To Reduce Bills We Need to Take Back the Power
What has happened to progressive ideas on energy policy? Politicians seem to be locked in a rhetorical battle to go further and further backwards.
There’s talk of a windfall tax which we tried in the noughties; some want a pool which we ditched in the nineties; and some want direct price manipulation which was the fashion of the seventies. Nationalisation is a word that keeps getting cheers on Question Time.
The debate over energy prices tells us more about the leaders’ sense of nostagia than their vision.
Energy supply is a long-term issue which needs long-term solutions.
The progressive long-term response to the problem of high energy bills is
(a) to reduce the cost of the Green Deal and focus more attention and financial support on energy efficiency (ideally paid for out of general taxation);
(b) to continue and accelerate the deployment of renewables to break our reliance on volatile gas imports and
Ironically support for the first two are the very policies that David Cameron is seeking to review. By choosing short-term political tactics over long-term strategic vision, Cameron risks saddling the country with higher long-term bills.
But as Keynes reminded us, in the long-term we are all dead. What are the short term options for consumers to reduce bills?
The government is right to encourage switching. People complain that it’s complicated, but it can hardly be surprising that a transaction of around £1000k per year has a few more ts & cs than choosing a pint of milk. It’s hard to over-emphasise that it is worth shopping around and doing the maths. You compare the market for car insurance, you compare the market for a mortgage, most people compare the market for toilet paper. Just get the lap-top out while the ads are on the X Factor and have a look at the alternatives!
If you really want to get technical, another possibility is collective purchasing. This is the idea of buying power and gas in large community groups to increase bargaining power and get a better deal. There are quite a few websites offering the opportunity, and generally if you sign up, you are not bound to take the offer they come back with. Certainly worth a look if you have lost interest in X-Factor and have devoted your whole Saturday night to the challenge.
But the best and simplest way to reduce bills and break our reliance of the big energy companies is to take back the power. You can do that in two ways – supporting community generation, and installing your own supply.
Firstly support community energy projects. These projects are owned by local communities and profits go back to local people and projects. They are often quite small scale, but as more and more community projects come into being, collectively they can have an impact on the generation mix in the country. They can involve anything from putting solar panel on school roofs to putting water turbines in local rivers to building small scale wind farms. Crucially they are owned by the community so they work for the benefit of the community.
Secondly and most simply, consider installing generation equipment (eg. solar panels) on home. By doing so you are taking the generation AND supply back into your own hands. You retain your grid connection so you can keep the lights on when the sun doesn’t shine, but when the it’s got its hat on you can sell power back to the grid. The investment required to install solar is significant but it is possible to finance panels through the Green Deal. Once they are up, they should be saving you money on bills and maybe even making you something on sunny days.
If you think this is a drop in the ocean, look at Germany. Through the massive-scale roll-out of small-scale renewables and community energy projects, Germany is succeeding in transforming its energy system. On the 3rd October this year, renewables made up 60% of German generation capacity on the grid at peak time. As one German politician puts it – changing the energy supply system to a greener, secure, cheaper mix dominated by renewables is ‘not a problem, it’s a task’. The big energy companies don’t like the move away from fossil fuels, but it is happening more quickly than anyone expected.
German politicians have made a clear decision about how to reduce bills long-term and deliver the secure, green energy future they want for their country.
We need the same progressive vision; not tactical political nostalgia.