Archive for May, 2013

A UK property management company wanted to cut energy consumption at its headquarters building, so signed up to the Energy & Carbon Management Gold Standard energy services programme which reported monthly on the building’s energy use. The detailed analysis identified consumption trends, peaks, troughs and any variances.

The first E&CM report showed that immediate savings could be made by resetting the building’s internal climate control systems to ensure the heating was on only during office hours when staff were present. It also highlighted how further savings could be realised if staff switched off their computers and other electrical equipment at the end of the day.

The client subsequently rolled out the E&CM energy services programme to its entire UK operations, benefiting their tenants through reduced consumption and lower utility costs. E&CM is now managing the installation of new gas loggers, which should support help identify further savings on gas consumption.

Savings delivered:

  • a 59,000 kwh annual savings on energy consumption
  • a £5,900 annual savings on head office heating costs
  • a 12% reduction in energy consumption after 6pm

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Chancellor relying on uncertain shale gas fracking to cut energy prices

In his March 2013 budget George Osborne announced tax incentives to encourage investment in shale gas extraction (‘fracking’), trumpeting the UK’s shale gas reserves as the means to cut energy prices.

English: Map of major shale gas basis all over...

English: Map of major shale gas basis all over the world from the EIA report World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States . License should be for DOE, but I don’t see a template for that. (Photo credit: Wikipedia)

Citing the example of the USA, where prices have plummeted due to significant fracking, Osborne maintains that shale gas could reduce the UK’s growing dependence on imported gas, while also driving down prices.

Scepticism remains, however, about the real impact shale gas might have, most recently in an April House of Commons Environment & Climate Change (ECC) Select Committee report, which found there was “substantial uncertainty” over the impact of shale gas on UK domestic energy prices.

The Committee did recommend that exploration should continue, but stated that “differences in geology, public attitudes, regulations and technological uncertainties” mean that commercially viable large-scale shale gas extraction is far from guaranteed.

Even if the UK develops a shale gas industry, increasing gas demand from Asia is also likely to push international gas prices up, negating any reductions from increased UK production, while concerns remain about the potential for earth tremors and ground water pollution associated with fracking.

What is clear is that those relying on shale gas as a panacea to the UK’s looming energy gap are taking a risk. Continued investment in renewables (on- and off-shore wind, biomass, solar, tidal and wave), a resolution of the nuclear pricing stand-off between EDF and the Government, and short-term investment in new gas-powered generation are likely to play a far more important role in the UK’s future energy mix than shale gas.

Energy & Carbon Management’s review of April’s energy markets shows both electricity and gas falling after the cold weather and pipeline problems of March: gas prices were down 3.86% and electricity by 4.73%.

Increased gas supplies, improved weather, the strength of the pound and (slightly) better than expected UK GDP figures contributed to the fall, as did weaker Eurozone, China and US GDP results, which pushed the price of oil down.

Annual electricity prices also recorded a fall of over 4%, although gas remained at approximately the same level as this time last year.

Indications are that prices should remain soft in the near term, with the caveat that any reduction in gas supply from Norway or an increase in the price of oil could increase price pressures.

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