Why is Energy Expensive?


Whether for our businesses or our homes, we all want a good energy deal. One that not only supplies cost effective energy but also with a company with a proven track record and good customer service.

“So what factors should we take into consideration when looking at switching suppliers?”

Since Prime Minister Theresa May pledged to cap prices, all of Britain’s top energy suppliers increased their prices. Wholesale gas prices spiked to their highest level in at least 10 years, thanks to the ‘Beast from the East’, while the heatwave had the opposite effect and led to higher than demand electricity.

Weather plays a major part in the way we consume gas and electricity, our consumption for gas peaks during the winter months whilst when we do have spells of a heatwave, our need to cool down by means of air conditioners and fans puts pressure on suppliers to generate more and keep up with the demand hence price hikes.

“What key factors are contributing to the increase of wholesale energy?”

We’re more reliant on gas imports from liquefied natural gas (LNG) ships and imports from Europe whereas previously we used our own storage facility to inject gas in the summer for us to use in winter which reduced our need for imported demand.

Brexit has also impacted prices, with a weak pound against the Euro, Europe has a greater advantage to import energy from the UK which puts more pressure on supply and demand and increases prices in the UK.

“What about renewable energy?”

Whilst renewable energy is cheap to operate it can be expensive to build and facilitate a functioning plant, location is also a factor to consider (for example special consideration is given to areas where wind can be generated constantly). Choosing the right location helps to maximise the amount of energy we produce. It has taken some time but governments are slowly starting to implement more policies in favour of greener energy with increased growth in renewables, take a look at the renewables obligation as an example of one such policy.

“So what is the cost of going green?”

Green energy tariffs are designed to promote renewable sources, but as we have established, green energy isn’t cheap to run and green tariffs will naturally cost more, however it doesn’t mean to say that there isn’t a good deal out there and we should pay particular attention to when wholesale renewable costs drop because naturally so will the price of green energy tariffs.

“How do I interpret my tariff?”

To the trained eye, checking tariffs is a simple process but for those who are less inclined to look over the small print, it can be a daunting task, especially if you are considering switching supplies or looking to make changes to your current supply. It can be even more of a time constraint if you have multiple premises supplied on different tariffs. A reputable energy broker can provide you with impartial advice and seek better and alternative suppliers for you.

Always consult an expert before you make any decisions about your energy supply. UK Energy Manager has helped businesses across many different sectors secure better energy tariffs and provided them with advice on how to make savings on their bills by making incremental changes to the way they use energy.

The Internet of Things (IoT)

The Internet of Things, or IoT for short, is the interconnection via the internet of computing devices embedded in everyday items, enabling them to send and receive data. In laymen’s terms, it’s used to describe the ever-increasing list of objects connected to the internet.

For many, these items are already essential, and we can’t live without them, such as a smart watch, home assistant services like Google and Alexa, your iPad and other connectables are all IoT devices. Whilst most of us embrace these technological marvels, there are some who don’t share our enthusiasm and won’t or can’t connect devices such as televisions, heating and utilities to the internet, but we believe that in the next five years it’ll be affordable, indeed a requirement, for every household to get connected. In fact, by 2020 there will be 31 billion devices connected to the Internet of Things, that’s more than three IoT devices per person.

“The possibilities of IoT are endless”

Now that we are familiar with IoT devices, we’re presented with unlimited possibilities on how we can live a more efficient, connected life. Everyday household items such as refrigerators, washing machines, coffee machines will send alerts to our phones and shop for us, your bed will monitor your sleep and adjust the temperature according to your sleeping patterns. Companies such as Amazon, already make consumers lives that much easier with ‘dash buttons’, allowing them reorder everyday items like coffee and toiletries, all with a push of a button. The possibilities of IoT are endless.

With the world moving to a more connected lifestyle, how do we make sure that the energy we use to stay connected isn’t counteracting all the hard work we are putting into becoming more energy efficient?

“how do we run our buildings and offices energy efficiently?”

Having all your devices constantly connected to the internet does take up a lot of energy, going against the idea of switching off what is not in use, so how can we run our properties’ energy efficiently in this changing environment? For us the answer is by using these very products to reduce energy consumption such as smart light bulbs, heating and lighting that are controlled from your phone. This provides a level of control we haven’t had before because you’re in charge of what you are using, when you’re using it and how much you’re spending on it. Smart buildings can still be green buildings!

