Carbon Reduction Commitment:

Because it’s part of the Climate Change Bill, targeted organisations will be legally required to make the necessary preparations before April, when the scheme officially starts.

The scale of these reformations is like nothing UK business and public sector organisations will have experienced – as the Carbon Reduction Commitment’s primary objective is to reduce carbon emissions from UK organisations by 1.2 million tonnes per year. If that wasn’t ambitious enough, they aim to achieve that reduction figure by 2020.

This growing pressure on businesses, schools and other public organisations to actively lower their emissions is becoming a headache for traditional energy suppliers.

Since the 70s, their estimated billing systems has relied almost entirely on analogue meter readers. But the new wave of carbon focused bills, commitments and acts has sealed the fate of analogue meter readers, which are now becoming increasingly outmoded.

In its place will be Smart Meters, which can accurately monitor and control energy use.

The problem for traditional suppliers is cost of buying and installing Smart Meters on a national scale. Their budget for service equipment is simply too small for a national reformation of their billing system.

Not much comfort to organisations being told they have to comply with legal requirements of the scheme namely, the bit that says publishing (exact) energy emission figures is mandatory.

Enter independent energy brokers, who have been quietly expanding their product offerings in preparation for this new era of emission conscious businesses. It’s now boom time for the likes of Catalyst Commercial Services, who are using their offering of free Smart Meter fittings as an entry-point with the many organisations that traditional suppliers cannot help.

Meaning traditional suppliers could lose out even further down the line – especially considering that independent brokers have acquired carbon reduction focused services and products beyond Smart Meters.

Which goes to show that prosperity favours the prepared, as independent energy brokers are now ideally positioned to supply organisations-in-transition with the efficiency solutions they will eventually need.

OJEC & PASA Energy Purchase:

OJEC stands for the Official Journal of the European Community (OJEC is now recognised as OJEU – the Official Journal of the European Union). This is the publication in which all tenders from the public sector which are valued above a certain financial threshold according to EU legislation, must be published.

The legislation covers organisations and projects that receive public money. Organisations such as Local Authorities, NHS Trusts, MOD, Central Government Departments and Educational Establishments are all covered by the legislation.

It has been published in 22 official languages (23 when Irish is required) of the member states, every working day since the Treaty of Nice entered into force on 1 February 2003. The OJEU superseded the earlier Official Journal of the European Community (OJEC) with the establishment of the European Union.

The term ‘Journal’ is misleading, as production of the hard copy version ceased in 1997, and can now be accessed online via Tenders Direct

Around 2500 new notices are advertised every week – these include invitations to tender, prior information notices, qualification systems and contract award notices. Purchasing Authorities can use the eProcurement portal, myTenders to publish OJEU and lower value tenders.

All three series of the OJEU are published every working day (5 days a week). Approximately 160,000 invitations to tender are published each year, of which more than 14,000 are from the UK or Ireland.

The Publications Office of the European Union (L’Office des publications de l’Union européenne, or OPOCE) is responsible for the production of the OJEU. OPOCE is based in Luxembourg and employs a staff of 655.

NHS PASA energy Framework Agreement

NHS PASA, established in April 2000, is an executive agency of the Department of Health.  

They are not a trading organisation being centrally funded by Government allows us to concentrate on those functions that demonstrate value to the NHS.

Being an integral part of the Department of Health, we are in a key position to advise ministers and Government on policy and the strategic direction of procurement across the NHS. With ministerial support we are leading the ongoing modernisation of purchasing and supply – ensuring that purchasing and supply strategies reflect and contribute towards the achievement of the Government’s policies, strategies and priorities.

Climate Change Act:

The targets set out by the Climate Change Act will not be met without a major overhaul of the energy consumption of existing buildings.  The evidence, says the Royal Academy of Engineers, is staring us in the face, simple maths tells us that the target of cutting emissions by 80% by 2050 is not attainable without radical measures.

Buildings currently account for almost half (45%) of the country’s emissions, with most estimates suggesting that 80% of the buildings we will occupy in 2050 have already been built.

This means that even if we achieve the unlikely goal of completely eliminating carbon from all other sources, emissions will still stand at 36% of today’s rate if nothing is done to improve the performance of these buildings.

A report published by the academy acknowledges the vast scale of the challenge while outlining what could be done to meet it, both in terms of new build and refurbishment.

