The Government’s subsidies for domestic and small-scale energy production come to an end this month (March 2019) making small scale generation from solar panels and the like much less attractive. But wouldn’t it be wonderful if we could all become energy self-sufficient, ensuring green production accounts for more and more of the country’s demand? It can be done, argues Kent Barker, but needs some radical alternative thinking in government

A farmer I know recently abandoned plans for an anaerobic digester on his land. He’d spent thousands of pounds on feasibility studies and planning permission. The plant would have taken the slurry from his cattle and excess crops from his fields and turned them into electricity. Enough to power half the nearby village. Another friend recently cancelled an order for solar panels for his roof. The electricity he’d have generated would have cut his bills, but it would have taken decades to cover his upfront cost. And all because the government has slashed – and is now ending – the ‘FIT’ scheme. 

The FIT or ‘’Feed In Tariff’ was a government subsidy to boost just this sort of micro-generation. For every kilowatt of electricity you created and fed back into the National Grid, you received nearly 13p. Then in 2015, Environment Secretary and Hastings MP Amber Rudd announced the price would be cut to just 4.01p.  From April 1st this year the scheme is closed altogether for new entrants. The result: a halt to the 800,000 households that have installed solar panels since 2010 and effective infanticide for the nascent micro-generation industry. 

A quarter of all UK CO2 Greenhouse Gas emissions come from energy production – mainly from coal oil and gas fired power stations, yet at the same time, the government removes incentives for us to ‘green up’; in another dingy Whitehall office, minsters are tinkering with OFGEM’s energy price caps – likely to result in price rises and 11 million customers being £117 a year worse off. But the price cap is a nonsense anyway, because it operates only for those customers on default tariffs ie: those who won’t, or can’t, shop around and switch providers annually.

What’s happened is that government has created a fake market which doesn’t work for so many people that they have had to impose artificial restrictions on it. The ‘free-market’ concept was that if you have lots of companies supplying (as opposed to producing) energy, competition would drive prices down. Which has turned out to be rubbish because 11 million of us aren’t interested in changing suppliers each year.

What government should have done – and should now do, is nationalise the SUPPLY of energy to our homes, while increasing competition among energy PRODUCERS. This would allow a regulated production market to determine the price. In turn, it would enable green and micro-energy production to flourish at the expense of coal, oil and even nuclear.

It could work like this: A new quango called, for instance, the National Energy Distribution Board (NEDB) is set up and sells electricity at a flat rate to everyone, however much they use, wherever they live, whatever sort of meter they are on. You’ll never have to worry about switching again; it’s one price for all.

The NEDB is a non-profit making body with two key objectives. First to keep electricity prices as low as possible and second to make electricity production as green as possible. Now these are clearly competing motives, so here’s how they could make it work. Currently a third of our electricity is produced from renewable sources. So that’s the baseline. NEDB would never source less than a third from renewables and, indeed, would increase that proportion year on year. And it would achieve this through a mixture of competition and price controls. Gas and oil and coal fired power stations,
dirty producers, compete with each other to supply the cheapest power to the NEDB, but at an ever-reducing total volume. Renewable producers also compete with each other to sell at the lowest prices and an ever increasing percentage of the total. But crucially, there is an important third area of competition: the domestic and micro-generation sector.

The NEDB would immediately restore the Feed In Tariff (FIT) subsidies for small producers. So, you install solar panels on your roof or in your garden and you get a subsidised rate for the electricity you feed back into the system ie: a rate high enough, to encourage millions of us to invest in solar panels and for all new house builders to install them, as a matter of course. (Blocks of flats could, perhaps, retro-fit them as cladding, instead of Grenfell-style combustible material).

We have to accept that skewing the market like this, to increase the proportion of renewables being used, would not necessarily result in the cheapest possible electricity. But it would result in a unified and stable price to consumers. It would encourage people, if they possibly could, to invest in micro production. It would incentivise small-scale production from anaerobic digesters, solar, wind and hydro schemes. It could, eventually, release us from our reliance on the mega-watt power stations and would almost certainly rule out nuclear power, as hopelessly unaffordable. And above all, it would result in a vital annual reduction in our CO2 climate
change emissions from this sector. What’s not to like?

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