Has the government got something against renewable and community energy? First, the government came for the feed-in tariff. Now they are coming for tax relief on community energy projects. Over 1,000 jobs have already gone in the solar industry in the last month as the sector adjusts to the scale of financial changes being brought about by the government. The TUC and renewables industry warn that another 27,000 jobs are at risk if ministers stick to their current approach.
This failure to support renewables smacks of short-term thinking. The United Kingdom needs a broader energy mix to keep the lights on, including a bigger slice of renewables. Our carbon emission targets require a swifter reduction in fossil fuel production. And, given the fragile nature of the recovery, green industries have the ability to generate jobs and growth. None of these factors are helped by the switch in government policy.
The UK led the world with the Climate Change Act 2008 and an ambitious target to cut emissions by 80 per cent by 2050. The first 100 days of a majority Conservative government has shown a remarkable change in the UK’s position on renewables and energy investment. The damage to small-scale renewables and community energy has been harsh. The latest announcement on 26 October, that the government will strip tax relief from community energy schemes receiving subsidies, is another hit. Excluding social enterprises delivering community energy schemes from the Social Investment Tax Relief will render many schemes unworkable. Co-operatives UK has described the move as a ‘heavy blow’ coming despite numerous assurances from the government. Social Enterprise UK has written to the chancellor stating:
The decision to change policy this late in the day has serious consequences for social enterprises delivering community energy schemes and their ability to secure investment in the future.
Reforming our distribution networks and giving communities control over their energy is central to transforming our energy market, to the benefit of consumers, communities and the climate. Already, we are seeing innovation and social enterprise coming together to deliver new community-owned renewables projects across the country. Last month, Edinburgh Community Solar Co-operative launched a local share option with the ambition to install and run solar panels across schools, community and leisure centres across the city. Further projects are in development with communities and partners working together to deliver local infrastructure. But this is now at risk. As Social Enterprise UK says in its letter to the chancellor: ‘Community energy organisations have been a success story. They are popular, they empower communities, they tackle fuel poverty, they stimulate local economies, provide jobs and they increase diversity in an all too uncompetitive energy market.’
The UK already lags behind on community energy and these latest government reforms will weaken our position even further. In Germany, just five per cent of the renewables installed are owned by the big utilities. The German partnership between localities and government (through financial interventions) has given communities a much greater stake in their own power, challenging the big operators, keeping costs down and creating a cleaner energy supply. The new devolution agenda offers the opportunity for social enterprises, co-operatives and councils to do the same in the UK. Nottingham city council has already established its own power company, Robin Hood Energy, as an alternative to the big six players. IPPR has written persuasively about how local authorities can provide an alternative to the big utilities under existing power in its City Energy – A new powerhouse report.
One politician who clearly gets this potential is the new shadow energy secretary Lisa Nandy. Speaking to the Labour party conference in September she challenged both the big energy producers and traditional left approaches to nationalisation. Nandy’s call for ‘secure, affordable energy, designed, build and owned by the people’ speaks to the ambition that should be driving our energy policy. But local innovation needs a national government that is on its side. The government is promising that energy secretary Amber Rudd will soon set out her plans to reset energy policy in the UK. With each passing day the stakes get higher.
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Andrew Pakes is former chair of SERA – the Labour Environment campaign – and tweets at @andrew4mk
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