Paul O’Brien argues that councils should be leading the way with renewable energy schemes. They can reap important economic and social rewards as well as environmental benefits

O'Brien, Paul

English

LSE Research Online

blogs.lse.ac.uk http://blogs.lse.ac.uk/politicsandpolicy/2012/04/19/local-government-green-economy-obrien/Local authorities should be at the forefront of goinggreen. This will see economic returns as well asenvironmental benefitsApr 19 2012Paul O’Brien argues that councils should be leading the way with renewable energyschemes. They can reap important economic and social rewards as well asenvironmental benefits.This is the eleventh article in a series on climate change and environmentalpolicy being hosted by British Politics and Policy at LSE.A report recently published by the Association for Public Service Excellence (APSE) suggests thereis still a business case for local government-led renewable energy schemes. We are finding thatmany councils around the UK are pushing ahead with the renewables agenda and would urgeothers to do the same. Our new research provides evidence as to both the business case andbroader impacts of renewables for local economies and communities.APSE commissioned the Centre for Local Economic Strategies (CLES) to examine the issue. Ourreport, Powerful Impacts: Exploring the economic and social benefits of renewable energyschemes, assesses the benefits of projects in terms of: payments from Feed in Tariffs (FiTs);number of people employed; value to supply chains; training and skills development; and savings incarbon emissions.CLES researchers found that £1 invested in local renewable energy schemes that were early to getoff the ground could deliver an average £2.90 in cashable benefits. They also found that a schemefitting solar panels to 500 homes can create 12 full-time equivalent jobs and save 650 tonnes a yearin carbon emissions.The model built in sensitivity tests for factors that are liable to fluctuations, principally FiT rates,borrowing rates, equipment costs and energy costs. While government proposals to cut FiTs forsolar schemes might have dented confidence, public sector decision-makers are now recognisingthat lower tariffs can be offset by falls in costs of equipment that are forecast.Researchers re-calculated the return on investment in light of the latest information on reductions toFiTs. Based on reducing the tariff from 43.3p per kWh to 21p for solar schemes, they found this fallsto £1.50.A return on investment of £1.50 is obviously a drop compared with rewards for those trailblazerprojects. But £1.50 can still be a healthy return and the predicted fall in the cost of solar panels alsomeans the initial outlay is reduced.The report features case studies demonstrating how forward-thinking councils have not onlydeveloped renewable energy projects as a way of cutting energy bills, enhancing energy securityand reducing emissions, but also used them as a catalyst to stimulate jobs, skills and supply chainslocally.It must be remembered that solar is just one element of renewables. While the authorities discussedin our report have used solar technology, we believe similar benefits can be derived from otherprojects such as wind, biomass, electric fleet and energy efficiency schemes.APSE’s previous publication, The Virtuous Green Circle, set out how a ‘revolving fund’ forinvestment in sustainable energy can operate in local government. CLES researchers found criticalsuccess factors are to deliver schemes at minimum cost and risks to the local authority and to ‘lockin’ economic benefit – and that a direct local authority approach offers most ability to control thesefactors.Our new report argues that impacts of renewable energy on local economies should be fullyrecognised in local decision-making and national funding mechanisms. To this end, we are pleasedthat the Department of Energy and Climate Change appears to have recognised the need todifferentiate between schemes that provide a community benefit and those driven by profit and willconsult to protect social landlords from an additional cut for multi-installations.This distinction is an important one. If cuts to FiTs make commercial rent-a-roof schemes lessattractive to those seeking purely to maximise profits, there is all the more reason for councils thatcan make a sound business case for renewables but also have broader environmental, social andeconomic ambitions, to take a direct approach.Fortune has most definitely favoured the brave and pioneering authorities have seen the best returnon investment in renewables schemes. We suggest that others should push ahead as a matter ofurgency.This article was originally published on the Association for Public Service Excellence(APSE) blog.Please read our comments policy before posting.Note:  This article gives the views of the author, and not the position of the British Politics andPolicy blog, nor of the London School of Economics. About the authorPaul O’Brien is the Chief Executive of the Association for Public Service Excellence (APSE).Based in Manchester APSE has 250 local authorities in membership. Paul was previouslyAPSE’s Principal Advisor (Scotland), and has over 28 years experience in local government.po’brien@apse.org.ukYou may also be interested in the following posts (automatically generated):1. We need to focus on growth and being greener – not ‘green growth’2. The government needs to go beyond the Green Deal if it is genuinely committed to makinghouseholds more energy efficient3. The Green Deal is an ambitious policy. But it may fail to deliver on its promise and coulddamage recent gains in household energy efficiency4. ‘Green Growth’ is an attractive concept for analysts and policy makers alike, but to beeffective it must be backed up by effective collective action, not spin.

Local authorities should be at the forefront of going green. This will see economic returns as well as environmental benefits

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