End to green energy ban could herald £100m council windfall

Local authorities could generate up to £100m a year in revenue from renewable energy installations, following the lifting of a government ban that stopped them selling energy to the grid.

According to an estimate from the Local Government Association (LGA), the lifting of the ban, which takes effect next week, could provide many councils with a valuable new revenue stream at a time when they are under pressure to cut costs.

Speaking to BusinessGreen.com, a spokesman for the organisation said the £100m estimate was a "ballpark figure", but he insisted that millions of pounds of revenue could be generated by local authorities over the next decade if they now accelerate plans to install renewable energy systems such as solar panels and wind turbines on council property.

"£100m is a feasible indication of what can be achieved if renewable energy technologies are rolled out by councils around the country," he said. "There is a lot of enthusiasm from councils around the lifting of the ban stopping them from selling energy to the grid as it will improve the investment case for renewable energy projects."

He said that a number of authorities such as Cornwall County Council and Bristol Council were already pursuing plans to install solar panels and wind turbines on council-owned land, while large numbers of other authorities were investigating the rollout of waste-to-energy technologies.

"In the current tough financial climate it is imperative for councils to look at means of cutting their not inconsiderable energy bills and generating alternative revenue streams that allow them to maintain services without increasing council taxes," he said.

The LGA's predictions are bound to be welcomed by energy and climate change secretary Chris Huhne, who earlier this week wrote to all councils in the UK urging them to take advantage of the opportunity to sell energy when the ban is lifted on 18 August.

The move was also welcomed by the renewable energy industry, which expressed hope that the change would encourage those councils that have consistently blocked planning applications for renewable energy projects to play a more proactive role in promoting low-carbon technologies.

"Councils have a vital role to play in the switch to a new low-carbon economy and today's announcement means they can now take full advantage of the feed-in tariff and the Renewables Obligation to deliver long-term benefit to their communities by way of additional income," said Gordon Edge, director of policy at trade association RenewableUK.

"In doing so we hope to see local authorities becoming champions of renewable energy and encouraging wider support."