Nov 1 2006
A radical shift away from large centralised power production to community based 'locally grown' energy could help cut carbon emissions and improve efficiency, Alistair Darling said today.
Following the Energy Review the Government, together with Ofgem, is examining the incentives and barriers that impact on this way of producing energy, known as 'distributed energy' or 'decentralised energy'. As part of this we are calling for evidence from interested parties.
The Government has also announced it has granted consent for a new power station at Isle of Grain in Kent. This station will make use of the heat produced when the electricity is made to supply local industry- an example of how we can use fossil fuels more efficiently.
Alistair Darling said:
"I want a shift in the way we make our energy to low carbon, high efficiency.
"There is huge potential for us to make energy a local issue, involving individuals, businesses and communities.
"More and more people want to generate their own electricity at home and people can now buy the products on the high street. Solar panels, wind turbines and greater energy efficiency can help cut emissions and the impact on the environment.
"Making it easier for people to sell surplus electricity back to the Grid and looking at the potential of new combined heat and power domestic boilers, must be considered. We want to understand the barriers to generating energy locally in large buildings like hospitals, hotels and universities."
Ofgem Chief Executive, Alistair Buchanan, said:
"Ofgem has already taken action to help more locally-based electricity generators connect to electricity networks. This includes incentives for local network owners to respond to growth in renewables and to invest in research and development to realise their potential.
"Ofgem has also identified action energy suppliers need to take to make it easier for people to generate their own electricity at home and sell back surplus electricity.
"To continue this progress both Ofgem and the Government need to understand what barriers may exist to further growth of distributed generation. We are therefore asking people to come forward with their views."
Mr Darling continued:
"The new power station in Kent shows what can be done to make energy supplies more efficient. Instead of being wasted, the heat produced will be used to supply nearby industry - equivalent to heating over one hundred thousand homes."
The Distributed Electricity generation document is published today and it asks for evidence of the barriers and incentives from interested parties. We are particularly interested in evidence on licensing issues, ensuring fair reward for distributed electricity sold into the grid, and the operation of private wire networks.