Right here, right now: can Labour start building energy democracy?

Mika Minio-Paluello

Wednesday, 14 October 2015

Lisa Nandy’s speech on “democratising energy” at Labour’s party conference, and the ensuing media attention, was welcome. For social movements, local councillors, Green Party campaigners and NGOs who have demanded energy democracy for years, it’s a relief to see Labour finally articulating a progressive energy vision.

One person dies of cold every six seconds in the winter. CO2 in the atmosphere went crashing through the 400 parts per million mark last year.  North Sea oil is shrinking fast. The Big 6 energy companies and oil corporations control our energy infrastructure, making vast profits at public expense.

The energy and climate crises need a dramatic and visionary response. A survivable and just energy future means a power shift – both a technology transition to renewables, and breaking the grip of elite interests on our energy systems. It means increasing community autonomy, ending fuel poverty, guaranteeing a truly just transition and moving away from fossil fuels.

Energy democracy can be realised by scaling up from decentralised, community-controlled renewable energy projects, a rapid expansion of democratic municipal utilities in every city and using the state’s institutions to pool and allocate resources.

It’s a big task, but we can start this power shift today.  Building a just energy economy means political parties catching up with bold policy proposals coming from the grassroots – groups like Trade Unions for Energy Democracy Fuel Poverty Action and Platform London.

Labour’s new Shadow Minister for Energy & Climate Change seems to have looked in the right places in her first weeks in post. It’s good to see Nandy point to the cities and counties, and say “Let’s not wait for this government. Because let’s face it, we’d be waiting forever.” Labour doesn’t need to wait for 2020. In fact, winning the election in 2020 means proving to the public that Labour’s ideas and processes work. It means not just opposing Tory destruction, but starting to build that 21st century energy future that we want.

Labour can begin building energy democracy where it is already in power: Wales, Greater Manchester, Nottingham, and elsewhere  It can fight the May local elections from a strong platform of collective ownership over energy and public service. It can articulate a different public discourse – making the desirable become feasible. And it can co-operate with grassroots movements, to build alliances, intellectual and organisational forces.

It’s still early days and there hasn’t been much detail on Nandy’s Shadow DECC team’s plans. So here are six practical steps that Labour can take to start democratising energy in the UK – right here and right now.

 

1. Solar Cities

Every Labour-run city should become a Solar City, visibly part of the 21st century and committed to the climate transition. Solar is the most popular energy form, especially in cities. A recent opinion poll showed that 65% of people would support a solar farm near their home.

Labour councils can prioritise installation of PV solar panels on municipal buildings, schools, council housings and transport infrastructure, while also setting up solar delivery units that work with housing associations, residents associations and community groups. The same poll showed huge support for renewable projects that are owned and controlled locally, with profits generated benefiting the community. The current Feed in Tariff review will make expansion of solar more challenging, but not impossible.

Financing could be sourced by launching solar bonds. By collectively issuing low carbon local authority bonds, Labour-run councils could share out the administrative costs and access lower-cost borrowing for projects otherwise too small to warrant their own bond.

Solar Cities should promote collective ownership over local energy generation. Municipal solar delivery units can maximise local job creation and benefits while reducing costs. 

 

2. Divesting from fossil fuels, building the new economy

UK local councils hold £14 billion of oil, gas and coal shares in their pension funds. Some of the most heavily exposed are Labour-run councils in Greater Manchester, Merseyside, South Yorkshire, West Yorkshire.

Greater Manchester alone lost over £100 million from its pension pot in 18 months through investment into coal stocks – in “terminal decline” according to Goldman Sachs. Putting money into distant fossil fuel multinationals does nothing for local lives, jobs or economies.

Instead, Labour-run councils could take the initiative and reclaim pension funds from over-paid City advisors. By divesting from BP, Shell, BHP Biliton and Glencore, councils can reinvest into community-owned renewables, public transport and social housing – creating local jobs, improving services and ensuring safer pensions for public sector workers.

Putting £14 billion into solar would create more electricity than Scotland consumes, or build 200,000 homes. This isn’t ‘pie in the sky’ thinking. The Borough of Islington’s pension fund is investing £150 million into social housing, while Lancashire invested into community renewables.

It’s a sensible strategy, that makes finance serve the public – not vice versa.

 

3. Public offshore wind 

Many Labour-run regions – whether countries like Wales or coastal regions like Tyneside, Merseyside or Lancashire – have large potential renewable energy resources, especially offshore wind. Today, offshore wind is largely seen as the domain of private companies – or at least foreign public entities like DONG or Statoil.

The Welsh government or Lancashire county council could pro-actively build publicly-owned renewable power. They don’t have to do this alone – public-public partnerships can help bring together expertise and financing from different sources. The Middelgrunden Offshore wind farm is co-owned by the city of Copenhagen, together with a residents co-operative. 3.5 kilometres off the coast of Copenhagen, it provides 4% of the Danish capital’s electricity.

