06 Dec 2013
The autumn statement was released with grand plans for reducing our energy bills by transferring the energy company’s obligation (ECO) to the taxpayer. Energy companies have succeeded in lowering their liability to finance the cost of providing insulation, new boilers and draught-proofing for struggling families and vulnerable people in communities across the country.
The question is whether this important support for the fuel poor and vulnerable people now considered to be too expensive will be reduced. Last year, 30,000 people died from winter cold related illness, one of the highest levels in Europe. Taxpayers will be financing shale gas extraction (fracking) that will be offset by less support for solar generated electricity and onshore wind. The net result is not beneficial to the taxpayer, nor to the energy consumer, creating less value for money from an economic standpoint.
The claim is that too much of the energy cost is spent on environmental measures. In fact all environmental charges comprise 9% of the average household energy bill of £1,350. These charges are for various services, including support for renewable energy and energy efficiency. Energy companies do not have a track record of success in rolling out programmes like the ECO on a government mandate. ECO replaced CERT and CESP, which were not considered successful programmes because the energy suppliers didn’t meet the government’s targets. Lots of money has been poured into ECO with little result. It’s just counterintuitive that a company whose obligation is to maximize profits for their shareholders is going to invest its resources in lowering its sales volumes by proactively investing in energy savings.
The taxpayer will not benefit from investments in shale gas extraction, for which many professionals predict will not bring down energy prices. We must focus our attention on making the infrastructural investments in the distribution network, including battery storage, and in distributed low cost generation like solar electricity and onshore wind bringing longer term value to our communities.
24 Oct 2013
This week, the Government announced that the taxpayer would be subsidising the construction of a £16 billion, 3.3GW new nuclear power plant at Hinkley Point in Somerset. The deal was stuck with EDF, the French state owned utility. In the wake of the disaster at Fukishima, with dangerous levels of radioactive Strontium entering into their water, any investment in the construction of a new nuclear facility is short-sighted, presenting a formidable threat to the economic health and potentially the physical well being of future generations.
The subsidy presents the threat of a dangerous economic legacy for us now and for future generations. The guaranteed strike price of £92.50 per MWh lasts for 35 years, and is twice the current price of electricity in the market today.
What this means is that every taxpayer, regardless of whether one benefits from it or not, will be financing the generation of this electricity for the next 35 years. Because of the base load nature of nuclear power, there may be times when no one is consuming this electricity yet, the taxpayer will still be paying EDF and the investor consortia for generating it.
Foreign investment could comprise more than 50% of the ownership of the plant, which means our taxpayers’ money is contributing to the wealth of foreign nations instead of being invested at home. It’s a no brainer for the Chinese to take up to a 40% stake in the consortium, because for them it is a guaranteed investment return with very little risk. The move creates distortions in the supplier market and sets a greedy precedent for other suppliers.
This graph, prepared by the EEG to analyse the level of subsidy to be provided for Hinckley Point demostrates that even when the taxpayer subsidy for decommissioning the plant and the long term storage of the nuclear waste is excluded, the subsidy for nuclear power far exceeds any subsidies for solar PV or Wind (either on or offshore).
It doesn’t make any sense to continue to invest good money into an expensive and dangerous source of electricity. The lion’s share of the budget for the Department of Energy and Climate Change is allocated to the Nuclear Decommissioning Authority to manage our legacy of radioactive nuclear waste.
The UK has the highest stockpile in the world of radioactive Plutonium buried in a temporary storage facility in Cumbria. The cost of managing our nuclear legacy is estimated to be about £100 billion, the equivalent of the entire investment required to upgrade our electricity network.
We must reject this plan to expand the facility at Hinkley and support investment in clean, renewable energy generation and energy efficiency investment. We must invest in a smart grid that would transform our network into a low carbon, clean energy generation, transmission and distribution network. Please contact your MP and let them know you do not support any subsidy for nuclear power.
If your business is located in East Sussex and your annual energy costs are over £1,500, you may be eligible for a grant of between £150 and £1,000 to invest in energy saving projects that will achieve a quantifiable reduction in energy consumption and spend. Qualifying projects could include upgrading lighting to energy efficiency models, fitting insulation or installing a renewable energy system. BHESCo can help you identify such a project.
The grant funding is provided by East Sussex County Council. The Council is keen to help local businesses improve their profitability and reduce their carbon footprint. The Sustainable Business Partnership are administering the grants on the Council’s behalf.
The grant is available to Small and Medium Sized Businesses (SME) only. An SME is defined as a small or medium sized business or social enterprise that has fewer than 250 employees and a turnover less than £35 million and that is not owned by a group or larger company that does not meet these criteria. Public sector organisations are not eligible for funding.
