Boris Johnson’s energy scheme to boost London’s energy security and reduce costs
London to produce 25 per cent of its power from local sources by 2025 under Energy for London initiative and the Greater London Authority will become first public body to receive a "junior" electricity licence
The Mayor of London is launching a new energy scheme that will improve the energy independence of the capital and reduce costs for consumers.
Boris Johnson announced the Energy for London initiative this week that will see the Greater London Authority (GLA) become the first public body to receive a "junior" electricity licence from industry regulator Ofgem.
The aim of the scheme is for London to produce 25 per cent of its power from local sources by 2025.
Under the scheme, the GLA will initially buy power from small-scale generators owned by London boroughs and public bodies and then sell it on to public sector bodies, such as Transport for London and the Metropolitan Police.
The Mayor's Office estimates that the licence could unlock more than £300 million in investment for 22 new heat and power projects already in the pipeline.
Johnson said the new scheme would provide a significant boost for London's energy sector: "Nurturing a new crop of small, low carbon energy producers across the capital is the key to a more secure, cost-effective and sustainable energy supply for us all," he said in a statement. Investing in locally sourced power will help keep Londoners' fuel bills down and drive innovation, jobs and growth in this city's burgeoning low carbon sector."
In the longer-term, if the scheme proves successful, it could be also widened out to private sector businesses that want to sell or buy energy produced in London, potentially generating more than £8 billion of investment and around 850 jobs a year until 2025.
Twelve boroughs and waste authorities in the capital have already been earmarked as having suitable small-scale power generating schemes that could benefit from the expected 30 per cent premium that Energy for London would be able to pay.
Ed Davey, the Secretary of State for Energy and Climate Change, has voiced his support of the scheme saying: "Opening up our energy market to smaller companies is good news for competition and therefore good news for consumers. This is part of my vision to help to meet the UK's energy and climate change challenges, supporting a sustainable and secure energy system, reducing UK greenhouse gas emissions, and lowering consumer bills."
