tag:theconversation.com,2011:/global/topics/energy-bill-1877/articlesEnergy bill – The Conversation2024-03-19T06:21:50Ztag:theconversation.com,2011:article/2260202024-03-19T06:21:50Z2024-03-19T06:21:50ZFinally, good news for power bills: energy regulator promises small savings for most customers on the ‘default market offer’<figure><img src="https://images.theconversation.com/files/582732/original/file-20240319-16-nu9kfi.jpg?ixlib=rb-1.1.0&rect=67%2C8%2C5540%2C3724&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/queensland-australia-common-public-substations-1062133949">chinasong, Shutterstock</a></span></figcaption></figure><p>Electricity customers in four Australian states can breathe a sigh of relief. After two years in a row of 20% <a href="https://theconversation.com/why-are-electricity-prices-going-up-again-and-will-it-ever-end-201869">price increases</a>, power prices have finally stabilised. In many places they’re going down. </p>
<p>The good news is contained in two separate draft decisions today by the <a href="https://www.aer.gov.au/news/articles/news-releases/default-market-offer-dmo-2024-25-draft-determination">Australian Energy Regulator</a> and Victoria’s <a href="https://www.esc.vic.gov.au/electricity-and-gas/prices-tariffs-and-benchmarks/victorian-default-offer/victorian-default-offer-price-review-2024-25">Essential Services Commission</a>, on the maximum price energy retailers can charge electricity consumers under a specific plan that must be offered to all consumers.</p>
<p>The price is officially known as the “<a href="https://www.dcceew.gov.au/energy/programs/price-safety-net">default market offer</a>”. It’s the price you’re charged on a “default” plan with an electricity retailer – in other words, the plan customers are on if they haven’t shopped around to find a better deal from competing retailers. The bottom line is, most of these residential electricity customers should receive price reductions of between 0.4% (A$13) and 7.1% ($211) next financial year. In most cases that’s less than the rate of inflation. </p>
<p>The relief is largely the result of a drop in <a href="https://theconversation.com/wholesale-power-prices-are-falling-fast-but-consumers-will-have-to-wait-for-relief-heres-why-222495">wholesale prices</a> – that’s the price paid to the generators producing electricity. Unfortunately, however, at the same time transmission and distribution prices – or network costs – have gone up. So the savings won’t be as great as they might have been. </p>
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<h2>A big improvement on previous years</h2>
<p>This is the sixth year in which regulators have set default market offers for retail electricity customers. They do it where there is competition in the sector: so in southeast Queensland, New South Wales, South Australia and, separately, Victoria. </p>
<p>It does not include Tasmania, the ACT, Western Australia or the Northern Territory, where the relevant regulator sets the prices and there’s no or very little competition.</p>
<p>About 5-10% of consumers across the states involved are on default plans. The rest have a contract arrangement with a retailer. But the draft decision, if enacted, still directly affects hundreds of thousands of people. And as commentators <a href="https://www.abc.net.au/news/2024-03-19/aer-flags-price-cuts-for-some-rises-for-others/103602946">have observed</a>, it sends an important market signal about the general direction of electricity prices.</p>
<p>The Australian Energy Regulator says most residential customers on the default market offer can expect to save on their electricity bills in 2024-25. But the offers vary depending where you live. </p>
<p>Have a look at the table above to see what residential customers without “controlled load” can expect. That covers most households. (Controlled load is when you also have an off-peak tariff for hot water heating.)</p>
<p>Some customers will be paying more for electricity. In Southeast Queensland, residential customers will pay 2.7% more, which is an extra $53 on average. </p>
<p>Using an inflation forecast of 3.3%, the Australian Energy Regulator also calculates what they call the “real” year-to-year variation in prices. So even if there’s a small increase in the price for a particular area, it’s less than the rate of inflation. For that example in southeast Queensland, it equates to a decrease of 0.6% and a saving of $12 in real terms. </p>
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<p>Residential customers on the <a href="https://www.esc.vic.gov.au/electricity-and-gas/prices-tariffs-and-benchmarks/victorian-default-offer">Victorian default market offer</a> can expect to save 6.4%. The retail power prices in Victoria are <a href="https://www.afr.com/companies/energy/power-bill-relief-could-be-coming-as-wholesale-electricity-prices-fall-20240130-p5f14e">slightly better than in the other states</a> largely because there are lower wholesale power prices.</p>
<p>All in all it’s a big improvement on the price hikes of <a href="https://theconversation.com/why-are-electricity-prices-going-up-again-and-will-it-ever-end-201869">last year</a> and the year before that. </p>
<p>The final default market offer prices will be released in May, but we can expect little change. </p>
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Read more:
<a href="https://theconversation.com/the-government-will-underwrite-risky-investments-in-renewables-heres-why-thats-a-good-idea-218427">The government will underwrite risky investments in renewables – here's why that's a good idea</a>
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<h2>Network prices are up</h2>
<p>Regulators set the default market offer by itemising all costs retailers are likely to incur in the course of running their business. From that, they calculate the fair price retailers should offer customers on default plans. </p>
<p>Wholesale electricity costs, incurred when retailers buy electricity from generators on the wholesale market, make up <a href="https://www.energyfactsaustralia.org.au/key-issues/energy-costs/">maybe 30–40% of your bill</a>. </p>
<p>The other major cost retailers face is for the electricity transmission and distribution network – that is, the “poles and wires”. These also comprise around 40% of your bill.</p>
<p>The network price is driven by inflation and interest rate rises, and also includes the costs of maintenance, and building new transmission infrastructure to connect renewable energy generators to the grid.</p>
<p>The easing of wholesale prices since their 2022 peak has been offset by increases in these network prices. In fact, network prices have increased by almost as much as wholesale prices have come down. </p>
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Read more:
<a href="https://theconversation.com/wholesale-power-prices-are-falling-fast-but-consumers-will-have-to-wait-for-relief-heres-why-222495">Wholesale power prices are falling fast – but consumers will have to wait for relief. Here's why</a>
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<h2>A difficult ask</h2>
<p>Responding to the draft decision on Tuesday, Federal Energy Minister Chris Bowen <a href="https://minister.dcceew.gov.au/bowen/media-releases/albanese-government-energy-plan-stabilising-energy-prices-after-global-crisis">said</a> it showed the Albanese government was stabilising energy prices.</p>
<p>But Bowen came to office promising to <a href="https://www.chrisbowen.net/media/media-releases-and-op-eds/powering-australia-labor-s-plan-to-create-jobs-cut-power-bills-and-reduce-emissions-by-boosting-renewable-energy/">cut power bills by $275 by 2025</a>. That deadline is not very far away.</p>
<p>Bowen made that commitment in December 2021. Very soon after, <a href="https://theconversation.com/electricity-prices-are-spiking-ten-times-as-much-as-normal-here-are-some-educated-guesses-as-to-why-182849">electricity prices</a> shot through the roof. It’s becoming very difficult to see how the $275 cost reduction will be achieved by next year. </p>
<p>The bottom line is prices have stabilised after a couple of bad years and hopefully the worst is behind us. But, it would be a brave person who attempts to predict where they go from here. There are too many moving parts. Governments should stay the course on policies, and consumers, worried about electricity prices, should go online, compare offers, and to find the best possible deal.</p>
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Read more:
<a href="https://theconversation.com/unsexy-but-vital-why-warnings-over-grid-reliability-are-really-about-building-more-transmission-lines-212603">Unsexy but vital: why warnings over grid reliability are really about building more transmission lines</a>
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<p class="fine-print"><em><span>Tony Wood may have interests in companies impacted by the energy transition through his superannuation fund.</span></em></p>In states with competition between retailers, the energy regulator is promising savings for most customers on the default plan. But it’s small change compared to price hikes. Here’s what to expect.Tony Wood, Program Director, Energy, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2112612023-08-20T20:04:13Z2023-08-20T20:04:13Z5 tips for getting off gas at home – for a cleaner, cheaper, healthier all-electric future<figure><img src="https://images.theconversation.com/files/543177/original/file-20230817-23-84peqv.jpg?ixlib=rb-1.1.0&rect=124%2C7%2C5052%2C3437&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/induction-cooking-home-on-black-portable-1477848773">Elena M. Tarasova, Shutterstock</a></span></figcaption></figure><p>Burning gas in our homes to cook food or heat air and water has become a contentious issue. Gas is an expensive, polluting fossil fuel, and there’s mounting evidence to suggest it’s also <a href="https://www1.racgp.org.au/ajgp/2022/december/health-risks-from-indoor-gas-appliances">bad for our health</a>. </p>
<p>Five million existing Australian households will need to <a href="https://grattan.edu.au/report/getting-off-gas/">get off gas</a> within the next 30 years. But for homeowners, the upfront cost can be a major barrier to action. Renters rarely get a say over the appliances installed in their homes. And apartment owners can struggle to make individual changes too. </p>
<p>In most cases it’s worth making the switch, for the energy bill savings alone. For example, analysis suggests a household in Melbourne switching from gas to electricity can save <a href="https://theconversation.com/all-electric-homes-are-better-for-your-hip-pocket-and-the-planet-heres-how-governments-can-help-us-get-off-gas-207409">up to A$13,900</a> over a decade.</p>
<p>If you’re contemplating upgrading gas appliances in your home, or even disconnecting from the gas network altogether, here are a few handy tips and resources to cut through the confusion. </p>
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<figcaption><span class="caption">Homes must switch away from gas by 2050, says policy think tank (ABC News)</span></figcaption>
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Read more:
<a href="https://theconversation.com/keen-to-get-off-gas-in-your-home-but-struggling-to-make-the-switch-research-shows-youre-not-alone-209589">Keen to get off gas in your home, but struggling to make the switch? Research shows you're not alone</a>
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<h2>Tip 1 – Find trusted, independent information</h2>
<p>There is no shortage of information on how to make the switch from gas to all-electric appliances. The challenge is finding <a href="https://theconversation.com/we-need-a-lemon-law-to-make-all-the-homes-we-buy-and-rent-more-energy-efficient-204369">trusted and independent information</a>. </p>
<p>Not-for-profit organisation <a href="https://renew.org.au/">Renew</a> has compiled a range of <a href="https://renew.org.au/resources/how-we-can-help/efficient-electric-homes/how-we-can-help-going-off-gas/">presentations, guides, case studies and research</a>. <a href="https://www.choice.com.au/">Choice</a> provides independent reviews of household appliances, including operating costs. The Australian government’s <a href="https://www.energyrating.gov.au/">Energy Rating website</a> provides information on appliances to help consumers compare performance. Some <a href="https://www.yarracity.vic.gov.au/services/take-climate-action">local councils</a> and <a href="https://totallyrenewableyack.org.au/">community groups</a> also provide information, support and bulk-buying schemes.</p>
<p>You could also visit some of the all-electric homes open to the public for <a href="https://sustainablehouseday.com/">Sustainable House Day</a>. This can help you learn what works from people who have already made the change. </p>
<p>The <a href="https://www.facebook.com/groups/MyEfficientElectricHome">My Efficient Electric Home</a> group on Facebook is another active and helpful forum. </p>
<p>If you are going all-electric as part of a wider retrofit, consider an independent <a href="https://www.homescorecard.gov.au/">Residential Efficiency Scorecard assessment</a>. This will help you understand what to else you can do to maximise <a href="https://theconversation.com/the-other-99-retrofitting-is-the-key-to-putting-more-australians-into-eco-homes-91231">thermal comfort, environmental benefits and financial outcomes</a>.</p>
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<h2>Tip 2 – Plan your approach</h2>
<p>Once you understand what to do, the next step is planning how to go about it. Think about what is most important to your household. What is driving the change? If it’s your health, you might like to start by eliminating indoor air pollution from the gas stove. Or if you want to save money, start using reverse-cycle air conditioning to heat your home, rather than gas.</p>
<p>There are three main ways to go all-electric: </p>
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<li><p><strong>Replace all your gas appliances at once</strong>. Making the change quickly minimises disruption to your home. You may save money on installation costs by doing everything in one go. You will avoid ongoing fixed gas supply charges once you disconnect from the gas network, but you may be required to pay an “<a href="https://energy.act.gov.au/switching-off-your-gas-connection/">abolishment fee</a>” for permanent disconnection. That fee can vary significantly, depending on your location and gas provider. Costs <a href="https://www.smh.com.au/environment/sustainability/would-you-pay-1000-to-get-off-gas-consumer-dismay-over-disconnection-cost-20230223-p5cmw9.html">could be up to $1000 (or more)</a> but some states like Victoria have capped the price a <a href="https://reneweconomy.com.au/fossil-gas-death-spiral-regulator-sets-exit-fee-to-socialise-cost-of-mass-disconnection/">household can be charged at $220</a>. Renters wouldn’t be able to permanently disconnect without permission from the landlord, so they would still be open to paying the daily connection fee even if they found alternative electric options for everything else. </p></li>
<li><p><strong>Replace your gas appliances one at a time</strong>, as finances allow. However, there will come a point where <a href="http://www.ata.org.au/wp-content/projects/CAP_Gas_Research_Final_Report_251114_v2.0.pdf">financially you will be better off</a> replacing all the remaining gas appliances. This is largely because it will not be affordable to keep paying the daily connection cost for gas if you just have one gas appliance remaining. </p></li>
<li><p><strong>Just stop using gas appliances</strong> in favour of existing electric appliances that do the same job, such as a <a href="https://reneweconomy.com.au/the-traps-laid-by-the-fossil-gas-industry-for-uninformed-households/">reverse cycle air conditioner for space heating</a>. You may have – or can buy – plug-in electric alternatives, such as a microwave ovens, portable induction cooktops, air fryers and heaters. These can be a good option for renters when landlords won’t make changes.</p></li>
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Read more:
<a href="https://theconversation.com/cooking-and-heating-without-gas-what-are-the-impacts-of-shifting-to-all-electric-homes-210649">Cooking (and heating) without gas: what are the impacts of shifting to all-electric homes?</a>
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<p>You could even borrow portable appliances to see how they work before committing to buying your own. </p>
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<figcaption><span class="caption">Households share their electrification journey (Renew)</span></figcaption>
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<h2>Tip 3 – Access available rebates and resources</h2>
<p>Most states offer various rebates for households to reduce the upfront cost of replacing gas appliances. These could reduce costs by thousands of dollars. Some rebates also target rental housing. Here is a list of key rebates available in different states:</p>
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<li><a href="https://www.epw.qld.gov.au/about/initiatives/household-energy-savings-program">Queensland</a></li>
<li><a href="https://www.energy.nsw.gov.au/households/rebates-grants-and-schemes">New South Wales</a></li>
<li><a href="https://www.climatechoices.act.gov.au/policy-programs/home-energy-support-rebates-for-homeowners">ACT</a></li>
<li><a href="https://www.energy.vic.gov.au/for-households/victorian-energy-upgrades-for-households">Victoria</a></li>
<li><a href="https://recfit.tas.gov.au/household_energy/energy_saver_loan_scheme">Tasmania</a></li>
<li><a href="https://www.sa.gov.au/topics/energy-and-environment/using-saving-energy/retailer-energy-productivity-scheme">South Australia</a></li>
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<p>Some not-for-profit organisations (such as the <a href="https://www.bsl.org.au/services/energy-assistance/">Brotherhood of St Laurence</a>) offer financial and other support for lower-income households struggling to pay their energy bills.</p>
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Read more:
<a href="https://theconversation.com/want-an-easy-400-a-year-ditch-the-gas-heater-in-your-home-for-an-electric-split-system-201941">Want an easy $400 a year? Ditch the gas heater in your home for an electric split system</a>
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<h2>Tip 4 – Wait for a sale or negotiate a better deal</h2>
<p>It might sound simple but you can always save money by waiting until these electric appliances are on sale. If you are buying multiple appliances you can try to negotiate a better price. Factory seconds outlets offer lower prices as well.</p>
<h2>Tip 5 – Know the issues</h2>
<p>While the shift to all-electric will likely provide many benefits there are some things you need to consider:</p>
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<li>The carbon emissions from electricity are falling fast, and many homes have rooftop solar. Combining <a href="https://grattan.edu.au/report/getting-off-gas/">all-electric with solar panels</a> will maximise returns. </li>
<li>You may have to adjust to how new technologies operate and perform. For example, you may need <a href="https://www.theage.com.au/goodfood/tips-and-advice/do-you-really-have-to-buy-new-cookware-all-your-burning-questions-about-induction-cooking-answered-20230810-p5dvd0.html">new, metallic cookware for an induction cooktop</a> and become familiar with their fast response. Additionally, some people find heat from reverse cycle air conditioners to be drier and/or draughtier than gas heating. Floor-mounted units heat more effectively. </li>
<li>It is not just the energy performance of appliances that matters. For example, noise from heat pump hot water services can vary across different brands. They can also require more space for installation.</li>
<li>Undertaking a wider energy retrofit (for example, increasing insulation in walls, ceiling and underfloor, upgrading windows to double glazing) may mean you can buy a smaller, cheaper reverse cycle air conditioner when replacing gas heating.</li>
<li>Electric appliances also need maintenance to make sure they perform optimally. For example, reverse cycle air conditioners have filters that must be regularly cleaned. While this can be done by households, it can be hard for people with mobility issues.</li>
<li>Depending on the capacity of your electricity switchboard or wiring, extra electric appliances may require upgrades.</li>
<li>For renters, while you could use portable appliances, you may not be able to disconnect from gas completely, meaning you would still have to pay a daily connection fee.</li>
<li>Gas and electricity prices can change over time, for many reasons. For example, if fixed gas distribution costs are spread over fewer customers.</li>
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<h2>A worthwhile investment</h2>
<p>Australian states and territories have started banning gas in new builds. Victoria and the ACT will soon require <a href="https://theconversation.com/cooking-and-heating-without-gas-what-are-the-impacts-of-shifting-to-all-electric-homes-210649">new housing and major renovations to be all-electric</a>. Others are likely to follow. </p>
<p>For people in existing housing around Australia, it can be daunting to make the switch. Many of us have grown up with gas in our homes and when one appliance breaks, the easiest thing to do is replace like-for-like. But the weight of evidence shows it’s worth taking the time to look at the alteratives and invest in upgrading to all-electric appliances. The benefits far outweigh the costs. </p>
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Read more:
<a href="https://theconversation.com/all-electric-homes-are-better-for-your-hip-pocket-and-the-planet-heres-how-governments-can-help-us-get-off-gas-207409">All-electric homes are better for your hip pocket and the planet. Here's how governments can help us get off gas</a>
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<p class="fine-print"><em><span>Trivess Moore has received funding from various organisations including the Australian Research Council, Australian Housing and Urban Research Institute, Victorian Government and various industry partners. He is a trustee of the Fuel Poverty Research Network.</span></em></p><p class="fine-print"><em><span>Alan Pears consults to and advises a number of not-for-profit organisations involved in transition from gas issues such as the Australian Alliance for Energy Productivity, Energy Efficiency Council, Renew. He has received funding from A2EP, EEC and Energy Consumers Australia for work in this area. He writes a regular column for Renew magazine, and for other websites such as Reneweconomy and thefifthestate. </span></em></p><p class="fine-print"><em><span>Nicola Willand receives or has received funding for research from various organisations, including the Australian Research Council, the Victorian State Government, the Lord Mayor’s Charitable Foundation, the Australian Housing and Urban Research Institute, the Future Fuels Collaborative Research Centre, the Australian National Health and Medical Research Centre and the British Academy. She is affiliated with the Australian Institute of Architects.</span></em></p>Thinking about getting your home off gas, but don’t know where to begin? Here’s a few handy tips to get you on your way.Trivess Moore, Senior Lecturer, School of Property, Construction and Project Management, RMIT UniversityAlan Pears, Senior Industry Fellow, RMIT UniversityNicola Willand, Senior Lecturer, School of Property, Construction and Project Management, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2074092023-06-18T20:08:19Z2023-06-18T20:08:19ZAll-electric homes are better for your hip pocket and the planet. Here’s how governments can help us get off gas<figure><img src="https://images.theconversation.com/files/532119/original/file-20230615-24-89xqx.jpg?ixlib=rb-1.1.0&rect=20%2C40%2C6689%2C4426&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/woman-cooking-tasty-rice-vegetables-on-2034240113">Pixel-Shot, Shutterstock</a></span></figcaption></figure><p>If every Australian household that uses gas went all-electric today, we would “save” more than 30 million tonnes of carbon dioxide emissions over the next ten years. That’s because there are more than <a href="https://www.energynetworks.com.au/resources/fact-sheets/reliable-and-clean-gas-for-australian-homes-2/">5 million households</a> on the gas network, and the <a href="https://grattan.edu.au/report/getting-off-gas">avoided emissions per home</a> ranges from 5-25 tonnes over the coming decade, depending on the location.</p>
<p>Most people would spend less money on energy too. Electric appliances use less energy than gas appliances to do the same job, making them cheaper to run.</p>
<p>Our <a href="https://grattan.edu.au/report/getting-off-gas">new report</a> shows how much most households can save by switching from gas to electricity for heating, hot water and cooking. The extra cash couldn’t come at a better time: about <a href="https://www.rmit.edu.au/news/all-news/2023/may/hidden-energy-poverty">a quarter of Australian households</a> say they found it difficult to pay their energy bills this year. </p>
<p>But many households face hurdles that stop them, or make it hard for them, to go all-electric. Governments could make it easier for people and bring emissions-reduction targets closer to reality. </p>
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Read more:
<a href="https://theconversation.com/want-an-easy-400-a-year-ditch-the-gas-heater-in-your-home-for-an-electric-split-system-201941">Want an easy $400 a year? Ditch the gas heater in your home for an electric split system</a>
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<h2>Most households save by upgrading to electric</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A chart showing estimated savings for each household switching from gas to electricity, over 10 years, in each capital city" src="https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=393&fit=crop&dpr=1 600w, https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=393&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=393&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=493&fit=crop&dpr=1 754w, https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=493&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/532139/original/file-20230615-29-h20bv5.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=493&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Over 10 years, the estimated savings for each household switching from gas to electricity range up to $13,900 in Melbourne. It’s a flat $3,890 figure for Brisbane, rather than a range, because there’s no gas heating.</span>
<span class="attribution"><span class="source">Grattan Institute</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Households in Melbourne tend to use more gas than those in other mainland capitals, mainly because the winter is so cold. Our report found Melburnians who replace broken gas appliances with electric ones, or move into an all-electric home, could save up to A$13,900 over ten years. Households with rooftop solar will save even more. </p>
<p>It’s a similar story in most parts of Australia except the west, where gas is relatively cheap. This mainly reflects differences in the historical development of the gas markets between the west and east coasts.</p>
<p>Getting off gas could also be <a href="https://www1.racgp.org.au/ajgp/2022/december/health-risks-from-indoor-gas-appliances">good for your health</a>. Several studies link cooking with gas to <a href="https://www.nationalasthma.org.au/living-with-asthma/resources/patients-carers/factsheets/gas-stoves-and-asthma-in-children">childhood asthma</a>. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/gas-cooking-is-associated-with-worsening-asthma-in-kids-but-proper-ventilation-helps-151591">Gas cooking is associated with worsening asthma in kids. But proper ventilation helps</a>
</strong>
</em>
</p>
<hr>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1660422437237043200"}"></div></p>
<h2>Households face a series of hurdles</h2>
<p>Renters make up nearly a third of all households, and they have little or no control over the appliances that are installed. As most electric appliances cost more to buy than gas ones – and the subsequent bill savings flow to tenants – landlords have little incentive to upgrade their properties from gas to all-electric. </p>
<p>Apartment living can increase the level of complexity. Multi-unit dwellings often bundle gas bills into body-corporate fees, limiting the occupants’ incentive to go all-electric. There can also be space constraints in these buildings. Centralised electric heat pumps, for example, take up more space than centralised gas water heaters.</p>
<p>Then there are households that simply can’t afford the upgrade. Induction stoves and heat pumps are more expensive than their gas equivalents, by up to a combined $2,000. This initial outlay will soon be recovered by cheaper energy bills, but that doesn’t help households that don’t have the cash up front. The <a href="https://melbourneinstitute.unimelb.edu.au/data/taking-the-pulse-of-the-nation-2022/2023/energy-poverty">12% of households that skipped meals</a> to pay their energy bills in the past year are the most likely to remain locked into high gas bills. </p>
<p>Some people also simply prefer cooking with gas. Some think induction cooktops will be no better than the poor-performing electric cooktops they may have used in the distant past. Others haven’t ever heard of a heat pump for hot water.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/heat-pumps-can-cut-your-energy-costs-by-up-to-90-its-not-magic-just-a-smart-use-of-the-laws-of-physics-185711">Heat pumps can cut your energy costs by up to 90%. It’s not magic, just a smart use of the laws of physics</a>
</strong>
</em>
</p>
<hr>
<h2>Here’s how governments can help</h2>
<p>Governments, both state and federal, should lower the hurdles on the path to all-electric homes – to reduce people’s cost of living and to cut carbon emissions.</p>
<p>As a first step, state governments should ban new gas connections to homes. In 2021, more than 70,000 households joined the gas network. Trying to shift households off gas while allowing new connections is like pouring water into a bucket with a hole. </p>
