With rising energy prices for households and businesses, and pressure on the UK to work towards its ambitious targets of cutting greenhouse gas emissions by 80% by 2050, lessening our reliance on expensive and harmful fossil fuels along with becoming more energy efficient are top priorities for many people. However, one group that may be bearing the brunt of such initiatives more than the rest are businesses.
On 8th July 2015, the Chancellor of the Exchequer George Osborne delivered his emergency Budget and although the subject of energy was rather neglected, a big energy-related change did emerge. The Chancellor announced that he would be scrapping the Climate Change Levy, a tax exemption incentive for businesses that get their energy from renewable sources. Those whose energy came from fossil fuels had to pay the Levy, but its removal means that both renewable and fossil fuels incur the same charges.
With the scrapping of the Levy and the steady rise in energy prices over the past few years, it’s no surprise that businesses have been working hard to reduce their carbon footprint, but have their efforts been paying off?
A new report by the Department of Energy and Climate Change has revealed some interesting facts about the UK’s energy usage. While transport remains the country’s largest energy consumer, domestic energy consumption actually comes next with the second highest usage rate at 27%, compared to the industrial sector, which was discovered to use only 17%.
This may come as a surprise to some, with many people assuming that the business sector would consume more of the UK’s energy, but these figures suggest that industries are leading the charge when it comes to energy efficiency. Whether it’s through ensuring that all computers, machines and plugs are turned off at the end of the day, installing energy-efficient lightbulbs or through switching their business energy tariff, it’s clear they are doing all they can to help both the environment and their bank accounts.
A report released in 2013 by The Confederation of British Industry (CBI) recommended that the government take steps to encourage businesses of all shapes, sizes and industries to improve their energy efficiency and therefore costs. This was not just for the individual benefits of a business, but also for the wider prosperity of the company, with the report stating: “Energy efficiency should also lead to a more secure, sustainable and affordable energy system in the UK, underpinning our long-term economic health.” At a time when both the economy of the UK and the rest of the world is still in recovery mode, and with the spotlight continuing to focus on the effects of global warming, there is no doubt that working towards a more efficient and greener energy system has its many benefits.
A bright efficient future
In addition to the promising news that the commercial sector is leading by example when it comes to energy efficiency, it appears that there is also a strong future ahead for green energy. According to latest figures from the Department of Energy and Climate Change, which look at the UK’s energy production for the previous year, the amount of electricity generated from renewable sources in 2014 increased by 21% compared to the previous year. Electricity from clean sources also accounted for 19.1% of the UK’s total generation; a significant increase from 14.8% for 2013.
If it wasn’t enough that renewable electricity production increased, the report also showed that our dependence on fossil fuels may be in decline. A key obstacle to overcome if the UK is to meet its ambitious green energy targets, our reliance on fuels such as gas, coal and oil is certainly a costly one, not only because the majority of our resources come from foreign imports. As gas and oil prices continue to rise, not only are we paying more to have these fuels brought over, but our environment is paying the price.
DONG energy in the UK
However, there is certainly light at the end of the tunnel as while renewable energy production increased by 9.3%, the report showed that oil, coal and nuclear production actually dropped in comparison, with coal decreasing by 8.6% and nuclear output by 10%. The only fossil fuel to experience growth was natural gas, which rose by 0.2% in 2014. Although there was a small increase, this actually contrasts the UK’s long-term decline in the production of natural gas, which has seen an average decrease of 8% from the year 2000, when it reached peak production, to the end of 2013.
Despite government cuts to subsidy schemes for solar panels and plans to withdraw funding for wind farms, there was a significant amount of growth in these areas, with solar actually proving to be the country’s main source of renewable energy. In 2014 the UK experienced an 89% increase in solar photovoltaic capacity, largely thanks to a high deployment rate of solar panels under the Renewables Obligation, which made access to panels easier and cheaper.
Lower energy prices
One of the biggest benefits of working towards energy efficiency and to use more renewable energy, is that energy prices will be far cheaper. As a vast amount of our fossil fuels come from foreign exports, and the fact that it will eventually run out, it costs far more than solar or wind power; something which Britain has plenty of.
If, as a whole, we use less energy, then less has to be produced which results in cheaper prices from the outset. But as we work towards a future where all our energy comes from the sun or a strong summer breeze, maybe we should all take a leaf out of business’ books, and start cutting our energy usage anyway we can, even if it’s just one small change.
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