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High energy prices built into confused market – reducing consumption is essential

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Recent reports and moves in the energy market sector show how high energy prices are embedded in the market. This new information underlines again that the only way for businesses, organisations and households to reduce their ever-rising energy bills is through efficiency, using less electricity in a sustainable way.

This week, we heard that former energy regulators believe aggressive regulation over the past six years may have hindered competition among energy suppliers, maintaining high prices. They advise the Competition and Markets Authority energy industry inquiry that Ofgem’s interventions have led to extra costs and have forced energy suppliers to remove some cheaper tariffs.

At the same time, Sara Bell, executive director of the UK Demand Response Association advises in a Guardian report that the energy market in the UK has never valued the customer as its core priority for a stark, simple reason.

She says, “Energy efficiency and this type of optimisation go hand in hand. Demand, response and energy efficiency totally complement each other: the more you invest in insulation, for example, the more flexibility you have.

“As a supplier, you are in an ideal position to manage all of these costs. But we have a market structure in the UK where most suppliers own [energy] generation assets. You are almost duty bound to your shareholders to optimise its revenue, so you have to sell at the highest price.”

New regulations mean that the National Grid can offer energy generation companies long-term contracts, up to 15 years. Demand response companies will only be offered 12 months – hardly competitive or compelling. It cements the power with the big energy companies.

It is interesting then, to see the arguments put to the energy competition inquiry by Stephen Littlechild, head of electricity regulation from 1989 to 1998, Sir Callum McCarthy, head of the current regulator Ofgem from 1998 to 2003 and Clare Spottiswoode, head of gas regulation from 1993 to 1998.

According to a BBC report, the former regulators say in their letter to the CMA that “regulatory interventions to promote more consumer engagement can increase customer and supplier transactions costs, leading to lower customer benefits including via higher prices, and weaker rather than stronger competition.”

“Regulatory interventions can also affect suppliers’ ability to compete as well as their incentives to do so,” they add.

Ofgem has recently changed the industry’s rules so that energy suppliers are now restricted to offering just four tariffs. This means some cheap special tariffs for “vulnerable” customers such as the elderly and the poor have been withdrawn. Suppliers have also been stopped from offering cheaper tariffs only to new customers, while refusing to offer such deals to existing ones.

There remains widespread and long standing concern that energy suppliers are able to keep on raising prices, free of any real competitive pressure, even when wholesale prices have been falling.

Add to this confusing mix the recent debacle over the revised Green Deal, quickly closed amid allegations of unacceptable practices from suppliers, and we can see how problematic the entire sector has become in this era of expensive energy.

Supplier switching and changes in behaviour can play a part but only for a limited time. Businesses, organisations and consumers all need to take the best advice from trusted sources, commit time and budget, then act to reduce energy and water consumption.

As a shining example, look no further than the Department of Energy and Climate Change, which has just completed an LED lighting retrofit to cut bills and carbon emissions.

We advise every customer to take this step – LED lighting can reduce electricity consumption by up to 85% and shrink their carbon footprint substantially.

Further savings are simply made through water-efficient products like eco showers and tap aerators in the home and at work. For businesses and other organisations, smart lighting controls, intelligent heating controls and smart pumps are among the best ways to cut energy consumption by 50% or more.

In this way, at least you are in control of energy spending, and have clarity rather than confusion through simple, efficient, sustainable actions.

Mark Sait is managing director of energy-saving specialists SaveMoneyCutCarbon.com. He is among the speakers at Blue & Green Tomorrow’s Sustainable September conference, which you can find out more about here.

Photo: Tristan Benninghofen via Free Images

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Further reading:

Ofgem blamed for ‘reducing competition’ and raising energy prices

Almost two-thirds of European households concerned about rising energy bills

Energy efficiency helps households battle rising utility costs

Just three EU countries on track to meet energy efficiency targets

The Guide to Sustainable Clean Energy 2014

Mark Sait is managing director of SaveMoneyCutCarbon, a uniquely positioned full-service efficiency partner to organisations and homes that want to reduce energy, water and carbon to improve sustainability. Clients include major hospitality groups, property ownership groups, distribution centres, theme parks and corporate offices as well as SMEs and private residences.

Energy

5 Easy Things You Can Do to Make Your Home More Sustainable

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sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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Energy

Is Wood Burning Sustainable For Your Home?

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sustainable wood burning ideas

Wood is a classic heat source, whether we think about people gathered around a campfire or wood stoves in old cabins, but is it a sustainable source of heat in modern society? The answer is an ambivalent one. In certain settings, wood heat is an ideal solution, but for the majority of homes, it isn’t especially suitable. So what’s the tipping point?

Wood heat is ideal for small homes on large properties, for individuals who can gather their own wood, and who have modern wood burning ovens. A green approach to wood heat is one of biofuel on the smallest of scales.

Is Biofuel Green?

One of the reasons that wood heat is a source of so much divide in the eco-friendly community is that it’s a renewable resource and renewable has become synonymous with green. What wood heat isn’t, though, is clean or healthy. It lets off a significant amount of carbon and particulates, and trees certainly don’t grow as quickly as it’s consumed for heat.

Of course, wood is a much less harmful source of heat than coal, but for scientists interested in developing green energy sources, it makes more sense to focus on solar and wind power. Why, then, would they invest in improved wood burning technology?

Homegrown Technology

Solar and wind technology are good large-scale energy solutions, but when it comes to small-space heating, wood has its own advantages. First, wood heat is in keeping with the DIY spirit of homesteaders and tiny house enthusiasts. These individuals are more likely to be driven to gather their own wood and live in small spaces that can be effectively heated as such.

Wood heat is also very effective on an individual scale because it requires very little infrastructure. Modern wood stoves made of steel rather than cast iron are built to EPA specifications, and the only additional necessary tools include a quality axe, somewhere to store the wood, and an appropriate covering to keep it dry. And all the wood can come from your own land.

Wood heat is also ideal for people living off the grid or in cold areas prone to frequent power outages, as it’s constantly reliable. Even if the power goes out, you know that you’ll be able to turn up the heat. That’s important if you live somewhere like Maine where the winters can get exceedingly cold. People have even successfully heated a 40’x34’ home with a single stove.

Benefits Of Biomass

The ultimate question regarding wood heat is whether any energy source that’s dangerous on the large scale is acceptable on a smaller one. For now, the best answer is that with a growing population and limited progress towards “pure” green energy, wood should remain a viable option, specifically because it’s used on a limited scale. Biomass heat is even included in the UK’s Renewable Heat Initiative and minor modifications can make it even more sustainable.

Wood stoves, when embraced in conjunction with pellet stoves, geothermal heating, and masonry heaters, all more efficient forms of sustainable heat, should be part of a modern energy strategy. Ultimately, we’re headed in the direction of diversified energy – all of it cleaner – and wood has a place in the big picture, serving small homes and off-the-grid structures, while solar, wind, and other large-scale initiatives fuel our cities.

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