Archive for January, 2015

The latest energy statistics show that the average person in the UK is using 10% less energy than they were five years ago, despite a (slightly) growing economy according to analysis from the Energy Savings Trust.

Advances in technology and an increasing focus on energy efficiency seem to have broken the link between growing wealth leading to higher energy use, despite an ever-increasing number of gadgets, larger TVs and so on.

According to the BBC report, EU regulations on household appliances have played an important part, with, for example, the latest A-rated fridge-freezer using 73% less energy than a 20-year old model. The ban on old-style incandescent light bulbs and fast-improving LED lighting technology is also having an impact. According to the Committee on Climate Change, the average household energy bill would be around £165 higher between 2004-13 if these savings had not been made.

Significant improvements in gas heating and hot water boilers coupled with increased loft and cavity wall insulation mean that the typical household uses 25% less gas than 25 years ago.

The overall impact is that the UK’s energy use is lower than it was in 1970, despite the economy being twice the size.

Government energy policies, which have played a vital role in this shift, may not be the most popular (green taxes etc), but this analysis clearly shows the individual and national benefits of proactive energy efficiency – and for most businesses there are still substantial savings to be made.

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For qualifying organisations, 2015 promises to be the year of the Energy Savings Opportunity Scheme (ESOS), the compulsory energy audit for businesses with 250+ employees, or turnover of €50m+ and balance sheet of €43m plus.

The audit must be completed by 5 December 2015 or fines of up to £90,000 could be imposed, so companies must appoint a registered Lead Assessor to oversee the ESOS process and confirm that the business has been audited in a compliant fashion.

It’s important therefore that ESOS-qualified organisations start the audit process as soon as possible

  • you’ll need 12 months of accurate data (buildings, transport & processes) for all energy purchased and used within the business
  • there will be pressure on ESOS Lead Assessors towards the end of the year, which in turn could push up the cost of compliance
  • leaving it to the last-minute means you may have no choice but to do an expensive full ESOS audit, rather than taking your time to identify the most effective route to compliance, building on your existing energy savings measures/policies
  • undertaking an early ESOS scoping assessment will ensure that you opt for the most cost-effective solution, but also the one that identifies the most commercially and financially viable energy savings

A key consideration should also be the choice of Lead Assessor, which will influence whether ESOS becomes a box-checking exercise or something that maximises potential savings and long-term value.

It’s important therefore to work with someone with relevant sector experience and a strong record in energy management, so do get in touch to discuss how you can best comply.

 

Related articles:

ESOS: any lead assessors out there

ESOS… another energy acronym, but one that could save you money

ESOS is coming: what does it mean for you?

 

 

Record low oil prices and the hottest year on record combined to push electricity and gas prices to unexpected lows during 2014, despite continued conflict in the Middle East and deteriorating relations between Russia and the West over Ukraine.

Whether oil remains at its current level – currently about US$55 a barrel compared to US$115 six months ago – is the key question, with the usual range of predictions as to what happens next.

One influential forecast from the US Government’s independent Energy Information Administration expects downward pressures to remain during most of 2015, which is good news, though there’s always scope for the unexpected to reverse this. Issues to watch include OPEC reversing its current stance and cutting output, or a renewed flare-up between Ukraine and Russia leading to disruption of supply to Europe.

Commercial electricity prices are increasingly determined by non-energy costs, however, with low carbon policies and investment in transmission and distribution infrastructure now accounting for over 40% of energy costs. This means that changes in the wholesale cost of electricity has less influence than it used to, but as these non-energy costs will definitely increase over the next few years even a small increase in wholesale markets will start to see prices pushing higher quite quickly.

What to do?

  • While wholesale prices remain low it continues to be a good time to check renewal options for any contract due to terminate during 2015
  • Fixed or pass-through? When comparing prices make sure you know whether the offer is for a fixed contract (one that includes future increases in charges such as the Feed-in-Tariff) or pass-through (where future increases are passed-through to you)
  • Whenever possible go for the fixed option as it ensures you’re not hit with unexpected charges, while also ensuring that you select the best overall price, as a low-priced pass-through contract may turn out to be more expensive in the long-term