NOW THAT’S AN IDEA!

One idea that could catch on here is the community purchase of energy – individually we may get regularly fleeced by the energy companies, but, a collective purchase of energy may mean that we can cut a better deal with the energy suppliers. The idea of collective buying of energy has been tried for the first time in Cornwall where it has saved households on average £130 per year on their fuel bills.

The scheme, Cornwall Together, aims to help households across the county save an estimated £3.7 million through cheaper energy tariffs. If things go according to plan it is hoped more than 20,000 people across Cornwall may be able to reduce their energy bills by 10-15%. This may be first time an entire community county has united to buy energy more cheaply, enabling it to also tackle economic problems, encourage environmental sustainability and improve people’s health and well-being.

Basically Residents register their interest with the scheme to find a cheaper energy tariff, providing details of their current fuel bills. Then Cornwall Together will negotiate on behalf of all those that have registered to get best value tariffs. As well as identifying best value deals, wherever possible a green energy option will be offered. For each energy switch, 10% of the total money saved will be put back into a fuel poverty fund which will benefit the whole county. Cornwall Together will then seek match-funding from other organisations.

The scheme was conceived by the Eden Project, Cornwall Together was originally pioneered by Cornwall Council, the NHS, Community Energy Plus and Community Buying UnLtd. They have been joined by delivery partners energyshare – the community renewable energy platform – and uSwitch.com, the independent price comparison and switching service. St Austell Brewery and Unison are also supporting the scheme, promoting it to their staff and also helping Cornwall Together reach vulnerable members of the community.

Collectively, Cornish households currently spend around £1.2 billion pounds on energy each year. According to the NHS approximately some 25% of these households in Cornwall are in fuel poverty. Across the UK the average household energy bill has risen by 140% a year since 2004 (from £ 522 to £ 1,254 pounds per year). Cornwall Together aims to secure cheaper energy bills for residents, helping to reduce fuel poverty in the county – and its associated health risks.

The idea of collective buying of energy may be catching on, as Consumer Futures (the new National Consumer Council) wants the Welsh government to promote collective switching to help fight fuelpoverty.  Merthyr Valleys Housing is currently talking to its tenants about starting a scheme. While community purchasing of energy is not a perfect solution to the problem of high energy costs it may well be an idea that is coming into its own and may provide a degree of protection from the worst excesses of the alleged free market for energy. 

SMALL IS BEAUTIFUL

Small may very well be beautiful in relation to energy in Germany (2012), 22% of the countries energy came from small scale green entrepreneurs.  Community co-operatives (both urban and rural), farmers and homeowners are part of the 1.3 million renewable energy producers. Small scale electricity generation is having a knock on effect; the energiewende is encouraging change throughout the energy system. In Berlin a community cooperative Is aiming to take control of the capital's electricity grid with some 35,000 km of underground cables. Co-operative members have taken on the established energy companies and are attempting to fight off the Chinese state grid which is trying to get a foothold in the German energy market. Around 1,300 Berliners have invested their cash in the venture. This is grass roots energy generation that has potentially the power (no pun intended) to change the nature of the energy supply system (in Germany and elsewhere). They aim to build an energy grid that is better handle the rise of green power and allows local use of locally produced energy. This development is a million kilometres away from the so called ‘Free market’ for energy that exists in the UK, which is pretty much dominated by the ‘Big 6’ energy cartel members. With the way the current monopoly is set up, it is difficult to imagine ‘Government’ at any level in the UK buying into the concept, let alone the practicalities and possibilities of genuine community owned and community beneficial energy generation projects even crossing the collective mind of Westminster and Whitehall. 

A DIFFERENT APPROACH

You may get the impression from time to time that that our country is littered with the remnants of failed models of economic development, most of them having failed to deliver long term economic benefits and more than a few long term jobs to our people and our communities. Perhaps what needed is to step away from the centralised state dependent model of economic development, as successive Westminster governments (regardless of party) have pretty much consistently failed to deliver for Wales. 

 While we do need some fresh economic thinking, we need to think differently and to find other economic models that can deliver sustainable long term jobs and lasting material benefits to our communities and to our country. Our over-dependence on Westminster or Cardiff Bay for that matter to solve our economic problems is understandable considering the nature of our economic and political history, but, is in my opinion regrettable. 