Report author Prof Doug King, said: “The sheer pace of change in the regulation of building energy performance has already created problems for the construction industry and the proposed acceleration of this process, aiming to achieve zero-carbon new buildings by 2020, will only widen the gulf between ambitious Government policy and the industry’s ability to deliver.”

The report reinforces the hierarchy of carbon cutting techniques, once again emphasising the need to tackle energy efficiency before looking at the savings that can be made by headline-grabbing renewable energy technologies.

“Before renewable energy generation is even considered it is vital to ensure that buildings are as energy efficient as possible, otherwise the potential benefits are simply wasted in offsetting un-necessary consumption,” said a statement from the academy.

“Creative solutions to make buildings more energy efficient include basic techniques, known for thousands of years, such as using daylight, natural ventilation and thermal mass, where masonry is used to store heat and moderate temperature variations.

“However, with the application of scientific analysis, these aspects of a building’s design can make a very substantial contribution to meeting the performance and comfort needs of the occupants without resorting to energy consuming building services installations.”

Energy Network Upgrades:

Energy industry watchdog Ofgem yesterday approved an initial £319m tranche of funding to help energy transmission companies connect six renewable energy projects to the UK’s National Grid.

The construction of new links to the high-voltage network is scheduled to start before the end of the fiscal 2010/2011 financial year and will include high-profile projects to hook up wind farms in the Shetland Isles and East Anglia to the grid.

Almost half the funding has been earmarked for transmission reinforcement initiatives in Scotland, in an attempt to prepare the country’s grid for a huge increase in renewable energy capacity.

“The funding proposals will enable vital new generation, much of it renewable, to be connected to the grid,” said Stuart Cook, the utility watchdog’s acting senior partner for transmission and governance, adding that the new investment marked “a significant step towards facilitating the Government’s 2020 carbon emissions reduction target”.

Ofgem is also waiting for National Grid Electricity Transmission, Scottish Power Transmission and Scottish Hydro-Electric Transmission to provide it with enough information to decide whether it should approve an extra £764m of investment in further grid upgrades, including proposals for new links between Hunterston-Kintyre and for the Western Isles.

If financing is approved, work on these projects is expected to begin in April 2012. The additional £764m in funding would bring total new grid investments to £1 billion, representing about 20 per cent of the three companies’ ten-year investment plan for hooking up renewable sources to the grid.

However, further grid investment is likely to be required and Ofgem reiterated its commitment to investigate further funding proposals as part of its next transmission price control review process, adding that existing price controls have been extended by a year to April 2013 to ensure that the conclusions of the body’s network regulation review can be included in the next settlement.

Urgent Action Required:

The £8.1 billion rollout of smart meters in Britain could be knocked off course unless the Government and Ofgem, the energy regulator, act urgently to convince the public that the information provided by the meters will be held securely.

Fears that data on energy consumption could be misused by criminals, police or insurance companies have curtailed the compulsory introduction of the meters in the Netherlands, according to a report by Datamonitor, the market analyst.

Dutch consumer and privacy organisations were concerned that information relayed as frequently as every 15 minutes could allow employees of utility companies to see when properties were empty or when householders had bought expensive new gadgets.

Smart meters, which are due to be rolled out to the UK’s 26 million households by 2020, are fitted with information and communications technology so that they can send data and receive instructions. The intention is that they will transform the energy industry — enabling the transition to a low-carbon economy — but utilities have been frustrated at the delay to agreeing a common model and standards for use.

Now Datamonitor is warning that the introduction of smart metering will rival the creation of the internet as a telecommunications project and will stretch utility industry practices and processes to breaking point.

Alex Desbarres, senior renewables analyst at Datamonitor and co-author of the report, said: “The Government and the regulator have to decide what they want the programme to achieve and then they have to quickly establish a dialogue with consumer groups and the general public.

“The backlash against smart meters could be aggressive if the message that they will reduce energy consumption and help lower carbon emissions is not made clear. The Government also has to address these privacy and security issues. Many people do not like the idea of utility companies having a permanent window on their private life.

“What is the industry going to do with all this data? At the moment, they do not have the processes to manage it — and without significant new systems the data itself is worthless.”

A new communications centre will be created to receive and manage the data from the meters to make it easier for customers to switch suppliers.