A free Energy Audit by a qualified commercial Energy Assessor is also available to East Sussex SMEs. The Energy Audit will provide you with recommendations for energy saving projects, which you could then apply for a grant to install.
If you already have an energy saving project in mind, you can apply for a grant without having had an Energy Audit first. Depending on the complexity of your proposed project, an Energy Audit may be required however before your grant application can be progressed. This is to make sure that your proposed project is suitable for your premises and business activities and to verify the potential energy savings that you have provided in your Grant Application. BHESCo can arrange for the Energy Audit for you.
To apply for a grant please go to the Sustainable Business Partnership CIC website download and complete an application pack and return it to email@example.com along with two quotes for the installation of your proposed project. Further guidance and full terms and conditions are also included in the pack.
Please contact us if you want some help in completing the application.
On Saturday, The Independent’s Environment Editor, Tom Bawden, weighed the evidence on Fracking, without mentioning the Shale Gas Report undertaken by the researchers at the Tyndall Centre, commissioned by the Co-operative Bank.
We can stop extreme methods like shale gas and coal bed methane extraction now. We have a choice. We don’t have to wreck the environment to maintain our standard of living. Express your choice. Please tell your MP that you are against extreme methods of fossil fuel extraction.
Shale gas and coal bed methane extraction methods now threaten communities across the UK. In the government’s drive to incentivise the fossil fuel industry, feeding our addiction to oil and gas instead of investing in a renewable energy alternative, the taxpayer continues to finance tax allowances for smaller fields like shale gas and coal bed methane. These incentives can cost hundreds of millions of pounds. The tax breaks for the gas industry make £500 million of profit exempt from tax, at 32%, this creates a toxic subsidy of £160 million. This doesn’t include the subsidy that the gas industry receives for the cost of decommissioning their drilling sites. According to HMRC, it is the UK Government’s aim to“maximise the economic production of hydrocarbon reserves” working with industry to increase its subsidy for marginal fields and projects.
In their report concluded almost two years ago, the Tyndall Centre described in detail the dangers of fracking, from its contribution to increasing harmful release of methane (a concentrated greenhouse gas contributing to climate change 20 times more effective in trapping heat than carbon) as well as the danger to the water aquifers in the areas where drilling takes place. Water is essential to life itself and cannot be tainted.
Treasury has done little to disguise its disdain for supporting the renewable industry by creating a volatile and uncertain investment climate in continuously decreasing the amount of Feed in tariff for wind and solar. The tariffs have a different effect on the taxpayer, as it is not direct tax relief, like the subsidy for oil and gas. The Feed in tariffs are actually paid by the energy suppliers, eventually passed onto the consumer in their energy tariff. It can be seen as a form of investment in our clean energy future.
According to OFGEM, from the inception of the Feed in Tariff in April 2010 to June 2012, 248,000 renewable energy systems have been installed, creating more than 1GW of clean generation capacity – enough to power about 213,000 homes. Since 99% of these systems are solar photovoltaic (PV), this means that for the next 25 years, the sun will generate 1 GW of electricity for free! Were the government to support investment in the energy infrastructure, the electricity transmission system, energy suppliers may be incentivised to invest in renewables in order to reap the benefit of increased distributed generation. Unfortunately, this has not been the case.
The burgeoning community energy movement has already started to make a real difference to our clean energy generation capacity. In the Southeast alone, about 235kW of solar electricity has been added to the grid by local community initiatives – enough to power about 50 homes. In Oxfordshire, the ambitious community group will replace the dirty Didcot power station by applying a power up and power down strategy – building renewable energy generation and transforming residential and commercial energy consumption. These strategies have been recommended by knowledgeable, reputable groups ranging from the Centre for Alternative technologies, Friends of the Earth, Greenpeace and Ecofys. Any one of these reports is an interesting depiction of our future with 100% renewable energy generation.
Communities should take power into their own hands to build an abundant local clean energy supply to secure our future energy on a national scale, claims Kayla Ente, founder of community energy service co-operative BHESCo……
Consumers have not benefitted from liberalisation of the energy markets. Instead liberalisation has created the current oligopoly of energy suppliers that control 99% of the market and play a dominant role in policymaking.
In an oligopoly, switching is only a temporary fix as all suppliers will basically offer the same price. Switching will not stop the tide of energy prices increases at 8 – 10% every year. Such increases are not sustainable, especially in a recessionary economy where our incomes on the whole have declined. Because we are dependent on energy in every aspect of our lives, energy has become a right, not a privilege.
