Tuesday, 18 August 2015

Local energy production and local energy supply

According to the Wales Fuel Poverty Projection Tool released in 2013, 31% of social housing tenants in Wales still lived in fuel poverty in 2012. This equates to 70,000 households, which is a rise of 6% from 2008 indicators. Tenants living in housing association properties have been affected significantly by rising fuel bills, benefit changes and the ‘bedroom tax’. High energy prices in Wales are compounded by the energy inefficiency of Welsh housing and lack of access to mains gas in rural areas. Furthermore, many social housing tenants in Wales are using prepayment meters to pay for their gas and electricity bills, which can mean that they end up paying more for their energy needs.

Taking these factors into account, along with the recent changes outlined in the UK Government’s summer budget, any opportunity which offers the potential of increasing household budgets as well as raising income for HAs, needs to be explored. Exploring the potential for local energy production and local energy supply is one of those opportunities.

CHC is holding a ‘Local energy production and local energy supply’ event in Cardiff on September 30th to explore these opportunities. Many organisations feel that we need to address the market failure impacting on low income households and we need to impact fuel poverty directly through price. There is a significant and growing appetite to intervene directly in the energy market, as outlined in a “Non-traditional business models: Supporting transformative change in the energy market” event recently run by Ofgem and Welsh Government. Feedback from this event will be provided at CHC’s event.

Examples of non-traditional business models include community energy projects which share an emphasis on community ownership, leadership or control where the community benefits, as well as ‘Energy Service Companies business models’, which include financing, designing, building, operating and maintaining small-to-medium scale demand management and/or low carbon energy projects, as part of either energy service contracts or energy performance contracts.

Following updates from Ofgem and Welsh Government, ‘Our Power’ will provide an update on their activity at the event. ‘Our Power’ is a new independent energy supply company and the first in the UK to operate on a non-profit distributing basis. It plans to sell heat and power to tenants in 200,000 homes across Scotland by 2020. This agenda item will be the longest session on the day, providing an opportunity to hear about Our Power’s journey so far and any potential for collaboration with the sector in Wales.

Before concluding the event with a ‘next steps’ discussion, a range of organisations will get an opportunity to outline their services and project work in relation to local energy production. Part of this includes local energy production through renewable energy systems. People in Wales have amongst the second highest electricity bills in Great Britain, which is largely due to Wales’ energy infrastructure and higher distribution costs faced by consumers in Wales.

A fair deal on distribution costs is needed for Welsh consumers. Part of this deal is the need to improve the capacity and infrastructure of the national grid with regards to installing renewable energy systems amongst other benefits. There is great potential for renewable energy in Wales and, alongside this, we need to consider the potential for energy storage, smart grids and other technological advances. Such projects can have significant social, environmental and economic benefits for housing associations, tenants and communities.

To book your place on CHC’s event on 30th September, please click here.

Shea Jones
Energy and Sustainability Officer

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