According to Datamonitor’s report, the present trials of smart meters, which are being conducted with four of the leading suppliers, are throwing up potential problems, including issues about access to properties and the need for rewiring and repiping. Datamonitor says that all suppliers have had difficulty obtaining and installing the necessary equipment for trials, illustrating the relative immaturity of the technologies.

A spokesman for the Department of Energy and Climate Change said that the privacy and security issues were being addressed: “Data protection and system security are crucial issues for the success of the rollout and operation of the smart metering and will be a vital part of the implementation work we will be doing. We will take a rigorous and systematic approach to assessing and managing these issues.”

A spokesman for Ofgem said: “Ofgem’s main concern is that the interests of consumers are protected when smart meters are introduced. Data protection and system security are crucial issues for consumers and we will take a rigorous and systematic approach to assessing and managing these issues. This will include stringent rules and safeguards.”

Energy UK, which represents the six main gas and electricity suppliers, said: “The industry has been working flat out to develop the smart metering programme since 2006 and continues to take on board lessons from other programmes around the world.”

The European Union said in 2006 that smart meters should be made mandatory, but voters in the Netherlands have vigorously opposed a compulsory rollout and succeeded in persuading politicians to vote against it.

Smart meters are expected to lead to the introduction of more variable price tariffs, based on time of day. It should be possible to charge consumers more at peak hours, which in turn would encourage many people to use electricity in periods of lower demand.

Flicking the switch

• The Department of Energy and Climate Change wants to see 47 million meters in 26 million properties by 2020

• Trials suggest that the £8.1 billion scheme may help people to save £28 a year

• Smart meters have a visual display allowing customers to see exactly how much electricity and gas they are using and relay the data to energy suppliers automatically

• Energy suppliers will be responsible for the roll-out of the meters at a cost of about £340 per household.

• UK homes add £33 a year to bills by leaving appliances on standby

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UK Gas Demand:

Ed Miliband conceded yesterday that the UK needed more gas storage, after the National Grid warned for the second time this week that supplies could run out. The first wave of gas cuts hit factories and industry across the country yesterday. Vauxhall’s car plant at Ellesmere Port and British Sugar’s refineries at Bury St Edmunds and Newark were among nearly 100 facilities that had their energy supplies cut.

The National Grid has also told British Gas and other power suppliers to cut or reduce their power to major corporate customers in an effort to preserve gas for domestic households as extreme weather caused a surge in demand.

The fuel switches in north-west England alone freed up enough extra gas to heat about 600,000 homes all day, a spokeswoman for the network operator said.

Yesterday’s warning followed a sharp drop in supplies from Norway on Sunday, which forced the operator to issue its first gas balancing alert since Monday.

It has issued only three appeals for help to balance supply in four years.

The National Grid’s second alert came as gas demand hit 454 million cubic metres – higher than the all-time record of 449 million in January 2003.

A spokesman for the Grid last night said: “There are some customers in the north-west and east Midlands who have had their business gas supplies interrupted because they are on interruptible contracts and we are facing very high demand.”

The cuts have drawn heavy criticism from industry groups, which accused ministers of ignoring warnings over shortcomings in the gas supply system.

The Major Energy Users Council said power interruptions were the last thing that struggling businesses needed, while the EEF manufacturers group – formerly the Engineering Employers Federation – said ministers had repeatedly ignored warnings the system was close to breaking point.

Roger Salomone from the EEF added: “While it is easy to say ‘I told you so’, the fact is we have been warning of such interruptions for a long time and the need for urgent investment in our infrastructure to avoid them.”

Shadow energy secretary Greg Clark said the power chaos tarnished the image of Britain at a time when the UK was trying to drag itself out of an economic slump.

He added: “We are heading for a crisis of confidence in the energy sector and the (demand/supply] situation would be worse if we did not have a recession that is reducing demand.”

But the Energy Secretary hit back, claiming the Conservatives were “playing politics” and scaring people with “meaningless” statistics about Britain’s energy supplies.

Mr Miliband stressed that figures revealed by the Tories, that the UK had only eight days’ worth of gas storage left, ignored the role of imports.

Insisting that more supplies were on the way, he added: “Your figures ignore the role of the North Sea, which provides 50 per cent of our gas storage and they ignore the role of import capacity in the UK.”

