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The Energy Bill - a case of government oversight
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The shorter and colder days of winter mean higher energy bills for many businesses. Research has found that an office based company will use 50% of its annual gas consumption in winter1. So, it's no surprise that many businesses are focused on cutting energy usage, not only to save money but also to build corporate reputation.


The UK government's Energy Bill seems to be a timely arrival for many organisations. Plans to reward those companies cutting energy usage are a welcome step forward.  Energy Secretary Ed Davey goes as far as saying that the Bill represents "the biggest transformation to Britain's electricity market since privatisation". However, this glowing endorsement is by no means a reflection of political harmony. Just weeks after the announcement, the Conservative chair of the parliamentary Environmental Committee, Tim Yeo, stressed the need for a decarbonisation target, which was not included in the Bill.

Whatever the political fallout, when it comes to reducing energy usage many will feel the government has missed a great opportunity.

The aim of the bill is to reduce the UK's dependence on fossil fuels, instead moving to a more diverse mix of energy sources, such as wind, nuclear and biomass. The government believes that this will fill the energy gap left by the closure of a number of coal and nuclear power stations over the next 20 years.

However, this focus on finding additional sources to create more energy has come at the expense of looking constructively at efficiency saving measures to reduce the amount of energy actually used. Detail regarding improving energy efficiency - including plans to financially incentivise businesses, improve access to relevant information, and incorporating reduced energy usage into building standards - has been sidelined, appearing only in a consultation document2. And whilst the government will potentially shield some energy-intensive industries from subsidising these developments, other businesses and consumers - who can ill-afford any increase in bills - will end up paying billions of pounds more for electricity to make up the shortfall. Government estimates show that these and other subsidies for low-carbon power will add £95 to household bills by 20203.

The capacity for UK plc to reduce the energy that it uses is massive, and the savings - in terms of energy and expense - that are achievable are significant. In fact, it has been estimated that if industry made the very simple switch from traditional factory lighting to energy-efficient lighting, Drax power station - the UK's single largest emitter of carbon dioxide - could be closed. Across the UK innovative companies are developing products designed to improve energy efficiency. These range from sophisticated monitoring devices that provide a detailed breakdown of usage, to products like low-energy lights able to cut bills by 80% and motor controllers which monitor loads 100 times a second to calculate the exact amount of power required at each precise moment.

There are some common areas where energy is often wasted, and where the biggest savings are possible. For example, on average, 25% of an organisation's electricity costs come from lighting4. And yet, LED tube lighting typically saves in excess of 70% of electricity costs with the added benefit of being a very low maintenance solution.

Creating a working culture around electricity saving initiatives is always a good starting point for businesses looking to improve energy efficiency. Regular staff meetings can help employees at all levels engage with the issue. Light switches should be clearly labelled to help employees select only those lights they need for the work being carried out. In addition, by ensuring timers are set to match trading hours you will experience immediate benefits to lighting costs. Meanwhile occupancy sensors are ideal for a store where cleaning or security staff work late.

For businesses looking to go a step further and invest in energy saving projects, engaging an expert to perform an audit to assess usage and where power is being wasted is essential. This will make it easier to identify the best technologies to invest in, and ultimately make the whole exercise more successful.

The Energy Bill has brought the topic of energy efficiency to the fore, and this is certainly positive, especially as many businesses struggle to cope with rising fuel prices. However, the continued focus on alternative and renewable energy is disappointing. Indeed some companies may be dissuaded by the large investments associated with renewable energy sources, and ultimately be put off examining their energy efficiency potential altogether. As the Climate Change Minister acknowledged, "The cheapest form of energy is the energy that you don't use." This admission makes it all the more baffling that proposals related to reducing energy usage have been relegated to a consultation document, rather than forming the main focus of the Energy Bill.



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