There are useful public-public models to learn from in the Latin American water sector, with partnerships between public sector companies set up by local governments and workers’ co-ops with technical expertise.

Pushing for public offshore wind could be a vote-winner for Kezia Dugdale in Scotland and Carwyn Jones in Wales, both of whom face big challenges in the May elections.

 

4. A London municipal energy company – for the people

London deserves a public energy company designed to address fuel poverty, drive the climate transition, create energy democracy and lower bills. Boris initiated a London supply scheme with a junior license in 2014, but it had limited ambitions and hasn’t been set up yet. London has the lowest amount of installed solar of any English region, despite being comparably sun-friendly. But there’s growing enthusiasm for municipal energy companies in the UK, with Robin Hood Energy launched by Nottingham City Council and Our Power in Scotland. Bristol and Islington have also shown interest.

Bulk buying energy could lower bills, helping alleviate the cost of living crisis in London. A London public energy company could build its own energy generation, siting solar on Greater London Authority property, council buildings and housing association stock. It could reinvest into the transition and prioritise measures to reduce consumption. Strong hire-local and buy-local standards would boost jobs and encourage renewables companies to invest in London. Learning from the Berlin Energietisch, the company should be built on strong principles of democracy with directly elected representatives from energy users and energy workers, ensuring accountability and that it serves the public interest.

Sadiq Khan will face a tough fight in London in 2016. Faced with Zac Goldsmith (Cons.) and Sian Berry (Green), he needs truly progressive environmental and energy proposals – those Green Party second preferences will be important. That means articulating bold policies, that stand out as committed to both social and environmental justice.

Labour has the chance to create a democratic London energy company. It could be a flagship for the municipal energy movement across the country, inspiring city councils and county councils elsewhere and driving public-public co-operation.

 

5. Scotland – from the bottom of the barrel to a just transition

Labour needs to conduct some hard soul-searching in Scotland. Energy is a big issue for the country, and the SNP has taken strong stances, e.g. offering solar subsidy guarantees despite Whitehall proposals for cuts.

The North Sea is in long-term decline, but the SNP – like the Tories – is wedded to protecting oil corporations at all costs. From the public’s perspective, the UK already has one of the worst tax systems in the world. At Lisa Nandy’s first DECC question time, both Tory and SNP MPs were calling for further subsidies for oil extraction. These prop up corporate profits, but don’t create longterm employment.

Rather than wasting billions on corporate welfare, Labour can demand accelerated just transition for North Sea oil workers. Fossil fuel workers who lose their jobs due to a shrinking fossil fuel sector should receive a climate job – a public sector job in the new economy. This is consistent with Corbyn’s leadership commitment to the 1 million climate jobs concept.

There is mass appetite in Scotland for public offshore wind – I witnessed it on the streets in the run-up to the referendum. People don’t want to be cheated out of their natural energy resources a second time around.

Labour can claim new ground, positioning itself as placing Scotland’s energy system in the 21st century, instead of continued dependence on a dying industry. The policy proposals are already there to create hundreds of thousands of jobs – far more than in fossil fuels  – Labour could seize them.

And while Scottish Labour promotes a transition to the new economy, the Westminster Labour leadership could demand a more sensible fiscal regime, that aims to maximise revenue over the long-run, rather than prioritising corporate profits and barrels extracted.

 

6. A movement for energy democracy

There are already movements across the UK fighting to stop fracking, end fuel poverty, defend jobs, replace energy colonialism with energy solidarity, and build co-operatives. It’s time for Labour to join these movements.

Labour can have a role in building energy democracy, from the bottom-up. There’s more to social change than seizing power.

That means showing humility – people have been fighting and organising these battles for years. Labour members have been involved, but the party itself has largely been on the sidelines. It means acting in a democratic manner, and bringing resources to the table.

Labour can rebuild an intellectual and practical relationship with co-operatives. It could take an active role in setting up energy co-operatives across the country. Small-scale co-ops are immensely popular across the country, including outside Labour’s core support base.

By reconnecting with the grassroots, Labour is aligning itself with majority opinion on many issues. For example, only 2% of the population support fracking.

By participating in movements, Labour can build trust amongst activists –  people who will be out on doorsteps at election time. The party can break with its image as arrogant and inward-looking. It can build respect by being respectful – and do the right thing. 

It’s time to break with the past of either privatising our energy resources, or centralising them in large unaccountable bureaucracies. Those pushing energy democracy, decentralised energy and public-public co-operation are the true modernisers.

 

Mika Minio-Paluello (@mikaminio) co-ordinates Energy Democracy Project,  is a member of Labour Energy Forum and has worked on energy policy for Platform for 10 years.

Topics discussed:

Sustainability

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  1. Posted by H J Cartmell

    Notice the lack of detail in the ‘public-public Latin American water sector partnerships’. Is that the Latin America that is as socialist as it is corrupt, and poor, except for the 1%. Now that IS a 1%.

    Reply