SIC welcomes end to ban on councils selling renewable energy

Shetland Islands Council has welcomed the ending of restrictions on local authorities making cash by selling energy from green projects to the national grid.

The department of energy and climate change has introduced laws, effective from 18th August, which permit councils to sell renewable energy into local and national grid networks.

In a press statement, SIC infrastructure chairwoman Iris Hawkins said the new legislation would help to make more wind energy projects viable.

“This change will potentially allow another funding source for renewable energy projects and could encourage council or partnership projects that will see more of the revenue generated being retained by the council for the further benefit of Shetland as a whole, including development of further energy efficiency initiatives,” she said.

Energy secretary Chris Huhne said on Monday that he had written to chief executives of councils up and down the country urging them to take advantage of the new laws.

“For too long, Whitehall’s dogmatic reliance on ‘big’ energy has stood in the way of the vast potential of local authorities in the UK’s green energy revolution,” he said. “Forward-thinking local authorities such as the Shetland Islands have been quietly getting on with it, but against the odds, their efforts frustrated by the law.

“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 SIC controversially transferred its 45 per cent stake in the Viking Energy Partnership – a joint venture with Scottish and Southern Energy – to Shetland Charitable Trust three years ago, a move in part prompted by fears that the council would not be able to sell the energy produced by the huge windfarm.

The trust has agreed to spend £3 million on taking the project through the planning process but, should it gain consent and then proceed beyond that, some councillors believe there could be a case for transferring at least part of the shareholding back to the SIC so that it shoulders a portion of the burden of the massive investment required to proceed with the project.

Among the considerations would be the tax implications for the profits if it is a local authority, as opposed to a charitable trust, along with concern over whether it could affect the size of the grant dished out to the SIC from central government each year. But one councillor said this week it was “always a possibility” and “in principle might be a way of sharing the burden of the investment”.