Engineering

Plan for energy co-ops to cut fuel bills by 20%

(GUARDIAN) - Gas and electricity bills will be cut by up to 20% under a scheme that will also cut carbon emissions by encouraging an increase in environmentally friendly technology.

Ed Miliband, the climate change secretary, will today back the scheme, which is designed to answer climate change sceptics who say tackling global warming will mean higher energy prices.

Under the plan, to be launched in Edinburgh by the Co-operative party at its annual conference today, local residents will join schools, community organisations and businesses to form consumer energy co-ops. These would negotiate with wholesale energy groups to supply gas and electricity at between 10 and 20% less than the normal domestic price.

A modest step towards reducing emissions would occur at this first stage because the co-ops would install smart meters in members’ homes.

A bigger step in cutting emissions would occur later when co-ops install environmentally friendly technology, including combined heat and power systems (CHP), heat pumps or biomass boilers. CHP is the process by which heat generated at power stations while creating energy supplies is captured and used to heat the homes of local people.

The co-op plan is closely modelled on a scheme in the coal-producing Belgian province of Limburg, where residents joined forces after fuel prices rose after liberalisation of the Belgian energy market in 2003. In all, 15,000 families each save an average of €250 (£218) a year in the scheme run by the ACW charity.

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