<p>Then, governments should provide landlords with tax write-offs on new induction stoves and heat pumps for hot water, for a limited time. After that, they should require every rental property to be all-electric. Governments should pay to upgrade public housing to all-electric, where they are the landlords. And they should pay not-for-profits managing community housing to do the same.</p>
<p>The federal government should help all households to spread the cost of electric appliances over time. It should subsidise banks to offer low-interest loans for home electrification, via the Clean Energy Finance Corporation. </p>
<p>And governments should set out to change people’s preferences, from gas to electric. They should embark on a multi-decade communication campaign, not unlike the campaign to upgrade from analogue to digital television in the early 2000s. </p>
<p>A key challenge will be shifting people’s ideas about the best way to cook. There are precedents. In Gininderry, a new all-electric suburb of Canberra, one developer recruited chefs to run demonstrations on induction cooktops at the display village. The proportion of potential homebuyers <a href="https://ginninderry.com/wp-content/uploads/2021/08/Ginninderry-2017-Householder-Attitudes-to-Residential-Renewable-Energy-Futures.pdf">willing to consider buying an all-electric home</a> rose from 67% to 88%. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/K9ytSh5TM9M?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Induction cooking with Chef David Wei at Ginninderry.</span></figcaption>
</figure>
<h2>‘Green gas’ is no panacea: electricity is cheaper</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Chart comparing the cost of hydrogen to electricity over time, showing hydrogen is more expensive and will remain so for decades" src="https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=572&fit=crop&dpr=1 600w, https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=572&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=572&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=719&fit=crop&dpr=1 754w, https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=719&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/532117/original/file-20230615-23-n0wdqe.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=719&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Hydrogen is more expensive than electricity and will remain so for decades.</span>
<span class="attribution"><span class="source">Grattan Institute</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The gas industry has another solution in mind: instead of switching from gas to electricity, it suggests using “green gas” – biomethane or “green” hydrogen. Biomethane is chemically identical to natural gas, but is derived from biological materials such as food waste, sewage or agricultural waste. Green hydrogen is made by using electricity to split water into hydrogen and oxygen.</p>
<p>But both options are <a href="https://theconversation.com/hydrogen-where-is-low-carbon-fuel-most-useful-for-decarbonisation-147696">too expensive and too far away</a>. Under the most generous of assumptions, green hydrogen will only become cost-competitive with electricity after 2045. And there is not enough biomethane commercially available to replace gas in households. </p>
<p>Meanwhile, more than three million Australian homes already run on electricity alone. </p>
<p>Getting the five million homes that use gas to the same point won’t be easy. But with good policy, it is doable. For households, and the climate, there is much to be gained.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/kicking-the-gas-can-down-the-road-why-a-gas-price-cap-is-the-worst-way-to-protect-energy-consumers-204752">Kicking the gas can down the road: why a gas price cap is the worst way to protect energy consumers.</a>
</strong>
</em>
</p>
<hr>
<img src="https://counter.theconversation.com/content/207409/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Esther Suckling does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A new report from the Grattan Institute shows most households can save thousands of dollars by getting off gas and switching to electric appliances.Esther Suckling, Research Associate, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2019412023-03-23T19:06:14Z2023-03-23T19:06:14ZWant an easy $400 a year? Ditch the gas heater in your home for an electric split system<figure><img src="https://images.theconversation.com/files/517128/original/file-20230323-18-hhruoy.jpg?ixlib=rb-1.1.0&rect=16%2C0%2C5447%2C3637&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Earlier this month, regulators <a href="https://theconversation.com/why-are-electricity-prices-going-up-again-and-will-it-ever-end-201869">flagged</a> power price rises in Queensland, New South Wales, Victoria and South Australia. Like many people, you’re probably wondering how you can minimise the financial pain.</p>
<p>Getting rid of gas and electrifying everything in your home can save you money. <a href="https://renew.org.au/wp-content/uploads/2022/11/Report-Limiting-energy-bills-by-getting-off-gas.pdf">Modelling</a> by not-for-profit organisation Renew showed annual bills last year for a <a href="https://www.nathers.gov.au/owners-and-builders/home-energy-star-ratings">seven-star</a> all-electric home with solar power were between 69% (Western Sydney) and 83% (Hobart) cheaper than bills for a three-star home with gas appliances and no solar. </p>
<p>There are other reasons to kick the gas habit, too. As renewables form an ever-growing part of Australia’s energy mix, electrifying the home increasingly helps tackle climate change. What’s more, there are sound <a href="https://www.unsw.edu.au/news/2023/02/a-heated-debate--how-safe-are-gas-stoves--">health</a> reasons to get rid of gas appliances.</p>
<p>But where do you start? And how do you get the best bang for your buck? Here, I offer a few tips.</p>
<figure class="align-center ">
<img alt="hand points remote control to air conditioning unit" src="https://images.theconversation.com/files/517117/original/file-20230323-18-mdtovq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/517117/original/file-20230323-18-mdtovq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/517117/original/file-20230323-18-mdtovq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/517117/original/file-20230323-18-mdtovq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/517117/original/file-20230323-18-mdtovq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/517117/original/file-20230323-18-mdtovq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/517117/original/file-20230323-18-mdtovq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Getting rid of gas and electrifying everything in your home can save you money.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>A quick guide to home energy use</h2>
<p>Australian home energy use can be separated into a few categories: </p>
<ul>
<li>space heating and cooling</li>
<li>water heating</li>
<li>cooking</li>
<li>vehicles </li>
<li>other appliances (many of which are largely already electric). </li>
</ul>
<p>Of the appliances that typically depend on gas, the <a href="https://www.rewiringaustralia.org/report/castles-and-cars-discussion-paper">largest component</a> (37%) is space heating, followed by hot water (24%) and cooking (6%). </p>
<p>This varies between states. Victoria, for example, is particularly dependent on gas. </p>
<p>But the breakdown above gives some insight into the largest contributors to energy costs in the average Australian home – particularly in the cooler southern regions. </p>
<figure class="align-center ">
<img alt="Graph of residential energy consumption by fuel and jurisdiction across Australia" src="https://images.theconversation.com/files/515715/original/file-20230316-22-sphr9m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/515715/original/file-20230316-22-sphr9m.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=336&fit=crop&dpr=1 600w, https://images.theconversation.com/files/515715/original/file-20230316-22-sphr9m.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=336&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/515715/original/file-20230316-22-sphr9m.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=336&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/515715/original/file-20230316-22-sphr9m.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=422&fit=crop&dpr=1 754w, https://images.theconversation.com/files/515715/original/file-20230316-22-sphr9m.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=422&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/515715/original/file-20230316-22-sphr9m.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=422&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Graph of residential energy consumption by fuel and jurisdiction across Australia 2020.</span>
<span class="attribution"><span class="source">Unlocking the pathway: Why electrification is the key to net zero buildings (December 2022) Australian Sustainable Built Environment Council</span></span>
</figcaption>
</figure>
<p>While both gas and electricity costs are rising, as they are now in most states, all-electric homes can expect lower overall increases. <a href="https://renew.org.au/wp-content/uploads/2022/11/Report-Limiting-energy-bills-by-getting-off-gas.pdf">Analysis</a> by Renew has shown ditching the old gas heater in favour of a split system/reverse cycle air-conditioner (without solar panels) can lead to average savings of A$546 each year in Canberra, $440 in Adelaide, $409 in Melbourne and $256 in Perth. </p>
<p>Heating a space with a reverse-cycle air conditioner is about four times more efficient than using natural gas. And when the electricity is generated by renewables, it can be done with zero greenhouse gas emissions.</p>
<p>And what about heating water? Using the existing electricity grid, the cost of using an electric heat pump is around half that of using a natural gas water heater. </p>
<p>The costs fall even lower if a household shifts to solar panels subsidised or financed by government, backed by a home battery providing the energy. In this case, heating costs are around a third of using gas.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-are-electricity-prices-going-up-again-and-will-it-ever-end-201869">Why are electricity prices going up again, and will it ever end?</a>
</strong>
</em>
</p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Worker performing heat pump maintenance, rooftop solar panels in the backround." src="https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/516215/original/file-20230319-18-dp7ipq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Using an electric heat pump is almost half the cost of using a natural gas water heater.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/hvac-worker-performing-heat-pump-maintenance-2202142885">Shutterstock</a></span>
</figcaption>
</figure>
<h2>So what’s the payback?</h2>
<p>Buying new appliances costs money. So it’s important to examine the “payback” period - in other words, the length of time it takes for energy bill savings to equal the cost of the initial investment in a new appliance. </p>
<p>The payback period can vary depending on:</p>
<ul>
<li>cost and quality of the appliance</li>
<li>an appliance’s energy rating</li>
<li>size of the system</li>
<li>for space heating, whether a split system is replacing an existing ducted system or being added on externally.</li>
</ul>
<p>A <a href="https://www.climatecouncil.org.au/wp-content/uploads/2022/10/CC_MVSA0323-CC-Report-Gas-vs-Electricity_V4-Single.pdf">report</a> last year by the Climate Council calculated the approximate cost differences between higher and lower-end electric appliances. Lower-end hot water heat pumps, reverse-cycle air conditioner and induction stoves were priced around $7,818 all together, while higher-end appliances cost around $14,936 together.</p>
<p>Both scenarios included installation costs and $3,000 for electrical upgrades and other costs. </p>
<p>The payback period for low-priced appliances ranged from five years in Hobart and Canberra to 15 years in Perth and Sydney. Higher-priced appliances were in the order of eight to ten years for most cities and 12, 16 and 19 years for Melbourne, Perth and Sydney respectively.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/people-are-shivering-in-cold-and-mouldy-homes-in-a-country-that-pioneered-housing-comfort-research-how-did-that-happen-188809">People are shivering in cold and mouldy homes in a country that pioneered housing comfort research – how did that happen?</a>
</strong>
</em>
</p>
<hr>
<figure class="align-center ">
<img alt="two pots on induction stovetop" src="https://images.theconversation.com/files/517118/original/file-20230323-16-hs40da.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/517118/original/file-20230323-16-hs40da.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/517118/original/file-20230323-16-hs40da.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/517118/original/file-20230323-16-hs40da.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/517118/original/file-20230323-16-hs40da.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/517118/original/file-20230323-16-hs40da.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/517118/original/file-20230323-16-hs40da.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The cost of electrifying the home partly depends on the cost of the appliances you choose.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<p>Rolled out at scale, household electrification is also a feasible way to reduce gas demand. It may be the only practical option available to decarbonise residential energy. </p>
<p>As research <a href="https://www.sciencedirect.com/science/article/pii/S0196890422013802#b0130">recently suggested</a>, so-called “green” hydrogen – made by using low-carbon electricity to split water into hydrogen and oxygen – is unlikely to emerge as a cheap replacement for gas boilers. And why look for a technological solution to a problem we already know how to solve?</p>
<p>Modelling by <a href="https://environmentvictoria.org.au/wp-content/uploads/2020/06/Vic-Gas-Market-Demand-Side-Study-Final-Report-1.pdf">Environment Victoria</a> has shown installing heat pumps for heating and cooling would reduce statewide gas use by 48 petajoules a year, compared to the relatively minimal 0.5 petajoules saved by installing induction cooktops. </p>
<p>At the same scale – and using a similar technology – replacing gas hot water with heat pump hot water reduces household gas use by 10 petajoules each year. That’s an enormous saving of gas.</p>
<h2>The bigger picture for all-electric homes</h2>
<p>Existing homes can benefit from a combination of electrification, rooftop solar and batteries. They can also benefit from energy efficiency measures such as installing insulation, stopping draughts, closing off rooms and wearing the right clothing for the season.</p>
<p>We can work together to speed up the transition to renewable energy and reduce the demand for gas. </p>
<hr>
<p><em>Rachel Goldlust is developing a “<a href="https://renew.org.au/our-news/gastoolkitsurvey/">Getting Off Gas Toolkit</a>” for Renew. It aims to provide clear, accessible and practical advice to households on replacing gas with renewables. The public is invited to complete a survey to help design the guide.</em></p><img src="https://counter.theconversation.com/content/201941/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Goldlust works for Renew on their forthcoming Getting Off Gas Toolkit. Renew has received funding from Boundless Earth and the Lord Mayor's Charitable Foundation for this work.</span></em></p>Reducing gas use in our homes will help avoid energy price hikes. But where is the best place to start?Rachel Goldlust, Adjunct Research Fellow, School of Archaeology and History, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1885062022-09-01T12:25:30Z2022-09-01T12:25:30ZThe most cost-effective energy efficiency investments you can make – and how the new Inflation Reduction Act could help<figure><img src="https://images.theconversation.com/files/480864/original/file-20220824-7032-sfaz1f.jpg?ixlib=rb-1.1.0&rect=880%2C428%2C6487%2C4214&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Weatherization and new windows are big money and energy savers.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/photo/father-and-son-together-checking-roof-window-in-royalty-free-image/865310586">Jasmin Merdan via Getty Images</a></span></figcaption></figure><p>Energy efficiency can save homeowners and renters hundreds of dollars a year, and the new <a href="https://www.congress.gov/bill/117th-congress/house-bill/5376/text">Inflation Reduction Act</a> includes a wealth of home improvement rebates and tax incentives to help Americans secure those saving.</p>
<p>It <a href="https://www.rewiringamerica.org/policy/inflation-reduction-act">extends tax credits</a> for installing energy-efficient windows, doors, insulation, water heaters, furnaces, air conditioners or heat pumps, as well as for home energy audits. It also offers <a href="https://www.rewiringamerica.org/policy/high-efficiency-electric-home-rebate-act">rebates for low- and moderate-income households</a>’ efficiency improvements, up to US$14,000 per home.</p>
<p>Together, these incentives aim to cut energy costs for consumers who use them by <a href="https://www.democrats.senate.gov/imo/media/doc/inflation_reduction_act_one_page_summary.pdf">$500 to $1,000 per year</a> and reduce the nation’s climate-warming greenhouse gas emissions.</p>
<p>With so many options, what are the most cost-effective moves homeowners and renters can make?</p>
<p><a href="https://jasminaburek.com/">My lab</a> at UMass Lowell works on ways to improve sustainability in buildings and homes by finding cost-effective design solutions to decrease their energy demand and carbon footprint. There are two key ways to cut energy use: energy-efficient upgrades and behavior change. Each has clear winners.</p>
<h2>Stop the leaks</h2>
<p>The biggest payoff for both saving money and reducing emissions is weatherizing the home to stop leaks. Losing cool air in summer and warm air in winter means heating and cooling systems run more, and they’re among the most energy-intensive systems in a home.</p>
<p>Gaps along the baseboard where the wall meets the floor and at windows, doors, pipes, fireplace dampers and electrical outlets are all prime spots for drafts. Fixing those leaks can cut a home’s entire energy use by about 6%, on average, by our estimates. And it’s cheap, since those fixes mostly involve <a href="https://www.energy.gov/energysaver/caulking">caulk</a> and <a href="https://www.energy.gov/energysaver/weatherstripping">weather stripping</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Illustration of a house showing common air leaks, primarily in the attic and along walls and vents." src="https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=657&fit=crop&dpr=1 600w, https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=657&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=657&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=825&fit=crop&dpr=1 754w, https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=825&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/480276/original/file-20220822-66815-9t0pw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=825&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Common places where homes leak – and where weatherization measures can save money.</span>
<span class="attribution"><a class="source" href="https://www.energystar.gov/campaign/seal_insulate/identify_problems_you_want_fix/diy_checks_inspections">Department of Energy</a></span>
</figcaption>
</figure>
<p>The Inflation Reduction Act offers homeowners a hand. It includes a $150 rebate to help pay for a home energy audit that can locate leaks. </p>
<p>While a professional audit can help, it isn’t essential – the Department of Energy website offers guidance for <a href="https://www.energy.gov/energysaver/detecting-air-leaks">doing your own inspection</a>. </p>
<p>Once you find the leaks, the act includes 30% tax credits with a maximum of $1,200 a year for basic weatherization work, plus <a href="https://www.rewiringamerica.org/policy/high-efficiency-electric-home-rebate-act">rebates up to $1,600</a> for low- and moderate-income homeowners earning less than 150% of the local median.</p>
<h2>Replace windows</h2>
<p>Replacing windows is more expensive upfront but <a href="https://www.energy.gov/energysaver/adding-insulation-existing-home">can save a lot of money</a> on energy costs. Leaky windows and doors are responsible for <a href="https://www.energy.gov/energysaver/update-or-replace-windows">25% to 30% of residential heating and cooling costs</a>, according to Department of Energy estimates.</p>
<p><a href="https://www.energy.gov/energysaver/where-insulate-home">Insulation can also reduce energy loss</a>. But with the exception of older homes with poor insulation and homes facing extreme temperatures, it generally doesn’t have as high of a payoff in whole-house energy savings as weatherization or window replacement.</p>
<p><iframe id="v1Ulk" class="tc-infographic-datawrapper" src="https://datawrapper.dwcdn.net/v1Ulk/3/" height="400px" width="100%" style="border: none" frameborder="0"></iframe></p>
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<p>The Inflation Reduction Act includes up to $600 to help pay for window replacement and $250 to replace an exterior door.</p>
<h2>Upgrade appliances, especially HVAC and dryers</h2>
<p>Buildings cumulatively are <a href="https://www.energy.gov/downloads/chapter-5-increasing-efficiency-buildings-systems-and-technologies">responsible for about 40%</a> of U.S. energy consumption and associated greenhouse gas emissions, and a <a href="https://constructionphysics.substack.com/p/every-building-in-america-an-analysis">significant share</a> of that is in homes. Heating is typically the main energy use.</p>
<p>Among appliances, upgrading air conditioners and clothes dryers results in the largest environmental and cost benefits; however, HVAC systems – heating, ventilation and air conditioning – come with some of the highest upfront costs.</p>
<p>That includes energy-efficient <a href="https://pv-magazine-usa.com/2022/05/25/what-are-upfront-and-lifetime-costs-of-heat-pumps/">electric heat pumps</a>, which both heat and cool a home. The Inflation Reduction Act offers a 30% tax credit up to $2,000 available to anyone who purchases and installs a heat pump, in addition to rebates of up to $8,000 for <a href="https://www.consumerreports.org/appliances/inflation-reduction-act-and-new-electric-appliance-rebates-a3460144904/">low- and moderate-income households</a> earning less than 150% of the local median income. Some high-efficiency wood-burning stoves also qualify.</p>
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<p>The act <a href="https://www.rewiringamerica.org/app/ira-calculator">also provides rebates</a> for low- and moderate-income households for electric stoves of up to $840, heat-pump water heaters of up to $1,750 and heat-pump clothes dryers of up to $840.</p>
<h2>Change your behavior in a few easy steps</h2>
<p>You can also make a pretty big difference without federal incentives by changing your habits. My dad was energy-efficient before it was hip. His “hobby” was to turn off the lights. This action itself has been among the most cost-saving behavioral changes. </p>
<p>Just turning out the lights for an hour a day can <a href="http://www.opasnet.org/testiwiki/index.php/Handprinter">save a home up to $65 per year</a>. Replacing old lightbulbs with LED lighting also cuts energy use. They’re more expensive, but they save money on energy costs.</p>
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<p>We found that a homeowner could <a href="http://www.opasnet.org/testiwiki/index.php/Handprinter">save $265 per year</a> and reduce emissions even more by adopting a few behavioral changes including unplugging appliances not being used, line-drying clothes, lowering the water heater temperature, setting the thermostat 1 degree warmer at night in summer or 1 degree cooler in winter, turning off lights for an hour a day, and going tech-free for an hour a day.</p>
<p>Some appliances are <a href="https://www.gov.uk/government/news/vampire-energy-dont-be-a-sucker-switch-it-off">energy vampires</a> – they draw electricity when plugged in even if you’re not using them. One study in Northern California found that plugged-in devices, such as TVs, cable boxes, computers and smart appliances, that weren’t being used were responsible for <a href="https://www.nrdc.org/resources/home-idle-load-devices-wasting-huge-amounts-electricity-when-not-active-use">as much as 23% of electricity consumption</a> in homes.</p>
<h2>Start with a passive solar home</h2>
<p>If you’re looking for a home to rent or buy, or even to build, you can make an even bigger difference by looking at how it’s built and powered.</p>
<p><a href="https://cshub.mit.edu/sites/default/files/images/0601%20Building%20LCA%20Brief_0.pdf">Passive solar homes</a> take advantage of local climate and site conditions, such as having lots of south-facing windows to capture solar energy during cool months to reduce home energy use as much as possible. Then they meet the remaining energy demand with on-site solar energy.</p>
<p>Studies show that for homeowners in cold climates, building a <a href="https://cshub.mit.edu/news/research-brief-passive-houses-and-zero-energy-buildings">passive design home</a> could cut their energy cost by 14% compared with an average home. That’s before taking solar panels into account.</p>
<p>The Inflation Reduction Act offers a <a href="https://www.consumerreports.org/home-garden/alternative-energy/how-the-residential-clean-energy-solar-tax-credit-works-a1771685058/">30% tax credit</a> for rooftop solar and geothermal heating, plus accompanying battery storage, as well as incentives for community solar – larger solar systems owned by several homeowners. It also includes a $5,000 tax credit for developers to build homes to the Energy Department’s <a href="https://www.energy.gov/eere/buildings/downloads/doe-zero-energy-ready-home-national-program-requirements-rev-07">Zero Energy Ready Homes standard</a>.</p>
<p>The entire energy and climate package – including incentives for utility-scale renewable energy, carbon capture and electric vehicles – could have a big impact for homeowners’ energy costs and the climate. According to several <a href="https://repeatproject.org/docs/REPEAT_IRA_Prelminary_Report_2022-08-04.pdf">estimates</a>, it has the potential to reduce U.S. carbon emissions by <a href="https://rhg.com/research/climate-clean-energy-inflation-reduction-act/">about 40%</a> by the end of this decade.</p><img src="https://counter.theconversation.com/content/188506/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jasmina Burek does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Cutting a home’s energy waste starts with stopping the leaks. Energy-efficient appliances and windows can make a difference, too.Jasmina Burek, Assistant Professor of Engineering, UMass LowellLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1838542022-05-26T11:25:42Z2022-05-26T11:25:42ZCost of living: the unhealthy coping strategies which are likely to rise as energy bills soar – plus how to get help<figure><img src="https://images.theconversation.com/files/465476/original/file-20220526-26-vlob4w.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C3840%2C2160&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/boy-freezing-warm-clothing-dilapidated-old-1312060946">Vlaimages/Shutterstock</a></span></figcaption></figure><p>The burden of very high energy prices does not fall evenly across society. The most vulnerable customers are more likely to be on the most expensive tariffs because they’re more likely to pay for their energy via prepayment meters and <a href="https://www.citizensadvice.org.uk/Global/CitizensAdvice/Energy/Energy%20Consultation%20responses/Vulnerable%20consumers%20and%20high%20energy%20prices.pdf">face barriers to switching</a>, such as <a href="https://www.ofgem.gov.uk/sites/default/files/docs/2020/01/consumer_vulnerability_strategy_2025.pdf">limited access to the internet</a>. </p>
<p>One in six of the poorest households have energy bills at least <a href="https://lordslibrary.parliament.uk/rising-energy-costs-the-impact-on-households-pensioners-and-those-on-low-incomes/">25% above</a> the average. These include people with unavoidably high energy costs, such as those confined to the home due to poor health or old age, as well as large families and those living in <a href="https://www.sciencedirect.com/science/article/pii/S2352484721007782">energy-inefficient homes</a> who cannot afford to insulate them or rely on their landlords to do so. </p>
<p>People living in privately rented properties will be hit particularly hard, as this sector of housing contains the greatest number of the least energy efficient properties and the <a href="https://www.sciencedirect.com/science/article/pii/S2352484721007782">most vulnerable occupants</a>. </p>
<p>My research, conducted with colleagues at <a href="https://www.fuelpovertyresearch.net/">the Fuel Poverty Research Network</a>, looked at how vulnerable households cope when faced with significant increases in energy prices. We found that people have ingenious strategies for beating the cold but they come at a cost to <a href="https://www.sciencedirect.com/science/article/pii/S2352484721007782">their health and wellbeing</a> if they become routine.</p>
<h2>Cold food and exercise as a distraction</h2>
<p>We interviewed private renting tenants living in fuel poverty. Fuel poverty essentially means an inability to afford to heat the home to a safe and comfortable level. We discovered that it was routine in all of the 50 households we studied to do the following things to reduce energy costs: </p>
<ul>
<li><p>spend as much time outside the home as possible (riding public transport, sitting in libraries, staying with family and friends, staying at work longer)</p></li>
<li><p>eat food cold out of tins and eat the cheapest, least nutritious food such as white bread and packet noodles</p></li>
<li><p>only heat and use one or two rooms in the home using plug-in electric heaters, and turn off radiators in other rooms</p></li>
<li><p>only use rooms that get sunshine</p></li>
<li><p>get children to do additional exercise to keep them warm and distract them from the cold</p></li>
