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Micro-generation of renewable energy ‘could push bills higher’

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ENCOURAGING renewable micro-generation of electricity could ‘unintentionally’ drive up bills even when sunshine is plentiful – unless it is carefully managed.

The island’s largest array of solar panels being installed at Guernsey Electricity, but the company is concerned about micro-generation, which could push bills higher. (Picture courtesy of Guernsey Electricity)

Alan Bates, chief executive officer of Guernsey Electricity, has issued the warning amid a renewed call for the States to provide ‘clear and concise’ direction on energy policy.

Writing in the utility’s latest annual report, Mr Bates said that the recent failure of the GJ1 power link to France via Jersey – and its replacement – reinforced the importance of securing a diverse, sustainable supply of electricity for the island and reducing reliance on fossil fuels.

‘Clear and concise energy policy direction from the States is now crucial and will be pivotal in defining the diversity and security of the island’s future energy supply, including local renewable generation and storage,’ he said.

Mr Bates pointed to the experiences of other traditional utility companies having to make significant investment decisions of their own in a ‘battle for survival’ in a rapidly changing energy market.

‘With this as a backdrop, Guernsey Electricity must steer a course that is affordable and sustainable in the future for a very small island and customer base. The search for value in this future, whilst mitigating the cost of stranded assets, will feature in many government deliberations on energy policy directions and interventions, with the outcome ultimately directing all the local energy companies.

‘The aspiration of energy policies in other jurisdictions to decarbonise the energy sector is creating a resultant pressure to drive the uptake of micro-renewable technologies on the island.

‘This technology expectation must be strategically managed in an appropriate way to prevent the unintended consequence of increasing customers’ bills and the potential flooding of the market with more-expensive electricity when the wind or sunshine is plentiful.’

A community-based approach could move Guernsey from a centralised power station to a future where more generation from renewables and storage was closer to where electricity was used.

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Technology and market forces are also making traditional utilities think again about their future business models amid pressure to maintain or lower energy prices.

In Guernsey this could see utilities branch out to new technologies and services, potentially including helping customers install their own generation and storage, and then managing those assets for them.

Energy supply would be only one of the services to provide.

‘For Guernsey Electricity, energy policy needs to direct and, where necessary, control the elements of this future that cannot be market- or technology-led on a small island. This is to prevent the market introducing additional stranded cost that the island can ill afford,’ added Mr Bates.

Will Green

By Will Green
Business Editor

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