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SIC could sell electricity

NEW rules to be introduced next week will allow local authorities to sell electricity to the National Grid for the first time.

The move has been welcomed by Shetland Islands Council, who were one of the bodies to respond to a UK government consultation on the issue launched in March.

Out of 74 responses, 70 were unreservedly in favour of a change in the law that barred councils from selling power for profit. The other four had reservations, but were generally in favour.

UK energy secretary Chris Huhne says that the change could allow councils in England and Wales to generate £100 million. The figure in Scotland could be even higher with its wind and marine energy resources, while in Germany local authorities generate one per cent of the country’s electricity.

SIC infrastructure chairwoman Iris Hawkins said the move could create a new source of funds for renewable energy projects in the isles and generate more cash for the council.

Mr Huhne said: “This is a vital step to making community renewable projects commercially viable, to bring in long-term income to benefit local areas, and to secure local acceptance for low-carbon energy projects.”

The move has been welcomed by environmental campaign group Friends of the Earth, whose executive director Andy Atkins said: “With budget cuts looming, the cash raised will be more welcome than ever, and should be used for schemes like making homes energy efficient, which will slash energy bills, tackle fuel poverty and create jobs.”

The council had originally set aside £3 million to invest in the Viking Energy wind farm project in Shetland, before transferring it to Shetland Charitable Trust.

The move was largely prompted by the law which restricted councils from selling electricity, but councillors and trustees also saw the tax advantages of having the trust make the investment.

The government has said that it will not set any arbitrary limits to the size of any renewable energy projects.

It is also working on proposals to allow communities that host renewable energy projects to keep the additional business rates they generate.

The Department for Energy and Climate Change (DECC) is launching an online portal – Community Energy Online – this autumn to support the development and deployment of low carbon community-scale energy infrastructure.