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A new report reveals that £9.5 billion of commercial energy is lost every year, with UK business energy costs potentially £570 million lower. How and why?
A report released today shows how more than half of commercial electricity is lost before it reaches homes and businesses.
The analysis, led by the Association for Decentralised Energy (ADE) finds that wasted total loss of energy equals the power generated by: 37 nuclear power stations; a landmass the size of England of bioenergy crops; or wind turbines covering 40% of Scotland.
The waste dwarfs nearly all proposed efficiency measures, with the report claiming it undermines efforts to create a competitive, modern economy as both consumers and businesses are faced with higher energy costs.
Ageing power stations, inherited from the public system of the 1960s and 70s, are one of the most glaring issues. Less than 10% of UK power stations currently recover waste heat, a missed opportunity to save £2 billion annually.
The UK’s electricity network’s efficiency also leaves much to be desired. Network efficiency has not improved since 1990. If UK transmission and distribution losses were equivalent to those in Germany (the best in Europe), energy users would save £605 million a year.
There are some incentives: UK networks are required to reduce losses as far as ‘reasonably practical’ or economically viable and the regulator, Ofgem, can reward network companies for reducing losses up to £32 million over the next five years. Yet this is insignificant compared to the Capacity Market, which will potentially add more than £1 billion onto consumer bills to build new power generation every year.
Of most relevance to small to medium sized businesses is the revelation that long term policy support could cost-effectively reduce business and public sector bills by £570 million.
The 14 organisations that have collaborated to publish Less Waste, More Growth: Boosting energy productivity, including representatives of industrial manufacturers such as EEF and environmental groups such as Greenpeace, claim that there are immediate, practical and cost-effective ways of reducing this waste, which could save the equivalent of more than £3 billion a year.
Louise Kingham, chief executive of the Energy Institute (EI), said the EI’s own research among its members highlighted the need for a systemic and more efficient approach to generating energy and therefore reducing waste – better balancing the energy system as a whole, across both supply and demand. “There is also a call for greater policy continuity to ensure there is a long term ambition by Government to achieve those goals. It is a huge challenge, but one that, together, I believe we can meet for the benefit of all.”
The report outlines three main recommendations to help achieve these savings:
Many UK SMEs may understandably be frustrated to realise that much of their business electricity tariff or business gas rates are in fact due to wastage.
As Paul Raynes, EEF Policy Director, said: “British firms and British consumers are paying swingeing surcharges on their power bills whilst these far lower cost options remain untapped. The sinful waste of energy before it before it even reaches those bill payers isn’t fair on them, or the planet.”
Tim Rotheray, Director at the Association for Decentralised Energy, shared similar sentiments: “The fact that we waste enough energy to pay half the electricity bill of every home in Britain should be a national embarrassment. Wasted energy reduces our productivity, undermines efforts to create a competitive economy on a global level and causes unnecessary emissions.”
SwitchMyBusiness.com agrees that the Government and business energy suppliers can and should cut business energy waste. However, despite the report’s identification of its recommendations as straightforward, we believe that in the current straitened economic circumstances, the necessary investments will take time to materialise.
In the meantime, making business energy efficiency savings will help, as Dr Douglas Parr, Policy Director at Greenpeace UK, said: “Cutting energy waste wherever possible should be a no-brainer. You can lower energy bills, cut carbon emissions, and boost energy security at a single stroke.”
However, the easiest way to reduce spending on business energy is almost always to switch business energy suppliers, especially as an array of unpredictable events can influence business energy bills.
Even those locked into a long contract could find that paying the exit fees still leaves them significant savings. And doing this comparison doesn’t have to be onerous: to compare business energy suppliers can take just 20 minutes: give us a call on 0330 0100 251 (or request a call back using our form).
"Very easy. Bea Luseni very efficient & knowledgeable."This review was posted by Alan Duffy on the 31st of March 2017
Super helpful and easy to work with
"Recommend this company in a heartbeat - Nicole Borneuf was super easy to talk to, was not pushy in the slightest, very helpful and replied with all my questions very professionally and did all she could to help. I had to deal with a few companies to sort my business energy out, all but Nicole were too pushy for my liking and I refused to follow through with them. Thank Nicole - you are a credit to your company, thank you for making the stressful energy change so easy."This review was posted by Mia Drew on the 29th of March 2017
An Extremely Competent Company
"Switch my business has not only helped my SME secure a good energy deal for the second year running but Jessica swiftly found a alternative supplier for me when I was let down on the day of switching by the new contractual provider I had chosen some 4 months previously. Being suddenly out of contract and without provider is everyone's energy nightmare. Greatest thanks."This review was posted by S McMillan on the 29th of March 2017
Helpful, friendly and we saved lots of money!
"Jessica Purnell was helpful and friendly, she made the whole process easy and simple AND we saved lots of money thanks Jess"This review was posted by Melanie Baker on the 23rd of March 2017
Quick & Easy
"Kabibi was very helpful and the whole process was very efficient. The one small reservation I had was that I was phoned up by Kabibi almost immediately having received my online quote - which wasn't enough time for me to finish reading the quotes! Fortunately she was able to assist me in a greater savings on both Gas & Electricity, and so as long as the switchover is seamless I will remain very happy with the service."This review was posted by Amanda Brown on the 21st of March 2017