4 Reasons Why Clean Energy Must be Public Energy

by Archie Davies

16 December 2015

There’s something almost quaint in the idea that the private sector is going to solve our energy and climate predicaments. Like Ant & Dec, the big energy companies and their state subsidisers keep making new programmes, and they’re only getting worse.

Across Europe and beyond, municipalities are stepping in to challenge the stranglehold of energy companies over energy supply. It seemed London was going to be following these innovative models when it announced in 2013 that it would pursue a ‘Licence Lite’ approach, allowing the city to connect public and small-scale energy generation with large consumers such as Transport for London. While not going far enough, this seemed to be good news.

It comes as a massive disappointment, then, to learn that the Greater London Authority (GLA) is inviting the wolf in to tea by signing a deal with one of the same companies which has so spectacularly failed to deliver the affordable, clean energy London needs. Rather than using Licence Lite to challenge the oligopoly, the GLA has asked German-owned utility giant RWE npower to run the programme itself.

A new campaign – Switched On London – has been launched in London to follow the lead of cities like Hamburg in demanding a publicly owned municipal energy company. Here are four reasons clean energy needs to be public:

1. We don’t have any more time to waste.

The deal which has emerged from Paris is long on fine words and drastically short on detailed plans for implementation. From Cumbria to Chennai and the Balkans the impacts of climate change are becoming ever more present in people’s daily lives. Meanwhile, for the last 30 years the world has experimented with a private-sector led response to climate change – a trend reproduced by the Paris deal.

But this has resoundingly failed: bills have spiralled, consumer satisfaction has plummeted, investment in new clean infrastructure has stalled, and power has become increasingly centralised in the hands of a small cartel of monolithic multinationals. Fossil fuel companies won’t jump; they have to be pushed. Global temperatures have already risen by around one degree, so we don’t have another 30 years to waste waiting for them to solve our energy and climate problems.

The solution is achievable; in Nottingham and Bristol city councils have established a public energy supply company. In Denmark and Germany community and public energy is leading the transition to renewables.

2. Energy provision should be about social justice.

In London a million people live in fuel poverty. Stagnating wages, rising rents and eviscerated welfare forces people to choose between heating and cooking. In the meantime, the profits of the Big Six have increased ten fold since 2007.

It doesn’t need to be that way. Progressive-pricing mechanisms can help the worst-off with their bills. Public energy could put an end to forced electricity cut-offs and invest in the ambitious energy efficiency measures needed to reduce bills and keep homes warm. Freed from the need to accrue grossly inflated profits, municipally-owned companies can supply and deliver energy according to principles of social justice that the Big Six would never dream of.

3. We need clean energy in our cities.

London is miles behind other cities. In Munich, the municipally-owned public utility has begun to deliver on the city’s commitment to 100% clean energy supply by 2025 while in the UK, London, Birmingham and Leeds are all serial failures at improving their air quality: in the capital, air pollution kills around 10,000 people a year. Cities around the world are choking their inhabitants through continued addiction to fossil fuel-based transport and energy systems. This leads to profound environmental injustice: pollution is concentrated in poorer urban areas inhabited mainly by working class communities and people of colour.

Municipally-owned energy companies can drive public investment into renewable energy, and maximise local green energy capacity such as solar and district heating. Divesting public pension funds from fossil fuels would release a flow of money to invest in new renewable energy capacity, and the public sector can sponsor municipal bonds – as have been issued for Crossrail for the desperately needed transition to new energy and transport systems.

4. We need a democratic energy system.

Energy isn’t a luxury, it’s a necessity. Yet it is controlled by an elite few, with companies operating in perennially suspicious ways, drawing the gaze of competition regulators and their own watchdogs. Fossil fuel companies don’t function in truly competitive markets; on the contrary they are bolstered by generous state subsidies while retaining power deep within corporate bureaucracies.

The energy system should be radically democratised. In Berlin, a campaign to re-municipalise the energy system was overwhelmingly popular. Over 600,000 people voted in favour of the proposal; more than 80% of those voting. The campaign failed only because a blocking coalition of the energy company Vattenfall and the city senate moved the date of the referendum. Consequently, the campaign fell just 21,000 votes short of the requisite threshold of 25% of city residents.

Public ownership can deliver radical transparency and accountability. Berliner Energietisch (Berlin Energy Roundtable) campaigned for new and democratic structures of participation. It demanded a municipal company answerable to advisory assemblies held across the city able to drive the company’s agenda through public petitions.

Following this lead and the success of energy democracy movements across Europe and beyond, Switched On London – a broad coalition of grassroots organisations, unions and environmental groups – is demanding a truly democratic energy system for the capital. With London Mayoral candidates vying to outdo each other on environmental issues, we’ll be building a grassroots movement in the run up to the 2016 mayoral elections to demand a people’s alternative to the Big Six.

There are nothing but tired ideological tropes and ingrained vested interests stopping cities from stepping in to secure clean, democratic and socially just energy systems. It’s time to take our power back.

Photo: Márcio Cabral de Moura/Flickr

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