The days of bringing in significant amounts of ‘inward investment’ are probably realistically over, Westminster has better things to spend its money on, at least as far as it is concerned. What we need are indigenous home grown businesses which will put down roots and stick around when economic times are tough rather than pulling up sticks and bugging out when the grant money runs out. We need to develop small to medium sized enterprises or local co-operative industries which will provide medium to long term sustainable job opportunities.

Mondragon

The co-operative model has worked well in Ireland and in the Basque country, there is no reason why it cannot work well here in Wales. The Basque cooperative model, as personified by Mondragon co-operative shows what can be accomplished. To grow local businesses and local jobs we are going to have create a real Bank of Wales, perhaps using the German Sparkasse and Landesbanken model which operate on a strictly regional basis and focuses support to local industries. 

At present too many small and medium sized businesses in our country are being denied credit by banks and this has prevented the growth of our private sector. The German Sparkasse and Landesbanken operate on a geographical basis, and have developed special expertise in the local industries so that they are better equipped to make investment decisions. The over centralised dividend driven rootless banking model that has been followed in the UK is incapable or unwilling to deliver or support economic development in Wales. 

Adam Price, rightly recently pointed out that“there are some great contemporary examples of Welsh co-operation at work.  Time-banking was a great idea developed by American Edgar Cahn, but it’s in the south Wales Valleys that it’s taken deepest root.  Antur Aelhaiarn, the UK’s first community co-operative, is still going strong after thirty years.  Glas Cymru is such a unique example of utility-based mutualism that Harvard has made it a case study.   But these wonderful examples are so often beacons without bridges, lone successes that have never scaled into a full-flung Mondragon-like movement”.

Jobs with Mondragon

Mondragon which is a collective of around 250 companies and organisations based in the Basque Country is proving to be one of the moreresilient economic success stories in recession-hit Spain. The Basque co-operative may well be the world's largest worker co-operative, it is certainly helping the Basque economy to try and resist the worst ravages of the recession in Spain. The company was established in 1956, in the province of Gipuzkoa; employs around 83,800 people with a business philosophy built around co-operation, participation, social responsibility and innovation. 

It began small, with a group of workers in a disused factory, literally using hand tools and sheet metal to make oil-fired heating and cooking stoves. It is now a large conglomerate with over 260 manufacturing, retail, financial, agricultural, civil engineering and support co-operatives and associated businesses; and has annual sales in excess of $US 20 billion (2012 figures). The Cooperative competes on international markets using democratic methods within its business organisation, helps to create jobs, and is committed to the human and professional development of its workers and pledges to development with its social environment. 

The unemployment rate in the Basque Country is 15%, and lower in the province of Gipuzkoa, (where much of Mondragon is based), the unemployment rate in Spain as a whole is now 25%. Some parts of the co-operative are wholly owned, others are run as joint venture operations, with some 114 local and overseas subsidiaries, which are committed to converting to employee ownership on a case-by-case basis, being consistent with local laws, customs and other cultural and economic considerations. The Mondragon group’s credit union (Caja Laboral) is now practically Spain’s ninth largest bank and continues to recover from an initial 75% reduction in its profitability, unlike the other Spanish banks which are still flat lining. 

Co-operative members as equal co-owners of their own workplaces, enjoy job security and individual capital holdings, with an equal sharing of profits on a proportionate basis and an equal ‘one-member one vote’ say in the way their enterprises are run. Pay within the cooperatives is strictly egalitarian, with the highest rates payable other than in exceptional circumstances being no more than six and a half times the lowest. 

We can learn a great deal from the example Mondragon and its methods when it comes generating and retaining sustainable jobs. There is no reason why the co-operative approach cannot be used to bring in a community upward slow burn approach to economic development, something that will not just provide local jobs but real community beneficial sustainable developments which can transform our communities and our country’s economic potential.

NOW THAT IS A GOOD IDEA...

A community beneficial project!

As I have said before, and no doubt will say again, what may work in Scotland may not necessarily work in Wales. That said every now and then something interesting emerges from Scotland which could work exceptionally well here in Wales. There is a scheme to build a hydro power generator in the Pentland Hills. So what you might say? Well this is different as the project has a significant community beneficial element which could benefit local people within an urban area. A  group of investors in Edinburgh  met to discuss building a hydro power generator in the Pentland Hills. They want to install hydro power at the first outlet from the Harlaw Reservoir. The scheme, known as Harlaw Hydro would be the first urban micro hydro project to be community owned in the Edinburgh area. The hope is to create a community benefit co-op and to encourage people to buy shares in it. Basically investors would get a capital return through the feed-in tariff and any surplus cash would be fed back in to the community through the Balerno Village Trust. Now that is a concept would work exceptionally well here in Wales, in the valleys and elsewhere bringing real benefits to some of our communities. 

