Last chance to influence the Energy Bill

Companies frustrated at the lack of clear guidance on energy efficiency have just a couple of days left to persuade the Department of Energy & Climate Change to write effective new measures into the Energy Bill - so that positive change finally takes root and utility bills could go down rather than up, says Duncan Everett, managing director at Optimal Monitoring:

On 29 November 2012, John Hayes, the Energy Minister, published the Coalition’s much anticipated Energy Bill, setting out the various measures that will be enforced to ensure the UK’s switch to ‘a low-carbon economy’ - and to attract the £110 billion investment needed to keep up with the nation’s rising demand for electricity.

Within the bill the energy reduction element is by no means finalised. To address this the Department of Energy & Climate Change (DECC) has embarked on a consultation period – open until the end of January – during which it is inviting ideas on how the Government can help businesses reduce their energy and ultimately cost.

This is a valuable window of opportunity for businesses and landlords to have their say, and to help mould requirements while they are still being formulated.

Arguably the biggest thing that needs to happen is the visibility and release of customers’ consumption data so that companies can get a clearer picture of how they are doing – how inefficient their energy consumption is currently, and how much this is costing them.

For all of the practical Government help that is out there for businesses – including incentives like the Green Deal and Enhanced Capital Allowance –how do you decide where to invest in the first place, with any assurance that your investment is going to give a return?

Achieving this level of insight is by no means straightforward as things stand. Even among many very large organisations whose consumption levels are being monitored by smart meters at half-hourly intervals, most are unaware of how to access and interpret this data.

This is because the utility companies own and hold the data, and do not proactively share it with customers - it is hardly in their commercial interests to curb companies’ energy wastage.

The result is that, despite being entitled to this data (and paying for it as part of their standing charges), the vast majority of organisations are none the wiser about their day-to-day carbon performance and any savings that could be made.

Even if they did manage to access the raw data being captured by the energy companies, it of course wouldn’t mean much to them without informed analysis related to their organisation and financial structure.

One of the most positive steps forward, if enough people demanded it as part of the new bill, would be free access to their energy consumption data, however and wherever they want it.

Surely to promote reduction it should be clear to the customer that they own the data. That this data is closely guarded and controlled by the energy providers hardly fosters customers’ freedom to choose or to switch suppliers.

Even if these big players decided to do more to make this information accessible and comprehensible to customers what happens when you change supplier?

Converting inertia

Once companies are better informed about their energy saving opportunities, they are likely to be more inclined to do something about it. At this point, any capital investment needed could be supported by the existing Government grants and schemes, and consumers will begin to realise the financial value in energy reduction. 

Yet so far it has been that crucial first step that has been missing – the acquisition of real decision-supporting information to propel companies forward on the road towards leaner, more environmentally-conscious energy use.

Another practical solution to companies’ apathy is to come up with a certificate scheme that works – i.e. in highlighting businesses’ true environmental performance in a way that is fair, accurate and comparable.

The existing Carbon Reduction Commitment (CRC) scheme is really just a paper exercise and not open to all, offering no tangible value because it doesn’t help companies decide what to do to improve their performance.

With real data and credible comparisons between companies, organisations would no longer be able to bury their heads in the sand and do nothing.

At this point, all is not lost; there is just time to influence the Government’s decisions on energy efficiency and carbon reduction while these aspects of the Energy Bill are still being firmed up, but only if we act quickly.

There is a lot to be said for holding up a mirror for companies and their employees, or landlords and their business tenants, and letting them react to what they see.

Only when presented with the extent – and cost – of poor energy efficiency can the proponents of a solution go to the board with a convincing enough argument for investment into alternative strategies.

Once individuals feel engaged and appreciate the impact of more efficient and responsible practices, they move from sceptics to advocates very quickly, as the DECC has found within its own walls.

After that it’s down to the right incentives (for example varying carbon tax based on companies’ real performance as shown on their DEC certificates) – or threats of exposure through poor public rankings.

If all else fails, it’s worth reminding company purse-holders that wholesale electricity prices are on course to double from 6p to 12p per unit by 2020. That should be enough to rouse any procurement manager from their apathy.

But whatever you do in the meantime, don’t miss the DECC’s consultation deadline of 31 January. Remember that the best solutions are often the simplest, but these can also be the easiest to overlook.

Have your say before it’s too late at http://www.decc.gov.uk/en/content/cms/consultations/edr_cons/edr_cons.aspx or if you would like a recommendation on how to respond we have created three suggested emails – available here: http://info.optimalmonitoring.com/decc-consultation-suggested-responses/