 2050, which was a model to help people do their own analysis of energy supply and how best to keep the lights on. This pathway made it clear that renewables, including micro-generation, could play a vital role in ensuring that we maintain energy security. Micro-generation are systems less than 5MW that community energy groups, like BHESCo are developing across the country
A free energy market is one that has few barriers to entry and encourages traders to compete in all aspects of their operations, from generation to distribution to customer care. Customer care includes a level of service that prioritises the customer experience. Smaller community energy companies can do this. Right now an opinion has developed within OFGEM, the electricity and gas market regulator, that could snuff out small community energy companies, like BHESCo, by creating more barriers to market entry for White label suppliers. Support BHESCo by ensuring that your MP rejects these aspects of Retail Market Reform in the Energy Bill. We need a fair and secure energy supply, which the energy bill in its present form will not deliver. Support BHESCo and sign up at www.bhesco.co.uk
06 Dec 2012
The Chancellor announced his plans to create growth yesterday promoting the Dash for Gas despite the fact that the UK Geological survey estimates that our technically recoverable reserves range between 150 billion cubic metres (bcm) and 570 bcm. According to BP’s review of the World 2012, this reserve is the equivalent to 2-7 years of UK gas demand in 2011. Insufficient to resolve our long term energy needs, or to fuel the lifetime of the 30 gas powered plants that Mr. Osborne proposes to build.
Frack off presents an interesting assessment of why its so important to provide a tax subsidy for shale gas drilling, or “Fracking” – an extreme method of blasting for gas through shale rock. Although we haven’t seen the details of our Chancellor’s growth plan, we feel confident that any additional monies to promote growth in our transmission infrastructure will be missing. These plans are all about subsidising certain types of generation capacity.
Our government is borrowing more to finance their austerity plans. The budget includes another £5 billion of mandatory cuts. The New Economic Foundation has announced their upcoming release of an economic strategy that “tackles unemployment, delivers good jobs and a sustainable future”. According to the Public and Commercial Services Union, these 13,500 civil servant job cuts are additional to the 50,000 jobs due to be cut in the next two years and the 63,000 already cut. You may be relieved to know that budgets in nuclear decommissioning will be spared because we have no choice. We have to invest to ensure that the stockpile of radiocative waste from old nuclear power plants is treated properly. No need to fret about our future, the new nuclear power plants that are in the pipeline along with the 30 gas fired plants, should ensure that the lights don’t go out.
If this blog is depressing you, consider the alternative, where we save 30% of our energy use by retrofitting thermally inefficient properties and replacing inefficient kit. We can build energy generation from local, renewable energy resources in a way that creates jobs and economic growth. Where we engage the newest technologies in wind, biomass, biofuels, tidal, wave and hydrogen to generate sufficient local generation to meet our needs. And best of all, we, the community, own it.
If this is how you like to think, think community energy suppliers, join BHESCo.