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People power: our changing energy equation

Posted on July 4, 2017

In the latter part of the recent General Election campaign the Green Party paraded around central London holding placards with giant question marks on them. It was a way of drawing attention to their question ‘where has debate on the environment gone in this election?’ It is not an unfair question in a context where President Trump has repeatedly blown hot and cold on American commitment to the 2015 Paris accord on climate change – and then pulled out, and where the G7 summit in Sicily exposed a chasm of difference between the ‘six’ and the ‘one’ (USA) on the subject. It is also not an unreasonable question in the context of our own muddled policies on energy production and consumption, including the Conservatives notable lifting from Ed Miliband, of the ‘cap’ on energy prices in an attempt to reign in the ‘big six’ energy companies and their ‘rip off’ prices, in their manifesto.

The transformation of the Coalition Governments claim to be ‘the greenest Government ever’ to the attempts to destabilise the green jobs revolution by suddenly switching off the already very low subsidy levels for solar energy, leading to the loss of 12,000 jobs so far in the solar industry, has gone hand in hand with a quite extraordinarily casual approach to actually reducing household energy bills. The much derided Green Deal (see my article posted on  26 March 2014) was finally killed off a couple of years ago in the row over Renewable Obligations Commitments, aka ‘green crap’, but nothing has emerged to take its place. Price caps on household energy bills are fine – until they are lifted at some point in the future.

Much more sustainable in both senses of the word, is the EU Commission plan to have a binding target to improve energy efficiency by 30% by 2030 compared with business as usual. To do this energy companies would have to achieve energy savings of 1.5% a year between now and then, using energy efficiency measures. This would have a fairly dramatic impact on household bills. But it would also have a fairly dramatic impact on company profits. Unsurprisingly energy companies absolutely hate the idea, while in public at least paying lip service to energy efficiency. This was brought home particularly starkly recently by the revelation by Greenpeace, that on the very day the UK Government triggered Article 50  it was also lobbying the EU Commission  on behalf of the energy companies, to drop or at the very least make voluntary, their energy efficiency proposals (1). Proposals incidentally that wouldn’t take effect until after the UK had left the EU.

To get all this in context, Government advisers recently found that shifting to A-rated fridge freezers, installing low energy light bulbs instead of incandescent, and  switching to condensing boilers, reduced the average household energy bill by £290 between 2008 and 2016. Overall, households pay about £115 a year less for energy in real terms than they did nine years ago (2). That is a saving that puts any putative ‘cap’ into perspective, and it doesn’t go away after a couple of years. The contrast with Germany where winters are considerably colder than in the UK but energy use per household a lot lower, is striking. There, a Government announcement a couple of years ago that all houses built before 1978 would be fully insulated by 2020 (why pre-1978 you ask? Because all houses post that date are already done) contrasts with the current Government promise to insulate one million houses by 2022. One million houses doesn’t sound too bad, until you realise that in 2007 2.5 million were done in a single year. On present trends we can see insulation measures going into homes will have fallen by 88% in a decade by the end of this year.

But consumer power is out there and the energy companies know it.  Remarkably, considering our reputation for poor weather and Government hostility, the UK is still leading solar growth in Europe (3). Indeed on one weekend in March, solar power broke a new record. The demand for daytime electricity in UK homes fell to night time levels. This was thanks to solar panels on roofs and in fields when solar panels created six times as much electricity as coal-fired power stations that day. There is no doubt that reducing energy demand is absolutely vital to reduce household bills as well as promote the transition to a greener economy, but the grip that energy companies have over us is being loosened by the day, as consumers and businesses defect from the grid by using solar, wind, smart demand response systems, and the emerging battery storage systems being pioneered by the likes of Tesla and Moixa.  As the tipping point nears, where consumers turn from being passive and put upon customers, to energy creators, the Government is about to be left on the side lines.

1.       Adam Vaughan: UK lobbies Europe to dilute flagship energy efficiency law. Guardian 28 May 2017

2.       Britain wouldn’t need price caps if the Tories hadn’t shredded energy saving schemes (Business leader). Observer 14 May 2017

3.       Caterina Brandmeyr et al:  People power: how consumer choice is changing the UK energy system. Green Alliance April 2017

This article first appeared in the June 2017 issue of Town and Country Planning.

 

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