Jenny Marra : Going Dutch for lower fuel bills

31 January 2012

Dallfield Multis at the bottom of Dundee’s Hilltown had an energy-efficient refit before Christmas, and four new boilers that would all fit together into an average living room are now powering the heat for all four multi-storey blocks.

It was on a visit to see these improvements to the multis that a thought occurred to me: if all the energy is coming from the same boilers, why don’t all the residents bulk buy their energy together from the same company and reduce their bills?

Economies of scale and all that.

I put it to the representative from British Gas who was on our visit.

It’s against European Competition law she replied.

Turns out, that’s no longer the case.

I put the idea of community energy buying to Dundee Pensioners’ Forum.

Several of the members talked about community energy arrangements in Dundee that used to work very well – there had been examples in the neighbourhoods of Logie and Mid Craigie, but they had ceased to exist after privatisation of the energy companies.

After a bit of digging, we discovered that community energy buying is taking place at the moment in Holland – also subject to EU law.

Members of communities voluntarily opt in to a body that negotiates a price for the whole community.

It is the voluntary opt-in that gets round EU law, according to Ofgem’s lawyers who have confirmed that such a system is workable in the UK.

In fact, Manchester is trying to put a similar scheme in place at the moment.

Working with the Energy Savings Trust, the local authorities are negotiating energy prices for their tenants.

The best bit of all this is the considerable saving that is possible.

Met de Stroom, the Dutch project, saves residents 20 per cent on their fuel bills.

It’s not quite going Dutch – but 20 per cent off a domestic fuel bill is a saving that nobody could argue with in the current economic climate.

But, even better, if local authorities in Scotland could adopt a similar scheme on behalf of their council tenants, we may be able to reduce the bills of many people who are struggling to pay their fuel bills, and making choices that no-one would want to make, between heating and eating.

Dundee has a total of 13,700 council tenancies and it has been estimated that 25 per cent of the city’s population is fuel poor.

Local authorities have the infrastructure in existence to seek the permission of their tenants to participate in such a scheme; they are making contact with them every month for rent payments.

If the council could start talking to the Energy Savings Trust to try to put such a scheme in place, then we could make a dent in the massive problem of fuel poverty in our city, and ultimately across Scotland.

The Local Government Network, which has produced research on this buying model, told me that the big energy companies, not surprisingly, are not keen.

In hindsight, this explains the reaction of the British Gas representative.

But they also report that some of the smaller energy providers do like the idea.

Surely those in favour of further competition in the energy market couldn’t disagree with breaking the stranglehold of the big six and letting smaller competitors into the market?

All’s fair in love and price wars, no?

But of course, it’s not just Dundee that could run such a scheme.

I described the idea in the Cities Strategy debate in the Scottish Parliament last week, and suggested to Cities Minister Nicola Sturgeon that she might want to consider the scheme for all our cities, and indeed, all over Scotland.

A little work by central government to assess the viability and put some support in place for local authorities to start this scheme would be a welcome move – government action that people would be pleased with.

I’ve asked Dundee City Council to consider setting it up anyway.

It seems like a practical solution to the problem of fuel poverty that so far has seen no viable solutions. If it can work in Holland and Manchester, why not Scotland?

One of the biggest problems of our day could find a solution in community collective buying. And the final and most appealing aspect to this neat solution?

The saving will land in the pocket of the fuel poor directly from the profits of the energy companies, missing out the middle man of tax-funded fuel allowances.

I hope for the sake of the hard pressed this winter, we can go Dutch very soon.

This article first appeared in "Scotland on Sunday" 29th. January 2012

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