<li><p>use smart meters, where installed, to help ration daily energy use. This leads, in some cases, to cutting back on other essential uses of energy such as lighting.</p></li>
</ul>
<p>These strategies can be damaging to health, especially if sustained over long periods. Underheating the home <a href="https://www.ncbi.nlm.nih.gov/books/NBK535294/">increases the risk of serious illnesses</a> such as heart attacks or strokes, breathing problems, flu and depression. Growing up in a cold home can affect attainment at school and lead to bullying if it makes <a href="https://www.nea.org.uk/articles/what-is-fuel-poverty/">personal hygiene a luxury</a>. </p>
<p>Not eating enough or eating food with a low nutritional value has <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1447925/">multiple health consequences</a>. Cutting back on lighting makes accidents more likely and restricting access to electronic devices used to communicate with others can <a href="https://www.iriss.org.uk/resources/esss-outlines/digital-inclusion-exclusion-and-participation">increase loneliness and isolation</a>. </p>
<p>Our <a href="https://www.shu.ac.uk/centre-regional-economic-social-research/publications/energy-in-efficiency-what-tenants-expect-and-endure-in-private-rented-housing">earlier research</a> showed how tenants felt unable to complain to their landlord about the cold for fear of being evicted. Those we interviewed were aware of their weak position as low-income tenants looking for accommodation at a time when housing is in short supply and rents are high. </p>
<p>They also knew that, while an energy efficient home is more desirable, installing cavity wall insulation or double glazing windows might allow the landlord to <a href="https://www.shu.ac.uk/centre-regional-economic-social-research/publications/energy-in-efficiency-what-tenants-expect-and-endure-in-private-rented-housing">raise the rent</a> beyond what they could afford. </p>
<p>A paper that myself and colleagues <a href="https://www.shu.ac.uk/centre-regional-economic-social-research/projects/all-projects/reaching-the-hardest-to-reach-and-highly-vulnerable-in-energy-advice-and-support">published in 2019</a> found vulnerable households struggle to get help from energy providers. The people we spoke to lacked the confidence to speak with the firms supplying their energy and felt that when they did, they were pushed towards generic online material rather than offered solutions tailored to their circumstances. Their anxiety was often interpreted by energy company staff as aggression, and conversations were rarely productive. </p>
<figure class="align-center ">
<img alt="An elderly woman reads a bill by the radiator with despair." src="https://images.theconversation.com/files/465487/original/file-20220526-19-g69x0w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/465487/original/file-20220526-19-g69x0w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/465487/original/file-20220526-19-g69x0w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/465487/original/file-20220526-19-g69x0w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/465487/original/file-20220526-19-g69x0w.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/465487/original/file-20220526-19-g69x0w.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/465487/original/file-20220526-19-g69x0w.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Energy prices are exacerbating a wider cost of living crisis.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/senior-woman-holding-gas-bill-front-1347745217">Solarisys/Shutterstock</a></span>
</figcaption>
</figure>
<p>Since 2019, the number of people living in fuel poverty <a href="https://www.nea.org.uk/news/government-plans-for-energy-crisis-woefully-inadequate/#:%7E:text=Fuel%20poverty%20charity%20National%20Energy%20Action%20%28NEA%29%20says,six%20months%20from%20October%202021%20to%20April%202022.">has doubled</a>. It’s likely to double again by the winter, with 12 million households expected to enter fuel poverty by <a href="https://www.bbc.co.uk/news/business-61562657">November 2022</a>. </p>
<p>This is a significant threat to public health which already <a href="https://www.gov.uk/government/publications/health-matters-cold-weather-and-covid-19/health-matters-cold-weather-and-covid-19">costs tens of thousands of lives</a> each winter. Combined with the broader cost of living crisis, many millions of households will be relying on unhealthy coping strategies to reduce their energy consumption in the difficult months ahead.</p>
<h2>How to get help</h2>
<p>If you’re a tenant in the private rented sector struggling to afford to heat your home, help is available which does not entail you having to deal with your landlord or energy provider directly. </p>
<p><a href="https://www.citizensadvice.org.uk/">Citizens Advice</a> is an independent and impartial advice provider and can help you find the best energy deal available. It can also ensure that you’re receiving all of the income and discounts <a href="https://www.citizensadvice.org.uk/consumer/energy/energy-supply/get-help-paying-your-bills/grants-and-benefits-to-help-you-pay-your-energy-bills/">you’re entitled to</a>. They can liaise with your energy provider to reach agreements about energy debt. </p>
<p>It is illegal to rent out a property with an energy performance certificate lower than an E rating on the A-G scale. Landlords are <a href="https://www.gov.uk/guidance/domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance">legally required</a> to <a href="https://www.gov.uk/guidance/domestic-private-rented-property-minimum-energy-efficiency-standard-landlord-guidance#:%7E:text=The%20MEES%20Regulations%20refer%20to,VAT%20%2D%20the%20cost%20cap.">spend up to £3,500</a> on improving the energy performance of their properties. </p>
<p>You can also speak to the <a href="https://england.shelter.org.uk/housing_advice/repairs/health_and_safety_standards_for_rented_homes_hhsrs#:%7E:text=Improvement%20notices%20are%20often%20used%20to%20deal%20with,notice.%20The%20council%20might%20suspend%20an%20improvement%20notice.">environmental health team</a> at your local council. They can assess the dangers posed to you by your home and take action if threats to your health are identified.</p><img src="https://counter.theconversation.com/content/183854/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Aimee Ambrose has received funding from the Economic and Social Research Council, the Eaga Charitable Trust and the Arts and Humanities Research Council, as well as public sector bodies and charities. </span></em></p>Millions of people will risk their health to afford heating and electricity in the months ahead.Aimee Ambrose, Professor of Energy Policy and Trustee of the Fuel Poverty Research Network, Sheffield Hallam UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1803652022-04-07T18:59:01Z2022-04-07T18:59:01ZEnergy strategy: expensive nuclear power push ignores chance to cut costs of UK’s electricity system<p>The high global gas price has quadrupled the wholesale energy price for consumers across the UK over the last six months, with those on default tariffs paying by direct debit likely to see their average <a href="https://www.ofgem.gov.uk/publications/price-cap-increase-ps693-april">annual bill rise</a> by £693, from £1,277 to £1,971. </p>
<p>To begin insulating the public from volatile gas prices, <a href="https://www.gov.uk/government/news/major-acceleration-of-homegrown-power-in-britains-plan-for-greater-energy-independence">the government plans</a> to accelerate the pace at which it is deploying renewable energy and low-carbon technologies. That means an increase in the nation’s offshore wind capacity from 11 gigawatts (GW) today to 50GW by 2050 – 10GW more than its previous target – and eight new nuclear power stations. </p>
<p>Yet apart from a promised five-fold increase in solar power generation by 2035, the strategy sets no target for generating electricity from some of the country’s cheapest sources, like onshore wind.</p>
<p>The government may defend its decision to ramp up the production of nuclear power as support for a home-grown and reliable source of energy. But some of that hefty investment would be unnecessary if Britain reorganised its energy system to make the most of the nation’s abundant renewable electricity instead.</p>
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Read more:
<a href="https://theconversation.com/gas-prices-how-to-ensure-consumers-dont-pay-for-the-next-energy-crisis-168611">Gas prices: how to ensure consumers don't pay for the next energy crisis</a>
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<p>When the price of a commodity like a soft drink goes up, production can be ramped up fairly rapidly to respond to spot market conditions, which quickly lowers prices again. Building a new nuclear power plant or offshore wind farm is quite different, requiring major investment and the certainty that there will be a reasonable return on upfront investment from selling energy over 30 to 40 years.</p>
<figure class="align-center ">
<img alt="Wind turbines arranged in a row far out at sea." src="https://images.theconversation.com/files/456878/original/file-20220407-18-ij3q5s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/456878/original/file-20220407-18-ij3q5s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/456878/original/file-20220407-18-ij3q5s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/456878/original/file-20220407-18-ij3q5s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/456878/original/file-20220407-18-ij3q5s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/456878/original/file-20220407-18-ij3q5s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/456878/original/file-20220407-18-ij3q5s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The cost of building an offshore wind farm has plummeted, but onshore wind is cheaper.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/farm-614836703">KKFoto/Shutterstock</a></span>
</figcaption>
</figure>
<p>In the UK, governments can intervene in the capacity market to ensure a secure electricity supply by paying for <a href="https://www.gov.uk/government/collections/electricity-market-reform-capacity-market">reliable sources</a>, which provides the long-term certainty necessary to build sufficient generating capacity. Financial backing changes to reflect <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1005447/enabling-high-renewable-net-zero-electricity-system.pdf">the state’s priorities</a>, and the drive for eight new nuclear reactors is <a href="https://www.theguardian.com/environment/2022/mar/28/boris-johnsons-energy-strategy-funding-row-with-rishi-sunak">reported</a> to cost the public £13 billion.</p>
<p>Building wind farms and nuclear plants is just the first step though. The speed at which they be can integrated into electrical networks and operated to be in tune with power, transport and heat demand is what will actually decide when energy prices stabilise.</p>
<p>Wind and solar energy sources cannot change their output to match the minute-by-minute needs of customers. System operators must either instruct renewable generators to dump some of their energy when demand is low but wind and sunshine is high, or ask fossil power plants to fire up and fill the gap when demand is too much for becalmed wind turbines to meet. </p>
<p>The cost of the former is around £20 million a day. The annual cost of balancing the energy system in this way reached a record £1.2 billion in 2021, up from 5% of the wholesale energy cost in 2010 to <a href="https://electricinsights.co.uk/#/homepage?&_k=vujwqc">20% today</a>. </p>
<p>How to get inflexible, low-carbon energy to homes and businesses reliably and cheaply is as important as building new, reliable sources. And on that count, making <a href="https://www.gov.uk/government/publications/digitalising-our-energy-system-for-net-zero-strategy-and-action-plan">more effective use</a> of renewable sources – and reducing energy demand overall – would mean the country could afford to build less nuclear power, which is one of the few low-carbon sources which <a href="https://www.reuters.com/article/us-energy-nuclearpower-idUSKBN1W909J">hasn’t become substantially cheaper</a>.</p>
<figure class="align-center ">
<img alt="A gloved hand holds a tool injecting cavity wall insulation into brickwork." src="https://images.theconversation.com/files/456879/original/file-20220407-19-ul8962.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/456879/original/file-20220407-19-ul8962.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/456879/original/file-20220407-19-ul8962.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/456879/original/file-20220407-19-ul8962.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/456879/original/file-20220407-19-ul8962.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/456879/original/file-20220407-19-ul8962.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/456879/original/file-20220407-19-ul8962.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Saving energy is possible through efficiency measures like installing cavity wall insulation.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/house-being-insulated-by-injecting-microbead-1894972093">Corlaffra/Shutterstock</a></span>
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</figure>
<h2>New technologies</h2>
<p>One way to increase customer demand for renewable and low-carbon energy when it’s abundant and reduce it when generation is tight is to incentivise storage technologies.</p>
<p>For example, if electric vehicles are charged up when there is plenty of wind and solar power being generated, 40GW of offshore renewable energy would be enough to power the country’s <a href="https://newcastle-my.sharepoint.com/personal/nla22_newcastle_ac_uk/_layouts/15/onedrive.aspx?id=/personal/nla22_newcastle_ac_uk/Documents/M&R%2520Policy%2520Paper.pdf&parent=/personal/nla22_newcastle_ac_uk/Documents&ga=1">entire vehicle fleet</a> without any of it going to waste. </p>
<p>To help harmonise Britain’s energy demand with periods when renewable output is high, the government could invest in digital technologies such as smart meters and set up new tariffs which can send price signals to EV chargers. It could also invest in improving the short-term forecasting of solar and wind output. These changes would make distributors aware of customer needs and help customers alleviate stress on the system.</p>
<p>While electric vehicle batteries can manage the variability of renewable output, Britain’s energy system also needs fixed storage – like grid-scale batteries which, unlike the government’s favoured solution of hydrogen fuel, are capable of very fast response times to manage sudden changes.</p>
<p>Enabling millions of electric vehicles and <a href="https://theconversation.com/should-you-get-a-heat-pump-heres-how-they-compare-to-a-gas-boiler-151493">heat pumps</a> to tap into nuclear energy and renewable power generated in the remote North Sea is no small undertaking – it requires urgent changes in how the UK’s energy system operates. </p>
<p>For instance, using passenger electric vehicles to help manage renewable output will require access to personal data, such as the location of a vehicle when it is plugged in, or real-time energy use in a customer’s home. Rules need establishing to assure customers that this data will be protected rather than abused and used for anything other than system management.</p>
<p>But the energy strategy offers little in navigating the complexity of integrating EVs in garages with wind farms offshore. The result could be a fragmented system – unreliable and costly to maintain as decarbonisation intensifies.</p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Failure to make the most of Britain’s abundant renewables will mean a costly and unreliable energy supply.Furong Li, Reader in Electrical Systems, University of BathNigel Turvey, Visiting Senior Industrial Fellow in Electrical Engineering, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1764022022-02-04T13:19:37Z2022-02-04T13:19:37ZEnergy discounts are a sticking plaster – here’s a long-term solution to soaring household bills<p>The energy crisis is biting hard. Average gas and electricity bills in the UK will rise by 54% on April 1 2022 when the regulator Ofgem lifts its price cap. This is an increase of roughly <a href="https://www.ofgem.gov.uk/publications/price-cap-increase-ps693-april">£700 a year</a> (US$950). According to the charity National Energy Action <a href="https://www.nea.org.uk/energy-crisis/">another two million UK households</a> could be plunged into fuel poverty by then, bringing the total to six million by the end of the year. Shockingly, that would mean more than a fifth of homes having to choose between heating or eating.</p>
<p>The rise in wholesale fossil fuel prices accounts for almost £500 of the rise in household bills, with the remainder due to bill payers <a href="https://www.carbonbrief.org/analysis-cutting-the-green-crap-has-added-2-5bn-to-uk-energy-bills">covering the cost</a> of failed energy suppliers. UK households are uniquely susceptible to these spikes because they inhabit some of the <a href="https://theconversation.com/the-uk-has-some-of-the-least-energy-efficient-housing-in-europe-heres-how-to-fix-this-151609">least energy efficient houses</a> in western Europe. </p>
<p>An obvious way to offset the impact of wholesale energy price rises is to improve the efficiency of housing stock, to deliver the same comfort using less energy. But a nationwide efficiency drive does not appear to be at the top of the UK government’s list of proposed solutions to tackle the energy crisis. </p>
<p>Instead, Chancellor Rishi Sunak has announced <a href="https://www.theguardian.com/money/2022/feb/03/energy-bills-rishi-sunak-discount-rebate-council-tax">a raft of measures</a> to offset price rises through one-off grants, council tax rebates and repayable discounts on bills. These measures may lessen the immediate financial pain, but they do not tackle the underlying causes. They represent a sticking plaster, not a long-term solution. </p>
<h2>A decade of failure on energy efficiency</h2>
<p>In one form or another, obligations on energy companies to increase domestic energy efficiency – especially in fuel poor homes – have been <a href="https://commonslibrary.parliament.uk/research-briefings/cbp-8964/">around since 1994</a>. Suppliers recoup the cost of installing wall and loft cavity insulation and other home efficiency measures via a green levy on customers’ energy bills. Today, the UK’s flagship energy efficiency programme, the Energy Company Obligation (ECO), costs the average bill payer just <a href="https://www.ofgem.gov.uk/sites/default/files/docs/2021/02/annex_4_-_policy_cost_allowance_methodology_v1.8.xlsx">£29 a year</a>.</p>
<p>But the ECO has performed poorly compared to predecessor policies. When it was launched in 2013, loft and cavity wall insulation rates <a href="https://www.carbonbrief.org/analysis-cutting-the-green-crap-has-added-2-5bn-to-uk-energy-bills">collapsed</a> by 92% and 74% respectively compared with 2012. The ECO delivered on average just <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1047733/Headline_HEE_tables_20_JANUARY_2022.xlsx">228,000 insulation measures</a> a year between 2013 and 2021 – <a href="https://researchbriefings.files.parliament.uk/documents/SN06196/SN06196.pdf">a drop of 83%</a> against the 1.3 million insulation measures achieved by the policy it replaced.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A graph showing the installation of different energy efficiency measures from January 2013 to September 2021." src="https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=366&fit=crop&dpr=1 600w, https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=366&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=366&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=460&fit=crop&dpr=1 754w, https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=460&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/444518/original/file-20220204-19-1m69nnn.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=460&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The installation of ECO measures has not returned to its 2013 peak.</span>
<span class="attribution"><a class="source" href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1047733/Headline_HEE_tables_20_JANUARY_2022.xlsx">BEIS</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The ECO has also done little to wean households off expensive gas heating. Since 2018, the ECO funded the installation of 230,000 new gas boilers, with 94,000 of these installed without other efficiency measures like insulation. Meanwhile, it has delivered just 545 electric heat pumps since October 2018 – roughly 14 installations a month.</p>
<p>In 2013, the Conservatives moved to “<a href="https://www.thesun.co.uk/archives/politics/354716/get-rid-of-the-green-crap/">cut the green crap</a>” from energy payments, gutting the ECO and raising rather than reducing household bills. <a href="https://www.carbonbrief.org/analysis-cutting-the-green-crap-has-added-2-5bn-to-uk-energy-bills">A recent analysis</a> by Carbon Brief suggested that cuts to the ECO will have added £808 million onto total household energy bills by summer 2022 due to 1.1 million fewer insulation installations per year. Since 2013, it’s <a href="https://eciu.net/analysis/briefings/heating/insulation-and-gas-prices">estimated</a> an additional nine million homes could have been insulated, saving homes a combined total of £830 on gas bills alone by 2022.</p>
<p>With the energy crisis making its own case for radical reform and the government <a href="https://www.gov.uk/government/consultations/design-of-the-energy-company-obligation-eco4-2022-2026">yet to finalise</a> its plans for the future of the ECO, we offer four recommendations for solving the energy crisis.</p>
<h2>Boost funding</h2>
<p>Since October 2018, the ECO has delivered <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1047733/Headline_HEE_tables_20_JANUARY_2022.xlsx">120,000</a> insulation measures per year. At this rate - under the ECO alone - it would take 50 years to implement just one insulation measure across a possible six million fuel-poor homes. At an absolute minimum, the government <a href="https://www.theccc.org.uk/wp-content/uploads/2021/06/Progress-in-reducing-emissions-2021-Report-to-Parliament.pdf">should be aiming</a> to install insulation in 1.3 million homes a year – a rate it managed pre-2013. </p>
<p>Sunak confirmed that from 2022 <a href="https://questions-statements.parliament.uk/written-questions/detail/2022-02-03/117864">the ECO’s funding</a> will grow from £640 million to £1 billion per year to retrofit a total of 305,000 homes during its lifetime, but this isn’t nearly enough. Recent research by the <a href="https://neweconomics.org/2021/09/great-homes-upgrade">New Economics Foundation</a> suggests net zero targets require increasing annual funding for insulation to around £7 billion, which would retrofit 7 million homes by 2025.</p>
<h2>Taxes not levies</h2>
<p>Funding the ECO through levies on energy bills means the poorest homes currently <a href="https://www.tandfonline.com/doi/full/10.1080/14693062.2020.1773754">pay the same</a> 15% share of their energy bill towards green policies as the richest households. The bulk of the ECO – and indeed, all green levies – is <a href="https://www.ofgem.gov.uk/energy-advice-households/costs-your-energy-bill">raised on electricity</a> as opposed to gas bills. This artificially inflates the cost of electricity and the running costs of electric heat pumps compared with gas boilers, <a href="https://www.raponline.org/wp-content/uploads/2020/03/rap-rosenow-lowes-principles-heat-decarbonisation-march-2020.pdf">disincentivising</a> the switch to low-carbon heating.</p>
<p>The answer is to shift funding for the ECO and other green policies onto <a href="https://www.bbc.com/news/business-59906223">general taxation</a>. This would offer a small reduction on bills prior to April’s price cap rise, with the lowest earners paying proportionally less. In the longer term, it would mean wealthier homes subsidising efficiency improvements in low-income households, alleviating fuel poverty and <a href="https://www.iea.org/reports/multiple-benefits-of-energy-efficiency/health-and-wellbeing">relieving some pressure</a> on the NHS, as warmer homes mean fewer health issues and lower healthcare costs.</p>
<h2>Let communities lead</h2>
<p>Insulating hundreds of homes at a time, neighbourhood-by-neighbourhood and coordinated by local authorities, could help to retrofit housing deeper and faster than tackling homes one-by-one. Fortunately, the government’s proposals for a revamped ECO envisage energy companies <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1010366/eco4-consultation.pdf">meeting half their obligation</a> via measures referred to by local authorities. Here, the local authority works closely with businesses and community groups to ensure measures reach those most in need, <a href="https://pureportal.strath.ac.uk/en/projects/5b55c68a-da0a-4957-8bc2-f9550ee8e163">relying on</a> their combined knowledge of and access to the community.</p>
<figure class="align-center ">
<img alt="A construction worker in overalls smooths out yellow loft insulation under wooden eaves." src="https://images.theconversation.com/files/444536/original/file-20220204-23-fddv6y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/444536/original/file-20220204-23-fddv6y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/444536/original/file-20220204-23-fddv6y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/444536/original/file-20220204-23-fddv6y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/444536/original/file-20220204-23-fddv6y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/444536/original/file-20220204-23-fddv6y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/444536/original/file-20220204-23-fddv6y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Insulating homes has wider benefits for public health.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/construction-worker-thermally-insulating-house-attic-1907495419">Irin-k/Shutterstock</a></span>
</figcaption>
</figure>
<h2>Low-carbon heating</h2>
<p>The ECO has a long history of installing new gas heating, perpetuating the problem of households being exposed to volatile gas prices and doing little to deliver on the government’s <a href="https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution/title#point-7-greener-buildings">net zero target</a>. This includes the goal of installing 600,000 heat pumps by 2028 – which the government is <a href="https://committees.parliament.uk/publications/8742/documents/88647/default/">not on track</a> to deliver.</p>
<p>Policies like the Boiler Upgrade Scheme exist to help households adopt low-carbon heating technologies, such as heat pumps, but these do not have the same level of funding or focus on fuel-poor homes as the ECO. The government must <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1010366/eco4-consultation.pdf">enact its own proposals</a> and ensure the next phase of the ECO makes provisions for installing low-carbon heating and limits or removes support for new and replacement fossil fuel heating systems. Failure to do this only makes another energy crisis inevitable, fuelled by runaway fossil fuel prices.</p>
<p>The UK government has already missed the opportunity to insulate millions of additional homes and prevent an eye-watering price cap rise in April. It can avoid repeating the same mistake by making home energy efficiency its number one priority.</p>
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<img alt="Imagine weekly climate newsletter" src="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/434988/original/file-20211201-21-13avx6y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><strong><em>Don’t have time to read about climate change as much as you’d like?</em></strong>
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<p class="fine-print"><em><span>Matthew Hannon receives funding from UK Research Councils. He is affiliated with the charity South Seeds and the British Institute of Energy Economics.</span></em></p><p class="fine-print"><em><span>Donal Brown receives funding from UK Research Councils and the EU Commission. He is affiliated with Retrofitworks CIC, and is a member of the Green Party. </span></em></p>A home energy efficiency drive can shield households from mounting gas and electricity bills.Matthew Hannon, Chancellor's Fellow of Technology and Innovation, University of Strathclyde Donal Brown, Research Fellow, SPRU, University of Sussex Business School, University of SussexLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1562252021-08-05T10:44:39Z2021-08-05T10:44:39ZWhy the UK’s unfair energy market is unlikely to spearhead a green transition<figure><img src="https://images.theconversation.com/files/414769/original/file-20210805-25-hzjc05.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4912%2C3264&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/double-exposure-electric-pole-sky-stock-1157896027">Art Stock Creative/Shutterstock</a></span></figcaption></figure><p>Millions of people will pay more for gas and electricity in the UK by the autumn of 2021 as the energy regulator, Ofgem, has removed a cap on prices. For some households, this could mean bills rising by as much as <a href="https://www.theguardian.com/business/2021/aug/06/millions-of-great-britain-homes-face-highest-energy-bills-in-a-decade">£153 (US$212) a year</a>, potentially pushing <a href="https://amp.theguardian.com/society/2021/jul/31/calls-for-social-tariff-on-uk-energy-bills-as-rises-push-extra-half-million-homes-into-fuel-poverty">an extra 500,000 homes</a> into fuel poverty.</p>
<p>Those heftier energy bills also fund much of the UK government’s flagship policies for the low-carbon transition. On top of their energy use, every home in the country is paying extra on their bill to cover the cost of retrofitting programmes to increase the energy efficiency of homes, help for those in fuel poverty and subsidies for renewable generation. All of these costs are added to energy bills at a flat rate.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A bar chart showing cost of green policy as share of income from each income group." src="https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=385&fit=crop&dpr=1 600w, https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=385&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=385&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=484&fit=crop&dpr=1 754w, https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=484&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/396077/original/file-20210420-15-lxuwos.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=484&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Who foots the bill for decarbonisation?</span>