Smart offices can be the same through controlling printers, PC’s, heating and lighting in just the same way a smart home can, helping businesses to cut back on energy wastage. It’s always good to continually review how much energy is being used to run your business and what this cost means in monetary terms. Speak to an energy specialist who can assist you by reviewing your bills and advise you on the best course of action.

Does being ‘smart’ mean you’re environmentally friendly?

Yes it does! Well if the humans involved are taking control by using smart products to help the environment by controlling on how much energy you’re using. By being connected you can be more conscious of your role in helping the environment by reducing your consumption but also how you can take control of what can be a big outgoing for your business.

You don’t need a BMS or even a fancy EMS to manage your energy use and environmental impact.

Find out what smart products you can use in your office and how you can reduce your energy usage by contacting us today.

Electric Vehicles – better for the environment? Not Yet!

The common theme through our blogs has been the need to be more energy efficient or ‘greener’. While the short-term motivation may be saving money or avoiding government penalties the long-term benefit is that to our environment and the planet we leave for the generations to come.

One of the chief culprits in the production of greenhouse gases are cars, which sees petrol and diesel cars becoming less attractive and the rise of the electric vehicle. But the question is this new kid on the block better for the environment?

The popularity of the electric car (EV) has undoubtedly increased and the automobile industry has responded (possibly also due to recent penalties for not meeting emission regulations), with some companies basing their entire model of cars solely on electrical charge whilst others offer the hybrid option working off both electricity and fuel.

The idea is that by using an electric vehicle you are moving away from dirty fuels to clean energy. But is this true?

Where does the electricity come from?

While the reduction of the use of fossil fuels in cars would help improve the ‘air’ that we breathe, especially in cities where car emissions shorten life expectancies, the electricity still needs to be produced.

As seen in previous blogs the government and energy producers are increasing the production of clean energy but this is still along way short of meeting the current demand for electricity. So how would the rapid increase in demand for electricity be met? Currently, without a substantial acceleration in the production of green energy, the choice would be fossil fuels.

This is especially true when you consider countries where the consumer may want to move to a cleaner car but there isn’t the political will to move to cleaner energy production. Unfortunately, this includes the USA and China who are the largest producers of greenhouse gases.

Is the move to electric vehicles truly a move to cleaner energy?

The cost of producing electric vehicles and their batteries.

The greater demand for electric vehicles will see their monetary price fall but as things stand the production of electric vehicles results in a greater amount of CO2 emissions than their gas-guzzling counterparts. A high proportion of which comes from the rechargeable batteries which they depend upon for power.

These batteries require the use of materials such as lithium which in their sourcing have a detrimental effect on the environment. This covers areas such as using large amounts of water, damaging the local environment where they are mined, the poor treatment of the miners and those local to production.

Even more ironically, given the aim of using these batteries, is that the materials are relatively scarce. This means that in continuing to use them, especially if the aim is to expand their use, we will need to source them from harder to access areas. One of these is through deep sea mining, which as we already know is a potential recipe for disaster.

Are current rechargeable batteries fit for purpose?

Is there sufficient infrastructure for Electric Vehicles? It’s true, the days of queuing at a petrol station would finally be at an end, but where would you go to recharge your EV? Even with an increase in recharge points the infrastructure is not yet ready for a wholesale move to electric vehicles.

The government and industry would rightly argue that a mixture of consumer expectation on shops and petrol stations, and financial support for councils and home owners, would see a quick roll out of charging points effectively ‘bolting on’ to the existing electricity grid. But this still adds up to a lot of money.

Is building the infrastructure for electric cars now the best way to use that money to benefit the environment?

What we think!

We’re not against the idea of moving towards a world where all cars, lorries, buses, etc. are electric vehicles. We as energy professionals simply question whether as things stand if all these good intentions will have any real positive effect.

We can look back only a few years to when biofuels were seen as the way forward, until that is someone pointed out issues such as deforestation, loss of biodiversity, soil erosion, increased demand for water, etc. This is the direction electric vehicles are going unless we see more joined up thinking.

Surely it would be better for governments and individuals to focus on the production and demand for the use of clean energy? Redirect the monies going into electric vehicles now to increasing that production so there is enough clean energy to run more vehicles? Indeed, to run them more cheaply than on fossil fuels?

Also, a cornerstone of our increased usage of clean energy is being able to store that electricity. So, a by-product of a larger clean energy industry will be the development of efficient and more sustainable energy storage. Given the right funding, time and regulation, the auto industry will find a way to produce the ‘batteries’ electric vehicles need to be truly green.