Mr Clark replied: “Fuel poverty is soaring, it is clear that every day that goes by the government are taking us back to a world we thought we had left behind in the 1970s.”

The UK is more exposed to gas supply problems than other countries because of its lower levels of storage capacity – accounting for about 5 per cent of the country’s needs, compared with about 24 per cent in France and 21 per cent in Germany.

Mr Miliband said: “We need more gas storage and there are more projects being planned we do need more gas storage.

“But it is worth saying that at the beginning of this week, UK gas storage was 80 per cent full.”

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Cheap Oil Going To End:

The world could start to run out of oil in the next ten years, sparking soaring energy prices and a rush for even more polluting fossil fuels, an influential new study by the UK Energy Research Council has warned.The world could start to run out of oil in the next ten years, sparking soaring energy prices and a rush for even more polluting fossil fuels, an influential new study by the UK Energy Research Council has warned.

The exact date of “peak oil” - when the amount of oil being pumped out of the ground every day reaches its highest point before beginning an inexorable decline - has been hotly debated for decades. Environmentalists have tended to warn oil could run out at any moment, while oil companies insist there are plently more oil fields yet to be discovered.

The most recent estimation from the International Energy Agency, that advises Governments around the world, said conventional oil would not peak until after 2030.

However an authoriative new study from the Government-funded UK Energy Research Council called this prediction “at best optimistic and at worst implausible”. The peer-reviewed research looked at 500 studies from around the world and took into account the difficulty of accessing new oil fields as well as growing demand. It predicted oil will begin running out before 2030 and there is a “significant risk” peak oil will be reached before 2020.

“In our view, forecasts which delay a peak in conventional oil production until after 2030 are at best optimistic and at worst implausible. And given the world’s overwhelming dependence on oil and the time required to develop alternatives, 2030 isn’t far away,” said the report’s lead author Steve Sorrell. “The concern is that rising oil prices will encourage the rapid development of carbon-intensive alternatives which will make it difficult or impossible to prevent dangerous climate change.”

Robert Gross, Head of Technology and Policy Assessment at UKERC, said as soon as oil begins to run out it will make energy more expensive, sparking a knock on effect on industry and economies around the world. Petrol prices would rise and long distance travel become more expensive.

“The age of easy and cheap oil is coming to an end,” he said. “It doesn’t suddenly come to an end, obviously it’s a gradual change, but we’re moving away from easy and cheap oil to increasingly difficult and expensive oil.”

At the moment oil is around ($70) per barrel after peaking at around ($147) per barrel in 2008 during the height of the economic crisis.

Dr Gross said the spectre of peak oil should encourage Governments to invest in more energy-efficient vehicles such as electric cars, renewable energy like wind or solar and improving energy efficiency in industry and homes.

But he said there was a risk that instead the world will start to look at even more intensive forms of fossil fuels, therefore producing more carbon emisions and causing “catastrophic climate change”. Alternatives include heating tar sands to produce oil at huge cost both environmentally and financially.

“The danger is high oil prices push us into high carbon resources just as much as they might help push us towards renewables,” he said.

“The challenge for policy makers is to make sure, on a global scale, that that isn’t the response to more difficult and expensive oil.”

The world produces around 85 million barrels of oil every day. It is estimated this could rise to more than 100 million barrels per day before declining.

Oil companies like BP claim billions more barrels are availabe in new oil fields discovered in the Gulf of Mexico.

However Mr Sorrell said these new supplies are extremely difficult to access and will only delay peak oil by a few weeks or even days.

Even if the new fields are exploited, he said the world needs to move away from oil in order to stop global warming.

But Mr Sorrell said the UK Government had no contingency plans for oil peaking before 2020.

“If these problems are ignored and we do not make these changes ahead of time, we are heading for trouble,” he warned.

The IEA is due to release its latest report on peak oil this November, just before the world meets in Copenhagen to decide a new deal on climate change. The report will be a key influence on whether the rich world is willing to agree to set targets to cut greenhouse gas emissions, while also helping poor countries to switch to a low carbon economy.

The Department for Energy and Climate Change is currently considering the UKERC report.