<span class="attribution"><a class="source" href="https://www.tandfonline.com/doi/full/10.1080/14693062.2020.1773754">Owen & Barret/Climate Policy</a></span>
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<p>According to <a href="https://www.ippr.org/publications/when-the-levy-breaks-energy-bills-green-levies-and-a-fairer-low-carbon-transition">a 2015 report</a>, this means, in practice, that those on the lowest incomes pay a six times higher share of their income for the transition than the highest income group, who also happen to have the <a href="http://www.ledevoir.com/documents/pdf/chancelpiketty2015.pdf">highest CO₂ emissions</a> on average.</p>
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<a href="https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A bar chart comparing energy use between different income groups." src="https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=334&fit=crop&dpr=1 600w, https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=334&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=334&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=420&fit=crop&dpr=1 754w, https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=420&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/396078/original/file-20210420-21-1wkxryc.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=420&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Higher income groups use significantly more energy than those on lower incomes.</span>
<span class="attribution"><a class="source" href="https://www.ippr.org/publications/when-the-levy-breaks-energy-bills-green-levies-and-a-fairer-low-carbon-transition">Garman & Aldridge/IPPR</a>, <span class="license">Author provided</span></span>
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<p>Through energy bills, people in the lowest income groups effectively self-fund their own fuel poverty support, including measures like <a href="https://www.gov.uk/the-warm-home-discount-scheme">the warm home discount</a> – a one-off winter payment of £140 towards energy bills – while also paying towards measures that mainly benefit <a href="https://www.tandfonline.com/doi/full/10.1080/14693062.2020.1773754">higher income groups</a>, like subsidies for rooftop solar panels.</p>
<p><a href="https://www.eci.ox.ac.uk/people/bboardman.html">Academic Brenda Boardman</a> warned about this problem in <a href="https://www.sciencedirect.com/science/article/abs/pii/030626199390061S">the 1990s</a>. Not only is this not a fair way to fund the national effort to decarbonise the UK’s energy system, but that same unfairness is slowing the speed and reducing the motivation for a transition in the first place.</p>
<h2>The big fix</h2>
<p>The UK’s energy market is dominated by six multinational corporations. On the website of Ofgem, the energy regulator, <a href="https://www.ofgem.gov.uk/investigations">a page</a> documents the multiple infractions of these companies, known as <a href="https://theconversation.com/uk/topics/big-six-energy-companies-16080">the Big Six</a>, from their <a href="https://journals.sagepub.com/doi/full/10.1177/1024529420964933">treatment of vulnerable customers</a> to their failure to fulfil obligations to reduce the carbon intensity of their gas and electricity.</p>
<p>Ofgem’s answer is a voluntary <a href="https://energyredress.org.uk/about-us">redress scheme</a> which companies under investigation pay into. This often funds programmes which advise vulnerable customers, such as the chronically ill, on how to navigate an (often intentionally) bewildering energy market. Npower paid <a href="https://www.ofgem.gov.uk/publications/npower-pay-ps26m-failing-treat-customers-fairly">a record fine</a> in 2015 of £26 million. The total number of fines and redress payments made in 2020 <a href="https://www.ofgem.gov.uk/energy-policy-and-regulation/compliance-and-enforcement">reached £71.3 million</a>.</p>
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<em>
<strong>
Read more:
<a href="https://theconversation.com/people-who-cant-heat-their-homes-need-energy-justice-not-fuel-bank-charity-40778">People who can't heat their homes need energy justice – not 'fuel bank' charity</a>
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<p>Had this money been spent directly on low-cost renewable generation, <a href="https://www.renewableuk.com/page/UKWEDExplained">57 megawatts of wind energy</a> could have been installed, enough to power around 40,000 homes annually. </p>
<p>These six companies made profits of nearly <a href="https://assets.publishing.service.gov.uk/media/5773de34e5274a0da3000113/final-report-energy-market-investigation.pdf">£2 billion</a> in 2015 from their standard tariffs. People are often placed on these automatically and tend to remain on them, with only the most nimble customers (<a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/699937/modernising-consumer-markets-green-paper.pdf">around 30% in 2016</a>) switching. The government <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/699937/modernising-consumer-markets-green-paper.pdf">noted</a> that those least likely to switch to cheaper tariffs earn less than £18,000 a year, are aged 65 and over, with a disability, or live in social housing or the private rented sector. As a result, a significant proportion of these profits are extracted from those <a href="https://www.ofgem.gov.uk/sites/default/files/docs/2008/10/energy-supply-probe---initial-findings-report.pdf">least able to pay</a>.</p>
<p>In fact, many people living in private rentals and social housing (20% and 17% of the population <a href="https://www.ons.gov.uk/economy/inflationandpriceindices/articles/ukprivaterentedsector/2018#main-points">respectively</a>) are effectively <a href="https://www.sciencedirect.com/science/article/pii/S0301421519300102">excluded</a> from the choice of installing the solar panels and electric vehicle charging points their energy bills finance, because such freedoms tend to depend on home ownership.</p>
<p>UK consumers also pay some of the <a href="https://www.gov.uk/cma-cases/energy-market-investigation">highest pre-tax rates</a> for electricity in Europe, and energy costs in general are <a href="https://www.gov.uk/government/publications/cost-of-energy-independent-review">higher than they should be</a> considering falling gas prices since 2014 and more efficient boilers and smart meters. Meanwhile, the <a href="https://www.ofgem.gov.uk/information-consumers/energy-advice-households/costs-your-energy-bill">third of the bill</a> which pays for the maintenance and environmental upgrade of energy infrastructure is taken at the same rate from billionaires as it is from those on Universal Credit. People without solar panels will continue paying for the essential network changes that incorporate the growing amount of renewable energy, and those who cannot afford to swap their fossil fuel burning car for an electric vehicle could end up having to travel further and emit more to get fuel, as retailers cease supplying or <a href="https://www.sciencedirect.com/science/article/pii/S0301421519300102">close their facilities</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A bar chart comparing pre-and post-tax electricity prices in EU countries." src="https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=346&fit=crop&dpr=1 600w, https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=346&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=346&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=435&fit=crop&dpr=1 754w, https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=435&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/396079/original/file-20210420-17-60vm8k.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=435&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Electricity prices from July to December 2015, including and excluding tax (p/kWh).</span>
<span class="attribution"><a class="source" href="https://www.gov.uk/cma-cases/energy-market-investigation">UK Government</a>, <span class="license">Author provided</span></span>
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</figure>
<p>While consumers fund measures which cut emissions from the UK’s energy system through bills, government policies effectively subsidise fossil fuels, mostly through <a href="https://journals.sagepub.com/doi/full/10.1177/1461452920960349">forgone tax revenue</a>. These UK subsidies result in effective investment in fossil fuel production of €11.6 billion a year, compared to the €7.76 billion <a href="https://journals.sagepub.com/doi/full/10.1177/1461452920960349">invested in renewables</a>. In this situation, the renewables consumers fund are more likely to add to the energy generated by fossil fuels, rather than replace it.</p>
<p>At the same time, renewable subsidies like <a href="https://www.gov.uk/feed-in-tariffs">the feed-in-tariff</a>, which paid people for the excess energy they generated with solar panels, have been axed. This makes it harder for people to pay to install solar power at home. Clearly, the transition to low-carbon energy could be quicker if government policy didn’t work against the best intentions of the public. </p>
<p>And the public are aware. <a href="https://www.sciencedirect.com/science/article/abs/pii/S2214629618311988">One study</a> in 2019 found widespread misgivings about excessive profits, a lack of transparency and close ties between the government and big energy companies. If people don’t trust the institutions tasked with overseeing the end of the fossil fuel era, how will they be persuaded to make the necessary <a href="https://www.theccc.org.uk/publication/behaviour-change-public-engagement-and-net-zero-imperial-college-london/">changes</a> to their own lives?</p><img src="https://counter.theconversation.com/content/156225/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lee Towers does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The cost of decarbonising the UK’s energy system is falling disproportionately on the poorest.Lee Towers, PhD Candidate in Energy and Politics, University of BrightonLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1263292019-11-05T14:46:49Z2019-11-05T14:46:49ZLabour’s low-carbon ‘warm homes for all’ could revolutionise social housing – experts<figure><img src="https://images.theconversation.com/files/300278/original/file-20191105-88409-1nd7wd6.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4252%2C2666&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A home designed to Passivhaus standards, with solar panels and windows that help conserve heat.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/modern-passive-house-white-roof-solar-1012291636">Radovan1/Shutterstock</a></span></figcaption></figure><p>All homes built from 2022 onwards would be carbon neutral under a Labour government, according to a recent election pledge by the party. Labour has also promised to guarantee “<a href="https://labour.org.uk/press/warm-homes-for-all-labours-plan-to-reduce-energy-bills-create-jobs-and-tackle-the-climate-emergency/">warm homes for all</a>”, by retrofitting the UK’s 27m houses with insulation, double-glazed windows, heat pumps and solar panels, to help them save and produce at least as much energy as they use, effectively neutralising their contribution to the climate crisis. </p>
<p>At the moment, that contribution is surprisingly large – heating and energy use in homes accounts for <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/790626/2018-provisional-emissions-statistics-report.pdf">18% of the UK’s total carbon emissions</a>. Decarbonising housing is an urgent task and will require a herculean effort – are Labour’s plans up to the job?</p>
<p>There’s at least no shortage of potential providers for new, zero-energy homes. Councils could choose to build the houses themselves or work in partnership with private developers and housing associations – non-profit organisations which rent affordable accommodation to people on low incomes or with particular needs. In order to make all new homes carbon neutral by 2022, all builders and developers would need to play their part.</p>
<p>Retrofitting all existing houses is estimated to cost about £250 billion, of which Labour pledges £60 billion in public subsidy. This would mean government investment would only cover 24% of the estimated cost, with the rest expected to come from “energy savings” down the line. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-hundred-years-of-social-housing-how-standards-and-quality-got-lost-along-the-way-121068">A hundred years of social housing: how standards and quality got lost along the way</a>
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<p>Meanwhile, councils and housing associations are already under strain to deliver enough affordable housing. In recent years, the amount of investment that the Conservative government has been willing to commit to building houses, through grants to housing associations and councils, has dwindled. </p>
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<img alt="" src="https://images.theconversation.com/files/300261/original/file-20191105-88428-60f2fr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300261/original/file-20191105-88428-60f2fr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300261/original/file-20191105-88428-60f2fr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300261/original/file-20191105-88428-60f2fr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300261/original/file-20191105-88428-60f2fr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300261/original/file-20191105-88428-60f2fr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300261/original/file-20191105-88428-60f2fr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The building of affordable housing has stalled under the Tories.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/cobblestone-reflection-house-puddle-after-rain-1098538682?src=e31965aa-d00d-4749-8505-360eb8f3f500-1-1">I Wei Huang/Shutterstock</a></span>
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<p>If they want to build new homes, housing associations are expected to build properties for private sale or rent and invest their profits into building social housing – that is, homes that are let for below-market rents. </p>
<p>But this policy of cross-subsidy hasn’t delivered <a href="https://www.insidehousing.co.uk/news/news/nhf-and-lga-bosses-clash-over-social-rent-focus-63426">the number of affordable homes that are needed</a>. A public commitment to fund the delivery of environmental standards in existing and new-build homes will be necessary to ensure Labour’s plans don’t fall short. But what could a future of zero-energy social housing look like?</p>
<h2>Street that could change Britain</h2>
<p>In July 2019, a council housing scheme in Norwich called <a href="https://www.theguardian.com/artanddesign/2019/jul/16/norwich-goldsmith-street-social-housing-green-design">Goldsmith Street</a> won <a href="https://www.insidehousing.co.uk/insight/the-gold-standard-how-a-council-housing-scheme-won-architectures-biggest-prize-63761">the prestigious Stirling Prize for architecture</a> for its eco-friendly design and for providing 100% social housing. Residents report lower energy bills – <a href="https://www.theguardian.com/society/2019/oct/11/spacious-and-green-norwich-award-winning-new-council-houses-goldsmith-street">as low as £150 a year</a> in some cases – and <a href="https://www.theguardian.com/artanddesign/2019/jul/16/norwich-goldsmith-street-social-housing-green-design">plenty of green space</a>. </p>
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<p>The houses have much thicker insulation than normal, triple glazing and mechanical ventilation which can <a href="https://theconversation.com/how-to-use-the-london-underground-to-heat-your-home-21256">recover and circulate waste heat</a>. Similar grand designs have offered glimpses of how homes might be greener, but Goldsmith Street’s commitment to social housing could help meet the <a href="https://www.bbc.co.uk/news/uk-england-46788530">drastic need for more affordable homes</a>. So how could this tantalising vision become the norm?</p>
<p>The answer might seem obvious: make it the law. But the UK construction sector is highly fragmented – and different subcontractors are often responsible for the walls, roof and electricity in a single house. This makes quality control difficult. There’s also a skills shortage, especially when it comes to the detailed knowledge required to build a zero-energy house. And if energy-consuming extras such as underfloor heating or electrically driven windows are added, the energy savings from design may be lost.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/climate-change-means-we-cant-keep-living-and-working-in-glass-houses-45006">Climate change means we can't keep living (and working) in glass houses</a>
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</em>
</p>
<hr>
<p>One solution might be to mandate the use of <a href="http://passivhaustrust.org.uk/certification.php">Passivhaus Certification</a>, as architects did on Goldsmith Street. Under this scheme, contractors must have the right qualifications and the energy modelling – which determines if a home will truly produce as much energy as it consumes – must be completed in a highly prescribed manner. A guarantee that the correct insulation and other features have been delivered and fitted must be rigorously reported to a third party. </p>
<p>While there are costs involved with this, certified Passivhaus homes typically have heating bills that are <a href="http://www.passivhaustrust.org.uk/what_is_passivhaus.php#2">one-tenth of the UK average</a>, meaning that residents of a three-bedroom semi-detached house could expect heating bills of around £50 per annum. </p>
<p>Most people would pay more for a car that came with free petrol for life, which is close to what a zero-energy home is. But people will need to believe this is what they will get. <a href="https://passivehouseplus.ie/magazine/insight/how-brussels-went-passive">More than 40,000 such buildings have been delivered</a> across Europe, and Passivhaus was the <a href="https://passivehouseplus.ie/magazine/insight/how-brussels-went-passive">route to low-energy construction that Belgium chose</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300265/original/file-20191105-88414-upjha.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300265/original/file-20191105-88414-upjha.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=378&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300265/original/file-20191105-88414-upjha.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=378&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300265/original/file-20191105-88414-upjha.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=378&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300265/original/file-20191105-88414-upjha.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=475&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300265/original/file-20191105-88414-upjha.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=475&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300265/original/file-20191105-88414-upjha.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=475&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A Passivhaus home (right) leaks less heat than a traditional building (left).</span>
<span class="attribution"><a class="source" href="https://en.wikipedia.org/wiki/Passive_house#/media/File:Passivhaus_thermogram_gedaemmt_ungedaemmt.png">Passivhaus Institut/Wikipedia</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>But Passivhaus only works if the right design decisions are made from day one. If an architect starts by drawing a large window for example, then the energy loss from it might well be so great that any amount of insulation elsewhere can’t offset it. Architects don’t often welcome this intrusion of physics into the world of art. In other industries – high-performance car design for example – the need to work with physics to reduce drag also affords an attractive, low and sleek look.</p>
<p>Architects and building engineers aren’t often taught together in the UK, and engineering is rarely included in architecture degrees. Our team at the University of Bath is working on simple energy modelling tools that could help architects incorporate these principles in their designs.</p>
<p>To take Labour’s plans from their blueprints and on to streets in the UK, an incoming government will need funding to roll out new homes and retrofit old ones. It will need to introduce regulation to ensure all homes are brought up to standard and drive a revolution in what architects currently consider acceptable for how houses should look and feel. That’s a tall order – but decarbonising each component of society will take nothing short of a revolution.</p>
<hr>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/300094/original/file-20191104-88372-xpdf2e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/300094/original/file-20191104-88372-xpdf2e.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=140&fit=crop&dpr=1 600w, https://images.theconversation.com/files/300094/original/file-20191104-88372-xpdf2e.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=140&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/300094/original/file-20191104-88372-xpdf2e.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=140&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/300094/original/file-20191104-88372-xpdf2e.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=176&fit=crop&dpr=1 754w, https://images.theconversation.com/files/300094/original/file-20191104-88372-xpdf2e.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=176&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/300094/original/file-20191104-88372-xpdf2e.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=176&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p><em><a href="https://theconversation.com/uk/newsletters/the-daily-newsletter-2?utm_source=TCUK&utm_medium=linkback&utm_campaign=TCUKGE2019&utm_content=GEBannerA">Click here to subscribe to our newsletter if you believe this election should be all about the facts.</a></em></p><img src="https://counter.theconversation.com/content/126329/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Coley receives funding from BIS and EPSRC.</span></em></p><p class="fine-print"><em><span>Jo Richardson does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Housing currently accounts for almost one-fifth of the UK’s annual carbon emissions.Jo Richardson, Professor of Housing and Social Inclusion, De Montfort UniversityDavid Coley, Professor of Low Carbon Design, University of BathLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/986172018-06-24T19:51:22Z2018-06-24T19:51:22ZIf you need a PhD to read your power bill, buying wisely is all but impossible<figure><img src="https://images.theconversation.com/files/224373/original/file-20180622-26567-u4uu4e.jpg?ixlib=rb-1.1.0&rect=33%2C881%2C5512%2C2502&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Energy bills are becoming to complex to understand.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>A recent survey found that Australia’s power companies are <a href="https://reneweconomy.com.au/power-companies-less-trusted-by-consumers-than-banks-telcos-26748/">less trusted than media companies, banks and telcos</a>. Customers hate electricity bills – not least because they are so complicated. But we can learn much by analysing them closely. </p>
<p>One feature that deserves close scrutiny is the all-pervasive discount. In electricity retailing, all but 3 of the 28 active <a href="https://www.miretailenergy.com.au/">retailers</a> use discounts in their retail offers. </p>
<p>In any kind of retailing, discounts give customers the impression that they are making a smart buy. This is often true, particularly in cases where it is easy to see and compare the discounted prices. But if it’s not easy to compare, customers may not realise if they’ve been duped. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/australian-household-electricity-prices-may-be-25-higher-than-official-reports-84681">Australian household electricity prices may be 25% higher than official reports</a>
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<hr>
<p>With electricity bills, it is all but impossible for customers to know whether their discounted price really represents a good deal. This is because the discounts are ludicrously complicated – as are the base prices themselves. </p>
<p>Large businesses do not complain about retail electricity markets. This is because they have the capacity, either in-house or through consultants, to evaluate complex retail price structures. Advances in data science may yet make such expertise available to everyone. </p>
<h2>Eye-wateringly complex</h2>
<p>To fairly compare your bill, you must be able to adjust for the discount in your current bill, and <em>also</em> in all the alternative competing offers. Having worked with thousands of bills, I know the myriad ways discounts are calculated make this terribly difficult. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/a-high-price-for-policy-failure-the-ten-year-story-of-spiralling-electricity-bills-89450">A high price for policy failure: the ten-year story of spiralling electricity bills</a>
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<hr>
<p>Let us count the ways a discount may be applied: </p>
<ul>
<li><p>some discounts are worked out as a percentage of usage charges while others are on the total bill</p></li>
<li><p>some discounts are before the receipt of concessions, others after</p></li>
<li><p>some discounts are before solar feed-in receipts, others after</p></li>
<li><p>few bills actually clearly state the discount rate, and some don’t state the rate at all</p></li>
<li><p>some discounts are only received on subsequent bills (so that if the customer leaves, the retailer avoids discounting their last bill)</p></li>
<li><p>some retailers offer several discounts in the bill but sometimes some apply after other discounts are taken off first</p></li>
<li><p>some will discount controlled load consumption, others not</p></li>
<li><p>some discounts are payable as rebates when the customer transfers to the retailer; other rebates are paid out over months and even years</p></li>
<li><p>some offer discounted amounts which are contingent on advance purchases of electricity, but the discount is not achieved unless purchases exceed the contingent amounts</p></li>
<li><p>some discounts in bills are not actually calculated in customers’ bills as the retailers say they are calculated</p></li>
<li><p>some retailers take up-front payments from customers and then feed those payments back to customers on each subsequent bill as if they are discounts</p></li>
<li><p>most discounts are conditional on customers doing something (usually paying the bill on time) but some are unconditional. Some bills have both conditional and unconditional discounts; others just one or the other. </p></li>
</ul>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/youre-paying-too-much-for-electricity-but-heres-what-the-states-can-do-about-it-93654">You're paying too much for electricity, but here's what the states can do about it</a>
</strong>
</em>
</p>
<hr>
<p>If that isn’t enough, electricity tariffs in Australia are stunningly complex commercial arrangements. They have daily charges and a wide range of methods for charging for consumption: flat rates; daily, monthly or quarterly block rates; time-of-use rates with two or three bands; combinations of time-of-use and block rates; one or more separate rates for controlled loads of different types; consumption rates that are seasonal; and now some bills with peak demand charges. </p>
<p>Solar feed-in rates offered by retailers often (but not always) vary depending on the receipt of subsidies. Most recently, some retailers have offered block rates for solar feed-in, or different prices for the first tranche of solar power feed-in. </p>
<h2>What can you do?</h2>
<p>It is no surprise that few customers have the time or skill needed to choose wisely. While this is not a peculiarly Australian phenomenon – evidence from <a href="https://academic.oup.com/oep/article-abstract/62/4/647/2362102">abroad</a> shows that lots of money is left on the table even when customers try to buy well – we think it is worse here. Our research is working to quantify this in Australia.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/factcheck-does-south-australia-have-the-highest-energy-prices-in-the-nation-and-the-least-reliable-grid-92928">FactCheck: does South Australia have the 'highest energy prices' in the nation and 'the least reliable grid'?</a>
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</p>
<hr>
<p>Government price comparison sites, like <a href="http://www.energymadeeasy.gov.au">Energy Made Easy</a>, are often advanced as solutions. But a <a href="https://www.aemc.gov.au/markets-reviews-advice/2017-retail-energy-competition-review">2017 competition review</a> found that these have had limited success in Australia and <a href="https://competitionpolicy.wordpress.com/2015/07/09/a-regulators-price-comparison-website-is-not-sensible-comment-on-catherine-waddamss-blog-post/#_ftn1">elsewhere</a>. </p>
<p>Complexity trips up governments too, and retailers work hard to persuade the regulators and policy makers to their point of view. </p>
<p>Regulating complexity away through standardisation is also suggested. Tight regulation can work well; think of the excellent market for bread and patisserie in France. But standardising the sale of electricity often comes at the expense of incentives for retailers to discover customers’ needs, and may <a href="https://www.eprg.group.cam.ac.uk/wp-content/uploads/2017/07/S.-Littlechild_-8-Apr-2018Upd.pdf">increase rather than reduce</a> average prices.</p>
<p>Policymakers want both customer protection and incentives to innovation. But the desire to have one’s cake and eat it can lead to half-baked solutions that make matters worse. </p>