Rather than buying costly electric vehicles, individuals and companies should focus on being energy efficient and demanding on the government and producers to provide them with clean energy to consume.

If you are a company and you would like advice on how to be more energy efficient and source clean energy, talk to a specialist, talk to us at UK Energy Management.

Climate Change – How do we play our part to help sustain the planet?

Last month we looked at the Climate Change Levy (CCL) and how this affects your business but what about climate change itself? How is global warming affecting the way people live and work?

Human led warming is now having serious implications for the planet’s climate stability

The global average temperature is about 15C (December 2018) well above the average for the 20th Century of 13.7C. So what’s causing this rise and how can we manage it? Temperatures fluctuate and geological evidence suggest that it’s been much higher and lower in the past, but scientists are concerned that natural fluctuations are being rapidly overtaken by human lead warming which is now having serious implications for the planet’s climate stability.

So what is the ‘greenhouse’ effect?

Like the glass of a greenhouse the Earth’s lower atmosphere traps some of the Sun’s energy, solar energy that should reflect out to space from the surface of the Earth is instead absorbed by atmospheric greenhouse gases. The energy which radiates back down to the planet heats both the lower atmosphere and the surface. If this didn’t happen, Earth would be a hostile planet to life with temperatures 30C colder. The balance of this essential process has changed, especially over the last century.

As the global population has increased so has the production of greenhouse gases. In particular the emissions from industry and agriculture. The greater amount of gases in the atmosphere means more heat is retained increasing the surface temperature. This is more commonly referred to as global warming or climate change.

Since the industrial revolution began in 1750, the levels of CO2 have risen by more than 30%

Most of our man-made emissions of CO2 are through the burning of fossil fuels and other greenhouse gases such as methane and nitrous oxide released through human activities. But since the industrial revolution began in 1750, the levels of CO2 have risen by more than 30%. The proof of the effect of these gases can me seen in the fact that 18 of the 19 hottest years on record have been since 2001.

What action can we take on Climate Change?

You may feel that you can do little to affect this global issue; however, making changes to our everyday use of energy is a good place to start. By limiting the use of fossil fuels such as natural gas, oil and carbon and replacing them with renewable and cleaner sources of energy we can increase energy efficiency and help the environment. Setting Targets and creating a “sustainability statement” also shows your commitment; publicly for CSR but this also helps internally for staff engagement and cost saving.

So how do I increase energy efficiency and save the environment whilst still running a profitable business?

Take advice from a professional who can help guide you through the complexities of energy efficiency

With another increase in the Climate Change Levy coming into force on 1st April, now is the time to look at alternative solutions such as renewable energy, making use of cleaner energy from natural sources such as wind and solar will have a positive effect on the climate. Assess your usage and start making changes to your current supply, simple steps like checking the efficiency of your equipment, lighting and heating for example is a good place to start and you’ll be surprised where savings can be made. Take advice from a professional who can help guide you through the complexities of energy efficiency by assessing your current situation and advising you on a solution that can benefit your business financially but also helps reduce the effect of climate change.

UKEM work with suppliers that provide cleaner sources of energy, speak to one of our professionals for impartial advice on how you can make the switch to greener energy, save money and help the planet for a better future.

The Climate Change Levy and Renewables Obligation – keeping you in the know

The Climate Change Levy – What is it?

The Climate Change Levy (CCL) is designed to encourage businesses to reduce their energy consumption or to switch to renewable sources in order to benefit the environment. The tax is on commercial energy usage; however, businesses with low energy consumption are exempt from paying this levy and are classed as ‘domestic consumers’ – this is calculated by using what is referred to as “de-minimis” values. There are also other circumstances where some types of business are also excluded from paying this levy. There is also the possibility of historical recovery of all or part of your CCL payments for the past 4 years; if you qualify.

“What are ‘taxable commodities’?”

The taxable sources your business may use include electricity, natural gas, hydrocarbon gas (in a liquid state), petroleum, coal, lignite and coke, all of which the government wants to conserve the use of.

