Archive for December, 2009

Climate Deal to Increase Domestic Energy Prices?

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Cop 15As the finer points of the Copenhagen climate talks are analysed in detail, it has become clear that at least two of the decisions made at the summit are unlikely to benefit either the planet or its peoples. Unfortunately, the EU’s green political posturing of late has amounted to very little in the way of definitive action.

In particular, the EU has decided to scrap its plans to cut carbon emissions across its member states by 30% by 2020. Disappointingly, the EU chose not to pursue a 30% reduction in carbon emissions over the next ten years because other countries failed to follow suit.

Amid various political debates, economic deals, side interests, subplots and counter strategies, it would appear that the main point of the Copenhagen talks took a back seat to less relevant issues. Although the main details of the summit are still being picked apart, it would appear that the Copenhagen talks ended in abject failure in terms of countries uniting with the aim of reversing climate change – a result that may have sealed the fate of future generations.

More relevant to domestic energy consumers of this day and age, the talks have also led to the possibility, if not probability, that energy prices will soar even higher than previously predicted.

Two major energy suppliers in the UK, E.ON and Centrica, have warned that the fallout from the EU’s decision to scrap its ambitious carbon emission targets will likely result in higher domestic energy bills. Following the EU’s limp response to the narrow-minded and short-sighted policies of other countries, the cost of carbon, which is paid by heavy polluters, was cut by almost 10% on Sunday on Europe’s emissions trading market. The current carbon price of €12 per tonne of carbon is far from the €40 per tonne required to make building new nuclear reactors financially viable. As stressed by E.ON and Centrica, unless action is taken to raise carbon prices, the cost of going green will be pushed even further onto consumers.

British Gas Announce Pay As You Save Scheme

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As if to prove a point in the wake of the Copenhagen climate talks, mother nature has demonstrated the effects of severe weather changes notably to Britain, Europe and eastern US. Although referred to by some weather experts as a ‘cold snap’, the ice, sleet and snow that has gripped many parts of the world during the past week shows little sign of relenting. Snow conditions in the US have reached blizzard proportions, with around 16 inches of snowfall reported in many states and up to two feet predicted in New England.

UK SnowIn Europe, scores of people have died as a result of freezing temperatures, whilst southern Germany recorded temperatures as low as -33 centigrade and thousands of passengers travelling between the UK and France suffered badly following the breakdown of the Eurostar network. As the predicted effects of climate change include the possibility of a new ice age, it is not difficult to draw parallels between this extreme ‘cold snap’ and what is known about global warming.

At this difficult time of the year, it is important that households keep central heating systems running throughout the day and night – if only to avoid problems with freezing pipes and broken down boilers. However, high domestic fuel prices have forced many consumers to reduce their energy consumption recently, especially during the Christmas period. As such, people can be forgiven for setting aside plans to give their homes an environmentally friendly upgrade.

Despite this, homeowners may wish to spare some thought to a British Gas scheme quietly announced on the same day the Copenhagen talks commenced. The Pay As You Save pilot scheme will be available for up to 100 homes initially and provides homeowners with £10,000 to make their properties more energy efficient. The £10,000 is available in the form of a loan which can be repaid over a 25 year term through the money saved by reducing bills or the profits generated from supplying energy back to the National Grid.

Is Darling’s Boiler Scrappage Scheme Enough?

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£400 of a new boiler with Darling's Boiler scrappage schemeThe Chancellor’s pre-budget report for 2010 has an obvious hint of pre-election bias about it, at least so far as it could have taken a tougher stance on the national debt.

However, as previously discussed in this blog, the pre-budget report represents good news for domestic energy consumers in so much as the Boiler Scrappage Scheme will allow up to 125,000 homes to benefit from a cash incentive of £400 for replacing old central heating boilers with a newer, more energy efficient condensing boiler. Clearly, this is likely to benefit energy consumers who can, according to the Energy Saving Trust, expect to save around £235 per year on gas bills.

Furthermore, gas boilers are thought to account for around 60% of the carbon emissions from an average UK home, so it is entirely sensible to address the efficiency of such boilers in order to meet environmental targets. Notwithstanding this, is the Boiler Scrappage Scheme’s cap of 125,000 households enough to make a significant difference to the environment? In consideration that there are approximately 4.5 million households in the country that could apply for the £400 cash incentive, it is quite clear the cap fails the scheme’s potential in so far as it only accounts for 2.7% of eligible households. Nevertheless, the boost in new boiler installations will help to stimulate the economy whilst it is also predicted to cut carbon dioxide emissions by 1.26 tonnes per home per year.

