City Government to Start Selling Power

By Jonn Last edited 70 months ago
City Government to Start Selling Power

Some news last week you night have missed: the Greater London Authority has decided to start selling power.

No, not that kind of power (don't be so cynical). The GLA has applied to the energy regulator Ofgem for a new type of electricity supply licence (a "licence lite", for those keeping score), which will allow it to buy excess electricity produced by the boroughs and other public bodies, and then sell it on. Boris is said to be exploring the possibility of widening the licence to include smaller private sector energy suppliers, too.

The idea is to make it more attractive for government offices and the like to install solar panels, wind turbines et al., by guaranteeing them a customer for any excess power they produce. They already can sell any spare kilowatts into the National Grid, of course, but only at measly wholesale prices. The GLA has said it'd cheerfully pay a 20-30% premium on that, in an attempt to encourage investment.

This, it claims, could attract as much as £300 million to finish off 22 projects already in the pipeline. By 2025, it reckons, we're looking at £8 billion of investment and 850 jobs a year.

There are inevitably a few questions arising from this, not least how they came up with those excitingly large figures (we're assuming they haven't just plucked them out of the air, but it's frankly not clear). Whether it'll really get us any closer to the Mayor's target of a 60% cut in carbon emissions by 2050 isn't that clear either.

The example projects the GLA cites in its press release - Islington's Bunhill Heat and Power project, the Westminster’s Pimlico District Heating Undertaking - both use gas. And while gas has many advantages, it is neither renewable nor carbon free. This is perhaps why Green GLA member and one-time mayoral candidate Jenny Jones has criticised the proposals for not going far enough.

But, you notice, she's not saying they're going in the wrong direction entirely. That to us seems kind of a big step.

Once upon a time it was the done thing for municipalities to have their own power generation divisions. Those days are long behind us, and today we're largely dependent on big multinationals instead (one of them, EDF, is actually just the French state in disguise, mind). With that in mind, any move towards more small scale local generation seems rather a good thing. If it persuades a few public bodies to stick a few solar panels on the roof as well, then so much the better.

Image courtesy of O.F.E, taken from the Londonist Flickr pool

Last Updated 18 March 2013