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City-energy companies could provide an alternative to the big six

Cities and local authorities can provide an alternative to the big six and create a cleaner, smarter, more competitive and affordable energy system, according to a new report from the think tank IPPR.

The report urges Britain’s cities to get even more active in energy markets and for the pioneers to go further.

The report shows that the market value of Europe’s biggest utilities and the strength of their balance sheets are under severe pressure due to transformations in the energy system.

The report says questions are now being raised – by parliamentary groups among others – about the delivery of Britain’s long term plan for energy investment.

IPPR argues that cities and local authorities have a range of options open to them to invest in and support local generation, which some are already utilising.

The new report argues that smaller scale electricity generation is increasingly cost effective, supports growth by smaller energy companies and delivers local jobs and growth.

The report also reveals how by becoming active in the energy supply market cities could support independent generators and ensure that low income consumers are paying a fair price for their energy.

The report shows that the UK’s cities are already playing a substantive and innovative role in the UK’s energy market – tackling fuel poverty, investing in local clean energy and benefiting the local economy.

IPPR director Nick Pearce said: “Around the world cities are spearheading the transformation that must occur in the energy sector. In Germany, for example, the city of Munich has already invested €900m in renewable energy projects and it has plans to invest a total of €9bn which will enable it to supply the entire municipality of 1million people with renewable electricity by 2025. In the UK, Lancashire County Pension Fund is investing at least £193m in low carbon projects.

“Local generation technologies like solar and medium-scale wind are radically transforming how energy systems operate, bringing to an end the dominance of centralised generation and distribution. This will create a system which is much more diverse and competitive. Cities should grasp the opportunity this presents to support local job creation and growth and enhance the resilience of local electricity supply. This will ensure that more low carbon subsidies directly benefit British communities.”

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