<p>The solution may be to master the complexity rather than trying to regulate it away. Many existing price comparison websites offer limited coverage of the market of competing offers, or look at only the energy consumption portion of a customer’s existing bill. </p>
<p>However advances in data science now make it cost effective to provide small customers with on-going analysis of their usage and their retailer’s charges in order to ensure that they are always on the best deal for them. Businesses using this approach <a href="https://flipper.community/">overseas</a> are well established, and the scope for further innovation is very large. </p>
<p>Overcoming the complexity of the retail market will take away the wool that retailers have a powerful incentive to pull over their customers’ eyes.</p><img src="https://counter.theconversation.com/content/98617/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce Mountain is the co-founder of MI Retail Energy which provides software to CHOICE for the operation of its Transformer service. </span></em></p>With electricity bills becoming more complicated, it’s increasingly difficult for customers to know if they are getting a good deal.Bruce Mountain, Director, Victoria Energy Policy Centre, Victoria UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/829752017-09-10T19:39:29Z2017-09-10T19:39:29ZWhat about the people missing out on renewables? Here’s what planners can do about energy justice<figure><img src="https://images.theconversation.com/files/184462/original/file-20170904-8529-hdlc69.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Solar panels are integrated into a block of flats in the Viikki area of Helsinki, Finland.</span> <span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Solar_panels_integrated_in_a_block_of_flats_in_Viikki_Helsinki_Finland.jpg">Pöllö/Wikimedia</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>The rapid shift to new energy sources is <a href="https://theconversation.com/pace-of-renewable-energy-shift-leaves-city-planners-struggling-to-keep-up-82206">outpacing land use planning</a> in cities. As interest in renewable energy burgeons, another concern has emerged – <a href="https://doi.org/10.1016/j.erss.2015.10.004">energy justice</a>.</p>
<p>Improvements in renewable energy generation, energy efficiency and storage technology benefit more advantaged populations like homeowners. These innovations are generally beyond the reach of more disadvantaged groups like renters, pensioners, students and the working poor. Researchers see this as an emerging <a href="http://www.analyse-und-kritik.net/2014-2/AK_Byrne_Portanger_2014.pdf">energy justice concern</a>.</p>
<h2>Energy costs hit the poor harder</h2>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=669&fit=crop&dpr=1 600w, https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=669&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=669&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=841&fit=crop&dpr=1 754w, https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=841&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/184840/original/file-20170906-9867-iswi6p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=841&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Rising power bills hit lower-income households particularly hard.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/mother-holding-baby-take-look-on-328104266">shutterstock</a></span>
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<p>A <a href="http://www.acoss.org.au/wp-content/uploads/2017/03/Consultation-Paper-Empowering-Vulnerable-Households-and-Decarbonisation.pdf">recent report</a>, prepared by the Australian Council of Social Service, The Climate Institute and the Brotherhood of St Laurence, highlighted the disproportionate impacts of energy poverty. Current policy settings and energy price rises <a href="https://www.facebook.com/VCOSS/videos/1598547540177078/">make life even more difficult</a> for people who are already struggling to pay their power bills.</p>
<p>Energy price rises can affect residents’ ability to <a href="https://theconversation.com/out-in-the-heat-why-poorer-suburbs-are-more-at-risk-in-warming-cities-66213">cool</a> or <a href="https://theconversation.com/forget-heatwaves-our-cold-houses-are-much-more-likely-to-kill-us-83030">heat</a> their homes, cook food and get hot water. Ultimately, this can have <a href="https://theconversation.com/housing-stress-and-energy-poverty-a-deadly-mix-9484">dire consequences</a> for <a href="https://theconversation.com/forget-heatwaves-our-cold-houses-are-much-more-likely-to-kill-us-83030">people’s health</a> and wellbeing.</p>
<p>Attention has been drawn to the inability of such households to tap into renewable energy in <a href="https://theconversation.com/wa-bathes-in-sunshine-but-the-poorest-households-lack-solar-panels-that-needs-to-change-82983">Western Australia</a> and the <a href="http://www.abc.net.au/news/2017-08-22/why-hasnt-darwin-embraced-solar-power-to-help-reduce-power-bills/8824690">Northern Territory</a>. Less well known are the emerging opportunities to reduce energy poverty. These include solar leasing, energy co-operatives and landlord incentives.</p>
<h2>Solar leasing</h2>
<p>Solar leasing is a strategy where a homeowner signs an agreement with a company to install solar panels. Up-front costs are limited and the system is paid back incrementally over its lifespan. In theory, this could enable landlords and low-income owners to gain access to cheaper solar energy.</p>
<p>There are many variations on such leases. One involves the owner buying power back from the leasing company, which sells surplus power to the grid. Another is where the owner obtains a low-cost loan, such as those offered by the <a href="https://www.fanniemae.com/content/guide/selling/b5/3.3/01.html">Fannie Mae</a> foundation in the US.</p>
<p><a href="http://www.latimes.com/business/realestate/la-fi-harney-20150322-story.html">Some caution</a> is warranted before entering such agreements, not least because leases can make homes harder to sell.</p>
<p>The relative <a href="https://theconversation.com/2017-will-be-a-big-year-for-australias-energy-system-heres-what-to-look-out-for-71703">vacuum of Commonwealth energy policy</a> in Australia is prompting some local governments to step in. The City of Darebin in Melbourne is an example. Its <a href="http://www.darebin.vic.gov.au/Darebin-Living/Caring-for-the-environment/EnergyClimate">Solar Saver Program</a> aims to help pensioners and other low-income earners get solar panels on rooftops. The panels are installed up-front and paid back through rates.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/184422/original/file-20170903-27231-10orp8a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Some councils are helping pensioners and other low-income earners to install solar panels to cut their energy bills.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/mikecogh/9647603520">Michael Coghlan</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<h2>Community renewable energy co-operatives</h2>
<p>A second idea is to increase competition in the energy market by enabling communities to generate their own energy. <a href="https://theconversation.com/communities-are-taking-renewable-power-into-their-own-hands-42480">Community renewable energy</a> projects are an example. </p>
<p>But such projects need not be market-based. A recent innovation in New South Wales has been the development of an energy co-operative in <a href="https://theconversation.com/get-in-on-the-ground-floor-how-apartments-can-join-the-solar-boom-79172">Stucco apartments</a>, a non-profit, student housing complex. This small-scale co-operative generates solar energy and stores it in batteries, selling it to tenants in the building, who are low-income students.</p>
<p>Larger versions exist in Germany. There <a href="http://www.abc.net.au/news/2014-11-10/german-village-first-to-become-energy-self-sufficient/5879360">whole villages</a> have become energy co-operatives of sorts, achieving energy self-sufficiency.</p>
<h2>Landlord incentives</h2>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/184659/original/file-20170905-28027-1ukl61k.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A landlord who makes improvements such as double glazing should be able to claim these as a tax deduction.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/pflintandco/6684902701/in/photolist-bbHSF8-jBLQvD-eR5wP5-oa1L4C-j8ZVVt-3sZAbY-nxLsSc-cud5B3-6jtyBF-7vLVuk-9QS7bh-UNGN9o-74HL4J-sxsZU-5BKWa3-jte4G-BUoEL6-5S3h17-dHDAAg-34Ydj3-pQj1uU-bnqYLZ-5qcYy7-aHYKCM-dCFLPL-8RTsme-jex6jj-qJvU2t-ff4iQa-JmxQM-794NQ4-aAd6GA-oExAUu-9Yv8tp-q3Dh3Y-2BTsT-92LQSg-4kkCVv-jV6NuW-6BJm2B-ayr14U-yzW4B-6xhy5R-8Bfv2s-f8BCZP-6BN7PC-6xhuF2-azKw6B-dD9a6v-6xhvPX">Paul Flint/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Several <a href="https://theconversation.com/renters-are-being-left-out-in-the-cold-on-energy-savings-heres-a-solution-65712">commentators</a> have identified the need for better incentives and penalties to encourage landlords to retrofit properties to make them more energy-efficient. </p>
<p>This includes changing the tax system. If rental properties are upgraded – with insulation, more efficient hot water systems, energy-efficient stoves or windows – these costs should count as legitimate tax deductions. Currently, these improvements are not treated as repairs and instead are depreciated over time. </p>
<p>Similarly, new minimum standards for energy efficiency in rental properties are needed. The NSW <a href="https://www.basix.nsw.gov.au/iframe/about-basix.html">BASIX system</a> is a step in this direction.</p>
<h2>The energy justice challenge for planners</h2>
<p>Land use planning systems are typically future-oriented. But most of the buildings that will exist in the middle of this century are already built. </p>
<p>We need to update planning systems to better manage systemic changes in existing built environments. These changes include the transition to renewable energy and associated energy justice concerns.</p>
<p>There are possibilities for improvement. For example, planners can learn from early innovations like the Stucco model. Working proactively with community energy co-operatives could reduce uncertainty for all stakeholders, minimise time wasted and maximise returns for participants.</p>
<p>Planners can also develop new policies and processes – such as model town planning schemes – to work with communities in delivering other small-scale renewable energy projects such as <a href="http://www.abc.net.au/news/2017-04-30/community-energy-projects-selling-out-within-minutes/8476794">community solar farms</a> and <a href="https://energy.gov/articles/how-microgrids-work">microgrids</a>. Another possibility is to <a href="http://www.abc.net.au/news/2017-08-17/millions-of-residents-locked-out-of-solar-benefit-to-power-bills/8813664">alter strata title</a> laws to make it easier to install solar in apartment buildings.</p>
<p>Modern land use planning was driven in large part by a desire to <a href="https://mitpress.mit.edu/books/origins-modern-town-planning">improve public health and social justice</a> by regulating development. Today’s planners should regard efforts to improve energy justice as a new but entirely appropriate professional responsibility.</p><img src="https://counter.theconversation.com/content/82975/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Byrne receives funding from the Australian Research Council for two research projects on: (i) climate change and social innovation and (ii) green space and health. He is a member of the Planning Institute Australia and Institute of Australian Geographers. He is affiliated with the Gold Coast and Hinterland Environment Council and donates to environmental groups (e.g. Australian Conservation Foundation). He has solar panels on his roof.</span></em></p><p class="fine-print"><em><span>Tony Matthews is a member of the Royal Town Planning Institute and the Planning Institute of Australia. He receives funding from the Australian Research Council and Griffith University for research which examines the nexus between urban planning and climate adaptation. </span></em></p>Not everyone can afford to pay for solar panels up front, but local planners can help disadvantaged households overcome energy poverty in several ways.Jason Byrne, Associate Professor of Environmental Planning, Griffith UniversityTony Matthews, Lecturer in Urban and Environmental Planning, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/775022017-08-03T14:43:46Z2017-08-03T14:43:46ZElectricity is a rip-off – we need a truly radical intervention in the energy market<figure><img src="https://images.theconversation.com/files/180748/original/file-20170802-22216-qrixoz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Mark Sayer / shutterstock</span></span></figcaption></figure><p>British Gas has <a href="https://www.theguardian.com/business/2017/aug/01/british-gas-hikes-electricity-prices-centrica-energy-bills">raised electricity prices by 12.5%</a> and its rivals are likely to follow suit. Another round of inflation-busting increases has put calls for an energy price cap <a href="http://www.bbc.co.uk/news/av/business-40787866/alan-whitehead-calls-on-government-to-cap-energy-prices">back on the agenda</a>. </p>
<p>When then Labour leader Ed Miliband first proposed a cap in 2013 it was dismissed by the Tories as coming from a “<a href="https://www.theguardian.com/money/2013/oct/09/ed-miliband-heat-david-cameron-energy-bills">Marxist universe</a>”. Four years later, Theresa May <a href="https://www.theguardian.com/money/2017/may/08/theresa-may-to-promise-price-cap-on-energy-bills-in-tory-manifesto">flirted with the idea</a> ahead of the 2017 election, while Labour included the policy <a href="http://www.huffingtonpost.co.uk/tom-bailey/labour-energy-cap_b_16667000.html">in its manifesto</a>. But whatever it is, it’s not a Marxist idea.</p>
<p>For a start, the price cap won’t work because the market is not only broken, it never worked in the first place. Incredibly high start-up costs mean energy is a <a href="http://www.investopedia.com/terms/n/natural_monopoly.asp">natural monopoly</a>, in which a small number of companies have been protecting significant investments in fossil fuels and nuclear power since the sector was first privatised. </p>
<p>Yes, you can regulate markets, but that requires a regulator with both sufficient teeth and the nerve to use them, and one which does not believe that switching suppliers is the answer to all its problems.</p>
<p>British Gas’s move will add £76 to an average family’s bills each year. In theory, people could simply choose a different supplier, most likely from another of the “Big Six” energy firms who dominate the UK market. But there are lots of reasons why people won’t switch. </p>
<p>First of all, humans are generally poor at <a href="https://www.washingtonpost.com/posteverything/wp/2017/02/13/the-discount-rate-problem-we-somehow-need-to-learn-to-worry-more-about-the-future/?utm_term=.b62a84e18d19">envisioning their future circumstances</a>. Offer someone an amount of money in six months’ time, and then see how quickly they’ll take a fraction of that now instead. </p>
<p>Second, energy supply is something householders fundamentally rely on, and the difference between one supplier and another really isn’t that much extra if you’re happy with the service you have. So for those who can afford it, paying less than a tenner extra a month to avoid the hassle and for a bit of reassurance they won’t be left hanging in the case of a power cut is going to be worth it. And there are <a href="http://www.thisismoney.co.uk/money/bills/article-2487167/Energy-bills-demystified-Make-sure-switching-myths-not-holding-back.html">many more reasons</a> people won’t switch, simply because humans are highly complex and rarely completely rational creatures.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/180756/original/file-20170802-21522-11q5caj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/180756/original/file-20170802-21522-11q5caj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/180756/original/file-20170802-21522-11q5caj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/180756/original/file-20170802-21522-11q5caj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/180756/original/file-20170802-21522-11q5caj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/180756/original/file-20170802-21522-11q5caj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/180756/original/file-20170802-21522-11q5caj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Should’ve switched after all.</span>
<span class="attribution"><span class="source">TeodorLazarev / shutterstock</span></span>
</figcaption>
</figure>
<p>The belief behind the cap is that up to <a href="https://assets.publishing.service.gov.uk/media/576c23e4ed915d622c000087/Energy-final-report-summary.pdf">10m “disengaged” Big Six customers</a> could’ve been protected from price hikes if they’d switched. </p>
<p>This may be true, especially in the short term or if they’d switched away from the Big Six, but it conveniently ignores the fact that a common cause of price hikes is governments signalling their intent to intervene in the market. And unlike governments, energy suppliers think in decades, so any threat of a cap will merely be seen as a signal to <a href="http://www.independent.co.uk/news/business/comment/british-gas-lays-down-gauntlet-to-government-with-huge-price-rise-a7870556.html">drive up prices while they can</a>, and then start lobbying like hell to get the cap raised by justifying the need for more of their costs to be passed to the consumer. An effective regulator might withstand this onslaught, but if we had an effective regulator there wouldn’t be a need for the cap in the first place.</p>
<h2>Price collusion can’t be avoided</h2>
<p>The problem with competition in the energy market is it encourages the sort of collusion and price fixing that even classical liberal economist Adam Smith <a href="https://www.adamsmith.org/adam-smith-quotes/">warned about</a> centuries ago. You can’t completely design out the potential for collusion because suppliers and network operators have to work together, otherwise the lights go off. And those who control the greatest assets in the market will exert the greatest influence on it – it doesn’t have to be active collusion, it’s a natural feature of imperfect markets. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/180754/original/file-20170802-6912-ljhe0p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Ours for just £150.</span>
<span class="attribution"><span class="source">SamJonah / shutterstock</span></span>
</figcaption>
</figure>
<p>Competition also means companies waste vast amounts of money paying staff to develop competing applications for different locations and technologies, when what is really required is a national strategy that sets out what is needed, and where, over the sorts of multi-decade periods energy suppliers need to justify investment. And then why bother wasting money putting those contracts out to tender? It clearly <a href="https://theconversation.com/the-case-for-re-nationalising-britains-railways-45963">hasn’t worked for the railways</a>.</p>
<h2>Eco-socialism</h2>
<p>A price cap is hardly a “Marxist” solution to all this. A traditional Marxist energy policy would of course start with renationalising the industry, as energy supply is an issue that requires strategic planning at a national level. A Marxist solution would also push highly-skilled workers towards the socially-productive renewables sector, which even government estimates say could <a href="https://www.gov.uk/government/news/renewable-energy-delivering-green-jobs-growth-and-clean-energy">support more than 35,000 jobs across the UK</a>. </p>
<p>Where eco-socialists, including myself, sometimes differ from traditional Marxism is on quite how much state ownership we see is necessary. I see a lot of value in <a href="https://theconversation.com/no-more-big-power-plants-civic-energy-could-provide-half-our-electricity-by-2050-38183">community ownership</a> because it doesn’t just help solve the energy problem, it also helps make people and communities more resilient. Towns and villages can’t become energy cooperatives overnight, however. They need investment, technical expertise, and an awful lot of support to get up and running. Does that sound Marxist? We already do it <a href="http://time.com/4089171/mariana-mazzucato/">with private companies</a>.</p>
<p>The Labour manifesto included support for a <a href="https://theconversation.com/labours-energy-manifesto-isnt-about-nationalisation-so-what-does-it-really-say-77970">publicly owned energy company in each region</a>, and the <a href="http://www.gov.scot/Publications/2017/01/3414">SNP</a> has proposed something similar. It’s not a complete solution, but it’s a big step in the right direction. Maybe it’s another idea Theresa May could consider borrowing?</p><img src="https://counter.theconversation.com/content/77502/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Keith Baker is co-author of ‘A Critical Review of Scottish Renewable and Low Carbon Energy Policy' which will be published by Palgrave Macmillan in September 2017. He has no other interests to disclose.</span></em></p>Price caps don’t cut it – but community ownership can help solve the energy problem and make people more resilient.Keith Baker, Research Associate in Sustainable Urban Environments, Glasgow Caledonian UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/766812017-04-28T11:55:55Z2017-04-28T11:55:55ZAn energy price cap could kill competition – here’s a better idea<figure><img src="https://images.theconversation.com/files/167029/original/file-20170427-15112-h7e0wg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">vectorfusionart / shutterstock</span></span></figcaption></figure><p>The Conservatives have announced their manifesto will include a pledge to <a href="http://www.bbc.co.uk/news/uk-politics-39685106">cap the price of energy bills</a>. This comes just two years after Labour campaigned to freeze household energy prices</p>
<p>The Tories are yet to flesh out the details of their plan, but it has already drawn strong reactions both for and against. The price of energy stirs deep emotions in part because it is a necessity, one which absorbs a <a href="http://www.cerre.eu/sites/cerre/files/Affordability_FinalReport.pdf">much higher proportion</a> of the income of those in poverty and “just about managing” than of richer households. </p>
<p>But there are two other important features: the first is that electricity and gas are essentially the same whoever supplies it (with a few exceptions for renewable generation or billing services). The second is that many people are paying more than they need to. Around 70% of British households are on the default “standard variable tariff” even though, thanks to competition between energy firms, cheaper prices are available to those willing to switch suppliers. </p>
<p>This raises the question of whether we should worry if people simply don’t take advantage of these deals. After all, what counts as “fair” in the energy market? Is it about equal access to the best offers, or whether we end up paying the same price?</p>
<p>Some people may find the process difficult, for example because they have built up debt which they need to repay, or because they don’t use the internet, or find bill comparisons challenging. These people are missing out on the best deals. Most people don’t face such barriers, however – they’re held back by a lack of information, or put off by the time and effort it takes to switch supplier. </p>
<p>The problem is that a competitive market keeps the energy firms on their toes. When customers can easily choose the best deals, suppliers will compete to offer lower prices and new services. If people don’t switch, these firms have less incentive to innovate.</p>
<p>An effective price cap would lower the highest prices, but it would also limit the “headroom” for new firms to undercut prices. So while a cap can lower the price for some consumers, it may reduce competition. </p>
<p>Relative price caps, which tie one set of prices to another, are particularly likely to damage competition. We saw this effect when the energy regulator introduced non discrimination clauses between different regions in 2009, which was followed by <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0297.2012.02537.x/full">softer competition</a> between the companies, higher profits – and <a href="http://www.iaee.org/ej/ejexec/ExecSum_WPZ.pdf">higher prices</a>.</p>
<p>Regulating prices is a good plan if the aim is to ensure fairness ahead of lower average prices. But such a move is likely to sacrifice the benefits of a dynamic energy market, and higher average prices will be felt most keenly by low income households who already spend a much higher proportion of their incomes on energy. </p>
<h2>Alternatives to price caps</h2>
<p>Smart meters, set to be rolled out at considerable cost over the next few years, are intended to help lower bills as people will realise how much energy they’re using – and when. But the benefits depend on people actually acting on this information. </p>
<p>Protecting consumers from making decisions about the energy market now may mean we are all rather lazier about engaging with opportunities in the future.</p>
<p>The government could of course go even further than a cap and simply give everyone free energy at the “meter”, or some form of free energy allowance paid for by taxation. But this might encourage people to use more energy, which would harm the environment. And is energy any more essential than housing, food or water, none of which are provided by the state for free?</p>
<p>There may be a better way to ensure fairness while also retaining the benefits of competition: hold an auction to supply the “sticky” customers. That refers to the 55% of energy buyers who have been on the more expensive tariffs for at least three years. In a recent <a href="https://assets.publishing.service.gov.uk/media/5773de34e5274a0da3000113/final-report-energy-market-investigation.pdf">investigation into the energy market</a>, the Competition and Markets Authority recommended that suppliers should give the details of those customers to the regulator, who might then make the contact details available to competing suppliers. Instead of encouraging competitors to approach these customers individually, they could be invited to make a better offer to them as a group. </p>
<p>There are many challenges to designing such an “opt-out” auction, but it has the benefit of providing a potentially better deal for the “disengaged” while <a href="https://competitionpolicy.wordpress.com/2016/03/11/the-cmas-energy-market-provisional-remedies-right-direction-but-inadequate-and-missing-an-important-trick/">harnessing the true power of competition</a>. While auctions provide competition for the market itself rather than acting as a competitor within the market, they still give firms an incentive to provide the best offer. In doing so, auctions are less damaging to competition than most forms of price cap, and certainly less damaging than a price freeze.</p><img src="https://counter.theconversation.com/content/76681/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Catherine Waddams receives funding from the UK Energy Research Centre, though this article is not based on this current research. She has previously received funding from the Economic and Social Research Council for her research into energy markets. This article does not reflect the views of any research council or centre.</span></em></p>Energy firms should compete over the ‘stickiest’ customers, who won’t switch suppliers.Catherine Waddams, Professor of Economic Regulation, Norwich Business School, University of East AngliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/694102017-01-12T19:27:48Z2017-01-12T19:27:48ZHot dogs and cool cats: keeping pets cool without blowing your energy bill<figure><img src="https://images.theconversation.com/files/150459/original/image-20161216-26077-atrirx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Pets suffer just as badly as their humans in the heat. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/bump/3625697927/in/photolist-6woDFe-fVHCrD-eQXwgk-95LBw7-52Fd7T-5SQomR-edehcz-d9MYQ5-d9NNCP-d9N3HK-d9N9kQ-d9N8Ci-k3axLX-FtHRw-aTnWFn-oaa8uX-5iJmAB-f6jtSa-9kzFQv-d9NDAm-d9NwD6-d9NuwX-ahjZn9-d9NKAX-d9NHR5-d9NzDg-d9NURA-d9Nsuy-d9PhuW-5kZY8p-d9MUxW-92QLMV-d9NMKN-d9N5sD-982jzM-d9NHha-d9MVxu-d9Nzto-d9MV5o-d9N9Dx-d9NSxV-d9N33s-d9NE5u-r3peJx-d9P99h-d9NKby-d9N3pC-d9NGFF-d9N89A-d9N8r1">Robert Occhialini/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>As the weather heats up, Australian households won’t just be cranking up the air conditioning for themselves. Some households will be turning it on for their dogs or cats. </p>
<p><a href="http://journals.sagepub.com/doi/full/10.1177/1469540514536194">Our research</a> on energy demand and household cooling highlights a recent trend towards air-conditioning rooms or homes for pets. As well as cooling homes occupied by both humans and their furry friends, air conditioners may be left on when dogs or cats are home alone. </p>
<p>Some pet owners also leave doors and windows open for their dogs and cats to move between indoor and outdoor areas. This means that air conditioners have to work harder and use more energy to maintain indoor temperatures.</p>
<p>Our research is consistent with an emerging international trend towards the “humanisation of pets”, which is contributing to energy use in households. </p>
<p>A <a href="http://pressreleases.eon-uk.com/blogs/eonukpressreleases/archive/2013/03/20/1923.aspx">2013 study released by E.ON UK (a UK power company)</a> on “hot-dogs and thermo-cats” found that more than half (52%) of UK pet owners turn up the heating for their pets when they go out. Some UK households also leave radios or televisions on for pets so that they don’t get lonely when their owners leave the home.</p>
<p>In other areas of everyday life, cats and dogs now play iPad games, eat specialised diets, have heated mats or air-conditioned kennels, and have their own fashion accessories and electronic toys.</p>
<h2>The energy impacts of home cooling</h2>
<p>On average across Australia, heating and cooling make up <a href="http://yourenergysavings.gov.au/energy/heating-cooling/understand-heating-cooling">40% of our energy use</a> in households, not including hot water. </p>
