Energy efficiency will be the priority for future UK Governments

With prices continuing to rise and demand set to double households and businesses are being encouraged to using energy in a more efficient way

Gareth Fuller/PA Wire Electricity pylons with wind turbines in the distance
Electricity pylons with wind turbines in the distance
It used to be rule of economics that a country’s overall wealth rose in tandem with energy use, but that link has now been broken.

 

Over the last decade the UK has used 10% less energy than the previous 10 years, while GDP has returned to its 2004 levels despite the financial crash which wiped 7% off national wealth.

This is particularly impressive as the number of households is 6% higher than 2004 – and is a trend that has been mirrored across the first world.

Experts attribute some of the falls in energy use a raft of households energy efficiency measures such as; better insulation and boilers and incandescent light bulbs – although there is still a long way to go (see panel).

With UK and global energy use set to double in the next 30 years, and UK energy prices set to rise as a result of renewable subsidies, the Government is keen to see households and businesses cut consumption by 50% by 2050.

If you throw into this mix the need for countries to cut greenhouse gas emissions by switching to renewable power supplies, then this presents a major headache for policy makers and grid operators.

Here in the North East a world-leading trial aimed at supporting the transition to a smarter renewable electricity system is coming to an end.

Launched in 2011 the £54m Customer-Led Network Revolution (CLNR) is a joint initiative between Northern Powergrid, British Gas, Durham and Newcastle Universities and National Energy Action.

It is the largest of its kind in the UK involving 12,000 North East domestic and business customers. All have installed smart meters, which allow them to monitor usage, and have been offered time-of-use tariffs leading to changes in the way they use electrical equipment.

Incentives offered during the trial include free electricity on a Saturday and cheaper energy during off-peak periods.

The findings report that on average the customers consumed 3% less energy and reduced their peak consumption by 10%.

Between the peak hours of 4pm and 8pm on a weekday, when electricity costs 30% more, almost all made efforts to shift energy consumption.

Jim Cardwell, head of regulation and policy at Northern Powergrid
Jim Cardwell, head of regulation and policy at Northern Powergrid
 

Jim Cardwell, head of regulation and policy at Northern Powergrid the electricity distribution network operator for the North East and Yorkshire, is one of the leads on the CLNR programme.

He said: “It has become clear during the trials that domestic customers have made efforts to move out of the peak congestion periods, between 4pm and 8pm.

“This has been most noticeable with things such as the dishwasher or clothes washer, but there has been less of flexibility when it comes to meal or bath times.”

Phil Taylor, director of Newcastle University’s Institute for Research on Sustainability, said: “People have learned to be flexible and are changing the time of use and manufacturers are bringing intelligent products to market which help them achieve that.

“But we have to try and make it more convenient. People are time poor but you just need to look at the way we all now recycle as part of everyday life. It can become quick, easy and convenient.”

The trial has included scores of North East businesses but in the smaller companies there have been no noticeable changes in behaviour.

Many of the region’s larger industrial users have been offered demand side response initiatives - which see them paid to switch of power at times of high demand on the electricity network - with little success.

Mr Cardwell speculated that ‘the needs of the business may have to come first’ and that more will have to be done to secure buy in from the business community.

He added: “There is a case to be made for us to work with the National Grid and demonstrate a unified approach which shows how some of the measures may create an additional revenue stream for business. In effect to show them that there’s something in it for them.”

One of the aims of the trials is to gauge the levels of investment that will be required to move the UK power grid from a ‘fit and forget’ system to one which operates in two ways, delivering and receiving electricity from renewable energy sources such as solar panels.

The trial has also looked at how to cut energy use and support the decarbonisation of the transport and heating sectors.

If electric vehicle usage gather momentum and more people opt for air source heat pumps this could increase electricity use by 100% by 2050.

Some estimate in the region of £200bn will have to be spent on upgrades to the UK powergrid to cope with increased demand.

Northern Powergrid estimates it will have to spend £148m upgrading its network over the next eight years, but says this is £34m less than it would have had to spend without the smarter measures currently being implemented.

Mr Cardwell added: “The national roll out of smart meters begins in 2015 and we expect to see some major changes in the way energy is used. The CLNR trials have shown that smart meters are a powerful energy efficient measure and combined with other initiatives will go some way towards reducing consumption.”

Electricity pylons
Electricity pylons
 

Neighbourhood energy efficiency competitions?

A common feature of household energy bills nowadays is the chart which compares your household energy consumption with that of your neighbours.

As the smart meter roll out gathers momentum, between next year and 2020, expect to see more of this.

In fact policy makers are even considering neighbourhood competitions with rewards for those who save the most energy.

Jim Cardwell, head of regulation and policy at Northern Powergrid said: “People enjoy competitions and friendly rivalry can be fun. It would be interesting to see what can be done and how we can support people to do it.

“Energy suppliers already include charts which demonstrate your energy use in comparison to neighbours. This establishes a benchmark and we may be able to build on that.

“Once we have more smart meters in people’s homes then they can become a powerful energy efficient measuring tool.

“Incentivising behaviour changes is a significant part of the energy demand reduction agenda.”

Mr Cardwell says that while rewards for individual households would most likely be small, it may be better to club together as a community and pool the rewards to support a youth group or nearby school.

He added: “Such schemes can promote social cohesion and promote social awareness.”

Phil Taylor, director of Newcastle University’s Institute for Research on Sustainability, added: “The CLNR trials have shown that customers are not motivated solely by price but also have a sense of social responsibility driven by the desire to do the right thing.

“People undertaking the trial have been sharing their experiences, creating a community spirit. One which can actively encourage changes in energy-use behaviour.”

Ofgem has warned gas and electricity suppliers
Ofgem has warned gas and electricity suppliers
 

Fuel Poverty

One reason put forward for the 10% fall in UK energy use is that rising prices may have forced hard-pressed families to use less.

There are currently 2.28m fuel-poor households in England – 10.4% of all households – and fuel poverty is projected to increase by 2014 up to 2.33m.

In the North East 129,000, or 12%, of all households cannot afford the energy they need to power and heat their home to an adequate standard.

Jenny Saunders, chief executive of Newcastle-based National Energy Action, said: “It is our view that greater investment in the energy efficiency of the nation’s housing stock is the most rational and sustainable means of addressing fuel poverty.

“We would like to see the Government recycle carbon taxes to match the Energy Company Obligation (ECO) to adequately resource a comprehensive energy efficiency programme for low-income households and communities.”

The Green Deal and new Energy Company Obligation (ECO), are the twin Government mechanisms introduced last year to help meet their carbon and fuel poverty policy objectives.

However take up of Green Deal has been slow and ECO’s progress was hampered when the Government extended its implementation timetable, so it could cut £50 off energy bills last year.

Ms Saunders added: “While the Government has committed to maintaining existing dedicated support in the form of ECO for low income and vulnerable households until March 2017 there will be a 33% reduction in ECO funding for solid wall insulation up to 2015.

“The ECO therefore remains insufficient to tackle fuel poverty, especially for households in hard-to-treat properties.”

The 2012 English Housing Survey found three-quarters - 16.6m - of dwellings would benefit from energy improvement measures, most notably from condensing boilers - 9.7m - and loft insulation upgrades and cavity wall insulation could benefit 5.6 million dwellings.

Speaking at Labour Party’s annual conference last month, the shadow energy and climate secretary Caroline Flint, said it would make five million homes more energy efficient within 10 years, all ‘without adding to anyone’s energy bill’.

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