Scottish councils set for potential green bonanza

9th August 2010

Scottish councils could be in for a green cash bonanza following a decision by the UK Government to give them the power to sell electricity generated from renewable sources to the National Grid, according to a leading Scottish energy lawyer.

Paul Minto, Head of Public Services at national law firm HBJ Gateley Wareing has voiced his support for the long awaited move, which could allow Scotland’s cash strapped local authorities to raise millions of pounds from renewable energy and help the Scottish Government achieve its renewable energy target of generating 50% of the country’s electricity from renewable sources by 2020.

The UK Government has stated that the rule, which bans the sale of electricity to the National Grid from renewable sources, will be overturned later this month.

The “Production and Supply of Renewable Electricity by Local Authorities Regulations 2010” will revise the Local Government (Scotland) Act 1973, which includes a provision preventing local authorities from selling electricity produced otherwise than in association with waste and heat. This restricts their ability to play a full role in the development of renewable energy, benefit from selling it and prohibits them from qualifying for attractive financial subsidies.

This change in legislation will provide local authorities with a financial incentive to invest in renewable energy allowing them to create a revenue stream where funds could be used for community benefit or channelled back into Scotland’s frontline services, currently facing significant spending cuts.

This will open up a host of opportunities for councils; permitting them to develop wind farms and sell the electricity directly, develop smaller scale community energy projects to supply remote communities or even to self-generate at council offices and sell the excess electricity into the grid.

Commenting on the UK Government’s decision, Paul Minto said: “The plans to overturn this rule is welcome news for Scotland’s local authorities.

"Until now, legislation has prevented them from taking advantage of renewable projects. This change will help councils to maximise the potential of renewable energy.

"In the current economic climate, councils will undoubtedly welcome the opportunity to raise funds from renewable sources, which could generate millions of pounds a year.

"Amendment of this legislation will also play a vital role in meeting the Scottish Government’s renewable energy targets, as well as supporting the creation of green energy jobs and regeneration.”

Paul Minto is Head of Public Services in Scotland and a member of the energy & climate change team at HBJ Gateley Wareing.