<p>Most Australians who live in southern states use cooling in their homes sporadically, turning it on during hot summer afternoons and evenings when they get home from work or other activities. The rapid growth in residential air conditioning for this purpose has been one of the main contributors to Australia’s <a href="https://theconversation.com/australias-rising-air-con-use-makes-us-hot-and-bothered-20258">peak electricity demand</a>, which has increased energy bills.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/150464/original/image-20161216-26056-ybuvo2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Not doing too much is a great way to keep pets cool.</span>
<span class="attribution"><span class="source">Cat image from www.shutterstock.com</span></span>
</figcaption>
</figure>
<p>Trends in pet cooling could change the energy demand for cooling in homes. Australia has one of the highest rates of pet ownership in the world, with 63% of households keeping an animal as a pet. </p>
<p>According to a 2013 report by the <a href="http://animalmedicinesaustralia.org.au/wp-content/uploads/2014/08/Pet-Ownership-in-Australia-2013-Summary-ONLINE-VER.pdf">Animal Health Alliance</a>, there are 4.2 million pet dogs and 3.3 million pet cats in Australia. Of these, 76% of dogs and 92% of cats are kept exclusively or partly indoors. </p>
<p>Providing air conditioning for pets during the day when people aren’t at home would raise residential energy demand. It could also extend and possibly increase electricity peaks if more areas of the property (such as kennels or garages) are being cooled for a longer time.</p>
<h2>What makes pets hot?</h2>
<p>Although cats and dogs differ in their physiology, in general <a href="http://www.murdoch.edu.au/_image/pressrelease/summerfun/pets_on_holiday_infograph.jpg/">older, sick or overweight pets</a> may be less resilient to the heat. Some breeds may also be more vulnerable than others. </p>
<p>For example, short-snout dog breeds (Bulldogs, Pekes and Pugs) are <a href="http://www.murdoch.edu.au/_image/pressrelease/summerfun/pets_on_holiday_infograph.jpg/">more likely to suffer from heatstroke</a>. This also applies to <a href="http://www.cat-world.com.au/heat-stroke-in-cats">short-faced cats like Persians or exotics</a>. </p>
<p>Many things can exacerbate heat stress for pets. For example, people living in apartments may find it more difficult to provide cool outdoor spaces for dogs, or to engage in “waterplay”, as recommended by <a href="https://petsaustralia.org/the-big-issues/beat-the-heat-protecting-your-pet/">Pets Australia</a>.</p>
<h2>How to keep pets cool</h2>
<p>Advice on how to keep pets cool varies and is different for cats and dogs. <a href="https://petsaustralia.org/the-big-issues/beat-the-heat-protecting-your-pet/">Pets Australia</a> recommends providing cool spaces such as shade, cold tiles or digging holes in the soil. Other examples include giving dogs cool treats like frozen meat, providing lots of water for hydration and stopping exercise. </p>
<p><a href="http://agriculture.vic.gov.au/pets/dogs/dog-health/heat-and-pets">Some websites</a> recommend keeping pets inside on hot days, preferably with an air conditioner or fan turned on. Other sites recommend cooling mats or vests such as gel pads, which can be refrigerated or frozen prior to use. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=439&fit=crop&dpr=1 600w, https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=439&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=439&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=552&fit=crop&dpr=1 754w, https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=552&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/150457/original/image-20161216-26051-q5t7a1.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=552&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Sometimes you just need a dip.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/ianthes/14751556507/in/photolist-otxzPa-9F1yKf-qRixb9-e4CpSJ-8abDTj-rdEZ41-gLVF3c-kqARU-91DpDH-88rNEq-dt4tqK-88owvT-nmHG53-a59RpD-gczLtc-CgfYiK-awmyoZ-9URyrf-nyYiYR-ajCkyK-c7uRAy-fCUGnF-aigAJw-nsdH3j-96zwkD-bJxtmZ-CnD3tu-rNeb3f-byRUwu-pfGLiE-hHC7gW-77tPrB-iLYdyS-9FMbSc-qydR8q-b8ZGg4-aL8fHa-aDh51A-nbMnyp-gVJ8E2-eZ7ZQC-pQ5TzM-zqEYG-bppgDq-oFP9xo-cg9Z7u-cgR1Gq-doD9RZ-fP68YC-d98Nmy">Pamala Wilson/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p><a href="http://www.murdoch.edu.au/_image/pressrelease/summerfun/pets_on_holiday_infograph.jpg/">Murdoch University</a> provides advice on how to recognise heatstroke warning signs, and what to do if you suspect your pet is suffering from heatstroke. The growing market for pet cameras is one way to keep an eye on pets while owners are out of the house. </p>
<h2>What needs to be done?</h2>
<p>As climate change continues to increase the severity and duration of heat waves, the incidence of heatstroke in pets is likely to increase too. This applies especially to those living in energy-inefficient housing or with access to poor-quality outdoor environments. </p>
<p>There is a clear need to seriously consider pet cooling in the design of energy-efficient housing and in energy policy that targets households.</p>
<p>It may also be timely to reconsider pet types and breeds appropriate for the Australian climate. <a href="http://www.myhusky.com.au/husky-guide/is-a-siberian-right-for-you/">Siberian huskies</a>, for example, prefer cooler climates and may be more likely to suffer from heatstroke than breeds with smooth or short coats.</p>
<p>More research is also needed to understand how Australian households are changing the ways they keep their pets cool, and what can be done to reduce heat stress in pets without increasing energy demand or electricity peaks in homes.</p>
<p>In the meantime there is a range of advice on how to keep pets cool. Many creative solutions are available that don’t require leaving the air conditioner running.</p><img src="https://counter.theconversation.com/content/69410/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Yolande Strengers currently receives funding from the Australian Research Council, Energy Consumers Australia and the Victorian Council of Social Services. She is a member of the Australian Sociological Association (TASA).</span></em></p><p class="fine-print"><em><span>Cecily Maller receives funding from the Australian Government and in the past has received funding from the Victorian Health Promotion Foundation (VicHealth) and the Victorian Government. She is a member of the Institute of Australian Geographers and The Australian Sociological Association (TASA).</span></em></p><p class="fine-print"><em><span>Larissa Nicholls receives research funding from Energy Consumers Australia and the Victorian Council of Social Service.</span></em></p>As the weather heats up, Australian households won’t just be cranking up the air conditioning for themselves. Some households will also be turning it on for their dogs or cats.Yolande Strengers, Senior Research Fellow, Centre for Urban Research, RMIT UniversityCecily Maller, Vice Chancellor's Senior Research Fellow, Centre for Urban Research, RMIT UniversityLarissa Nicholls, Research Fellow, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/626212016-07-18T20:05:18Z2016-07-18T20:05:18ZIt’s not easy being green, especially when affordable help is so hard to find<p>The transition to a clean energy future is upon us, as shown by the <a href="https://theconversation.com/factcheck-qanda-is-australia-the-world-leader-in-household-solar-power-56670">huge uptake of solar panels</a> and by the Turnbull government’s decision to set up a <a href="http://www.environment.gov.au/minister/hunt/2016/pubs/mr20160323-factsheet.pdf">A$1 billion Clean Energy Innovation Fund</a>. But what about those people who are at risk of <a href="https://www.theguardian.com/sustainable-business/2016/may/09/solar-power-batteries-the-energy-transition-could-be-profound-and-theres-a-lot-to-lose-for-those-who-cant-keep-up">being left behind</a>? </p>
<p>Our <a href="http://www.lowcarbonlivingcrc.com.au/research/program-3-engaged-communities/rp3038-lower-income-barriers-low-carbon-living">survey of lower-income households</a> shows that information about low-carbon living is often difficult to access, and that assistance is sometimes misdirected. </p>
<p>As a result, transitioning to low-carbon living is much harder for these households than it should be.</p>
<h2>Listening to the people</h2>
<p>Between December 2015 and June 2016, we held 23 focus group discussions with 164 lower-income households across eight metropolitan and regional centres in New South Wales, South Australia, Tasmania and the Northern Territory. Our aim was to try to understand the challenges these households face in transitioning to low-carbon living. This was part of a wider study, funded by the <a href="http://www.lowcarbonlivingcrc.com.au/">Cooperative Research Centre for Low Carbon Living</a>, on finding ways to help poorer households reduce their carbon impact.</p>
<p>Almost everyone we spoke with supported the idea of low-carbon living. However, the ability to afford whiz-bang green technology – from expensive solar panels and battery systems right down to LED lightbulbs – is a big issue for these households. </p>
<p><a href="https://theconversation.com/australias-energy-sector-is-in-critical-need-of-reform-61802">Significant increases in energy costs since the late 2000s</a> have added to this problem. In some states, bills have more than doubled in just the past six years. </p>
<p>While money is a key problem, it’s not the whole story, and there are ways to help. We have found a range of factors, besides affordability, that limit lower-income households’ ability to transition to low-carbon living.</p>
<h2>Finding reliable information</h2>
<p>Not everyone is looking for a hand-out; many just want to know how they can help themselves become more energy-efficient.</p>
<p>A major barrier that cropped up time and again in our survey is accessing the “right” information. Many people get good tips about assistance programs through friends and family, or via charities like the Salvation Army (one of our in-kind project partners).</p>
<p>But outside these avenues, information is often <a href="http://yourenergysavings.gov.au/energy/energy-efficient-living">only available online</a>, and many of our participants said that they either can’t afford internet access at home or, more importantly, don’t know what to search for.</p>
<p>What little information trickles through is often hard to understand. The Tasmanian government, for instance, offers a <a href="http://www.concessions.tas.gov.au/concessions/electricity_and_heating">range of concessions on power and heating bills</a> for older people or those who need to run medical equipment at home. But the benefits are expressed in cents per day (the current electricity concession, for instance, is 132.557¢ per day), which can make them unnecessarily hard for customers to calculate. Eligibility criteria are also often complicated. </p>
<p>With access to government services increasingly being <a href="https://www.humanservices.gov.au/">moved online</a>, the process can become a confusing rigmarole for many people, while others may miss out entirely.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/130844/original/image-20160718-2133-1r5ewid.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Clean energy: easier for the well-heeled…</span>
<span class="attribution"><span class="source">Bruce Judd</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Misdirected assistance</h2>
<p>Most of the assistance programs available to lower-income households, such as <a href="https://www.humanservices.gov.au/customer/services/centrelink/utilities-allowance">Centrelink Utilities Allowances</a>, are aimed squarely at providing financial relief. </p>
<p>States and territories also have their own rebate schemes to offer relief from rising energy costs. In NSW, for example, <a href="http://www.ewon.com.au/index.cfm/help-for-customers/help-paying-bills/eapa/">EAPA vouchers</a> are designed to provide emergency and crisis relief. </p>
<p>But with lower-income households less likely to own their homes, they are often precluded from accessing programs to encourage green energy, such as <a href="http://yourenergysavings.gov.au/rebates/renewable-power-incentives">solar panel rebates</a>. This is a classic <a href="http://www.industry.gov.au/Energy/EnergyEfficiency/Non-residentialBuildings/HVAC/FactSheets/Documents/HVACFSSplitIncentives.pdf">split incentive</a> – the owner buys the panels (and gets the rebate) but the tenant gets the benefit (lower bills), making the owner less likely to invest.</p>
<p>This leads to the question of why rebates are not offered for <em>using</em> green energy, as well as for installing it.</p>
<p>“Green” criteria already exist in some other assistance programs. For example, the <a href="http://nils.com.au/">No Interest Loan Scheme</a>, which helps lower-income households buy products such as whitegoods, now requires appliances to meet certain energy-efficiency standards. </p>
<p>The same principle could easily be used to help lower-income renters access electricity from cleaner energy sources.</p>
<p>Giving poorer households free <a href="http://yourenergysavings.gov.au/energy/energy-efficient-living/home-assessment/get-home-assessment">home energy assessments</a> is a good start, but they are focused purely on cutting energy consumption.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=451&fit=crop&dpr=1 600w, https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=451&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=451&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/130845/original/image-20160718-2110-fl27dq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">… and harder for those who are doing it tougher.</span>
<span class="attribution"><span class="source">Bruce Judd</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Removing hurdles</h2>
<p>The compounding impacts of energy bill increases mean that many lower-income households are doing it pretty tough. Forgoing comfort in not turning on the heater or air-conditioner is one thing, but skipping meals or medication (as many of our survey respondents do) can have significant impacts on health and well-being. </p>
<p>Unfortunately, lower-income households have been going without life’s essentials for <a href="http://www.smh.com.au/national/families-going-without-food-and-medicine-to-pay-the-bills-20130325-2gq2e.html">far too long</a>. Setting up assistance programs is a good start, but we need to make sure that those who need help are getting it. </p>
<p>Here are our five suggestions for making it happen:</p>
<ol>
<li><p><strong>Get the info out there.</strong> It’s important that people get the right information when they need it. Putting information online is great but it cannot be the only way – consideration must be given to those without internet access or who are less computer-literate.</p></li>
<li><p><strong>Keep it simple.</strong> Information needs to be straightforward and clear. If it’s stuffed with jargon and confusing numbers, it can become self-defeating.</p></li>
<li><p><strong>Support the support organisations.</strong> Charities like the <a href="https://salvos.org.au/">Salvation Army</a> and the <a href="https://www.vinnies.org.au/">St Vincent de Paul Society</a> serve important roles within our community, but they too need our continued help, especially when funding is <a href="http://probonoaustralia.com.au/news/2015/10/donations-to-charity-growing-but-slowing-down/">not keeping up with needs</a>.</p></li>
<li><p><strong>Get value for the public’s money.</strong> A billion-dollar public fund may sound like a big deal, but this is small fry compared to Australia’s <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4604.0Main+Features12013-14?OpenDocument">A$878 billion annual domestic consumption expenditure</a>. Nonetheless, it is a good start in heading towards the right direction. We just need to make sure it helps those who need it most.</p></li>
<li><p><strong>Overcome personal pride.</strong> Asking for help is never easy, and that’s why so many lower-income families go without. Making sure that incentive programs reach the right people, in the right way, can dramatically improve their willingness to use them. Hopefully, in the long run, fewer families will need to go without.</p></li>
</ol><img src="https://counter.theconversation.com/content/62621/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Edgar Liu receives funding from the Australian Housing and Urban Research Institute, Cooperative Research Centre for Low Carbon Living, New South Wales' Department of Family and Community Services, PAYCE Communities, SGCH Ltd, South Australia's Department for Communities and Social Inclusion, and Strata Community Australia (NSW chapter).</span></em></p><p class="fine-print"><em><span>Bruce Judd receives funding from the Cooperative Research Centre for Low Carbon Living, the Australian Research Council, and the Australian Housing and Urban Research Institute. </span></em></p>It’s not just about finding money for things like solar panels – poorer households can also find it harder to gain access to reliable information about the green energy options they do have.Edgar Liu, Research Fellow at City Futures Research Centre, UNSW SydneyBruce Judd, Professor, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/613852016-06-27T17:08:58Z2016-06-27T17:08:58ZEnergy market investigation a let down for consumers paying more for power<p>On any other Friday the government’s major report on the energy market rip-off would have been headline news. It was the result of a <a href="https://assets.publishing.service.gov.uk/media/576d3f15e5274a0da9000092/energy_market_final_report.pdf">two-year investigation</a> by the Competition and Market Authority (CMA) into why household bills keep rising – a process that started with a probe by energy regulator Ofgem way back in 2008. </p>
<p>But <a href="https://theconversation.com/uk/eu-referendum-2016">Brexit</a> meant that the report, published on June 24, passed by largely unnoticed. This is a shame, as bills keep rising, and the CMA’s proposals won’t solve the problems in the energy markets.</p>
<p>Here are four key ways the government’s investigation has let down consumers:</p>
<h2>1) The big six will still dominate</h2>
<p>The UK energy market is dominated by a “big six”: Centrica, SSE, EdF, EoN, Scottish Power and Npower. They are involved in both the wholesale (generation) and retail (supply) markets, controlling <a href="https://www.ofgem.gov.uk/sites/default/files/docs/2015/09/retail_energy_markets_in_2015_report_0.pdf">around 90%</a> of the sector. </p>
<p>The CMA isn’t too worried about this sort of “vertical integration”, pointing to the recent emergence of new challengers such as Nottingham-based <a href="http://www.iresa.co.uk/">Iresa</a>, the low returns on offer in the wholesale market, and the low possibility of price discrimination in the same wholesale market (where electricity generators charge different suppliers different prices).</p>
<p>There are a number of problems with this. The low profits from generation don’t reflect effective competition and a lack of market power – it just shows these big companies are able to <a href="http://wrap.warwick.ac.uk/4939/">keep their generation profits low</a> because of higher profits on the retail side of the business. Previously (prior to 2002) they were able to balance out their revenues in the opposite manner, with low revenues from the retail trade counterbalanced with higher cash flow from the wholesale business. </p>
<p>In any case, despite the new entries, the big six still control the vast majority of the energy market. It’s questionable if these new entrants will stick around – as many new companies <a href="http://www.city.ac.uk/__data/assets/pdf_file/0004/107392/Boroumand_Finon_Electricity_retailers_competition.pdf">disappeared in the past</a>. And even if these firms cannot use price discrimination this is not a guarantee against abuse of market power in a sector where wholesale prices are passed onto customers.</p>
<h2>2) Responsibility shifts from companies to consumers</h2>
<p>The CMA found that more than half of customers never switch their suppliers and around 70% are on the most expensive tariffs, despite often substantial <a href="https://www.gov.uk/government/news/switch-to-save-27-billion-up-for-grabs-by-switching-energy-supplier">gains from switching</a>. Its estimates suggest that energy customers have been overcharged to the tune of £1.4 billion per year, something the CMA largely blames on a lack of switching by consumers.</p>
<p>This lets companies off the hook, however, and shifts the responsibility for competition onto customers in an industry struggling with market domination by a few firms. One of the remedies proposed by the CMA is a price cap for vulnerable customers. However <a href="http://www.ft.com/cms/s/0/c3434584-e693-11e5-a09b-1f8b0d268c39.html#axzz4Ci8OQMiW">experts</a> from in and outside the CMA investigation challenged the narrow definition of “vulnerable” which only included those on prepayment meters (just 16% of domestic users).</p>
<h2>3) Reversal of Interventions after Retail Market Review</h2>
<p>Measures introduced after Ofgem’s <a href="https://www.ofgem.gov.uk/gas/retail-market/market-review-and-reform/retail-market-review">Retail Market Review</a> in 2010 have been identified as the second culprit for the problems in the energy markets. Aiming for “simpler, clearer and fairer” conduct in pricing energy, these interventions lowered the number of tariffs each supplier could offer to four. Ofgem also required price comparison websites to provide full rather than partial information about available offers. </p>
<p>The CMA says these measures made energy markets less competitive. But this ignores the widespread dissatisfaction with the previous situation in which each supplier offered a large number of tariffs which many customers found complex and confusing. </p>
<p>The CMA’s analysis privileges “competition” over social and consumer welfare: competition at any cost, be it through artificial complexity created by extra tariffs or information withholding by comparison websites.</p>
<h2>4) It has taken far too long</h2>
<p>The six large energy suppliers have effectively been under investigation since 2008, starting with the Ofgem probe. The long periods involved in such investigations mean consumers continue to be exploited in the interim. This is particularly noteworthy as privatisation is conventionally expected to reduce the inertia and heavily bureaucratic procedures, often associated with public provision.</p>
<p>But aside from a false dawn that lasted a few years immediately after privatisation, the energy sector failed to deliver on its own promises of lower prices. In 2014 British households spent 75% more for electricity and 125% more for gas in real terms than they did in 2004. This is despite the fact that gas consumption declined by around 30% in the same period while electricity consumption went down by <a href="https://www.gov.uk/government/statistics/energy-consumption-in-the-uk">around 15%</a>.</p>
<p>It is high time, therefore, the public sector takes control of the UK’s energy through nationalising the industry progressively over time. This would not only eliminate abuse of market power by big players, but also secure the UK’s future energy supplies and reduce its carbon emissions.</p><img src="https://counter.theconversation.com/content/61385/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Hulya Dagdeviren does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A major report on why energy bills are so expensive was published the day after the vote for Brexit.Hulya Dagdeviren, Professor of Economic Development, University of HertfordshireLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/608472016-06-14T23:37:48Z2016-06-14T23:37:48Z22 ways to cut your energy bills (before spending on solar panels)<p>Winter is here! Despite many Australians opting not to heat their homes to the point of complete comfort, many of us nevertheless will soon receive a nasty surprise when the energy bills arrive.</p>
<p>With Australia’s historically cheap energy, old housing stock in many areas, mild climate and frequent emphasis on low building costs, many homes are little more than “<a href="http://www.theage.com.au/comment/australian-houses-are-just-glorified-tents-in-winter-20150608-ghj2ox.html">glorified tents</a>” when it comes to thermal performance. </p>
<p>Besides wanting smaller bills, many residents also want to improve comfort, <a href="http://www.thefifthestate.com.au/arts-and-letters/how-to-wipe-out-household-energy-bills-in-9-steps/76854">lessen their environmental impact</a> and <a href="https://theconversation.com/energy-star-ratings-for-homes-good-idea-but-it-needs-some-real-estate-flair-54056">boost their home’s value</a>.</p>
<p>So here is a list of 22 things you can do to improve your home’s energy performance – some cheap, some free, and some that can even make you some money up-front as well as cutting your bills. Of course, to reach the ultimate goal of a home <a href="http://www.domain.com.au/news/welcome-to-victorias-most-sustainable-community-the-cape-at-cape-paterson-20151218-glno5i/">heated and powered by 100% renewable electricity</a> you may still wish to put some solar panels on your roof, but why not consider the following actions first?</p>
<p><strong>1. Make sure you get the <a href="https://www.energymadeeasy.gov.au/">maximum discount</a></strong> on your energy bills. Although not available everywhere, in Victoria discounts of up to 38% are available on gas or electricity. Ring up your retailer and just ask, or threaten to switch, or better yet seek out a retailer that doesn’t treat their discounts like <a href="http://www.powershop.com.au/toolkit/">state secrets</a>.</p>
<p><strong>2. Monitor your power usage</strong> with the help of a <a href="http://www.smartmeters.vic.gov.au/interactive-devices">“smart” electricity meter or in-home electricity display</a>. This real-time (or near-real-time) information is more useful than the coarse monthly data commonly printed on energy bills. It can help identify appliances that have inadvertently been left on or those that draw excessive power when not in use.</p>
<p><strong>3. Heat your water off-peak</strong>. If you have a resistive-electric hot water storage tank, make sure it heats up at night, when off-peak power rates apply. In some areas, “<a href="http://switchon.vic.gov.au/bills-pricing-and-meters/flexible-pricing">time of use</a>” rates are available.</p>
<p><strong>4. Get rid of your ‘garage fridge’</strong>. It can cost hundreds of dollars a year to run an <a href="https://www.washingtonpost.com/news/wonk/wp/2014/11/26/why-its-not-okay-to-have-a-second-refrigerator/">inefficient 20-year-old fridge</a>, especially if it’s in a garage that hits 50°C in summer.</p>
<p><strong>5. Ditch your super-hot plasma</strong>. If you have a <a href="http://www.sustainability.vic.gov.au/services-and-advice/households/energy-efficiency/at-home/appliances/tvs-and-home-entertainment-systems">10-year-old television</a> that gets so hot you can fry an egg on the screen, check out the newer models that can use <a href="http://reg.energyrating.gov.au/comparator/product_types/32/search/">one-tenth of the electricity</a>.</p>
<p><strong>6. Install a modern showerhead</strong>, such as those designed with <a href="http://pure-electric.com.au/products/methven-kiri-satinjet-ultra-low-flow-4.5-litre">double-impinging jet technology</a> that use only 5 litres of water per minute. Old showerheads can pass up to 35 litres per minute. Why not grab a bucket and stopwatch and test yours?</p>
<p><strong>7. Insulate any exposed hot water pipes</strong>, including the <a href="http://www.valvecosy.com.au/">pressure-relief valve on your hot water tank</a>. Make sure hot water pipes do not <a href="http://mei.insights4.net.au/switching-gas-report-available-here">run uninsulated straight into the soil</a> in your garden. <a href="https://sites.google.com/site/homeenergyefficiencyresource/home/hot-water-cylinder-work/increase-insulation-of-existing-hot-water-cylinder">Insulate electrically heated storage tanks</a> where it is safe to do so.</p>
<p><strong>8. Check your heaters and air conditioning</strong>. Gas heating systems should be checked at least every two years by a qualified person, not least to keep <a href="http://www.esv.vic.gov.au/For-Consumers/Gas-and-electrical-safety-in-the-home/Gas-safety-in-the-home/Heating-your-home-safely-with-gas">poisonous carbon monoxide gas</a> at bay. All heating or cooling system filters should be cleaned regularly to improve energy efficiency and air quality.</p>
<p><strong>9. Inspect your ducts</strong>. Poorly installed or degraded ductwork can lead to big energy losses, which can go unnoticed for decades. Ensure that small children or animals have not gone under your house and damaged your gas heating ducts. Check also that air returns are properly “boxed-in” and do not draw air in from the wall cavity instead of from the living space. However, cleaning the inside of your ducts is not critical for energy saving, and risks damaging them in the process.</p>
<p><strong>10. <a href="http://passivehouse.com.au/page/blower-door-testing">Banish drafts</a></strong>, for instance by plastering over those ubiquitous <a href="http://www.hobsonsbay.vic.gov.au/files/f66b552b-d808-43b8-b55c-a41e00e00c4e/Blocking-Draughts-FAQ.pdf">wall vents</a> – relics from the days when homes relied on unflued heaters or gas lights. Seal off unused chimneys and fill any other cracks, gaps or holes around <a href="http://ecomasterstore.com.au/products/draughtdodgers-for-doors">doors</a>, windows, skirting boards, floorboards and architraves. Remember to close air-conditioning ceiling vents in winter. Ventilation should be controlled by opening windows, not by having permanent holes in the walls.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/126475/original/image-20160614-29222-124i05b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Older houses can be full of drafts, including from wall vents which are a throwback to times when homes were full of indoor pollution.</span>
<span class="attribution"><span class="source">Bidgee/Wikimedia Commons</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p><strong>11. <a href="http://efficiencymatrix.com.au/our-videos/">Eliminate ceiling-mounted downlights</a></strong> wherever possible. A small number of modern wide-beam LEDs can adequately replace a larger quantity of narrow-beam halogen downlights. Aim to have as few holes cut into your ceiling as possible, because these holes let heat escape in winter and let it in during summer.</p>
