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The law of averages: UK off-grid homes feeling the effects

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To quote Mark Twain,“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

It’s often the case that when we learn something important, we never forget it. And it’s such a point that was brought to my attention when considering the current policy of electrification of the rural economy. So it was time to dust off the grey matter and remember when I first went back to college to take my heating exams.

Then, the golden rule was always: before you take pen to paper, check what fuel you’re going to use. For many of us in the UK, this is a relatively simple question. If our home is ‘on-grid’ (and in the UK this more or less means connected to the natural gas supply) then hey presto; it’s gas.

However for around 2.5 million, or 12% of UK homeowners, it’s a different story. Having a home off the gas grid poses a number of issues, but the first is always, “If I can’t use natural gas, then what?

Historically, the UK has used coal for our heating needs but in the 1970s there was a rush to several newfangled devices including electric storage heaters, heating oil and latterly liquefied petroleum gas (LPG) for off-grid homes.

Making a choice of fuel type has long-term consequences for the government and off-grid homes, as once the infrastructure is put in place it’s much more expensive to switch. By sheer market numbers, heating oil won this battle, as electric storage heaters were less than ideal, practically requiring their own power station to run at night and older gas boilers would enthusiastically consume litres of LPG, and at less energy per unit than oil. Therefore LPG always seemed the expensive route and oil won out.

But how times change, and with the new technology inside modern gas boilers, and a little insight into how the market presents the consumer with key numbers such as fuel costs, maybe the tide will soon be turning in favour of LPG.

So what’s with the numbers? Well, I recently went to see a bulk LPG supplier who was considering how to approach oil customers with a view to switching, and as ever the issues of energy/price per unit came straight to the top of the agenda. The figure quoted for oil was around 58p per litre, so I decided to check this out.

To use another phrase popularised by Mark Twain, what I found were “lies, dammed lies and statistics”. This is a saying that’s as true now as in the 19th century. When it comes to fuel prices, there seems to be a fog surrounding the figures. Very little seems clear, even when you’re presented with an average price. I mean, what could be clearer than a market average of 58p?

When I wanted to find out about off-grid fuel cost comparisons, it seemed almost impossible to gather up-to-date information, and nowhere could I find any government consumer advice or direct fuel cost comparisons between LPG and oil. I was frankly shocked to find that the government is not properly addressing this type of information.

The average UK homeowner is facing a crisis in controlling their expenditure, coupled with increasing instances of fuel poverty. The rise of fuel costs for UK homes could easily tip millions of families into fuel poverty, which would be a catastrophe for our nation. The government’s policy of electrification of our rural economy and lack of attention to detail in fuel pricing and energy efficiency is, in my opinion, socially irresponsible and damages our nation’s wellbeing.

When I thought more about this it seemed to me there are actually two averages at play, and it’s only the second, real-world ‘consumed average’ value we need to concern ourselves with.

The first average which is typically quoted to consumers is the published price that’s available, averaged across the year and taken from quotes given by suppliers, but this excludes VAT and is also often the bulk order price. I checked out the average 2012 price of 58p and at no time could I actually buy oil at that price. The best I could find was 63p plus 5% VAT.

The consumed average is the one that should really concern us, as it reflects the average price when oil is actually used. For example, as in the first average, if you take the price of oil in the summer months into account you lower the corresponding winter oil costs. But unfortunately in the real world, UK homeowners cannot take advantage of this price as fuel storage is limited by tank size, traditionally around 1,000 litres for off-grid homes.

I found that if you average the oil costs by when oil is actually used the effect on the average price increases by a whopping 28%. Where the published average price of a litre of domestic heating oil was annualised at 58p, the consumer actually paid an average price of around 76p.

As such, if you compare the published average against the real-world consumed average, taking into account increased consumption in the winter months, then the actual fuel bill for a UK off-grid homeowner rises by over 20%, or £400 annually, than what a consumer would calculate if they chose to use the published average. This disparity can be seen in the graph below.

Additionally, if you take into account the energy efficiency of the process of turning oil into useful heat, and compare this with LPG, you’ll be surprised to learn that even though LPG has a lower energy output per litre, it now represents a more economical and environmentally friendly choice for heating off-grid homes.

LPG for heating now costs around 48p a litre, and the maximum efficiency that gas boilers can achieve is now at around 98%, using Zenex’s super condensing GasSaver and Superflow technologies. This is compared to oil and it’s much lower efficiency of around 55% (when you include boiler cycling, and domestic hot water use, which the Energy Savings Trust reported was barely 30% efficient).

When it comes to energy efficiency we need to be honest with consumers about what the real costs are, so why isn’t the government doing more about this? Is it afraid to upset the oil industry?

Unfortunately the government seems to be going down a muddy track in tackling rural off-grid policy. Promoting the electrification of the heating and hot water services for off-grid homes, rather than more cost-effective options like LPG, shows us clearly that the government advisers are removed from reality and should do more to promote energy efficiency for its consumers.

Chris Farrell is the managing director of Zenex Energy, a British company founded in 2003 specialising in innovative energy saving products for both the domestic and commercial markets. This post originally featured on his blog, The Green Entrepreneur.

Further reading:

Why ‘sticky’ groups may be the cause of our energy woes

Applying ‘Victor’s razor’ to UK energy policy

Why supporting innovation is vital for UK energy policy in 2013

Time for a change in energy policy

Affordable heating for all

Chris Farrell is the managing director of Zenex Energy, a British company founded in 2003 specialising in innovative energy saving products for both the domestic and commercial markets

Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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