Spiralling energy costs are hitting the news again. In the UK, household bills are estimated to rise by as much as £1,200 this year. The 27th energy company went bust this week and high energy use industrial companies are implementing rationing, adding to our supply chain woes. Another crisis meeting in Downing Street is underway discussing short term options including handouts to the hard up, removing climate levies (just a month after COP26) and a VAT moratorium…. Hmm !
So this morning, I get one of those nuisance tele-marketing calls asking me if I wanted to switch energy providers to lower my bills! I replied “I am amazed you are still calling people, as you are folks that got us into this mess”..the lady continued “I can get you a two year deal at 25p/kWh, how much are you paying now ?”..I replied “between 10 and 15p”…’that’s impossible” she retorted and ended the call. The truth is it’s not impossible and it comes taking control of your energy consumption.
First we need to understand three truths:
- We are likely to use twice as much electricity at home by the end of the decade by adding electric heating and cars.
- Electricity costs have been historically rising at 5% CAGR and we believe will grow at 7% CAGR for the remainder of this decade, quadrupling energy bills by 2030.
- The transition to renewables will be chaotic with regular supply and demand imbalances creating price spike waves in both fossil fuels and the cleaner alternatives.
The UK Government’s strategy of using market competition allowing customers to easily switch suppliers to keep prices lower is now a busted flush. My energy supplier is now no longer taking new customers. The “simplicity of switching” to lower costs has been an illusion and has led us into this mess.
We now need a longer-term strategy to manage a vital resource that we have taken for granted that is going be a lot more expensive and less resilient in the future, whether we are home or business owners. Simply put, we need to use less energy now and even less in the future.
We have used a methodology called “Assess, Reduce, Reuse, Replace” for some time, whilst simple, it’s mightily effective. We have demonstrated that this will reduce costs by 30% in the short term and become the foundation for sustaining 60-75% lower costs in the longer term. If you do the maths, this means your costs would be the same in 2030 as they are today. But it’s going to take more work than just switching suppliers, but I guess you know that was coming!
Measurement is a Smart Place to Start
We start with another basic truth, the majority can tell you what they pay for energy per month, but most don’t know the energy they actually consume, what a kilowatt-hour is, whether it’s a lot or a little, and more, what drives that consumption. We have all been “flying without instruments” for some time and now the weather has closed in!
So we need to measure, there are many monitoring tools on the market and this really is the right place to start. We use our own tool at home, in schools, colleges, hotels, warehouses and factories.
Let’s use a Home example as something we can all relate to. When we look at the daily consumption pattern our eyes are naturally drawn to the peak levels, but it’s the base-load that is more telling, this is the power usage that’s always on, no matter what. We call it “vampire consumption”, something that silently drinks your energy in the middle of the night! We measure this base-load and often find that it represents over 25-35% of the daily total and its often higher still in the work-place. Investigating this base load is often surprising, once we found a “server farm” and an air conditioning unit to cool it in a domestic airing cupboard…really !
Finding relationships between heating loads and internal and external temperatures and lighting loads with sunrise/set times pinpoint optimisation reduction opportunities.
It also helps us quantify the size of the replacement renewable energy systems and determine the daily optimisation tactics to get the most from the investment.
We learn by doing. We extended our house in 2019 by 60% and added some very power-hungry equipment but we set ourselves a goal of not consuming a single kWh nor £ more in our bills: the extension was to be net zero and cost neutral.
In the two years that followed, we have driven down the energy consumption per square metre (sqm) by a third. Our energy consumption remains at 2018 levels. By looking closely at the time of day consumption, utilising smart energy tariffs (Octopus Agile and GO) and optimising the solar generation and storage, we have reduced the energy cost per sqm by 60% and reduced our emissions below 50% of 2018 levels. Our cost of electricity (inc VAT) has remained below 15p/kWh as it was in 2018 and thus price inflation has been eliminated.
Without the energy monitoring tool, we would not have known where to focus and nor could we have evaluated the results nor calculate the return on investment.
It’s not been plain sailing and mistakes were made, but our energy monitoring system has been the guiding light and consistently provided data insight into what we have accomplished and where to go next.
Our 2022 goal is reduce consumption by a further 10% and move another 10% of our consumption into lower cost tariff periods and this will reduce our energy cost by 75% overall. This will then allow us to bring on our first electric vehicle this spring without increasing our energy cost beyond 2018 levels. So it’s your choice: “U-switch if you want to”, or “take back control of your energy”.