<p><strong>12. Install <a href="https://shop.ata.org.au/shop/led-downlight-insulating-cover">downlight covers</a></strong> over all downlights that protrude into accessible attic spaces. Not only does this reduce <a href="http://www.fire.nsw.gov.au/page.php?id=709">fire hazards</a> and keep out insects, but it will also reduce air flow through the roof.</p>
<p><strong>13. Replace all regularly used lights with LEDs</strong>. LEDs use a tenth of the energy of halogen or incandescent bulbs, so will pay for themselves in just a few months (even less in places where <a href="http://www.sustainability.vic.gov.au/services-and-advice/households/energy-efficiency/toolbox/how-to/replace-12-volt-halogen-downlights">free replacement</a> is on offer). Replace less regularly used bulbs with LEDs as and when they burn out, and vow never to buy a non-LED bulb again.</p>
<p><strong>14. Insulate your attic…</strong>. If you don’t have roof insulation, buy some. If you do, check it meets the recommended “<a href="http://www.yourhome.gov.au/passive-design/insulation">R value</a>” for your climate. Ensure all vertical attic surfaces (walls, skylight tunnels) are also insulated, and include a <a href="http://www.thefifthestate.com.au/innovation/building-construction/insulation-how-to-make-the-right-decision/72343">layer of aluminium</a> in your attic space. <a href="http://www.ata.org.au/wp-content/uploads/Thermal-Imaging-Presentation.pdf">Thermal imaging</a> can be used to identify existing flaws, such as gaps or sections of insulation inadvertently moved by tradespeople working in the attic. </p>
<p><strong>15. …and your floors and walls too</strong>. In cooler Australian climate zones, <a href="http://www.ecomaster.com.au/what-is-underfloor-insulation/">floor</a> and wall insulation can help keep heat in, making your home warmer and cheaper to operate.</p>
<p><strong>16. Cover your windows from the inside…</strong> with drapes, curtains or blinds. This will keep in heat at night and on cold winter days, and keep out the sun in summer. Cheaper or do-it-yourself thermal window treatments such as plastic films or even bubble wrap can be applied in some situations (just don’t expect to win any design awards).</p>
<p><strong>17. …and the outside</strong>. Trees, plants, external awnings, blinds or shade sails can all keep out the summer sun and stop windows getting hot. Remember that <a href="http://www.ata.org.au/wp-content/uploads/Thermal-Imaging-Presentation.pdf">significant heat will reflect</a> onto windows from sizzling decks, paved areas and walls (but not lawns). It’s better to keep out the sun in the first place rather than try to cool your house down.</p>
<p><strong>18. Double glazing</strong> for windows cuts out noise, improves security and <a href="https://www.ata.org.au/news/atas-new-green-home-heating-e-book">saves energy too</a>. For many Australian climate zones, I recommend that homeowners never buy a window in future that isn’t double-glazed. <a href="http://www.diydoubleglaze.com.au/ATA.pdf">Retrofit options</a> options such as “secondary glazing” are also available.</p>
<p><strong>19. Fit a pool cover</strong> if you have a swimming pool. Not only will this stop the water cooling down overnight in summer, but a cover can also minimise cleaning, chemical use and the running time for your filter pump. Consider upgrading to a <a href="http://www.energyrating.gov.au/products/swimming-pool-pumps">more efficient pump</a> if yours is more than a decade old, and ensure it does not run for more hours each day than required.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/126477/original/image-20160614-17209-1doru8y.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Remember to cover up when not sunbathing.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File%3ABackyard_swimming_pool_in_Queensland.JPG">Kgbo/Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p><strong>20. Use reverse-cycle to heat your home…</strong>. If your home has <a href="https://theconversation.com/hot-summer-nights-and-cold-winter-evenings-how-to-be-comfortable-and-save-money-all-year-long-51046">reverse-cycle air conditioning (also known as a heat pump)</a>, this may be the cheapest way to heat, especially as <a href="https://theconversation.com/its-cold-in-my-house-and-the-price-of-gas-is-going-up-what-can-i-do-44824">gas prices rise</a>. On heat mode, reverse-cycle units harvest <a href="https://theconversation.com/the-cheapest-way-to-heat-your-home-with-renewable-energy-just-flick-a-switch-47087">free renewable ambient heat from the air outside your home</a> and pump it up to the toasty temperature you need inside. Having installed high-efficiency reverse-cycle units, I can heat my own home for <a href="http://renew.org.au/articles/comfortably-ahead-a-tale-of-two-heaters/">one-third of the cost</a> of ducted gas heating.</p>
<p><strong>21. …and your water</strong>. If your hot water system is nearing its use-by date, consider replacing it with a heat pump. This is an especially good option for homes that already have <a href="https://theconversation.com/get-more-out-of-your-solar-power-system-by-using-water-as-a-battery-37807">solar panels and low feed-in tariffs</a>.</p>
<p><strong>22. If you can <a href="http://energyfreedom.com.au/">eliminate all gas use</a></strong> in your home (for <a href="http://mei.insights4.net.au/switching-gas-report-available-here">space heating, water heating and cooking</a>), you can eliminate your gas bill with its nearly A$1 per day fixed supply charges.</p>
<h2>And then there is solar…</h2>
<p>In Australia these days, you won’t be paid much money for selling your electricity back to the grid. However, it might still pay to install solar if you can <a href="http://reneweconomy.com.au/2015/solars-inconvenient-truth-its-all-about-self-consumption-19817">consume most of the energy yourself</a>, by running your pool pumps, appliances, space heating and cooling devices, hot water system and even an electric car with solar electricity harvested during the day. </p>
<p>In future, as <a href="https://www.ata.org.au/news/grid-connected-batteries-economically-attractive-by-2020-ata-report">electricity storage batteries get cheaper</a>, there may be even more economic reasons to have solar panels on your roof.</p>
<p>This article doesn’t list every possible <a href="http://www.thefifthestate.com.au/politics/local-government/how-gamification-is-saving-brisbane-renters-thousands-on-energy-bills/82684">behavioural trick</a> or <a href="http://www.yourhome.gov.au/">home improvement</a>. Sadly, some homes will never be fantastic energy performers without significant modification. But hopefully there are a few things on this list that will work for you – even if it’s only a case of finally covering that drafty doorstep, or giving your creaking “beer fridge” a dignified retirement.</p><img src="https://counter.theconversation.com/content/60847/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>In addition to his role at the University of Melbourne, Tim has conducted over 400 home energy assessments/consultations working or volunteering with organisations such as the not-for-profit Moreland Energy Foundation - Positive Charge.</span></em></p>There are loads of things you can do to cut your energy bills - and many don’t involve stumping up any cash up-front at all.Tim Forcey, Energy Advisor, Melbourne Energy Institute, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/541642016-02-15T03:20:38Z2016-02-15T03:20:38ZEnding the ‘arms race’ at the centre of utilities regulation<figure><img src="https://images.theconversation.com/files/110696/original/image-20160208-12837-8u4lq4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Energy network owners are frequently using legal battles to draw out the regulatory process.</span> <span class="attribution"><span class="source">From www.shutterstock.com</span></span></figcaption></figure><p>Generators, retailers and consumers should be able to negotiate deals with energy, telecommunications and water network owners to keep the system honest, <a href="https://business.monash.edu/__data/assets/pdf_file/0005/404195/Rethinking-Utility-Regulation-in-Australia-Final.pdf">new research argues</a>. Utilities regulators are hamstrung by legislation that allows utilities network owners to drag out decisions and pass on costs.</p>
<p>The length of regulatory decisions and associated documentation has grown by over 2000% in some cases. Decisions regularly take several years to make and are also more complex and hence less transparent with no clear benefits to customers.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=542&fit=crop&dpr=1 600w, https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=542&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=542&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=681&fit=crop&dpr=1 754w, https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=681&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/110283/original/image-20160204-3002-1eikwfg.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=681&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Data from published determinations available from the AER. ‘t.’ refers to ‘transmission network’, ‘d. refers to ‘distribution network’.</span>
</figcaption>
</figure>
<p>Legal battles appealing the regulators decisions have been especially frequent in energy and to a lesser extent in telecommunications. Energy network owners appealed the regulator’s decision 40% of the time since 2006. Not only does this lead to costs and delays, it also has increased the businesses’ allowable revenue by an additional $3 billion.</p>
<p>An alternative approach is needed to deal with the complexities of utility regulation. An example of this is a system that puts users at the centre of the regulation. The available evidence from <a href="http://www.sciencedirect.com/science/article/pii/S0301421512005290">United States</a>, <a href="http://www.sciencedirect.com/science/article/pii/S0301421509004339">Canada</a>, and in Australia (the <a href="https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0ahUKEwjq693G9d_KAhULnZQKHUSYAF0QFggnMAI&url=http%3A%2F%2Fwww.econ.cam.ac.uk%2Fdae%2Frepec%2Fcam%2Fpdf%2Fcwpe1218.pdf&usg=AFQjCNEtzFyJwuVjwy35IFXeXP2wlH3Vog&bvm=bv.113370389,d.dGo">Hunter Valley decision</a>) indicates that allowing negotiation between users and owners of these networks with regulatory backup can lead to quicker, simpler decision making as well as more prudent investment decisions and lower overall prices. </p>
<p>Generators and retailers are also likely to have a much better idea of what they need from the networks than the regulator. They are also much more likely to be knowledgeable about the optimal timing and nature of new investment in the network. They also have an incentive to keep these costs low.</p>
<p>The benefits of introducing competition and greater consumer choice are substantial. For example, the Productivity Commission’s 2005 <a href="http://www.pc.gov.au/inquiries/completed/national-competition-policy/report">review of National Competition Policy</a> estimated gains to our national income from these reforms of 2.5%, adding roughly $40 billion annually.</p>
<p>The regulation of utilities is necessary because some of these networks, such as the networks of poles and wires in electricity, are well recognised monopolies. Legislation requires regulators such as the Australian Competition and Consumer Commission (ACCC) and the Australian Energy Regulator to establish an “efficient price” for utilities that reflects a competitive market.</p>
<p>However, such an approach to regulation is proving to be too difficult and expensive. The information and expertise needed by the regulator is just too great. Utilities network owners (with more information and knowledge than the regulator) have the incentive to get regulatory approval for higher costs. This in turn allows them to charge greater prices.</p>
<p>To capture higher prices, utility network owners can try to game the regulatory system in various ways. For example they can provide excessively lengthy and detailed information backed up by a range of experts, or they can provide it late in the regulatory process. Not only does this slow the whole process down; the regulator can risk being appealed if it does not adequately consider the information put to it as we have seen in the electricity sector.</p>
<p>The result can be an “arms race” of ever increasing use of experts and complexity and evermore resources used in the process.</p>
<p>A greater concern is that regulation appears to be contributing to a misapplication of resources in some sectors, particularly in energy and telecommunications.</p>
<p>For example, the asset base of electricity transmission and distribution companies has grown by 45% and 120% respectively in around a decade. The total increase in the asset base over this period sits at around $35 billion. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=484&fit=crop&dpr=1 600w, https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=484&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=484&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=608&fit=crop&dpr=1 754w, https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=608&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/110285/original/image-20160204-3006-3kp9fx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=608&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Data from AER State of the Energy Market Reports (https://www.aer.gov.au/publications/state-of-the-energy-market-reports)</span>
</figcaption>
</figure>
<p>This increase cannot be explained by total electricity transmitted and distributed as this has declined since its peak in 2008. Nor can it be explained by number of customers or growth in peak demand. Some tightening of the reliability standards may have contributed to this expenditure but can hardly explain increased expenditure of this magnitude. Which begs the question – how can this cost be justified to users? </p>
<p>Requiring generators, retailers and consumer representatives to negotiate with network providers would not be without its challenges as they would have to actively engage with the regulated business in the first place. In the end, however, putting the primary stakeholders in control of their fate (and using regulators only as a backup to negotiations) will ensure decisions are made under the best possible incentives.</p><img src="https://counter.theconversation.com/content/54164/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Joe Dimasi is has been involved in the regulation of utilities for two decades. He is a former Commissioner and Senior Executive of the ACCC and continues to work in the regulation of utilities.</span></em></p><p class="fine-print"><em><span>Peter J. Lambert does not have any affiliations with any organisation that would benefit from this article.</span></em></p>Generators, retailers and consumers should be central to regulating utilities because network operators are gaming the system.Joe Dimasi, Professorial Fellow, Department of Economics, Monash UniversityPeter J. Lambert, Assistant Researcher, Monash Business Policy Forum, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/301362014-08-06T08:37:45Z2014-08-06T08:37:45ZCollective bargaining and a dose of game theory can help you lower your energy bills<p>Energy prices are rising, and it hasn’t gone unnoticed that the profits of the handful of large energy supply companies <a href="http://www.bbc.co.uk/news/business-28563296">are rising too</a>. While it can be argued that there is no direct causal relationship between the two, there is clearly a case for consumers to have access to better tools that help them access the best tariffs and lower their bills. </p>
<p>In particular, those consumers with energy consumption patterns that are more predictable or desirable for the companies that supply them should be able to demand better prices than others without. The problem is that a single individual customer doesn’t have much in the way of negotiation power in the market. One possible answer is for them to band together into groups, and engage in collective bargaining to get a better deal, a concept called collective energy purchasing.</p>
<p>The trend of joining forces to negotiate better prices for their electricity started in continental Europe, particularly in Belgium and the Netherlands, but has gained considerable traction in the UK. The Department for Energy and Climate Change <a href="https://www.gov.uk/collective-switching-and-purchasing">ran a £5m fund in 2012</a> to provide support to organise such group bargaining. </p>
<p>Schemes such as the <a href="http://www.which.co.uk/switch/about-which-switch/about-the-big-switch">Big Switch</a> and the <a href="http://thisisthebigdeal.com/">Big Deal</a> provided thousands of consumers with a way to switch, saving up to 25-30% on their annual electricity bill. More recently, several start-ups firms and local initiatives have started <a href="http://www.theguardian.com/money/2014/apr/06/energy-bills-consumers-collective-cheaper-rate">offering similar schemes</a>.</p>
<h2>A better deal for all</h2>
<p>The process of joining together is typically mediated by a third party, and a large part of it can be automated. For instance, given the adoption of smart meters, it is not hard to imagine a near future in which consumers can simply upload (or provide access to) information about their usage, and a web service can work out which is the optimal tariff and carry out the collective purchasing and switch on their behalf. </p>
<p>It’s a compelling idea, but there’s no guarantee an automatically selected tariff will always be the best choice for all the group’s customers. Buying as a group may provide an optimal result for the group, but this is an averaged result rather than one that applies with respect to each individual customer. Individual customers (or subgroups of customers) may be better off switching individually, or forming their own subgroup around another tariff.</p>
<p>This type of phenomena is called coalitional stability, and has been long studied in coalitional game theory, and more recently, in distributed artificial intelligence. <a href="http://eprints.soton.ac.uk/364307/">Recent research</a> has started using AI techniques to address the challenge of designing more efficient group-buying aggregators.</p>
<h2>Predicting use and spreading risk</h2>
<p>One central issue is modelling how predictable each customer is. Distribution companies must estimate how much electricity their consumers will use and buy long-term, forward contracts. Any shortfall of electricity has to be bought on the spot market or during <a href="http://www2.nationalgrid.com/uk/services/balancing-services/">balancing</a>, typically at a higher price. The converse also holds, in that any electricity bought in excess has to be sold during balancing, usually at a loss. So having accurate data about consumption is important.</p>
<p>A “prediction of use” tariff, which asks customers for a prediction of their electricity use (or estimates this from their past consumption records) and charges them accordingly would better match their cost to the supplier based on how predictable their energy use is. Crucially, while each consumer may be unpredictable, grouping them together in a collective reduces their aggregate uncertainty, making their consumption more predictable.</p>
<p>In fact, a market could comprise a whole range of these prediction of use tariffs. Some of could be flat, like existing tariffs, where the utility company would carry the risk but charge higher prices. Others would encourage greater predictability from customers, lowering the risk to the supplier who in turn provides a much better price for electricity consumption within the predicted limits (and extra charges for use beyond the predicted amount). Different consumers with different requirements could be dynamically clustered, depending on how well they predict their consumption, with buying groups formed around particular tariffs.</p>
<p>The sort of coalitional game theory that can help design software and tools to provide the best tariffs can also divide the bill in the most fair way. On way is the concept of marginal payment, where a customer pays the difference between what the group pays including him or her, and what the group would pay if he or she were not a member.</p>
<p>It’s conceivable that better artificial intelligence techniques can help us provide incentives for people to form groups. A well known problem in electricity group buying is that people are reluctant to commit until a critical mass is reached. So marginal payments could depend not only on ease of predicting consumption but also on how early a member joined their collective purchasing group.</p>
<p>Used wisely, such collective schemes can raise consumers’ awareness of their energy usage, lowering overall energy consumption, leading to less carbon emissions, lower costs for supplier and consumer, and less wastage. </p><img src="https://counter.theconversation.com/content/30136/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Valentin Robu's research at the University of Southampton was supported by the industrially funded iDEaS project (<a href="http://www.ideasproject.info/">http://www.ideasproject.info/</a>).</span></em></p>Energy prices are rising, and it hasn’t gone unnoticed that the profits of the handful of large energy supply companies are rising too. While it can be argued that there is no direct causal relationship…Valentin Robu, Lecturer in Smart Grids, Heriot-Watt UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/258162014-04-22T20:06:38Z2014-04-22T20:06:38ZEnergy-smart appliances cut Australian power bills by billions<figure><img src="https://images.theconversation.com/files/46808/original/4gvwwz5m-1398151331.jpg?ixlib=rb-1.1.0&rect=0%2C4%2C3000%2C1994&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Better appliances and energy-efficiency rules saved Australians more than A$3 billion on electricity last year alone.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The latest review of <a href="http://www.energyrating.gov.au/wp-content/uploads/Energy_Rating_Documents/Library/General/Equipment_Energy_Efficiency_Program_%28E3%29/Impacts-of-the-E3-Program.pdf">Australia’s energy-saving appliance scheme</a> has delivered a rare trifecta: a good news story for the economy, the community and the environment. </p>
<p>According to my estimates from data in the <a href="http://www.energyrating.gov.au/wp-content/uploads/Energy_Rating_Documents/Library/General/Equipment_Energy_Efficiency_Program_%28E3%29/Impacts-of-the-E3-Program.pdf">Department of Industry review</a>, the value of energy saved in Australia last year alone was around A$3.2 billion. Of this, some A$2.7 billion was saved by households.</p>
<p>The <a href="http://www.energyrating.gov.au/">Equipment Energy Efficiency</a> (E3) program aims to reduce energy use by household and business appliances, through the use of energy labels and enforceable standards for energy use.</p>
<p>This latest review found that in 2013, the E3 program <a href="http://www.energyrating.gov.au/wp-content/uploads/Energy_Rating_Documents/Library/General/Equipment_Energy_Efficiency_Program_%28E3%29/Impacts-of-the-E3-Program.pdf">reduced Australia’s greenhouse gas emissions by 13.5 million tonnes</a> at a cost of minus A$119 per tonne: in other words, it <em>saved</em> money to cut emissions. Overall, the savings delivered by embracing efficient appliances were three times greater than the costs. </p>
<p>The savings in energy use were equivalent to 7% of all Australian electricity consumption – a fact that certainly helps to explain the <a href="https://theconversation.com/another-summer-on-the-nem-24451">recent declines</a> in electricity consumption.</p>
<p>By 2030, the program is forecast to be saving 34.4 million tonnes of greenhouse gas emissions per year, at a cost of minus A$118 per tonne and a benefit/cost ratio of 4.6. That means for every A$1 we spend, we get A$4.60 of benefits back.</p>
<p>Not a bad result for a program with little political commitment and a low public profile. Imagine what it could achieve if it was taken more seriously.</p>
<h2>Energy efficiency can cover a carbon price</h2>
<p>An average Australian household saves about A$6 per week from appliance energy efficiency.</p>
<p>When Australia’s carbon price was announced in 2011, <a href="http://archive.treasury.gov.au/documents/2118/PDF/Modelling_carbon_price_household.pdf">Treasury modelling</a> estimated that a A$23-per-tonne carbon price would cost households A$9.90 per week, of which energy and water was A$4.60. So even without the financial compensation given out by the government, the energy-efficiency program has offset more than 60% of the estimated impact of carbon pricing on households. </p>
<p>What’s more, <a href="http://climatechange.gov.au/sites/climatechange/files/files/reducing-carbon/carbon-pricing-policy/households-cost-ets.pdf">Treasury estimates</a> suggest that moving from the fixed carbon price to a globally-linked trading scheme (assuming a carbon price of A$6 per tonne) would reduce household weekly carbon costs by A$7.30. On this basis, Australia’s appliance efficiency program would already more than offset the total cost impact of an ongoing emissions trading scheme, even if international carbon prices doubled. </p>
<p>Of course, appliances have been growing more efficient all the time, but the savings estimated here are on top of the “business as usual” trend. Without the incentive provided by the program, households would be using more energy and paying higher bills.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=169&fit=crop&dpr=1 600w, https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=169&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=169&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=213&fit=crop&dpr=1 754w, https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=213&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/46828/original/wqp5h6jp-1398167602.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=213&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">How much money, energy and emissions are estimated to have been saved since 2000, thanks to better energy standards for appliances.</span>
<span class="attribution"><a class="source" href="http://www.energyrating.gov.au/wp-content/uploads/Energy_Rating_Documents/Library/General/Equipment_Energy_Efficiency_Program_%28E3%29/Impacts-of-the-E3-Program.pdf">Department of Industry</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>The case for going further</h2>
<p>Since 1986, when the first energy labels began to appear on refrigerators, the program has provided a steady incentive for replacing inefficient appliances with better-performing ones. But given the huge savings and emissions cuts on offer, there is a strong case for a more aggressive program. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/46807/original/2bjy3pm4-1398150676.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/46807/original/2bjy3pm4-1398150676.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=800&fit=crop&dpr=1 600w, https://images.theconversation.com/files/46807/original/2bjy3pm4-1398150676.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=800&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/46807/original/2bjy3pm4-1398150676.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=800&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/46807/original/2bjy3pm4-1398150676.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1005&fit=crop&dpr=1 754w, https://images.theconversation.com/files/46807/original/2bjy3pm4-1398150676.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1005&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/46807/original/2bjy3pm4-1398150676.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1005&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Star performance: rating stickers first began appearing on Australian appliances in 1986.</span>
<span class="attribution"><span class="source">Gnangarra/Wikimedia Commons</span></span>
</figcaption>
</figure>
<p>The new report estimates that accelerating the program could deliver further net savings worth A$1.5 billion. But this is a very conservative figure, based on past studies that have consistently underestimated the benefits.</p>
<p>The estimates of savings to date are also conservative, because they use 2000 as a baseline, despite the fact that the program has been around for much longer. </p>
<p>Between 1986 and 2000, the average efficiency of new refrigerators purchased by Australian consumers improved by around 40%. Similarly, dishwashers became 23% more efficient between 1993 and 2000 – savings that are not captured in the report’s figures.</p>
<h2>Are there more savings to be made?</h2>
<p>There certainly are. One option is to expand efficiency programs to include a wider range of products. </p>
<p>A typical ceiling fan, for example, uses about 80 watts, whereas the most efficient models use less than a quarter of this. Energy labelling and minimum standards could drive large savings, especially in tropical areas. </p>
<p>Stronger measures could be introduced sooner. For example, swimming pool filter pumps are large energy consumers, and the existing voluntary energy labelling scheme shows savings of up to 80%. But the present schedule will not see mandatory labels and <a href="http://www.energyrating.gov.au/programs/about/">minimum energy performance standards</a> until 2017. </p>
<p>Replacing old, inefficient appliances offers big benefits. For example, many old refrigerators are faulty, and use up to eight times as much as a modern fridge, so replacing them brings disproportionately large savings. This could be encouraged by offering trade-ins for specific models, or offering home audits to identify appliances in need of replacement.</p>
<p>The program could also be expanded to include funding the development of new energy-efficiency technologies.</p>
<p>In a <a href="http://www.a2se.org.au/?option=com_content&view=article&id=400">recent conference presentation to the Australian Alliance to Save Energy</a>, I compared the energy performance of market-leading appliances against average ones. Replacing appliances with the best ones on the market can deliver power savings of 30-80%.</p>