Other green measures outlined in Alistair Darling’s pre-budget report include the feed-in tariff scheme, which will start in April 2010 and aims to guarantee the minimum value of power returned to the National Grid. Indeed, the feed-in tariff scheme is expected to earn households that generate their own green electricity through wind and solar power around £900 per year on average. Moreover, this figure would not be subject to taxation. The Chancellor also reserved an additional £200 million for existing energy efficiency initiatives, which include cavity wall and loft insulation, that would benefit a further 75,000 homes nationwide.

Boiler Scrappage Scheme Plans Announced

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Boiler scrappage scheme announcedThe UK government confirmed plans for its long awaited boiler scrappage scheme in its pre-budget report yesterday. The scheme is the culmination of a 10 Downing Street petition started by Mick Willaims of Williams & Co., a plumbers’ merchant in the south of England and led by Sian Berry’s Reheat Britain campaign .

The scheme will help secure thousands of jobs within the boiler and plumbing industry whilst saving thousands of pounds of wasted domestic energy and thousands of tonnes of carbon dioxide emissions every single year.

The scheme applies to boilers rated at 70% efficiency and less (‘G’ rated) and provides for a £400 incentive for the homeowner to upgrade their ageing and fuel hungry boilers. The scheme is expected to commence in early 2010 with an estimated allowance of 125,000 households. There are currently over 4.5 million inefficient boilers in the UK which will be eligible for the rebate, we’ve compiled a handy boiler scrappage rating check to see if you may qualify for the rebate.

UPDATE:
The scheme has now been launched, please see our guide: How To Apply for the Boiler Scrappage Scheme

UK Government Outlines Smart Meter Implementation

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The Department for Energy and Climate Change (DECC) has recently outlined plans to install smart meters in all UK homes by 2020, which will require that some 48 million meters are fitted in approximately 26 million properties over the next ten years. Therefore, it should come as no surprise that the scheme is set to cost a pretty penny, with current estimates in the region of £8 billion.

Nevertheless, the DECC argues that the smart meters are necessary in order to effectively monitor domestic energy usage, which is essential if the country is to live up to the Government’s greenhouse gas emission targets. Moreover, as climate change strategies are currently under discussion in the Copenhagen Climate Change Conference, which is due to close on the 18th December this year, it is quite possible that existing Government targets will be revised in the new year.

In any case, the need to cut carbon emissions, which refers broadly to various greenhouse gases such as carbon dioxide and methane, is extremely important in a world that is thought to be heading towards climatic catastrophe. Notwithstanding this, domestic energy consumers will no doubt want to know precisely what smart meters are, how they operate and whether they will subsidise the bill of introducing them to homes throughout the country.

In respect to the latter question, energy companies in the UK will be responsible for installing the smart meters in homes, so no fee will be charged to consumers directly. However, it is estimated that energy bills will increase by around £15 per household per annum up to 2020, although £10 of this is expected to be covered by the savings generated from there no longer being a requirement for people to read gas and electricity meters. Nevertheless, it is thought that smart meters, which are capable of monitoring gas and electricity usage throughout the home in detail, will save consumers around £25 to £35 each year by providing them with real time information of their energy consumption and costs.

Ofgem Warning to Gas Suppliers: Reduce Consumer Bills

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The rising cost of domestic energy bills has long been a cause of concern amongst UK consumers, watchdogs and charitable organisations. Indeed, millions of homes throughout the UK are now thought to be suffering from some form of fuel poverty, which refers to those who spend more than 10% of their household income on heating bills.

Gas & Electricity PricesUnfortunately, fuel poverty is not merely the preserve of the near destitute – on the contrary, the term has managed to creep its way into the collective conscious of many millions of people throughout the country. As such, it was with considerable disappointment that Ofgem’s previous commentary on high energy prices was published without a clear direction for those ultimately responsible: the energy suppliers themselves.

