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Germans not just great at football: UK can learn from Deutschland’s 1,100 electricity suppliers

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Germans not just great at football: UK can learn from Deutschland’s 1,100 electricity suppliers

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Published by Max Salsbury for 24dash.com in Environment and also in Communities

Germans not just great at football: UK can learn from Deutschlands 1,100 electricity suppliers Germans not just great at football: UK can learn from Deutschlands 1,100 electricity suppliers

It's not just the England football team that could learn a thing a two from their German cousins - the country's massive quantity of energy suppliers is something the UK would do well to copy, a new report has revealed.

Think tank ResPublica's latest publication reveals that just 12 new firms have entered the UK's electricity supply market since 2011, bringing the total to 25.

On top of this, the so-called 'big six' own 93.5% of the market between them.

In Germany, however, things couldn't be more different: 1,100 suppliers share the market between them - 44 times the amount in the UK - and the country's 'big four' own only a combined 44% of all trade.

German households can choose from an average of 72 energy suppliers, most of which are established locally.

The ResPublica essay - ‘Creating Local Energy Economies: Lessons from Germany' argues that the UK can deliver on greater transparency, lower household bills and genuine competition if communities, local authorities and small businesses could enter into the supply market and sell their energy locally.

At present, there are no local energy suppliers in the UK.

The essay reveals that the Greater London Authority is the only body to formally progress an application to become a local licensed supplier. But over 15 months have passed since mayor Boris Johnson announced the application, and a decision as to whether the GLA can go ahead has not yet been made.

In Germany, from 2010 to 2012, 90 communities and municipalities entered into the supply market and 190 communities had bid to run their local electricity distribution network.

A growing number of local groups are appealing to private energy companies to put their local utility back into public hands.

ResPublica's head of research, Caroline Julian, said: "Germany's energy markets and corresponding infrastructure are so different that it's tempting to think that we can't possibly learn from their success. To the contrary, there are ways in which we can begin to encourage new businesses into our energy markets and facilitate the local trade and supply of our energy.

"Communities, local authorities, small businesses and housing associations have the ambition; and recent surveys show that there is demand for local power. Government simply needs to cut the red tape and implement a far more ambitious vision of Britain's future energy market."

ResPublica is calling on the government to set up a 'help to supply' scheme, which is says would "open the floodgates to a spectrum of new suppliers".

According to the think tank, the scheme would encourage existing energy retailers and big businesses to partner up with a community, small business or local authority to help them get off the ground and into the market.

It also calls on Government to radically simplify the requirements needed to set up as a new energy supplier, and recommends that local supply licences should be made possible. At present, it is only possible to register at the national level.

Lord Smith, chairman of the Environment Agency, said: “This essay shows very clearly how Germany has succeeded – where we have so far failed – in creating a bottom-up revolution in energy supply and distribution. Property-level renewable installation, community energy companies, small-scale local schemes: these have been the way forward for German electricity production, and it’s been a big success. We could learn some serious lessons here.”

Former minister for energy and climate change Greg Barker added: “To achieve the competitive, liquid and innovative energy market we need in the UK, it is crucial that we support new entrants, promote decentralised ways of working and harness community-based initiatives.

"This essay rightly affirms that we need to be more ambitious in considering what energy markets in the UK could look like. I believe that we need to deliver power to the people and facilitate the 'big 60,000: the recommendations from this ResPublica essay deserve serious consideration."

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