Time for an Energy "New Deal" for Londoners

I was delighted to hear candidate for London Mayor Ken Livingston talk about creating a London wide energy co-operative. He was taking a leaf out of the book of the greatest of all US Presidents Franklin Delaware Roosevelt. It was in 1933 when the Roosevelt administration passed the Tennessee Valley Authority (TVA) Act authorizing the TVA Board to construct transmission lines to serve “farms and small villages that are not otherwise supplied with electricity at reasonable rates,” this opened up rural America for co-operative energy.

In the thirties US farms relied on kerosene lamps, hand milking, the wood stove and the washboard. Today 99 per cent of US farms have electricity. The vehicle that bought electricity to this vast country was not capitalism, investor-owned utilities refused to invest as they felt there was insufficient revenue to justify the capital expenditure on the required infrastructure, it was co-operation.

Today almost all of rural America gets its electricity from co-ops and many have joined together to form wholesale generation and transmission (G&T) businesses to supply their member-owners with electricity. In the US today there are 841 distribution co-ops and 65 G&T’s supplying electricity to 42 million customer members in 47 states. They strive to bring the best service to their members at the lowest possible cost and despite the fact that supplying rural areas is more expensive than cities some have managed to be cost effective enough to enter urban markets.
The US national brand of energy co-ops is Touchstone Energy; their slogan is the power of human connections. They bring innovation and a national network to deliver energy to 27 million owner members every day. They argue their success is down to the co-op business model putting customers first. They deliver energy to their members at the cost of the service. Compared to investor-owned utilities which distribute their profits to investors across the world — not necessarily to those they serve.

Whilst an Energy New Deal for Londoners would be an excellent program, here in the UK energy co-operatives are one of the fastest growing sectors of the co-op economy. It seems quietly the UK population is taking power into their own hands. Statistics realised by Co-operatives UK at the tail end of 2011 show a 24% rise in the number of ‘member owned’ energy co-operative enterprises in the last four years.
The Co-op UK figures show that member owned energy organisations are the fastest growth area for co-operative enterprise in the country. The data was released with a comprehensive Co-operatives UK research report on the sector, The Co-operative Green Economy by Pat Conaty.

Ed Mayo, General Secretary of Co-operatives UK pointed out that “The big six energy companies are still the giants in the market, but grassroots co-operatives are now organising under their feet.”

The most significant of the new Co-op energy suppliers is, Which Consumer Action award winning, Co-operative Energy set up by the Midcounties Co-op as an alternative to the big six energy companies. Nigel Mason, of Co-op Energy says, “Co-operatives empower people and result in tangible improvements to people’s lives and energy is one example of where joint action makes more sense than isolation. We started Co-operative Energy to challenge the major energy suppliers to treat consumers fairly, bringing co-operative values to a mistrusted sector.”

On a different scale Sheffield Renewables a co-operative which develops, funds, builds, owns and operates renewable energy schemes, is run by local people, for local people. It is an example of a new and growing form of energy co-operative, which is raising investment from the local community to generate energy from hydro-electric power. Mark Wells, member and Development Manager, says “The work we do is one which allows communities to work together to develop and own local renewable energy schemes. This is empowering and at the same time keeps people in touch with the climate change debate and their effect on the environment. In our case, profits will help support development of further local renewable energy supplies.”

To date there are 43 communities who are already producing renewable energy. Local residents have invested £16 million in these schemes, ranging from over £2 million in a wind farm in Oxfordshire through to smaller sums to install solar panels. But there are factors holding back the development of these schemes and this is where a pro-active Mayor can make a difference. There are barriers facing communities including: shifting government legislation, planning hurdles and bureaucracy that makes it hard for local schemes to establish themselves.

River Bain Hydro, for example, has successfully set up a hydro electric scheme in North Yorkshire, but had to spend a huge proportion of its limited time negotiating with power companies because of a lack of co-ordination. As they explain: “Between the power house and the grid, a distance of a hundred yards, we ended up with five different organisations involved in delivery.”

Paul Monaghan, Head of Social Goals at The Co-operative Group, says: “The potential for a community-led clean energy revolution in the UK is enormous. Countries like Germany and Denmark have shown us the way. With The Co-operative Bank’s commitment to invest £1 billion in renewable energy by 2013, and our broader support for co-operative enterprise, we are ready to help realise the significant benefits that community energy can deliver for society and communities.”

So with a Billion pounds of potential investment and a pro-active Mayor the light at the end of the tunnel for Londoners could be powered by co-operative electricity!
For information the Report: The Co-operative Green Economy can be found at: www.uk.coop/energy And if you want to check out Co-op Energy go to: www.cooperativeenergy.coop