Climate change secretary backs energy co-op scheme

Ed Miliband, UK energy secretary, has backed a scheme that will reduce gas and electric bills by up to one-fifth by increasing the use of environmentally-friendly technology. Carbon emissions will be dramatically reduced as well.

The scheme is designed to answer charges from critics who insist that tackling global warming will lead to higher energy prices. The project was launched by the Co-operative party at its annual conference, held on September 12.

Local residents will join with businesses, schools, and community organisations to form energy co-ops. The co-ops, with their increased bargaining power, can then negotiate with the wholesale energy market to provide energy fuel at discounted prices between 10 and 20 percent.



Once the supply has been secured at a set discount, co-ops will also install smart meters in members’ homes to help homeowners better manage how they use energy. A big step towards reducing the output of carbon emissions will occur when environmentally-friendly technologies are installed. Co-ops will install combined heat and power systems (CHPs), biomass boilers or heat pumps. CHPs work by capturing heat generated at power systems to heat the homes of local residents.

The co-op plan closely resembles a scheme underway in the Belgian province of Limburg where a purchasing cooperative was formed when fuel prices jumped following the deregulation of the Belgian energy market six years ago. Today 15,000 Belgian families have joined the energy co-op and save an average of €250 annually.

The Limburg scheme piqued the interest of the Co-operative party because Belgium’s energy market closely resembles the UK’s. According to a party spokesperson a series of pilot projects in Britain have proven the concept will work. One of these pilot schemes involved the Reddish Vale Technology College in Stockport.

The energy co-ops can fund their efforts by raising money through the Emissions Reductions Target which is designed to help along projects that benefit the environment. Similar to the way building societies raised funds in the 1980s to compete with high street banks, co-ops can use their status as mutual societies to raise capital from the community.

“There is a false choice that we have to kill: that is you can’t be green without it costing,” said Michael Stephenson, general secretary of the Co-operative party. “People want to be environmentally sensitive, but they see it as punitive.”

“The virtue of this scheme is that it says you can be environmentally sensitive, but save money,” Stephenson continued. “The key to reconciling those two objectives is you take a co-operative approach.”

“Communities should be able to work together to generate clean energy in their own area,” said Secretary Miliband. “We’re bringing in guaranteed feed-in rates so local wind or hydro power gets a cashback. We want communities to be able to work together to show their area can lead the way on climate change.”

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