Why a democratic energy system for the UK is inevitable

Say what you like about renewable energy – and a vocal minority certainly like to – but the public love it. The latest quarterly research by the Department for Energy and Climate Change (DECC) found that over four-fifths (81%) of respondents support renewable energy. That only 19% backed shale gas provides some explanation of why ministers are doing all they can to bolster the nascent industry.

Energy is a basic right in the modern world: it is a national shame that one in ten UK households are in fuel poverty. And how focused the system is on decarbonisation is a major determinant of whether we meet our carbon targets and our share of the Paris commitment to keep temperature rises to no more than two degrees.

But there’s a dichotomy. It’s true that if you ask people whether they like solar, wind or tidal energy, they’ll happily say yes. It’s also true that most of us want to see climate action: 70% of DECC’s respondents said climate change was a concern. But away from the survey booths, most people simply don’t seem to have the kind of relationship with energy that turns their in-principle support to something more concrete. The daily expectation of energy is in practice little more than plugging an appliance into the wall, hitting the on-switch, trusting that it’ll work, then grudgingly paying a bill to one of six big energy companies that, the DECC research showed, we increasingly distrust.

There are two reasons people feel like this. First, our centralised energy system is disempowering and old-hat. It has underinvested for years. Retail companies are unpopular, with ScottishPower’s recent £18 million fine just the latest evidence of failing customer service; the public bristle at huge profits while millions struggle under mounting bills. Second, the majority have a passive relationship with our energy system; very few have a stake in the green economy. Energy isn’t a thing we do, it is something that is done for us. But things are changing.

In our 2015 report, Power Failure, the New Economics Foundation pointed to the exciting renaissance in locally-owned energy supply companies that are setting out to deliver either green energy, or cutting bills for the less well off, or both. Nottingham and Bristol City Councils have established their own fully licensed energy supply companies with social objectives, with Nottingham’s Robin Hood offering bill savings of £265 a year. With the London Mayoral election this week there have also been repeated calls for both main candidates to pledge to set up a similar scheme in the capital.

Increasingly we are likely to see cash-strapped councils turning to setting up energy companies as a way to bring in new income while also delivering decent, green outcomes for the people they serve. Mayors and local leaders don’t need to wait for government to navigate the minefield of the power of the big utilities and manufactured tabloid outrage about ‘green crap’. They can, and will, get on with it themselves.

The DECC poll also showed that three-quarters of the public agree that local communities should be given a financial stake in renewable energy developments. That would be a start: only a tiny, albeit influential, 5% of the public ‘oppose’ onshore wind farms, yet even that 5% might find their concerns diminishing if they could actively benefit from the development.

But there are ways to deepen that relationship still further, given a national framework that’s specifically designed to provoke widespread engagement with renewable energy.  Denmark’s “right to invest” principle requires developers to give communities first refusal on becoming equity stakeholders in the project – a far deeper relationship than the occasional ‘community benefit’ payment coming your way. And in Germany energy generated locally can easily be sold locally – technically possible in the UK but hugely costly due to the operation of our market and centralised grid – meaning you could get cut-price energy from the wind farm on the hill over there.

The dust is still settling on on DECC’s controversial cuts to solar subsidies, which led directly to a 75% drop off in installations. It does look like the government has tried to slow the pace of small-scale energy while devoting ever-greater political attention to getting new nuclear and shale gas off the ground. But the decentralised renewable energy genie is out of the bottle, and it’s a game-changer. By the end of this year all IKEA stores will be selling solar panels, which may soon find themselves plugged into thousands of Tesla’s home storage batteries, or similar. Anyone signing up becomes an owner of a small piece of the green economy; as does anyone investing a few pounds in a larger project via platforms such as Abundance; as does anyone who switches to a private or public energy company built around principles of social fairness and environmentally sustainable energy.  

Restoring public purpose and opening up new models of ownership in energy are two sides of the same coin. They are both enabled by the radically changing profile of energy technologies themselves: smaller-scale, renewable systems, with characteristics that naturally enable more local, more dispersed approaches. This is the way things are inevitably heading, as the IPPR argues: ever-more-attractive economics, breakthroughs in electricity storage, and smart grids.  

A quarter of Germany’s total energy mix is from renewables, of which half is owned by private citizens or community groups. The German ‘Energiewende’ – its nationally-mandated plan to deliver 60% of energy from renewables by 2050 – has democratisation at its core. Ninety two percent of the German public think renewable energy should continue to be expanded.

This is chicken and egg: the more people have a stake in the clean energy economy, the more support there will be for it, and vice versa.

The UK’s Energiewende is just as likely to be found in that combination of local, democratic energy and the disruptive characteristics of the technology itself.

David Powell is Associate Director for Environment at the New Economics Foundation (NEF). He tweets at @powellds.

The views expressed in this article are those of the author, not necessarily those of Bright Blue.