Press Centre

Press Centre

Press Release: Creating Local Energy Economies – Lessons from Germany

23rd July 2014

Football isn't the only thing we can learn from Germany

Germany has 44 times the number of energy suppliers than the UK – Government must do more to support new entrants into the supply market, think tank argues. Lower bills depend on support for new local suppliers.

A new publication by the influential think tank ResPublica reveals that businesses looking to become energy suppliers face major barriers to entry in the UK. 12 new businesses have entered into the supply market since 2011, taking the total number to 25, but the ‘big six’ still capture 93.5% of the market share.

In stark contrast, Germany is home to 1100 electricity suppliers, and the four largest energy businesses hold only 44% of the retail market. Households in Germany can choose from an average of 72 energy suppliers, most of which are established locally.

The ResPublica essay, ‘Creating Local Energy Economies: Lessons from Germany‘, which is supported by the Winston Churchill Memorial Trust and Co-operative Energy, argues that the UK can deliver on greater transparency, lower household bills and genuine competition if communities, local authorities and small businesses could enter into the supply market and sell their energy locally. At present, there are no local suppliers in the UK.

The Greater London Authority is the only body to formally progress an application to become a local licensed supplier. But over 15 months have passed since the London mayor, Boris Johnson, announced the application, and a decision as to whether the GLA can go ahead has not yet been made. This is despite the introduction of simpler and more accessible routes to market by the regulator in 2009.

In Germany, the story is different. From 2010 to 2012, 90 communities and municipalities had entered into the supply market and 190 communities had bid to run their local electricity distribution network. A growing number of local groups are appealing to private energy companies to put their local utility back into public hands.

ResPublica’s Head of Research, Caroline Julian, said: “Germany’s energy markets and corresponding infrastructure are so different that it’s tempting to think that we can’t possibly learn from their success. To the contrary, there are ways in which we can begin to encourage new businesses into our energy markets and facilitate the local trade and supply of our energy.

“Communities, local authorities, small businesses and housing associations have the ambition; and recent surveys show that there is demand for local power. Government simply needs to cut the red tape and implement a far more ambitious vision of Britain’s future energy market.”

The ResPublica Essay calls on Government to set up a ‘Help to Supply’ scheme, which would open the floodgates to a spectrum of new suppliers. The scheme would encourage existing energy retailers and big businesses to partner up with a community, small business or local authority to help them get off the ground and into the market.

It also calls on Government to radically simplify the requirements needed to set up as a new energy supplier, and recommends that local supply licences should be made possible. At present, it is only possible to register at the national level.

Lord Smith, Chairman of the Environment Agency, says:

“This essay shows very clearly how Germany has succeeded – where we have so far failed – in creating a bottom-up revolution in energy supply and distribution. Property-level renewable installation, community energy companies, small-scale local schemes: these have been the way forward for German electricity production, and it’s been a big success. We could learn some serious lessons here.”

Rt Hon Greg Barker MP, former Minister for Energy and Climate Change, says:

“To achieve the competitive, liquid and innovative energy market we need in the UK, it is crucial that we support new entrants, promote decentralised ways of working and harness community-based initiatives.

“This essay rightly affirms that we need to be more ambitious in considering what energy markets in the UK could look like. I believe that we need to deliver power to the people and facilitate the ‘big 60,000: the recommendations from this ResPublica essay deserve serious consideration.”

Tom Greatrex MP, Labour’s Shadow Energy Minister, says:

“The obligation to decarbonise is also an opportunity to change how we generate and consume our power. We can put individuals and communities at the centre of that process, empowering them to deliver cleaner, greener energy. This paper is a welcome contribution to that discussion.”

Ramsay Dunning, General Manager at Co-operative Energy, says:

“The amazing progress of citizen-owned energy in Germany shows what is possible when an enabling policy environment is provided by a supportive Government over a number of years. Here in the UK, new entrants such as Co-operative Energy are emerging, but we and others could do so much more if a stable policy framework was in place and Government spoke with one supportive voice.”

— ENDS —

Note to editors

Embargoed copies of the report and press/broadcast interviews with the report authors are available on request from press@respublica.org.uk.

ResPublica was recently short-listed for the energy and environment award at the Prospect Think Tank Awards 2014.

Contacts:

Elliott Mears, elliott.mears@respublica.org.uk, 07775 801726
Caroline Julian, caroline.julian@respublica.org.uk, 07719 359 982

About ResPublica

The ResPublica Trust (ResPublica) is an independent non-partisan think tank. Through our research, policy innovation and programmes, we seek to establish a new economic, social and cultural settlement. In order to heal the long-term rifts in our country, we aim to combat the concentration of wealth and power by distributing ownership and agency to all, and by re-instilling culture and virtue across our economy and society.

