Disruptive change ahead in the way we buy and use energy

A thermal image of a house

In the spring, Ofgem announced its Insight for Future Regulation project, and has now produced the first paper of a series:  first Future Insights discussion paper. It sets out some of the dramatic changes in the way we use and buy energy which might come about in the next five or ten years.

First, a health warning – past predictions are not a firm guide to the future, though they are the best we have got.  Between December 2012 and March 2016, the number of active gas or electricity suppliers in the domestic market doubled from 20 to 43. Forecasts by the (then) Department of Trade and Industry in 2000 for electricity demand in 2015 turned out to be 20% too high – our appliances are much more efficient than anticipated. Continue reading “Disruptive change ahead in the way we buy and use energy”

The future is electrifying

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Two thirds of our current electricity generating plants will be decommissioned by 2030.   In the next fifteen years, they will need to be replaced with a mixture of new power stations and by generating more energy from renewable resources – primarily wind and solar, and tidal might also have a place. On top of that, we will need more electricity as we proceed with the electrification of heating and transport – some predictions suggest that we should eventually be planning for a seven-fold increase in electricity generation capacity.    Continue reading “The future is electrifying”

A new fuel poverty strategy

A thermal image of a house

The fuel poverty strategy of 2001 (‘to eradicate fuel poverty by 2016’) has patently failed. A new one is promised in the current Energy Bill, which is completing its Parliamentary stages.

Within six months of the date of the Act receiving Royal Assent (in December or January), the Government is bound to propose a new strategy, after which there will be a public consultation, a Government response, and the tabling of the necessary secondary legislation. This ponderous process means we might not have a new strategy in place till early 2015 (though ministers hope to move faster), but clearly the thinking time has already started.

Age UK, with others, is in constant conversation with the Department of Energy & Climate Change. A key bone of contention is the targets to be set in the strategy, since these will only be real if there is funding to underpin them, and there is considerable uncertainty about the available funds. Continue reading “A new fuel poverty strategy”

Green Deal performing poorly

At the heart of Age UK’s Warm Homes Campaign lies the conviction that the best way to insulate people from remorseless increases in energy costs and the health risks posed by cold homes is a major house refurbishment programme. The Green Deal was intended to drive that work – and upgrade 4m homes by 2020 – but the six month figures for the scheme are hapless, and we see no room for optimism any time soon.

As of mid-October, there are 219 Green Deal schemes in operation. True, there is a upstream pipeline of house surveys completed and Green Deal plans in preparation, but older householders seem rather underwhelmed. Whilst one in ten say their homes were not warm enough last winter and they would benefit from improved energy efficiency measures, 70% said they would not want a550x280_thermostat_lady Green Deal. The most frequently cited reasons were aversion to debt, and seeing the ‘loan’ repayment scheme as too expensive.   Continue reading “Green Deal performing poorly”

What on earth are carbon taxes?

Energy is a huge political and household issue. The dual fuel bill for an average household is £1315 per year, and that’s before the current round of price increases.

What we’ve learned this week is that Secretary of State Ed Davey wears a jumper to keep warm at home, and that British Gas is increasing its prices by 9.2%. We also learned from the Scottish Nationalists that if Scotland voted for independence and if they were to be in Government, they would cut prices by removing the social and environmental obligations on energy suppliers, and instead pay for fuel poverty programmes with the proceeds from carbon taxes.200x160_gas_hob_g_main

These carbon taxes come in two forms, and are levied on the industries emitting the largest amount of greenhouse gasses, principally carbon dioxide. The idea is to push these industries into using non-polluting energy – energy generated from wind and tides and other renewables, and from nuclear sources. The EU Emissions Trading Scheme is one of the carbon taxes and applies to all members of the EU, though the revenues go to the national governments.   Continue reading “What on earth are carbon taxes?”

Disarray in fuel poverty policy

In their consideration of the Energy Select Committee report on Energy Prices, Profits and Fuel Poverty (published 29 July), the media focused on the opacity of the energy companies’ accounts, the lack of transparency, and the apparent weakness of the Regulator, Ofgem, in looking after consumers’ interests.

Elderly woman trying to keep warm by the firesideBut the media failed to comment on the trenchant observations made by the Committee on fuel poverty. Here, the Government came in for a lot of flak. The Committee found it disappointing that so much of Government fuel poverty policy centres on short term help with bills when improving the thermal efficiency of the UK housing stock should be the priority. It commented on the hiatus in fuel poverty policy whilst thrashing out a new definition and a new approach, and observed that policy has effectively been frozen at a time when energy price rises have made energy costs increasingly unaffordable for vulnerable and low income households. Continue reading “Disarray in fuel poverty policy”