Wasted energy: Business groups urge government to do something about losses


blown bulbMore than half of the UK’s energy is lost in the transition from generation to end use and government needs to address those losses or everyone will pick up the tab.

That’s the message from a consortium of institutions, trade associations, green groups and business lobbies.

The group, led by the Association for Decentralised Energy (ADE), have released a paper that reiterates much of what the ADE has been saying for some time.

Three key government actions would drastically cut energy system losses and make the UK more competitive and energy efficient, according to the group. Their paper, hosted at the ADE’s website, states:

  1. Government should aim to improve energy system productivity year on year as is done in competitor countries like the United States and Germany, with the purpose of reducing energy costs for users.
  2. Electricity generators, networks and businesses should be able to contribute to a strong, more productive economy. For business, this means combining a revised energy tax regime with clear, simple and investable policy to leverage improvements in energy productivity
  3. Government should enhance the natural market direction with a more solution-based approach to its energy policy assessments, allowing the demand side and the supply side to compete equally.

One of the three actions appears to be progressing as Treasury begins the process of simplifying business energy taxes. Setting continuous improvement targets for energy system productivity would also be relatively straightforward. However, companies that provide demand side response services have long argued that current government policy favours traditional generators over demand-side response providers.

One demand-side firm, Tempus Energy, is challenging whether the legality of the capacity market claiming that “a five year old” could see that “it is anticompetitive“.

The Association for Decentralised Energy has long argued that the “mind-bendingly complex” mess of energy taxes needs redesigning, and that government is increasing the cost of decarbonisation by picking technology winners. Association director Tim Rotheray has also previously slammed government for measuring the wrong thing when it comes to energy energy efficiency by focusing on final energy demand over primary energy savings.

The coalition of 14 organisations are now voicing those problems and solutions at greater volume.

Launching the paper, Rotheray added: “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. It does not have to be this way. The productivity review is a great opportunity for Government to focus on how it can support investment in cutting energy waste.”

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. Whatever our differences on clean energy the Government must surely realise the obvious benefits of making our energy system more efficient. The broad sweep of organisations supporting this initiative shows that a genuine welcome awaits an effort in this direction.”

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. We should prioritise opportunities to cut carbon emissions in ways that don’t hurt consumers or competitiveness.”

Louise Kingham, chief executive of the Energy Institute (EI), commented: ”Our own research among EI members has 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.”

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