On Monday, however, Ofgem released a warning to gas suppliers that energy prices must fall in line with the drop in wholesale gas prices by the New Year. As reported in the BBC online news service, Ofgem advised that gas suppliers must no longer “use investment as a shameful excuse to overcharge consumers”. In fact, the normally submissive regulator, whose main purpose is to ensure healthy competition exists between suppliers, has been quoted as saying it “will not shy away from proposing radical reform to protect the interests of consumers”.

Although Ofgem’s warning is anything but specific, it nonetheless marks a departure from its previous stance of ‘observe and report’, which had lacked any kind of bite that would upset energy suppliers. Nevertheless, it remains to be seen whether Ofgem has grown teeth since its last discussion on low wholesale fuel prices and disproportionately high consumers bills. In the meantime, fuel poverty is an issue that is probably going to worsen unless suppliers reduce bills. In fact, the latest figures for 2009 suggest that almost 5 million households in England alone are suffering from fuel poverty, which is why Ofgem’s interim advice to consumers is to shop around for the best deals, as this could save around £200 on the typical annual bill.

South Lanarkshire Council Consents to E.ON Wind Farm

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Wind turbines approved for DungavelOne of the UK’s leading energy companies, E.ON, announced on Tuesday that planning consent had been granted by the South Lanarkshire Council for the development of its proposed Dungavel wind farm. Situated on Dungavel Hill, which lies to the south of Strathaven, the wind farm’s approval is likely to stimulate employment in the region whilst it will also provide a significant amount of renewable energy for the local community.

In fact, the Dungavel Hill wind farm is estimated to produce up to 29.9 MW, which is enough to power some 20,000 homes based on the UK’s average annual consumption of 4,725 kWh per home. Comprising thirteen large wind turbines, the project is also thought to reduce carbon dioxide emissions by approximately 40,000 tonnes per year, which is also based on current Government statistics.

However, whilst the approval of the Dungavel Hill wind farm project will come as good news to all those concerned about the planet, such ventures are not always met without opposition. Indeed, many a so-called NIMBY (not-in-my-back-yard) has objected to similar projects throughout the UK on the grounds that the rather unsightly wind farms spoil the environment, which ought to be preserved at all costs. Although the irony of such an argument evidently fails to dawn on protesters, it is quite clear to most ordinary folk that protecting the planet – in terms of ensuring its habitability for human beings – involves cutting carbon emissions by massive amounts.

Of course, not everybody agrees with the climate change forecasts of which they are constantly reminded. Nevertheless, there is sufficient scientific evidence to show that the protective ozone layer surrounding the planet is fast disappearing and that certain greenhouse gases – notably carbon dioxide – are chiefly to blame. Therefore, it is with considerable satisfaction that the Dungavel wind farm, which will make a significant local contribution to carbon emission targets, has been met with little opposition.

Cheaper Solar Power for Domestic Central Heating

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Solar Roof Panels Most people are now familiar with terms such as global warming, the greenhouse effect and carbon footprints, which is why many people have chosen to live their lives in an altogether greener and more environmentally friendly manner. Indeed, if the planet were to suffer the sort of climate change predicted by scientists, human beings would not fare too well.

However, it is arguably not too late to do something about the state of the planet, which is why numerous homeowners attempt to do their bit by insulating lofts, cavity walls and upgrading their central heating boilers.

Greener initiatives include solar panel installations, which had become popular throughout the UK before losing favour to a certain extent. Indeed, rightly or wrongly, solar panels have become associated with cost inefficiency, which is certainly not a desirable badge to wear in the current economic climate. However, tests undertaken by the independent EU Energy Institute suggest that domestic solar panel installations actually constitute excellent long term investments. In fact, the EU Energy Institute predict that solar panels will be competitive with energy supplied by the grid in terms of cost for around half of all homes in Europe by 2020. Furthermore, this is apparently achievable without Government subsidies.

The Institute also conducted tests on existing solar panels and found that around 90 percent of models could last for some 30 years instead of the predicted 20 years. This encouraging find has prompted the Institute to suggest that banks ought to offer mortgages on solar panels in order to help stimulate the market. Moreover, as solar panels are manufactured in bulk, the inevitable increase in supply will naturally reduce prices. According to the Institute, solar panel costs dipped by 30% in the previous year and are likely to drop further as output increases and demand is tempered by the ongoing economic problems.