Local authorities should buy clean power direct from producers, particularly community schemes, to speed decarbonisation, according to Matthew Clayton, MD at Thrive Renewables.
“If local authorities put out tenders for delivering renewable power direct into the city estate, that would be the fastest way for them to meet Net Zero objectives and ensure genuine local participation,” said Clayton.
Renewables investors and developers, he said, are keen to fund and build projects, which can then be transferred to community ownership over the medium term.
Clayton said Thrive has already developed models that enable that approach in a subsidy-free environment, both private wires for industrial and commercial hosts and bridge funding that enables communities to take control of their own renewable assets.
Based in Bristol, Thrive’s Clayton said the local authority, which hopes to find an institutional partner to fund the first £1bn tranche of its Net Zero programme, stands a good chance of attracting the required investment.
“I think they could get [the £1bn],” said Clayton. “It won’t be overnight, but if an arbitrary line is drawn in ten years and we look back at what has been achieved by the city, it will have made a material impact.”
Clayton said the “intention and appetite” to decarbonise is “definitely there” from local authorities, with Bristol “probably leading the way”.
“But the most powerful thing local authorities could do is look to purchase renewable energy directly from local energy projects.”
Liquidity issue
In the broader market, he said utilities and trading entities also “have a role to play” in rebuilding the longer-term power markets required in a post-subsidy world.
“Fifteen years ago [pre-subsidies], energy traders were routinely trading, five, ten, fifteen-year futures around Europe. But then subsidies meant that the need for longer-term liquidity in the market evaporated,” said Clayton.
“Now subsidies have ended, bar for nuclear and offshore wind, the energy market needs to again provide that longer-term certainty so investors can hang decisions on those contracts.”
Clayton said given appetite for longer-term futures has returned, “I’m optimistic that we will see that liquidity start to stretch out again.”
If it does not, he suggested, “frankly nothing will get built.”
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