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AS news hits the press about the imminent demise of Nottingham’s Robin Hood Energy company (RHE), I took a look at the plinth in front of St Mary’s church in the middle of Nottingham.
The plinth offers a mythical version of Robin Hood’s demise; slowly being “bled” to death in a priory run by his cousin. There’s an image of Robin, summoning enough energy to call his friend Little John to help fire the arrow that was to define his final resting place.
Hailed initially as visionaries and pioneers, Labour councillors who set up Britain’s first not-for-profit, municipal energy company since 1948 are now being pilloried for its “failure.” Instead of this being a story about how rigged and crooked the British energy market is, it has become a stick with which to beat municipal enterprise. Instead of asking why such companies flourish elsewhere in Europe — but not in Britain — it is being used as a way of telling the public sector to keep out of domains in which private companies have systematically fleeced the poor.
RHE has indeed run up losses and debts of over £30m. Given the way RHE has been “bled” by Ofgem constraints and Big 6 opposition, they would have been lucky not to. Thirty million pounds sounds a large amount in the public domain, but it is piddling in comparison to losses currently carried around in private-sector energy companies. Even the most progressive are in a similar position.
Bulb energy, for instance, is racing into the clean energy market whilst making a loss of £129m last year. Backed by US and Russian hedge fund money, it is presumably a safer bet. Octopus Energy made a loss of £35m last year, but rides a wave of popularity. Most of the big players in the energy market are in similar positions, especially those stuck with ageing power stations or huge decommissioning costs. But in today’s roller-coaster energy market, the key seems to be the customer base.
Short-term losses aren’t the problem. As long as shareholder dividends are paid and company expansion continues, such losses are just accommodated. You can bet the consultants/auditors’ report on Nottingham will barely mention this.
Instead, expect to see an auditors report castigating the city for overstepping its remit and competences; questioning the very presumption that these were waters the public sector should even paddle in. This would hardly be surprising since most of the big auditors make their money out of advising large companies on how to avoid paying taxes, find offshore banking enclaves and devise ingenious bonus schemes to reward overpaid executives. Prince John would be delighted.
I have my own criticisms of the way city councillors failed to open the doors of Robin Hood Energy; failing to make the public genuine partners in such a visionary idea. Politically, no equivalent to Robin’s band of Merry Men (and Women) was ever built up by the council. So, when the crunch came, no troops were there to step in to defend the cause. But, in truth, all the routes open to Nottingham’s equivalents, in Denmark and Germany, had already been slammed in the face of municipal energy companies in Britain.
My own (low energy) house, for example, is kitted out with solar panels. I get paid just over 5p for every kilowatt of electricity I feed into the Grid. But when I buy it back the price is closer to 18p. Technically, I could give my surpluses to a neighbour. But if I did so for several of them I would become a criminal. You can only share with a number of people if you have a full “supplier’s licence.” This costs around £3 million to obtain. I skipped the option.
Robin Hood Energy “bit the bullet” and paid the cost of getting a full supply licence. Several other local authorities then sheltered under the Nottingham umbrella (as “white label” energy companies operating under their own names). So why have all seemed to fail when, in Germany, there are over 1,000 such local authority Stadtwerke? Why has Robin Hood bled to death when Europe’s most efficient energy system — in Denmark — operates on a similar not-for-profit basis; with local networks entirely run by local authorities or as co-operatives?
The answer is simple. Since privatisation, Britain’s energy market has been rigged in favour of big, centralised (and dirty) energy. Until recently, Britain’s energy prices were allowed to rise remorselessly. Energy-sector profits and dividends were bountiful, but the shifts into clean energy and energy saving were both minimal. The public and planet got a poor deal. The poor got a worse one. Feudalism works like that.
Robin Hood Energy’s “crime” was not that it intended to “rob the rich to feed the poor.” It never sought to overthrow the rotten system. Its starting point was to give the poorest of the poor — those on pre-payment meters — a better deal than the extortionate rates most were having to pay. In that sense it worked.
What Robin Hood was never allowed to do was threaten the energy cartel in ways that decentralised energy systems elsewhere were already beginning to do.
Last time I visited Germany we went to the village of Feldheim, just outside Berlin. The village is one of hundreds that produce an abundance of renewable electricity — mainly from wind turbines and solar roofs/arrays. Everyone in the village loved it. Why? Because in Germany they have a right of local supply; meaning they can sell electricity surpluses to themselves, at prices closer to wholesale than retail charges. In practice it meant that villagers were paying €0.13cents/kWh as opposed to the €0.27cents/kWh retail price.
Of course people were happy. Everyone talked about the importance of saving the planet. It’s just so much easier to do so when your bills are cut in half too. In Britain, Ofgem and big energy suppliers have always opposed such a right. It would mark the death of their oligopolies. It would mark the end of short-term, investor-driven priorities, the end of putting increased production ahead of carbon reduction.
If Robin Hood Energy, and other local energy companies, had been allowed to go down this path we would have been faced with a genuine energy revolution. Instead of being just bulk buyers of electricity, local energy companies could have become producers too. Firms and households around Nottingham could have become producer/consumers (Europe calls them “prosumers),” engaged in a much wider process of energy transformation.
As in today’s Copenhagen, Nottingham could have been in the process of not just cutting energy prices, but harnessing energy surpluses; storing them locally, using surpluses to develop a city-wide charging network for the tram and the shift into EVs, and using energy profits to finance fuel poverty initiatives that turn poor housing into eco-housing.
None of this will happen until Britain’s “rigged” energy market rules are scrapped. The accountants report on RHE will not tell you this. When Robin Hood is sold — probably to one of the Big 6 — councillors will be duly castigated and energy democracy will go unmentioned. Robin Hood will be left to die, until others step in to challenge a feudal British energy market, long past its sell-by date.
But it isn’t the end. For those with half a brain in their heads — and half an interest in the poor and the planet — the legend will live on. At some point, Robin will be back.
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