More than half of the energy used to supply the UK’s electricity is wasted before it ever reaches customers, says a new industry report.
It also revealed that the 54% of the wasted energy equated to annual losses of £9.5 billion.
A coalition of industrial bodies such as the Food and Drink Federation, EEF, and prominent environmental groups, collaborated on the report, which revealed that fewer than 10% of UK power stations currently recovered waste heat, largely because much of the existing power infrastructure dated back to the 1960s and 70s.
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
Paul Raynes, EEF Policy Director
“This represents a missed opportunity to save £2 billion annually,” the report said.
Although UK networks are required to reduce losses as far as ‘reasonably practical’ or economically viable, the report also said network efficiency had not improved since 1990.
“All this waste undermines efforts to create a competitive, modern economy as both consumers and businesses are faced with higher energy costs.”
It also revealed only limited efforts to reduce network losses such as congestion reduction, by recognising losses through wholesale prices, or distribution network demand side flexibility.
If half of current centralised thermal generation was instead directly connected at the distribution level near demand, the avoided transmission losses would save energy users £135 million annually, the report found.
“British firms and British consumers are paying swinging surcharges on their power bills whilst these far lower cost options remain untapped,” said Paul Raynes, EEF Policy Director.
“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.”
To remedy the situation, the report suggests the government seeks to improve energy-system productivity year on year as is done in the US and Germany.?
A revised energy tax regime with clear, simple and investable policy and a more solution-based approach to energy policy assessments, allowing the demand side and the supply side to compete equally, was also recommended.
Louise Kingham, chief executive of the Energy Institute (EI), said: “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 longterm 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.”