Tapping into the shale gas reserves using extreme extraction methods has dire consequences on our water supply. Hydraulic fracturing creates millions of litres of waste water, containing hazardous levels of hydrochloric acid. This chemical contaminant must be stored in specially lined ponds. At best, fracking is a five year feed of our fossil fuel addiction before we wake up and realise that we have seriously damaged our environment, like the realisation of bad behaviour after a debauched night out. Increasing worldwide demand will still tenaciously drive prices ever upward over the long term.
Our centralised power stations lose 65% – 75% of the energy generated from unsustainable sources like fossil fuels and uranium in transmission and distribution. Although heat represents about 41% of energy consumed, most of the heat generated by the large stream engines in centralised power stations is wasted in the air.
Unfortunately, unsuspecting taxpayers end up paying for the lack of vision and sound economics in our energy policy. The new Energy Bill including Electricity Market Reform (EMR) means that subsidies will be transferred to the shareholders of large corporate power generators in the form of a guaranteed price for electricity production, regardless of whether that electricity is consumed or not.
Fracking corporations will receive larger tax breaks in the coming years. There is a real danger that the current energy policy will create a continuation of the culture of waste in our society, due to an irrational fear that the lights will go out.
There is little innovation in our nation’s energy strategy because there is painfully little movement in important areas like upgrades to distribution and transmission networks to create smart grids. Investment in energy storage pales in comparison to the money that will be invested in nuclear power and Carbon Capture and Storage technologies. Investment in a smart grid was supposed to be addressed in EMR, however, this has been conspicuously omitted, calling the National Grid “a natural monopoly”. This may have been ok when the grid was nationalised, not now.
Naturally, the current suppliers want to maintain the status quo of centralised systems where the consumer is kept enslaved to the supplier. And naturally, these powerful forces influence policy decision-making and the media. There is a light at the end of this tunnel: community energy suppliers can stimulate investment by creating micro-generation points and then investing in their own micro-grids for local energy distribution, all connected to transmission stations run by the National Grid.
In 2011, there were 19 Community energy co-operatives generating 19.6MW of renewable energy, powering approximately 16,000 homes. Shareholders in these co-operatives are making a steady return on their investment in tangible local energy generation assets. As we transition into our new sustainable way of living, during this ‘Time of the Great Turning’ (as Joanna Macy has named it), a post industrial evolutionary movement, a ‘small is beautiful principle should be applied to local energy generation. Consumption near the source minimises efficiency losses. Combining natural renewable energy sources, like sun, wind and biomass to power our needs, making our buildings more efficient by sealing the leaks coming through the fabric, becoming more conscious of how we use energy in our environment will all contribute to our long term energy security.
According to the Department of Energy and Climate Change, community groups are involved in four main activities: Reduce, Manage, Generate, Purchase. In Brighton, Brighton & Hove Energy Services Co-operative has been launched to stop the tide of rising energy prices. It is a not for profit co-operative dedicated to help people reduce their energy costs now and forever. We do it now, by organising a collective buying initiative where one price is negotiated for our members, like a large corporation would for its energy supply. We can do this by offering thousands of customers, worth about £120 in profit each, to one supplier. Energy suppliers pay millions in marketing costs to encourage the public to switch to their service. We can save these large suppliers money by reducing their marketing spend and pass that savings onto our members.
BHESCo is working with neighbourhood groups and our local council to map out neighbourhood energy plans, offering a way to implement low cost energy savings and local renewable energy programmes. We are a link between the large energy suppliers and the local consumer. Suppliers are required by the government to identify super priority customers, people living in hard to treat properties that leak massive amounts of heat through their walls, ceilings and floors. The path to these people, many of them vulnerable, is arduous as they are difficult to find, do not trust the large suppliers and do not want to enter into any loan commitment with them at a high cost.
BHESCo is launching a programme of low energy, durable lighting retrofits to small and medium sized businesses in Brighton & Hove which presents a way to quickly reduce electricity consumption as many office buildings have old fluorescent lighting that is hard on the eye and on the pocket. We can go some way to helping these businesses reduce their operating costs and lower their carbon footprint, just by upgrading their lighting to longer lasting LED (low emission diode) lights. These are mercury free, unlike other low energy lighting that is for sale in some supermarkets.
We believe in that by working together, we can continually create wins for members of our community. We invite all people who want to make a difference in their community within the Sussex area to contact us. Together we can help bring about the Great Turning.
Kayla Ente is founder of BHESCo, a community energy service co-operative. She is a qualified accountant, MBA and environmental economist. Kayla lives and works in Brighton, UK.