We believe that such a settlement can be achieved through the restoration of civic institutions, inter-personal relationships and ethos-led principles, and by fostering an asset-based, competitive and mutual approach to economy and business. To argue this is to say that morality and markets are not opposed: each requires the other to foster prosperity.

Our ideas are founded on principles which move beyond the political dichotomies of left and right, by addressing the future and recognising the reality and complexity of the problems that already confront us. We argue that the solutions we need must prioritise the importance of shared prosperity, a flourishing society and a renewed culture of virtue.

About Co-operative Energy

Co-operative Energy is a new energy provider supplying gas and electricity to customers across England, Scotland and Wales. The business is committed to fair pricing, lower carbon energy and is the only energy supplier wholly owned by its customers, who are rewarded twice a year with a share of profits. Co-operative Energy is committed to providing energy with an easy to understand tariff and a commitment to fair practice. The business is also helping to tackle climate change by supporting renewable energy and has pledged that the carbon content of its electricity will remain less than half the national average. Co-operative Energy is part of The Midcounties Co-operative, one of the largest independent co-operatives in the UK, owned by over 400,000 members.

In addition to general support for renewable energy, Co-operative Energy actively seeks to source power from community generation initiatives. By offering long-term power purchase agreements, a secure market for community energy is provided and a project’s viability is significantly enhanced. Supply is now contracted from six such projects, with supported enterprises ranging from co-operatives to crowd-sourced joint-ventures. Going forward, Co-operative Energy is looking to develop an increasing number of long-term power purchase agreements with community groups and independent energy generators, with a view to directly supporting 160MW by end 2016.

Press enquiries to press@respublica.org.uk.


1 comment on “Press Release: Creating Local Energy Economies – Lessons from Germany”

Leave a Reply

Your email address will not be published. Required fields are marked *

Time limit is exhausted. Please reload CAPTCHA.

Food security, accessibility, and sustainability should be categorised as a publ...

Food security, accessibility, and sustainability should be categorised as a public good says new report by the Lifelong Education Institute   The Lifelong Education Institute’s latest report ‘Hungry to Learn: Lifelong Learning Pathways for the Agri-food Sector’ raises concerns over the neglected potential of the agri-food sector in the UK, and especially around the gap between its skills requirements and the available skills provision by agri-food education institutions....

THINK TANK CALLS FOR A BEHAVIOUR REVOLUTION IN SCHOOLS

A new report, Behaving to Learn, by the think tank ResPublica challenges the Government to be bold and drive a revolution in behaviour management across state schools to improve the outcomes for children and the lives of teachers....

New collection of essays by Conservative MPs offers fresh ideas for tackling pov...

PRESS RELEASE EMBARGOED | 24th MAY 2023 00:01 For Media Enquires please contact mike.mavrommatis@respublica.org.uk...

Playing by The Rules | Press Release

PRESS RELEASE New independent regulator needed to protect English football clubs and give working-class fans a greater voice Ahead of the much-anticipated publication of the Government White Paper on the creation of a new independent regulator for English football (IREF), think-tank ResPublica warns that it must not be an ‘owners’ and directors’ charter’ and must ensure that the game’s fans are treated as highly-valued stakeholders and given a greater voice at both club and national level....

How smart solar at scale can power UK’s economic recovery

In its latest report, ‘Smart Solar at Scale: Meeting the UK’s net-zero emissions and clean growth targets’, ResPublica argues that the energy sector can play a central role in powering the UK’s economic recovery, post-Covid-19....

Press Release
  • Comments Off on ResPublica Report | Size doesn’t matter, small places must not be left behind in the devolution process.
ResPublica Report | Size doesn’t matter, small places must not be left behind...

The Government’s focus on metro-regions has meant that mid-sized cities, towns, districts, and counties have been locked-out of the devolution process....

Phillip Blond on LBC with Shelagh Fogarty

Listen to Shelagh Fogart from LBC, interviewing ResPublica’s Director, Phillip Blond, on the need to reform NHS Services....

Press Release
  • Comments Off on ResPublica Report | How to improve the Health and Wellbeing of the UK population
ResPublica Report | How to improve the Health and Wellbeing of the UK population

A new report launched today by the independent think tank ResPublica, set out how we can properly refigure our public health system in the light of its successes and failings in the Covid-19 epidemic....

Press Release
Election pledges will not meet the UK’s future skill needs

The next Government must unleash the potential of the UK’s workforce to compete in the 21st century economy.  ...