Bristol Council is leading the way in terms of municipal involvement in energy supply. It owns wind turbines and solar farms and is poised to set up its own energy company, as it celebrates being European Green Capital 2015
Bristol Council is launching its own energy company, Bristol Energy, in a bid to tackle fuel poverty in the city and reduce carbon emissions. The company, which will launch later this year, will also provide an income for the council as it attempts to plug the gap in its funding.
Bill Edrich, commercial director of energy at Bristol Council, said the company will bring a ‘triple bottom line for the city’. ‘It will create jobs, help us tackle fuel poverty and inequality, and encourage a switch to low-carbon,’ he said.
The company will supply gas and electricity, and its energy prices are likely to be lower than those offered by current providers. The council is particularly keen to use its position in the energy market to switch those currently on pre-payment meter tariffs to smart meters, reducing fuel costs for vulnerable households and allowing the council to make savings to its social care and welfare budgets.
‘As a local authority we pick up the social costs of energy provision failures, from poor attendance at schools and people using food banks as they choose between eating and heating, to increased costs in social care when elderly people are no longer able to stay in their homes’, says Edrich.
‘City energy suppliers could disrupt the energy
market and help repair the current crisis of trust’
A fundamentally different business model
Those paying for their energy using pre-payment meters – often low-income households – are charged a premium. By switching them over to smart meters Bristol Energy will help households budget and control their energy spend, and engage its customers in a conversation about energy usage. Through monitoring those households with high energy costs, the council will be able to target its insulation and energy efficiency programmes more precisely, for example.
‘As a city council and a public service our business plan is fundamentally different to that of a private energy company,’ Edrich said.
In its report City Energy: A New Powerhouse for Britain, IPPR spelled out the potential for local authorities to provide an alternative to the Big Six energy companies.
‘The high levels of trust that cities and local authorities have from their local communities means that city-energy suppliers could prove to be very popular, which would disrupt the energy market and help repair the current crisis of trust’, it said.
The report urged local authorities to take a greater stake in their energy supplies to help British cities make the transformation to greener, cleaner and more affordable supplies.
The launch of Bristol Energy follows on from Nottingham Council, which became the first in the country to set up its own energy company, Robin Hood Energy, earlier this year. Municipal energy is more common in Germany and Scandinavia however; Munich has a target to supply its entire municipality of one million people with renewable electricity by 2025.
Bristol Council has invested £3.1m in the new company and received European funding to create the initial outline business case. It expects to make a return of 12% after five years of trading and 35% by year ten.
Bristol Energy aims to source all its electricity supply from renewable sources by 2050, and to obtain it as locally as possible. Through a community-based finance model, the council supports local community energy organisations to set up renewable energy projects on council-owned land and buildings.
Clare Goff is former Editor of New Start magazine