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February 22, 2012

How to break the closed shop

The six big energy companies hold 99% of the market. They hike their prices and we meekly accept as inevitable the extra hit on our pockets. What makes it all the more galling is the scale of their profits – an increase of £2bn on last year.  Local People Leading consistently promotes the merits of localised energy production but it remains on the fringes of mainstream policy. A new report by think tank, Respublica, argues that it should start to be regarded as the genuine alternative to the ‘closed shop’ energy market.



Scotland on Sunday

For a copy of the new report by Respublica click here.

Community-run renewable energy projects should be promoted by ministers to break the grip that the Big Six power firms have over consumers, a leading think-tank director has said.

Philip Blond, the director of Respublica and the man behind David Cameron’s Big Society, has cited examples of community energy projects in Scotland as a potential blueprint for ending the “closed shop” in the energy market.

His intervention comes as the Big Six energy firms, which include Scottish Power and British Gas, are expected to announce bumper profits of £15 billion in the coming weeks. Profits for 2011 are understood to be £2bn higher than the previous year due, in part, to a severe winter and rising energy prices.

The Big Six energy companies currently control 99 per cent of the energy market, and Blond believes that this needs to be challenged. In a new paper by his think-tank, Re-energising Our Communities: Transforming the energy market through local energy production, Blond argues that community enterprises are the best way to tackle the problem by utilising renewable energy sources.

He has highlighted the Isle of Eigg Heritage Trust in the Hebrides, where islanders have managed to produce all their own energy needs through a series of developments since 2008, including wind farms, solar panelling on buildings and building a hydro dam.

The project is now producing profits as well as picking up a £300,000 renewable energy award in 2010 in a competition run by the National Endowment for Science, Technology and the Arts.

The report also mentioned the Fintry Renewable Energy Enterprise near Stirling, involving 15 wind turbines. The villagers will receive £50,000 profit until their loan on the development is repaid and then could be bringing in £400,000 a year for community projects and developments. The report says the UK Government must “broker in the social, environmental and economic benefits of community energy” by putting local communities at the heart of the development of projects and ensuring they enjoy more of the benefits from sustainable energy production.

The emphasis on community projects fits the Big Society blueprint at the heart of the Conservative manifesto in 2010, which the coalition government has struggled to pursue since against a background of cuts.