Climate Change Secretary Ed Miliband wants to legislate for “local energy revolution” in next parliament.

guardian.co.uk, Thursday 25 February 2010 16.40 GMT

Local councils will be allowed to start generating and selling electricity back to the grid, in legislation being planned to bring about a “local energy revolution”.

Ed Miliband, the climate change secretary, intends to help councils to become energy providers, individually or jointly, by setting up renewable energy companies. The plan is the latest attempt to shake up the energy provision and encourage sustainable sources. Councils are responsible for some 10% of UK carbon emissions and Miliband thinks they need incentives to move to lower carbon energy.

The plans amplify existing reforms that allow a community to make money from generating sustainable energy by selling it back to the grid via feed-in tariffs. The government wants to extend this arrangement to local authorities to help them cut their carbon emissions. In the next parliament Labour plans to provide a support service for cooperatives, social enterprises and community interest companies to enable them to invest in renewables both for individual homes and for communities.

The London borough of Lewisham wants to begin generating energy and Labour councillors in north-east England are also backing the proposals.

Sir Jeremy Beecham, the chairman of the Labour group on the Local Government Association, said: “It’s a great idea. Takes us back to the days of Joseph Chamberlain’s municipal society.

“Councils own a lot of buildings including schools — and have to bring down emissions … One way is to let them have the power, like local communities now have, to make energy and if they have any left over, they feed it back to the grid.