“We are already well aware of the significant challenges for investment in future oil production and that there is a role for Governments to play in reducing demand for fossil fuels,” a spokesman said. “Our climate change, energy efficiency and energy security policies outlined in the UK low carbon transition plan are not only reducing the UK’s carbon emissions, but are consistent with the need to reduce our use of fossil fuels.”

Big Six Break Up Plans:

Britain’s ‘Big Six’ utilities would be broken up under Conservative government - report
30 November 2009 - The British Conservative party plans to break up the ‘Big Six’ utilities in an attempt to increase competition and reduce customers’ bills, according to a newspaper report.

The Guardian said that Greg Clark, the shadow secretary for energy and climate change, wants to introduce rules to force the ‘Big Six’ - British Gas, Scottish & Southern Energy, RWE npower, EDF Energy, Iberdrola Scottish Power and E.ON UK - to divest the bulk of their power plants to allow new entrants into the market.
 

The ‘Big Six’ control the production and supply of electricity and gas to almost all UK households and businesses. Only a handful of small independent power plant operators and tiny suppliers survive. Energy analysts say the market dominance by the ‘Big Six’ makes it impossible for anyone else to gain a foothold.

Clark is understood to be pushing for the proposals to be included in the Conservatives’ new policy paper on energy, which will probably by published by the end of the year and will feed into the party’s general election manifesto.

The policy paper will also promise that if a Conservative government were elected next summer, it would ask the Competition Commission to investigate whether consumers’ gas and electricity bills are too high.

It is not clear how much support Clark has within the party for his radical break-up plan, reported the Guardian. But such an aggressive stance from a senior figure in the shadow cabinet shows that the Conservatives are intent on a shake-up of the energy industry.

One industry source said the party felt they had “unfinished business” from 1997, when there were more than a dozen independent power generating and supplier companies in the UK.

The six will fiercely resist any break-up plan. One company warned that only they had deep enough pockets to make the estimated £200bn investment to replace the UK’s ageing energy infrastructure and meet renewable energy targets.

One way round this would be to regulate consumers’ electricity and gas bills, linking them to wholesale energy prices. This would encourage other players to build power plants as fixing bills would guarantee them a return on their investment.

Industry sources also claimed that investment would be halted during the course of any review by the Competition Commission, which could last four years. The Energy Retail Association, which represents energy suppliers, said: “Nobody wants a prolonged period of uncertainty when about £200bn of investment is needed to improve Britain’s energy infrastructure for the future.”

The Conservatives say they would ask for a limited review that would take less time.

Consumer Focus said the Competition Commission should investigate whether allowing the ‘Big Six’ to dominate the market resulted in higher utility bills for customers.

The ‘Big Six’ are all vertically integrated, which means they own power plants and source the gas themselves to supply their own customers. This means they will always be profitable at a group level because their retail businesses subsidise their power plant arms when generating costs are high and vice-versa.

As a result, companies have not fully passed on the recent falls in wholesale energy prices to consumers. The companies argue they need to keep profits high to invest in new energy infrastructure, but do not say by how much.

More than 100 MPs have signed an early day motion calling for a Competition Commission review of the industry, which is backed by Consumer Focus.
 

Legal Obligation To Cut Emissions:

Twelve million low-energy light bulbs were posted to UK households over the holiday season by an energy company as part of its legal obligation to cut carbon emissions, despite government advice that many would never be used. Npower sent out the packages last month to escape a ban on issuing unsolicited bulbs which came into force on January 1st.

The German-owned company saved millions of pounds by giving away the bulbs.

Alternative ways of meeting its obligation, such as insulating homes, are much more effective but up to seven times more expensive.

It faced a fine of more than £40m, or 10 per cent of its turnover, if it failed to meet its target for improving efficiency in homes under the carbon emissions reduction target scheme.

Households have received more than 180 million free or subsidised low-energy bulbs in the past 18 months.

A survey in July by the Energy Saving Trust found that the average home had six unused ones lying in drawers.

In 2008 the government ordered the big energy companies to invest in measures for improving energy efficiency and cutting fuel poverty. Companies can choose how to meet their obligations. Each measure they fund is given a score for the lifetime carbon savings it achieves.

Companies were allowed to register immediate carbon savings from every bulb issued on the assumption that all recipients instantly installed them in some of their most intensively used light sockets.

In reality, many people either stored the bulbs or threw them away, often because they were the wrong fitting or wattage.

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