Are ESCos the best way to deliver local energy?

Light and warmth are things the majority of Scots are lucky enough to have at their fingertips.

But with a pressing need to reduce the amount of carbon emitted by our power sector, it’s time to look at new ways of providing those everyday essentials.

There are already about 40 small companies in the energy market, all vying for customers and offering a huge array of tariffs.

Now a new contender is emerging – and it’s one which could go much further than that.

Local authorities in Nottingham and Bristol have set up their own energy companies, which they say can save customers up to £250 a year on energy bills.
Since September, when Nottingham City Council launched Robin Hood Energy, the region has moved from seventh to first place in terms of price competitiveness in England.

In Enfield, the local authority is to create a company to pipe hot water from an energy-from-waste facility to a new £1.5billion social housing development.

Now both the London Mayor Sadiq Khan and First Minister Nicola Sturgeon are looking to set up Energy Services Companies, or ESCos.

These are moves which could have big impacts on the way we buy power.

There are challenges, however. So far progress in Scotland has been slow.

Glasgow City Council has been planning an ESCo – and a city centre district heating network similar to Enfield’s – for six years, while the subject was under discussion in Edinburgh in 2013.

These delays, according to Richard Bellingham, director of the Institute for Future Cities at Strathclyde University, are largely down to cost.

Analysis conducted by consultancy firm Jacobs on behalf of the Scottish Cities Alliance last year suggested Scotland’s seven cities are “on the right path” in terms of actions being prioritised to deliver a low-carbon economy – “albeit the scale and pace of application needs to be raised substantially”.

The benefits of increasing that pace and scale – in terms of lowering energy costs for consumers and cutting carbon emissions – are substantial.

Industry, academia and business all have a responsibility to ensure we stay on the right path, and Scottish Renewables will be doing all it can to keep the momentum going.

When the benefits are so large, the effort deserves to be made.

Blog by Stephanie Clark, Policy Manager, Scottish Renewables