On 7th July 2010 the Department of Energy and Climate Change (DECC) announced plans to repeal the provisions of the Local Government (Miscellaneous Provisions) Act 1976 which prevents local authorities in England and Wales from selling electricity produced from renewable sources. New Regulations (currently in draft form) are expected to come into force before the end of 2010.

Current position

Under the existing regulatory regime local authorities are not permitted to sell the electricity generated from a non-heat source (e.g. from wind or solar PV). The Local Government (Miscellaneous Provisions) Act 1976 (England and Wales) and the Local Government (Scotland) Act 1973 give local authorities power to generate heat and electricity, and power to purchase, sell and supply heat. However, the legislation currently prevents local authorities from selling electricity which is produced other than in association with heat (or from heat and waste in the case of Scotland).

Proposed position

The draft Production and Supply of Renewable Electricity by Local Authorities (England) Regulations 2010 and the draft regulations of the same name for Scotland will permit local authorities in England and Scotland (the Welsh draft Regulations are expected to reflect those of England) to sell green electricity, where that electricity is generated by that local authority from the following sources:

Biogases
Biomass
Hydropower
Landfill gas
Marine
Sewage treatment gas
Solar PV
Wind

Interestingly, a wider list of sources is contained in the draft Regulations but some of those do not generate electricity.

Clearly, local authorities will begin to consider the commercial and other merits of generation of such electricity which may very well include partnering (in one form or other) with private sector organisations.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 09/07/2010.