<p>Then there is the potential to improve performance through the use of “smart” technology and design, such as load-sensing motors in washing machines. You can then take that further by encouraging changes in user behaviour, such as buying low-temperature detergents, cutting down on household bills and power use for hot water. </p>
<p>My research suggests that for most appliances there seems to be potential to improve effiency by another 30-60% beyond the current best available performance.</p>
<h2>Smarter choices for the future</h2>
<p>Australia’s appliance energy efficiency program (which <a href="http://www.energyrating.gov.au/">New Zealand also joined a few years ago</a>) has already cost-effectively cut greenhouse gas emissions, helped to reduce peak energy demand, reduced energy bills, and offset much of the cost associated with Australia’s fixed carbon price. </p>
<p>If, rather than scrapping carbon pricing, Australia were to shift to a globally-linked emissions trading scheme, carbon costs would be significantly reduced and the benefits from appliance efficiency would outweigh household carbon costs. That would effectively give us a climate policy that actually makes money. </p>
<p>Expanding and strengthening our energy efficiency program would deliver even more savings for Australian households, businesses and for the environment. But that’s if our government chooses to act.</p><img src="https://counter.theconversation.com/content/25816/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Alan Pears AM has carried out consulting work for many sustainable energy organisations and provides policy advice to a variety of organisations. At present he has no paid roles for such organisations. He is an honorary adviser to the Energy Efficiency Council, Climate Alliance and Alternative Technology Association.</span></em></p>The latest review of Australia’s energy-saving appliance scheme has delivered a rare trifecta: a good news story for the economy, the community and the environment. According to my estimates from data…Alan Pears, Sustainable Energy & Climate Researcher, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/222832014-01-22T14:45:32Z2014-01-22T14:45:32ZWhy fracking for shale gas won’t bring Britons cheap energy bills<figure><img src="https://images.theconversation.com/files/39684/original/z22n9p4w-1390401188.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Burning issue.</span> <span class="attribution"><span class="source">ClawzCTR</span></span></figcaption></figure><p>Debate over the development of shale gas in the UK and its potential benefits has intensified in recent weeks as the prime minister <a href="http://www.bbc.co.uk/news/uk-politics-25705550">visited a fracking site</a> in Lincolnshire to make announcements over how more money from any gas produced should go back to local communities. </p>
<p>Media reports regularly claim that shale gas will <a href="http://www.telegraph.co.uk/finance/newsbysector/energy/10551182/Shale-set-to-cut-energy-bills.html">lower domestic energy bills</a>, linking shale gas to another political hot potato – energy’s role in what the <a href="http://www.bbc.co.uk/news/uk-politics-25549708">Labour party has called</a> the “biggest cost-of-living crisis in a generation”. Those who say bills will fall in the UK look to the US, where shale gas production has lowered gas prices and supported an economic recovery through cheap energy. We can have that here too, goes the argument. </p>
<p>Well, the British experience is unlikely to follow a similar path to that in the US but it’s still attractive for the economy to develop shale gas if it can be done commercially and with the right environmental and social safeguards. These are challenging hurdles to overcome, however.</p>
<p>The US shale gas “revolution” has been <a href="http://www2.warwick.ac.uk/knowledge/business/fracking">impressive in many ways</a>. Back in June 2008, US gas prices peaked at more than US$13/Mbtu (natural gas is priced in millions of “British thermal units”, abbreviated as Mbtu). The discussion at the time was of the US needing to import liquefied natural gas (LNG) and billions of dollars were invested in constructing import terminals. </p>
<p>But rising prices had encouraged small, entrepreneurial drilling companies to develop cost effective ways to produce gas from shale rock. Domestic US shale gas production started to rise. But echoing the original development of oil in north-eastern US a century or so ago, a boom in gas supply within the US plus the financial crisis led to a bust in prices which fell as low as $2/Mbtu in April 2012.</p>
<p>In January 2014, the US price is back to more than $4/Mbtu. But prices in Europe and Asia are several times that level, and governments around the world are looking with envy at the benefits received by US consumers, politicians and energy intensive industries.</p>
<p>But North America is an island as far as gas is concerned – albeit a pretty large one. While the US had been preparing to import gas before the shale revolution, it does not have the network of international pipelines or export facilities that exist in Europe or other parts of the world. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/39674/original/n5cxw6gt-1390393122.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/39674/original/n5cxw6gt-1390393122.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/39674/original/n5cxw6gt-1390393122.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/39674/original/n5cxw6gt-1390393122.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/39674/original/n5cxw6gt-1390393122.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/39674/original/n5cxw6gt-1390393122.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/39674/original/n5cxw6gt-1390393122.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">You’ll still need to watch the meter.</span>
<span class="attribution"><span class="source">Leo Reynolds</span></span>
</figcaption>
</figure>
<p><a href="http://www.ft.com/cms/s/0/be69a732-ab5a-11e2-8c63-00144feabdc0.html#axzz2r31AcuY0">International critics</a> of the US argue that the lack of progress in approving gas export facilities or lifting the ban on exporting US-produced crude oil are deliberate tactics to keep energy prices low and maintain the economic advantage they have fostered. Canada meanwhile faces the dilemma of declining oil & gas exports to the US, and is considering its own investment in pipelines and export terminals <a href="http://blogs.ft.com/beyond-brics/2014/01/15/asia-wide-gas-buyers-club-throws-spanner-in-canadas-energy-plans/#axzz2r367HAod">to serve Asian countries</a>.</p>
<p>As North Sea oil and gas developed, a series of sub-sea pipelines were built between the UK, Norway and the rest of Europe to enable the UK to sell gas internationally and enjoy the economic boom it provided.</p>
<p>This network served the UK well and, since 2004, the same pipelines have supplied gas into the UK as it has become a net importer. Regulators <a href="https://www.ofgem.gov.uk/ofgem-publications/40204/gas-sos-report.pdf">point out</a> that the UK’s gas market is “the least concentrated and most liquid amongst the larger countries of the European Union”.</p>
<p>If the UK can develop shale gas commercially and sustainably on a significant scale, it will take a highly controversial change in policy for that gas not to become part of the wider European market, where prices are currently around $12/Mbtu. </p>
<p>This is recognised by UK politicians with a detailed understanding of the situation. Energy Secretary Ed Davey has been clear that <a href="http://www.bbc.co.uk/news/business-25815247">lower prices are unlikely</a>. The benefits of a sizable shale gas industry will be in terms of energy security, jobs in the UK and the economic contribution of producing gas here in the UK rather than importing it. </p>
<p>So the UK energy market after a shale gas boom would mirror the development of North Sea oil and gas. When North Sea energy came online, prices in the UK still reflected world markets but the country gained significant economic wealth from having a thriving oil and gas industry. </p>
<p>The government takes more than half the value of North Sea energy in taxes. How much it will take from shale is still being debated, but the chancellor can certainly look forward to significant tax revenues, even allowing for some to be passed back to local communities. But the consumer won’t find their bills are suddenly much cheaper.</p><img src="https://counter.theconversation.com/content/22283/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Elmes owns shares in oil & gas companies he has worked for in the past.</span></em></p>Debate over the development of shale gas in the UK and its potential benefits has intensified in recent weeks as the prime minister visited a fracking site in Lincolnshire to make announcements over how…David Elmes, Head, Warwick Business School Global Energy Research Network, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/209972013-12-03T13:45:22Z2013-12-03T13:45:22ZLabour’s ten-point energy plan goes too far – or not far enough<figure><img src="https://images.theconversation.com/files/36686/original/rn3wffbg-1385992958.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Whodunnit: who broke the energy market?</span> <span class="attribution"><span class="source">Chris Young/PA</span></span></figcaption></figure><p>It is ironic that it is the Labour frontbench leading the charge against what it calls the UK’s “<a href="http://www.independent.co.uk/news/uk/politics/ed-miliband-outlines-plan-to-break-up-big-six-gas-and-electricity-companies-and-abolish-energy-regulator-8971212.html">broken energy market</a>”, because practically every controversial aspect of the energy market was the creation of the last Labour governments.</p>
<p>For example, concerns over household energy bills stem from the creation of energy regulator <a href="https://www.ofgem.gov.uk/">Ofgem</a> in 2000, which abolished retail energy price controls shortly after it was formed. The lack of transparency in energy companies’ costs and profits has been exacerbated by the introduction of the <a href="http://www.publications.parliament.uk/pa/cm200304/cmselect/cmpubacc/63/63.pdf">New Electricity Trading Arrangements</a> (NETA) in 2001, and the growing vertical integration of energy companies: by operating as both generators, consumers and suppliers of energy, the firms can sell electricity to themselves at below market cost. The Labour government at the time failed repeatedly to refer this to the Monopolies and Mergers Commission.</p>
<p>Labour also introduced the <a href="https://www.ofgem.gov.uk/environmental-programmes/renewables-obligation-ro">Renewables Obligation</a> in 2002, <a href="https://www.ofgem.gov.uk/environmental-programmes/feed-tariff-fit-scheme">Feed-in Tariffs</a> in 2010, and amplified the practice of obliging energy suppliers to improve the energy efficiency of their customers’ homes, through the Energy Efficiency Commitment in 2002, and then the greatly expanded Carbon Emissions Reduction Target, the latest manifestation of which is the <a href="https://www.ofgem.gov.uk/environmental-programmes/energy-companies-obligation-eco">Energy Company Obligation</a> (ECO). These “green taxes” and obligations are perhaps more widely known as, after David Cameron’s reported outburst, “<a href="http://www.theguardian.com/environment/2013/nov/21/david-cameron-green-crap-comments-storm">the green crap</a>”.</p>
<p>But times move on – maybe the energy market does need fixing by the party largely responsible for the way it currently functions. The question is whether <a href="http://www.carbonbrief.org/blog/2013/11/decoding-labours-10-point-energy-plan/">Labour’s proposed “Ten-Point Plan</a>” will make matters better or worse.</p>
<h2>Shifting energy priorities</h2>
<p>Any answer to that question must consider the objectives of energy policy as the means to regulate, or guide, the energy market. These are generally accepted to be: keeping energy affordable, reducing carbon emissions and securing supply – inevitably referred to as “keeping the lights on”.</p>
<p>These three objectives rarely pull in the same direction and generate significant pressure on political priorities at different times. The effect is generally to cause politicians to flip-flop between them as the politics of the moment demand. For example, green levies such as ECO and its forerunners were introduced when green issues had a high profile. Before energy prices started rising it was politically easier to add the costs to consumer bills – partly because they were less obvious there – rather than introduce more transparent taxes, even though academics like me <a href="http://www.jrf.org.uk/publications/reducing-impact-green-taxes-and-charges-low-income-households">pointed out at the time</a> that this was regressive.</p>
<p>Today, there are <a href="http://www.publications.parliament.uk/pa/cm201012/cmselect/cmenergy/742/74207.htm">conflicts</a> between energy policy objectives that any reform needs to resolve. Low-carbon energy sources are still more expensive than the fossil fuels they replace, which puts pressure on consumers whether paid for by household bills or taxation. </p>
<p>Power companies need to invest in new infrastructure, to be paid for by company profits that will, again, ultimately be paid for by consumers. Energy efficiency improvements to homes will reduce bills for those that get them, but the costs are recouped only slowly. Not all homes can be made more energy efficient immediately or cheaply, so bills or taxes will still need to go up in the short term before the benefits will be felt.</p>
<h2>Piecemeal market fixes</h2>
<p>The first three of Labour’s ten points reverse some of the decisions made, or developments tolerated, when they were last in government. They propose, rightly, to end vertical integration, re-establish a wholesale electricity pool to improve price transparency and clarify the trading arrangements that were muddied by NETA.</p>
<p>Three more seek to generate the confidence the energy companies need to take forward low-carbon investment, by allowing the <a href="http://www.greeninvestmentbank.com/">Green Investment Bank</a> to borrow and back low-carbon projects. The plan endorses the government’s Feed-in Tariff that would replace the Renewables Obligation, and also the <a href="http://www.carbonbrief.org/blog/2013/06/the-decarbonisation-target-didnt-pass-what-now">2030 decarbonisation target</a> recommended by the Committee on Climate Change, which the government has rejected for the time being.</p>
<p>While welcome, it remains to be seen whether these proposals will undo the damage done by Labour’s reckless, albeit politically successful, promise of an <a href="http://www.bbc.co.uk/news/uk-politics-25178726">energy price freeze</a>. This has cast a shadow over the energy sector, making it more difficult and more expensive for energy companies to borrow money for new projects. But all these proposals are small beer compared to the two major proposals for institutional reform.</p>
<h2>New institutions, old ideas</h2>
<p>The most substantial of Labour’s proposals are the abolition of Ofgem, its own creation, replacing it with a “a tough new energy watchdog”, and the creation of a new Energy Security Board “to plan for and deliver on our energy needs”.</p>
<p>When politicians propose new institutions to solve perceived problems, the first question to ask is: are they necessary? In this case, definitely not. Ofgem behaves according to the “guidance” and legal powers given it by the government – if the government wants Ofgem to regulate energy prices or show any new teeth it considers necessary, it can simply give Ofgem the power to do so.</p>
<p>The proposed Energy Security Board is still a black hole, its powers and scope of operation unknown or poorly defined. But there’s no evidence such a body would make any improvement to the UK’s energy needs over current arrangements – especially if these were subjected to the targeted, well-specified reforms, some of which are among Labour’s other proposals.</p>
<p>Worse still, presenting new, yet-to-be-defined institutions alongside reform of the trading arrangements and industry structure will only serve to introduce a further lengthy period of uncertainty into the energy market. This will almost guarantee that the private companies currently being relied on to build the new power stations the UK needs will not build them by the time the UK needs them. If Labour really wants to keep the lights on, perhaps it should have just declared that the government will build the power stations itself – and then we really would be back to the pre-Thatcher days of the <a href="http://www.rwe.com/web/cms/en/286400/rwe-npower/about-us/our-history/history-of-electricity-industry/">Central Electricity Generating Board</a>.</p><img src="https://counter.theconversation.com/content/20997/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Ekins is Co-Director of the UK Energy Research Centre, funded by the Natural Environment Research Council through the Research Council’s Energy Programme.</span></em></p>It is ironic that it is the Labour frontbench leading the charge against what it calls the UK’s “broken energy market”, because practically every controversial aspect of the energy market was the creation…Paul Ekins, Professor of Resources and Environmental Policy, UCLLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/205212013-11-20T06:19:28Z2013-11-20T06:19:28ZWater firms’ failure to invest stores up problems<figure><img src="https://images.theconversation.com/files/35620/original/xhq9fdhz-1384885273.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Fetch a bucket.</span> <span class="attribution"><span class="source">Matluba Mukhamedova/World Bank</span></span></figcaption></figure><p>There’s been much debate this past month about Britain’s rising gas and electricity bills. Price hikes have followed utility companies’ reports of massive increases in profits, such as Scottish Power which <a href="http://www.theguardian.com/money/2013/jul/11/scottish-power-profits-prices">more than doubled</a> its pre-tax profit in the year it raised gas and electricity prices by 7%.</p>
<p>This has caused anger, not least because more than 3m people <a href="https://www.gov.uk/government/publications/fuel-poverty-2011-detailed-tables">spent 2011 in fuel poverty</a>. Add the Prime Minister David Cameron’s comments, backed by the industry, that price rises are <a href="http://blueandgreentomorrow.com/2013/10/23/rising-energy-bills-prompt-david-cameron-to-announce-green-tax-review/">due to green levies</a>, and the outlook is that people are forced to choose not only between heating and eating, but between eating and hope for a habitable climate.</p>
<p>So while energy politics inevitably involves debating how to balance cost, climate change and poverty (among other issues), the water industry has managed to skirt such debate – despite the same issues. The <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/244595/qep221.xls">average cost of water</a> per household is relatively small compared to <a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/244599/qep231.xls">gas and electricity</a>, at £388 compared to £1,279. Nonetheless, water poverty in the UK is a <a href="http://www.york.ac.uk/inst/spru/presentations/JRBWaterPovFRSUM2012.pdf">very significant problem</a>. Between 2009-2010, nearly a quarter of households were in water poverty, defined as spending more than 3% of their income on water.</p>
<p>Water prices have <a href="http://www.york.ac.uk/inst/spru/presentations/JRBWaterPovFRSUM2012.pdf">consistently risen</a> since the industry was privatised in 1989, faster than overall prices in the UK and faster than average earnings. Partly this is due to increasing water provision and treatment costs, affected by various factors including climate change-related flooding and drought, over-use and waste, but also by ageing, leaking pipes. So innovation that will help drive down these costs is key.</p>
<h2>The “innovation barrier”</h2>
<p>In a <a href="http://spp.oxfordjournals.org/content/early/2013/10/17/scipol.sct074.abstract">recently published paper</a> with Susan Molyneux-Hodgson from the University of Sheffield, we presented findings from two years of research studying a group of academic researchers’ efforts to generate bold technical innovation for the water industry. We explored how researchers and the industry worked together and how these groups explained the lack of funding for adventurous innovations.</p>
<p>A recurring story is of the UK’s impregnable “innovation barrier” for developing cutting-edge technologies, for which there is very little funding as most available money from the UK Research Councils and from industry goes toward incrementally improving existing techniques.</p>
<p>We found the lack of industrial investment was explained by claiming consumers were ignorant of the costs and “true value” of water. This meant they were unwilling to pay the “real costs” of provision, and of research and development to tackle infrastructure and climate change-related problems. Consumers were often blamed for their influence on regulators, who seemed unwilling to let the companies charge more.</p>
<p>Many academics in natural sciences and engineering bought into the idea that the problem wasn’t so much with monopolies profiting massively from essential water services – while the infrastructure aged and climate change got worse – but with consumers, who just couldn’t – wouldn’t – accept how much it would cost for problems to be fixed.</p>
<p>Ultimately, the construction of the problem framed its own solution: the industry wants to educate consumers about the value and costs of water so they will be willing to pay more for research and innovation, which the industry believes will help solve leakage and climate change problems. Is it right to be sceptical of the idea that charging more for water would result in greater research and infrastructure investment? </p>
<h2>Short term profit over long term gains</h2>
<p>Well, in the UK <a href="http://archive.defra.gov.uk/environment/quality/water/industry/cavereview/documents/cavereview-finalreport.pdf">investment in research and development</a> varies from a barely visible 0.02% of turnover up to a mere drop in the ocean at 0.66%. We found those in industry saw no clear incentive to invest in bold technological programmes of innovation if there wasn’t a clear profit to come from it.</p>
<p>Of course, investments in technologies to help protect us against floods and storms, shortages and droughts, and to help reduce the impact we’re having on the environment cannot easily be turned into short-term profit-making ventures. But clearly existing costs would be astronomical if we allowed the effects of climate change to escalate and the infrastructure to crumble.</p>
<p>Technologies are not the only thing we need to help alleviate these problems – we also have to look at consumer and corporate practices. But technological innovation is important. The costs of innovation are not too high, they are essential, but the companies still aren’t willing to pay.</p>
<p>The utilities regulators and our politicians have to be brave and challenge the industries. Because David Cameron’s desire to cut green levies to tackle household fuel bills is the same as “educating” consumers as to the “true value” of their water – a means to protect profits for shareholders at the expense of the UK’s most impoverished, and potentially at the cost of the planet.</p>
<p><em>First published on Policy@Manchester’s <a href="http://www.manchester.ac.uk/policyblogs">Manchester Policy Blogs</a></em></p><img src="https://counter.theconversation.com/content/20521/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The research on which this post is based was funded by the EPSRC. </span></em></p>There’s been much debate this past month about Britain’s rising gas and electricity bills. Price hikes have followed utility companies’ reports of massive increases in profits, such as Scottish Power which…Andrew Balmer, Simon Research Fellow , University of ManchesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/204522013-11-19T09:35:36Z2013-11-19T09:35:36ZThree visions for reforming the electricity market<figure><img src="https://images.theconversation.com/files/35522/original/jfk6hwt9-1384797066.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Would you buy a used energy market from these people?</span> <span class="attribution"><span class="source">PA</span></span></figcaption></figure><p>The impending third reading of the <a href="https://www.gov.uk/government/collections/energy-bill">Energy Bill</a> in the UK’s House of Lords marks the final stage of a long and intensive review process for legislation designed to overhaul the UK’s energy market. The question is whether the Energy Act, once enacted, can deliver the necessary changes that will make the UK’s energy industry fit for the 21st century.</p>
<p>The bill’s passage through parliament has been marked by heated debates over energy prices, rising fuel poverty and falling industry competitiveness, and warnings around future energy security and environmental sustainability. It’s reasonable to wonder whether the government – any government – can realistically plan for and steer an industry that must concern itself with so many different and often opposing needs.</p>
<p>At the heart of it, the fundamental question is what sort of industry arrangement is best to meet this multitude of consumer, industry and government demands? In my view, there are essentially three main options (perhaps with combinations of them possible).</p>
<p>The first option is re-nationalisation, a reversal of more than 20 years of privatisation and liberalisation policies which, despite people’s feeling of being ripped off, have resulted in Britons enjoying among the <a href="http://www.energypriceindex.com/wp-content/uploads/2013/10/HEPI_October-2013.pdf">lowest energy prices in Europe</a>. Regardless there are many who would advocate such a radical step, if only to increase the sense that people would regain some control over the industry. Even besides the major legal hurdles, it’s highly doubtful that these days the government has deep enough pockets to pay off the energy firms’ shareholders.</p>
<p>A second option would be to continue with the existing market arrangements, where a limited number of major (mostly foreign) companies run the market – and in many ways dictate the rules. This option favours large, centralised solutions involving power plants and transmission lines, and would continue to be subject to a high degree of government interference. Due to the perceived lack of transparency and accountability it would also be likely to further entrench the sense of an adversarial culture between consumers, providers, and regulators.</p>
<p>The third option might be to follow through with the process of liberalisation and create a genuinely open electricity market. This would be designed and served by a much greater number of “prosumers” – companies, and individuals, that are both electricity generators and consumers. Examples include homeowners producing electricity via solar photovoltaic panels on their roofs, <a href="http://adnams.co.uk/about/news/company-news/environment/adnams-anaerobic-digestion-plant/">a brewery using renewable waste products to generate gas</a>, or a <a href="http://www.bloomberg.com/news/2011-11-29/vattenfall-sells-part-of-hamburg-energy-networks-to-city.html">town or city buying back its distribution network</a>. Many industry commentators would argue that to solve the complexities and challenges involved in producing and consuming energy in the future we will need much more proactive engagement from the public and from the industry.</p>
<p>Specifically, what’s needed is a greater sense of ownership of and responsibility for our energy; where it comes from, its significance to our livelihoods, and the economic and environmental costs involved. Such an arrangement should encourage many more homeowners, businesses, and local communities to benefit from an fundamentally open electricity market by raising their awareness of the various technological options available, but also allow them to share in the gains.</p>
<p>The Energy Bill’s <a href="https://www.gov.uk/government/policies/maintaining-uk-energy-security--2/supporting-pages/electricity-market-reform">Electricity Market Reform</a> (EMR) creates incentives in the form of guaranteed electricity prices for various means of generating electricity. These are the so-called “<a href="https://theconversation.com/osborne-wont-usher-in-a-renewable-renaissance-15789">contracts-for-difference</a>”, bargains most recently seen being hammered out between the government and EDF over the price for electricity from <a href="https://theconversation.com/hinkley-c-goes-ahead-but-future-nuclear-costs-must-fall-19407">Hinkley Point C nuclear power station</a>. The question is whether forward-looking financing mechanisms like these are sufficient to attract the new energy entrepreneurs and “prosumers” to the market. Behavioural science tells us that, especially with incentives whose pay-off lies in the distant future, people are often unwilling to make the investment now for a payback later.</p>
<p>Perhaps a different set of financial incentives are needed, ones that would make investments in energy infrastructure more immediately attractive. How about tax rebates for all companies and stamp duty offsets for home owners that invest in decentralised energy generation such as rooftop solar and wind, or in energy efficiency measures? The aim should be to make the energy market more democratic by increasing the ways in which people choose and participate in, finance, and benefit from the decentralised solutions to the energy market’s problems, rather than leaving this to government and the Big Six.</p>
<p>The government is right to seek to reform the energy market; it remains to be seen who will be the main beneficiaries.</p><img src="https://counter.theconversation.com/content/20452/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frederik Dahlmann does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The impending third reading of the Energy Bill in the UK’s House of Lords marks the final stage of a long and intensive review process for legislation designed to overhaul the UK’s energy market. The question…Frederik Dahlmann, Assistant Professor of Global Energy, Warwick Business School, University of WarwickLicensed as Creative Commons – attribution, no derivatives.