Select Committee on Trade and Industry First Report


Local energy is capable of making a major contribution to the nation's energy requirements both through electricity and heat. There are no serious technical obstacles to its development but it is not a short term panacea. Conventional generating capacity, whether recently closed or due to close in the next few years, will need to be replaced urgently and the grid upgraded if we are to "keep the lights on".

Government policy could, and should, do much more to encourage the development and take-up by consumers of local energy. This will help create the mass market, which will reduce the costs of local energy systems for consumers. However, a major driver of take-up will also be if the relative price of energy from traditional fossil fuels increases in the long-run.

In the debate about localised energy production, there is too much emphasis on electricity production and not enough on the contribution that could be made by local heating schemes, whether household or community-based, to energy security and reducing carbon dioxide emissions.

The phrase "local energy" is more accurate, easier to understand and less restrictive in its scope than the word "microgeneration" or any of the other terms of art used to describe energy produced by individuals, businesses or communities for their own consumption. It should become the preferred phrase to describe the generic concept in all official documents to encourage its more widespread public adoption.

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Prepared 30 January 2007