Local Authorities – Renewable Energy Generation

The UK's commitment to achieving a 20 per cent reduction in greenhouse gas emissions by 2020 may be raised to 30 per cent (driven in part by reduced energy consumption from the recession). Local authorities ("LAs") are now being encouraged to play their part in meeting emissions targets by both championing energy efficiency and renewable energy generation.

Whilst LAs were always able to generate renewable electricity for their own use, the Department of Energy and Climate Change ("DECC") has announced draft legislation¹ (the "Renewable Electricity Sales Order") to remove a restriction which prevented LAs from selling electricity; a restriction² which was designed to protect the privatised electricity generators. Under the draft legislation, LAs which sponsor renewable energy developments may now benefit not only from lower energy bills for their own consumption, but also from central government financial incentives such as Feed in Tariffs (FIT) (applicable to