Wirral Council plans local energy company

Phil Davies: Confident residents will get a better deal on energy
Phil Davies: Confident residents will get a better deal on energy

Wirral Council looks set to become the next local authority to launch a municipal energy company. The Council’s leader has backed the move and the cabinet will next week consider three commercial structures to supply residents with gas and power.

According to the council, one in ten Wirral households are in fuel poverty, defined as spending at least 10% of household income on energy. Suppliers tend to require substantial upfront deposits from lower income households or those with patchy credit history, compounding their problems.

The council hopes to address the issue by offering energy “at a much cheaper rate” than other suppliers, according to Phil Davies, leader of Wirral Council. He thinks it can achieve that through a not-for-profit model and low overheads.

“We will do everything in our power to support our residents to live safe, healthy and fulfilling lives,” said Davies.

“These proposals would see the council create a new energy company which would, at no cost to the tax payer, put us in a position to sell gas and electricity to residents at a much lower rate,” he continued.

“I am delighted we have been able to produce such an imaginative proposal to help every resident in our borough save money on their energy bills.”

The council will consider becoming a white label supplier, a fully licensed supplier, or taking the ‘licence lite’ model developed by regulator Ofgem. The council claims each option has been launched successfully by a number of local authorities, citing neighbouring Liverpool City Council’s white label operation and Nottingham City Council’s fully licensed supply model.

While it is true that Liverpool City Council’s ‘Leccy’ white label company is provided by Nottingham City Council’s licensed supply arm, Robin Hood Energy, the jury remains out on the licence lite model, so far only taken up by the Greater London Authority, and which has been beset by delays.

While a white label approach is considered the simplest for municipal companies aiming to secure better retail energy prices for residents unable to access market leading deals, becoming a fully licensed supplier is now relatively straightforward due to ‘licence in a box’ companies reducing the administrative burden. Securing a full supply licence also enables municipal energy companies to think beyond local energy retail.

Bristol City Council opted for the licensed supplier model when launching Bristol Energy. The company now supplies small businesses (up to 3GWh annual consumption) as well as households nationwide and is actively seeking to buy power from renewable generators above 50kW via power purchase agreements (PPAs), as well as to sell energy to businesses via third party intermediaries. Bristol Council is also expanding heat networks within the city as part of its bid to become carbon neutral by 2050.

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