TREASURY MESSES WITH CLEAN ENERGY

Westminster MPs on the Energy and Climate Change Select Committee may have hit the nail squarely on the head when they accused the Treasury of making the government's clean energy revolution unworkable and creating the risk of higher household bills. Rightly in my opinion they said Treasury changes to the draft Energy Bill will increase the risk of borrowing for investors.

MP’s noted that it would put up the cost of renewable and nuclear power, with customers bearing the extra cost. Somewhat naturally a Treasury spokesman said the aim was to achieve government goals while protecting businesses and consumers. The suggestion is that the Treasury has clearly intervened in the draft Energy Bill in a way that will put up bills to consumers and put off investors by increasing their risks, which just happens to be exactly opposite of what the Treasury officially says that it wants.

Chancellor George Osborne for, in his view, trying to undercut subsidies to onshore wind - potentially the cheapest option of expanding the UK's renewable energy portfolio. MPs wanted Treasury ministers to attend the Committee to answer questions about their influence on energy strategy, but they declined. On-shore wind is not the real issue, this is about Westminster and Whitehall trying to weaken the commitment to green renewable energy period - so that the nuclear option (their favourite option) becomes to only game in town.

A Treasury source stated that it would be inappropriate for ministers to be questioned at this stage in parliamentary proceedings. The committee has major worries about the finance department's impact on the draft bill, including the long-term contracts for developers who are being asked by the government to plough billions in the UK's low-carbon infrastructure.

The Department of Energy and Climate Change (Decc) originally said the government would guarantee the contracts, thereby reducing the risk for investors and allowing them to borrow large amounts at a low rate of interest, but, the Treasury has since ruled that the government will not be the guarantor.

MPs are also concerned about the ongoing consumer subsidy to renewable and nuclear power generators, which are needed for the UK to meet its legally binding targets. The Treasury says the subsidy will be limited to hold down the cost to consumers - but it won't reveal the size of the future cap.

The UK Chancellor is under pressure from right wing backbench Tory MP’s to make major cuts to the support for onshore wind, which could seriously damage the renewable energy industry. I have real and significant concerns about the impact of, the ownership of on-shore wind developments and the flawed nature of the planning process – thanks to the 50 MW rule - here in Wales.

The Con Dems and the Treasury while being more than happy to allow massive land based windfarm developments in Wales appear to be wholeheartedly indifferent when it comes to encouraging community-owned and community beneficial energy schemes. This is where a local community builds a small solar, wind, hydro etc plant in their area, and members of the community have a stake (e.g. hold shares) in it.

Such installations would earn payments from the Government's Feed-in Tariff scheme for 20 years or more, and could pay for themselves in around 10 years. This means that potentially local community share holders could be in profit after 10 years, not to mention the added benefit of reduced energy bills.

Mind from a pro-Nuclear Treasury point of view the last thing they would want are ordinary citizens, community activists, councillors, local landlords, farmers, etc reaping their own rewards from small scale energy generation projects because over the medium to longer term the big boys profits would reduce along with post civil service and post Westminster jobs for the boys and girls in Westminster and Whitehall.

POWER TO THE PEOPLE!

The news that Llangattock Green Valleys project won the Welsh final of the British Gas challenge in 2009, and also won the UK title as well is good news. It shows what's possible and what can be done when people have ownership of a local community beneficial project. Winning means that Llangattock (Powys) has won £100,000 to spend on a local environmental project.The village was chosen from 100 projects across the UK to be one of the final 14 communities who would go head-to-head over 14 months as part of the Green Streets challenge, a project which helps communities not just to save energy but to actually generate their own energy. Combinations of solar panels and 100 radiator panels were installed at the village school, along with an source heat pump to the village hall, and 43 homes in Llangattock installed 655 energy efficiency measures including insulation, solar panels, a biomass boiler, multi-fuel stoves and new boilers. As a result the community is expected to save £62,000 over five years and nearly 200 tonnes of CO2. All in all that's actually pretty impressive and is literally case of power to the people!