Evidence from a variety of sources suggest that the world is heading for a serious energy shortage in the years ahead. Rapid economic development in China and India, coupled with consistent energy use in already industrialized nations, will put a huge strain the world’s ability to meet a projected rise in energy demand.
To everyone at BHESCo it seems abundantly clear that a consequence of this global rise in demand will be a huge corresponding rise in cost, unless action is taken now to increase energy efficiency and reduce energy waste.
“One thing is certain,” said Nobuo Tanaka, the IEA’s executive director, “the era of cheap oil is over.”
‘Business Green’ reported that the Government may have to extend financial support to UK industry, as the latest projections from the independent Committee on Climate Change (CCC) confirmed that business energy costs may rise by around a third by 2030.
According to one forecast published by The National Grid, the price of electricity could double over the next two decades. Indeed, this year already oil prices have nearly doubled from their February lows.
And of course, a tremendous increase in energy consumption by industrialising nations like China, India, and Brazil, will lead to an increase in global greenhouse gas emissions.
The IEA believe that this anticipated emissions increase would result in a 6oC rise in the average global temperature by 2100, which would likely devastate many species and coastal communities worldwide.
It is essential that visionary leadership on a national scale is matched by a proactive grassroots movement at the local level to promote a rollout of energy saving measures and habits. Much like communities came together to ‘Dig For Victory’ during the war, we feel that the same ethos is needed now in the battle against climate change.
There are dozens of small changes that households and businesses can make in order to lower their energy use and carbon emissions, ranging from to replacing lights that are frequently on with LEDs, replacing old inefficient appliances and topping up your insulation.
Through our Energy Saving Service, BHESCo is helping our local community to make these essential changes to the way we use energy. The beauty of it is that by initiating energy saving measures in the home and reducing carbon emissions, people are also able to make huge savings on their annual energy bills. Its almost like getting paid to save the planet!
For help reducing your energy use, please view our Energy Saving Tips page or contact BHESCo to book a visit from our Energy Saving Team.
15 Oct 2015
In the past few months, we have seen some challenging developments in the renewable energy sector. Two key announcements from the Government have stripped away the stabilising wheels for clean energy, removing some of the incentives on which the industry has relied, making it harder to progress. The reasons were effectively that prices for renewable energy has come down as to no longer require the same level of subsidy that it did five years ago.
The first announcement came in July 2015, when HMRC proclaimed that renewable electricity would lose its exemption to the Climate Change Levy, a tax on the supply of commodities to businesses. Renewables have been exempt from this charge since is was introduced in 2001, providing a subsidy for low margin investments in renewable generation.
The reason given for this change is to “correct an imbalance in the tax system by preventing taxpayer’s money benefitting renewable electricity generated overseas”. However, this logic is refuted by industry insiders who argue that more than 70% of the Levy Exemption Certificates went to UK providers. The removal of this tax exemption could mean a drop in income for some renewable schemes of between 5-6%. Although this may not sound like much, this could mean the difference between sink or swim for some smaller companies, as Dr Gordon Edge of RenewableUK explains:
“Yet again the Government is moving the goalposts, pushing some marginal projects from profit into loss. It’s another example of this Government’s unfair, illogical and obsessive attacks on renewables”
The great irony is that because the renewable industry is nearing price-parity with fossil fuels, and because the Government wants to ensure low energy prices for hard-working families, the requirement of clean energy generators to pay toward the Climate Change Levy will lower their profit margins, meaning they will need to raise prices in order to compensate.
The second measure affecting the renewables industry came from the Department of Energy & Climate Change (DECC), when it announced on 22 July 2015 that it would be removing preliminary accreditation from the Feed-in-Tariff. Pre-Accreditation means giving green energy generators a guaranteed tariff level in advance of a project being commissioned, which is vital for financial modelling and creating investment offers. Removing this guarantee means that energy providers would receive the tariff rate as at the date they apply for full accreditation. In the DECC’s own words, “this will mean that a developer will not be certain of the level of suport they will receive under the scheme until the point at which their application is received by Ofgem”.
According to the DECC, pre-accreditation was introduced to “remove a large degree of risk” and to “offer greater certainty to industry”. The table below illustrates the huge increase of installations deployed under the FiT pre-accreditation scheme since it was introduced in 2012:
So what could be the reason for removing such a successful incentive now? The rationale provided by Amber Rudd, minister of DECC, is that there has been a much greater uptake in renewable energy projects than was forecast. Predictions had been for approximately 750,000 new renewable installations nationwide between 2010-2020, whereas the reality is that there have already been 700,000 installations as of 2015. This has “significantly outstripped expectations”, meaning that budget forecasts for 2020 are no longer workable.
It makes no sense that at the same time we’re told climate change is the fight of our generation, we are being also being told that the UK cannot afford the present pace of renewable growth. Or that energy security is a big national priority, then stop the support for the one area that provides it. It is tragic that just as renewables are challenging fossil fuels for market dominance, their progress has been curtailed. The irony of the green industry being punished for exceeding expectations is absurd, especially at a time when financial incentives for fracking are are on the rise. As David Attenborough said in his recent interview with Barack Obama, to transition to a low-carbon economy all we need to do is make renewables cheaper than fossil fuels, and common sense market mechanisms will do the rest.
However, there is cause for optimism. Given the tremendous advances in the efficiency of renewable technology, as well as the recent growth of solar power in the UK, perhaps Amber Rudd and DECC are right; perhaps the renewable industry is resilient enough to ride without support. And the decision to cut the Feed-in-Tariff has not yet been settled either, with consultations underway (please complete this one by 10:10 here), so if you do feel this is wrong, contact your MP and let them know.
Moreover, even without the subsidies of the past, there are still enormous opportunities to lower our energy bills as well as carbon emissions through energy efficiency measures, such as insulation, draught-proofing, or double glazing.
If the recent developments in the renewable industry have highlighted one thing, its that communities cannot rely on fluctuating external factors if they desire a stable and fair energy supply. To defend our communities against such unexpected changes in the future, we need to take control of our own energy networks, which will ensure resilience and price stability.
And what’s more, we will not be penalised for our successes.
Price comparison website uSwitch, announced that almost four million UK households (14%) owe money to their energy supplier. Increasing gas and electricity prices over the winter pushed UK households into debt at an average amount of £128 per household. Despite the mild winter, bills are £53 higher than at the start of 2013. The report highlights households are facing increased pressure to meet their rising fuel bills with the number of household falling into energy debt rising dramatically. It was also reported that the average household energy bill is 168% higher than in 2004, an increase of £472. Read the full report from uSwitch on their website.
At BHESCo, we are working hard to alleviate this problem by inviting the Brighton and Hove community to reduce their consumption and therefore expenditure on energy, making their homes more comfortable and energy efficient. Monetary savings can be made on energy bills by switching supplier, ensuring that you are on the tariff that meets your requirements. If you are in debt to your energy supplier and cannot switch, we may be able to help through BHESCo’s Fuel Poverty Fund.
Homes can also be made more energy efficient by installing simple energy saving initiatives, such as draught excluders and energy saving light bulbs. The Green Deal Home Improvement Fund is a way that you can reduce your energy bills for less! Find out more about this programme here.