Procurement, Capital and Shared Assets Productivity Workstream

Big Wins Strategy

Potential Big Win Suggestion

Big Win Suggestion: Local Energy Companies/Authorities

Impact overview
Hard to implement / 2 / Easy to implement
Risk High / 5 / Risk Low
Negative Policy Impact / 5 / Positive policy impact
Slow return (12 months or more) / 5 / Fast return
What is it?
In many ways the idea of Localised Energy Companies rolls the clock back to Victorian days of Metropolitan Energy supply by local authorities at the time.
In the current political climate, there is a significant case for local authorities to take a more significant role in Decentralised Energy, namely by setting up an energy company or authority run solely by the local authority. There is a unique opportunity for this within local authorities given their power over their own localised infrastructure (assets and streets), the relationship with communities and businesses, and the potential of waste to energy schemes.
What are the benefits?
By running a decentralised energy network as opposed to reliance on the National Grid for energy, local authorities have a much wider scope and responsibility for the sources of energy they use, and how the energy is distributed across the service area. Therefore a greater reliance on cost-effective renewable technologies can be achieved, having a positive impact on carbon reduction. It also ensures that economic and social enterprise opportunities that are created by the decentralised network are maintained within the local area.
Integration with renewable energy and the benefits of Feed In Tariffs makes this a very quick win for local authorities that can develop in to long term sustainable benefits in terms of cost reduction and revenue stream
What is the Big Win proposal?
Given the political backing for localised energy, this big win represents a substantial opportunity. The major requirement for Local Energy Authority to be successful is to develop a new blueprint model for the area, and most importantly to identify the commercial opportunities within the value chain highlighted below.

This model has provided great success for a number of local authorities, who are now well renowned for being market leaders in decentralised energy networks. This model also has many opportunities for social and environmental improvement in the local area in terms of carbon reduction, job creation and renewables thought leadership.
What are the risks/problems to avoid?
Development of approach dependent on private sector partnership.
Ensure local energy authority is managed effectively.
What examples exist of this approach?
There are a number of successful examples of local energy authorities operating in the UK, and Capita Symonds have experience in working with the three largest decentralised networks, in Southampton, Sheffield and Birmingham.
How scalable is this opportunity across England?
In essence we believe this is a significant revenue generating opportunity of local authorities but needs to be developed in partnership with the private sector to bring the commercial and integration capability.
Which tier of councils would use this and at what approximate implementation cost?
As our experience shows, this idea can be supported by all tiers of local Government, providing the size of the area to be served by the Local Energy Company is large enough to be economically viable.
Other resources/links to supporting documents/case studies etc.
Key contact: Richard McWilliams