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Beating Your Energy Bill

14th Aug 2014

Myth or Fact?

Every news source, supplier, broker and consultant (including us) has been posting about the increased prices and how to possibly beat them. We know that everyone including businesses want to save as much as possible. We are all holding onto those pennies as tight as possible and we don’t blame you. The question we have been asking is “can you beat the constant energy price rises.” We have looked at this and have some good news and bad news for you. We will kick start with the bad news first (why your bills will rise) as it is better to end on a positive note (What you can do).

Bad News (Why Your Bills are Increasing)

Unfortunately at our current rate of development and energy use we are set to see increased price rises, not just in the United Kingdom but in the whole world. We have identified some of the key areas that will increase the price of your energy bill (both domestic and business).

1 – Fossil Fuels –We are trying to decrease our reliance on fossil fuels, although we are still heavily reliant on this type of fuel to meet all our demands. You may think “But I’m consuming electricity, how is that a fossil fuel?” Well, how is that electricity made? Most of the electricity consumed in the UK is made by power stations using fuels such as coal and natural gas. Therefore, everything you use in day to day life has a carbon footprint. Fossil fuels will only ever run out as they can’t be manmade but are formed over millions of years. Therefore, this fuel will become more scarce, making it more valuable as a commodity. The more you use over a short space of time will mean that the price will have a steep incline.

2 – Transportation and Distribution Costs –This is similar to the use of fossil fuels. Sometimes it can be confusing as to what transportation and distribution costs are, however this non-energy related cost is a big factor in all energy bills. The Transportation charge refers to gas and how that gas gets to your home or business. Therefore, getting it there is a charge in itself. This is due to the fact that the National Grid manages all transportation to the 8 local Gas Distribution Networks (GDNs), which means the National Grid’s charges are within that transportation. Those charges also include the GDNs Local Distribution Zone (LDZ) charge and the rental of the gas meter and taking meter readings.

The Distributioncharge relates to electricity. Similar to the gas explanation above, electricity is managed by the National Grid, for which all supplies are passed through the local distribution networks. This is then distributed to your houses or businesses. Therefore, all those costs in the transportation charges are replicated in the electricity distribution.

3 – Technology –Everything is at our disposal and we have become an increasingly energy intensive society, not just here in the UK but in most of the developed world. This has led to a substantial rise in energy consumption. We are constantly reliant on technology. Can you remember the last power cut you had? We can guess that you were all on your phones as they run off a battery. However, most people charge their phone every day. Let alone the use of tablets, computers, laptops, TVs and entertainment systems. If you look back at the 80s or the 70s there were no mobiles or mobile technology like tablets. There were only landlines, music players, TVs, video recorders and radios. These could be turned off from the switch once they had been used. In Today’s world everything needs to be kept on as it is always updating and with games on your phone your battery dies more quickly. This means that we are consuming more electricity than we have previously. Therefore an increased use of resources will mean a higher bill and of course consumption of more fossil fuels.

Now isn’t the time to panic, there are solutions and areas you can look into to solve your problem.                                                                                                                

Good News (What You Can Do)

Every cloud has a silver lining and we are about to demonstrate three for you. These are areas to consider:

1 – Renewable Energy –Even though technology was stated as part of the problem it can be part of the solution as well. Technology is developing at a substantial rate which it is making all our products cheaper. This includes renewable energy for domestic and business use. This allows even small companies to harness the power of the sun and/or wind to power part of their house/business. They may look costly at around £7,500, but this is a lot cheaper than when they were first produced. These will only keep decreasing in price which will ensure that there could be an abundance of renewable energy sources. One idea that could be a possible future method to reduce our energy demand is Solar Roadways. This project managed to raise £2.2 million from a crowd funding site. Therefore, this could be the future of our roadways instead of tarmac. This should all, in theory, lower your bills because of the increased input to the grid from a renewable source.

2 – Energy Efficiency Compliance –The UK and EU Government has put in place strict carbon targets for the UK and EU to reach by 2020 known as the 20-20-20 target. The EU is looking at reducing their greenhouse gas emissions by 20% from 1990 levels. To raise the share of EU energy consumption produced from renewable to 20% and a 20% improvement in energy efficiency throughout the EU.  The ESOS Assessment is another initiative introduced by Government which is looking at all large organisations and their energy efficiency. This will help everyone reduce their energy use and become more energy efficient which should in theory lower your bills due to the nature of energy intensive businesses being subjected to audits and energy saving measures.

3 – Monitoring Energy Use – This is probably one of the most common forms of reducing your energy but it has been made easier. For domestic use there is the possibility of having smart meters which will let you know every single detail. It will allow you to see what appliances use the most and how much you have used. Business consultants/brokers can see where and when you are consuming the most and advice you accordingly. This way you will have someone informing you that you are using too much. This will help you proactively reduce your bills by understanding your home and your business.

In conclusion, there will more than likely be more price rises on the horizon but if you take control and look at how you can improve your home and business energy usage you will be able to beat those increased prices. This will allow you to have cheaper bills and a happier mind. There are more energy saving measures out there if you look hard enough. What are you waiting for? Start being proactive and make sure that your home and business are energy efficient.

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