Smart meters are set to be installed in businesses across the country over the next few years but many people still have questions about smart meters including how much will they cost?
The Hub recently looked at how smart meters will help small businesses and the country as it moves towards a low carbon economy.
Ofgem answers a number of questions regarding smart meters on its website.
How much will smart metering cost me?
The answer is that smart metering will cost a small amount but these costs make up only a small element of customer bills. The benefits of the smart meter outweigh the costs with the net benefit to business consumers being around £100 a year by 2020.
How will I be protected?
Energy providers installing smart meters will have to comply with a code of practice which governs the installation of the meters. The code considers how businesses will be affected and will try to ensure that businesses face a minimal amount of disruption. Ofgem will be responsible for protecting the interests of business consumers before and during the roll out.
Will I still be able to change supplier?
In a word yes you will. Meters will be able to work together to ensure it’s still possible to compare business energy prices and switch supplier. As soon as mass roll out begins in 2014 there will be some technical specifications which all smart meters will have in common and a central Data Communications Company (DCC) will be formed to ensure interoperability. In circumstances where suppliers don’t use the DCC for smart meters arrangements will be made to protect consumer interests.
How will the Data Communications Company (DCC) affect me?
The DCC will manage data to and from smart meters but in the smaller business sector use of the DCC will be voluntary. It’s highly likely that energy providers installing smart meters will use the services of the DCC for both domestic and business customers. However, some may choose to make their own arrangements and not use the DCC.
The International Energy Agency (IEA) has said the draft energy bill which the Government announced last week, could increase business costs.
The International Energy Agency said that a number of features of the energy bill are “more than is strictly necessary” and could lead to higher business energy prices.
Utility Exchange reported last week that campaigners had warned that the bill could result in higher energy bills for consumers and the IEA has reiterated this.
The reforms are designed to move the country towards low carbon energy generation and replace aging coal and nuclear power plants while maintaining low prices. However, the IEA warns the proposals could lead to higher electricity prices as energy providers via for government subsidies rather than working on keeping prices and costs down. It also said the reform package was a “pioneering effort” but also “untested”.
The report from the IEA also warns that the bill could mean low carbon energy generation could be side lined in favour of more gas fired power stations. The report advises the UK government to encourage an “efficient mix of new, cleaner generation, more efficient use of existing infrastructure and more flexible demand”.
The executive director of the IEA, Maria van der Hoeven, said “Huge private-sector investments in energy infrastructure are needed. Consumers must be certain that they are paying for the most cost-effective solutions”.
The features of the energy bill including “contracts for difference” (CfD) are what the IEA calls a “fundamental departure” from market based principles and suggests they “will need to be carefully monitored and adjusted to ensure that they complement market-based incentives for timely, efficient and innovative private sector responses, and do not become an expensive and ineffective substitute for them”.
In response to the IEA review of the UK’s energy policy, the Minister of State for Energy, Charles Hendry, said “Our draft Energy Bill is focused on making sure we create the right market conditions to encourage long-term stable investment which will allow us to meet our carbon targets, keep the lights on and consumer bills down”.
The largest independent oil refinery in the UK could close after administrators said they were unable to find a buyer for the site in Coryton, Essex.
The owner of the refinery, Petroplus, went into administration earlier this year. If the site was to shut down 850 jobs would be lost. The administrators, PricewaterhouseCoopers (PwC), said a buyer had not been found, blaming the £625m needed to keep the refinery going.
Refinery operations could stop as early as 4 June if a buyer is not found and PwC is currently in discussions with trade unions regarding job losses.
Talks are still on-going with interested parties who are looking at turning the site into a storage terminal. This would help to reduce any impact on petrol supplies if refining on the site was to stop.
The AA has said it is concerned that closing the refinery could mean speculators again push up the wholesale price of refined fuels resulting in higher petrol prices for consumers. High fuel prices have hit businesses hard especially as they also face rising business electricity prices.
A spokesman for the AA, Luke Bosdet, said “Our concern is speculators will now seize on this latest news to drive up the price at the pumps because there will be a perceived reduction in supply following the Coryton closure”.
The AA says consumers are still paying more than they should be at the pumps as wholesale fuel prices have fallen by around 10p a litre over the past 14 days.
The Coryton refinery supplies around 20% of the fuel in the south east of England. The Department of Energy & Climate Change (DECC) however, has said closure of the refinery will not affect petrol supplies.
A spokesperson for the DECC said “We want to reassure people that there will not be any impact on fuel supply from this development. Continuing jetty operations at Coryton means that there should be no loss of supply through the terminal to London and the south-east”.
There’s been a lot written about the Carbon Reduction Commitment (CRC) but what is it and who does it affect?
The CRC is now known as the CRC Energy Efficiency Scheme. It’s a compulsory scheme aimed at reducing CO2 emissions from large businesses. Large businesses and public sector organisations produce 12% of the UK’s carbon emissions.
The scheme compels businesses to report how much energy they use and they then have to pay a tax on the amount of carbon they have emitted.
So which businesses are affected by the scheme? Businesses qualify for the scheme if they consume more than 6GWh of electricity through half hourly meters in 2008. They have to register with the Environment Agency, the organisation administering the scheme.
Organisations taking part in the scheme will not only help to reduce carbon emissions but they will also save money by reducing their energy bills. A league table shows how different organisations perform and the better they are at cutting emissions the higher they will appear in the league table.
The Government has recently proposed changes to make it simpler while keeping the parts of the scheme which encourages energy saving but reducing the amount of bureaucracy.
According to the Department of Energy and Climate Change website the proposals to simplify the scheme include:
- Shortening the CRC qualification process.
- Reducing the number of fuels covered by the CRC from 29 to 4.
- Reducing the amount of reports required by businesses.
- Reducing the length of time participants will have to keep records.
- Removing the requirement on facilities covered by Climate Change Agreement or EU Emissions Trading System installations to purchase CRC allowances.
- Adopting new emissions factors for the CRC which will align it with Greenhouse Gas reporting processes.
- Removing the detailed metrics of the Performance League Table from legislation and placing them in government guidance
Consultations on the simplification of the scheme are still taking place and the deadline for responses is Monday 18th June.
More details can be found on the DECC website and the Environment Agency site.
Sky’s offices in London could be the greenest in Europe with a new wind turbine to boost their credentials.
The broadcaster has had a new 100kw wind turbine installed to generate enough electricity to power the lighting at Sky Studios which has been open for almost a year.
Sky Studios already has a combined cooling, heating and power biomass plant (CCHP) on site as the company moves towards its target of all company owned sites getting at least 20% of their energy from renewable sources by 2020.
The CCHP and the wind turbine will help the organisation to reduce their business electricity costs. The studios have a number of green features including a rainwater harvesting facility, energy efficient lighting and natural ventilation for the offices and studios.
Head of environment at Sky, Fiona Ball said “As well as contributing towards our 2020 on-site renewable energy goal, the turbine’s position at the heart of our campus has got everyone very excited and is a clear demonstration of our commitment to reduce our carbon emissions”.
She said Sky would probably install wind turbines at more of its sites in the UK.
Utility Exchange has talked about ways of reducing business electricity costs on The Hub. As business electricity prices increase and will undoubtedly continue to rise, it’s important for businesses to look for ways to reduce their energy costs. While not everyone can have an on-site wind turbine, there are simple actions which can be taken to help reduce costs, such as turning off computers, printers and photocopiers at the end of the day and using low energy light bulbs. For more business energy saving tips visit The Hub.