“To assess the impact of CCL and how to reduce it, speak to us”

If you want to reduce or stop paying the levy, you need to start looking at using less of these taxable commodities. This could be by installing measures to make your site more efficient and the easiest areas to do this are lighting and heating; or by generating your own energy via renewables, such as solar and wind. You should work with a reputable intermediary, who can accurately review your requirements and assist you by recommending the right balance of traditional and renewable energy to meet your budget, showing you how your business can reduce energy consumption – UK Energy Management can deliver all of this for your business. In the 2016 budget, the government announced changes to the main rates of the Climate Change Levy, in April 2017 the first changes came into place, followed by an increase in April 2018 and there is another increase of 65% due from 1st April 2019. Now is the time to act.

“Now is the time to act”

What is the Renewables Obligation?

The Renewables Obligation (RO) is a government mechanism designed to help support the move to large scale renewable electricity generation. It does this by placing an obligation on all licensed suppliers of electricity to source a portion of the electricity from renewable sources. Renewable obligation certificates are issued to operators of accredited renewable generating stations for eligible energy they have generated through renewable sources. Those with insufficient certificates pay money into a buy-out fund which is in turn distributed to those who do have the certificates. It therefore acts as a clear motivator to produce renewable energy, making it more affordable and ensuring greater supply to the consumers. This is passed on to commercial energy users by energy companies that do not fully source their energy from green generation.

What do I need to do?

The landscape in the energy industry is ever changing and tax and regulation is one of many factors to be considered. At UK Energy Management, you can benefit from our knowledge and experience within the energy sector, our team of professionals will guide you through all the options available to you. Your next step is to contact us and start a conversation.

Contact us on 020 3893 8108 or contactus@ukenergymanagers.com today.

Renewable Energy: Help Save the World and Benefit Your Business at The Same Time

Welcome to our first blog of 2019; with the beginning of a new year we will start with a positive blog about renewable energy, why it is so popular, and how it can help you and your business. 

Renewable Energy is about utilising cleaner energy, derived from natural sources such as solar, wind, hydro, biofuel and geothermal; this allows us to move away from fossil fuels and the negative effect they have on our environment.

“Benefitting the world and your business”

As well as benefiting the world around us there are many advantages to using renewable energy to power your business.

Energy Security – by generating your own renewable energy or working with an energy supplier who produces electricity using renewables, you are reducing your dependence upon fossil fuel- based energy. Fossil fuel is becoming scarcer and potential disruptions to supply will increase in the future. More renewable energy supply is being added each year.

Government Legislation & Tax – legislation encouraging cleaner and more efficient energy use will only increase with taxation helping to enforce it. It therefore makes sense to be positive in this area and taking advantage of the tax breaks on offer where possible.

Lower Energy Bills –fossil fuel- based energy costs are rising; plus there no signs of this changing . So, while there may be an initial cost to move to renewable energy, over the long term you will benefit from lower energy costs.

Reputation & Marketing – increasingly millennials, and indeed the population, are becoming more focussed on their effect on the environment. Being able to market your business/product as having a smaller carbon footprint can only be beneficial.

Your Options

There are two options available to you, you could generate your own energy by installing your own equipment such as turbines or solar panels, or you could use a green electricity supplier who provides this for you using a mix of renewable sources. Increasingly these two options are blurring as many businesses are using a mixture of the two or selling their excess energy to such suppliers.

Using a supplier is the easier option as its their responsibility to make sure the supply reaches you as installing equipment can initially be costly. However, if you look at the long term benefits you can start to understand how you will see a clear return on your investment.

“Are your competitors already benefitting from renewable energy?”

Have you looked at installing your own renewable energy recently? Advancements in technology mean that costs have improved, installation and maintenance is far easier and the number of businesses taking advantage of this option have increased. Are your competitors already benefitting?

Feed-in Tariffs – could you be taking advantage of them?

The Feed-in Tariff (FIT) scheme, is a government led initiative which encourages businesses to use more renewable energy technology (for example solar panels; essentially, you are generating your own energy and you also earn money for any surplus energy which can be used elsewhere.

FITs require licensed electricity suppliers to pay fixed tariffs to micro and small renewable and micro-CHP generators for electricity generated and exported to the National Grid. Ofgem advises that these suppliers have certain obligations and all licenced suppliers are required to participate in some aspects of the FIT scheme.

Is there any reason why you wouldn’t be looking to take advantage of them?

“We feel passionate that all businesses should be considering cleaner energy”

Your next steps

At UK Energy Management we feel passionate that all businesses should be considering greener and cleaner energy. We hope that this blog has piqued your interest and you will join us on this journey. UK Energy Management are experts in this field and work directly with renewable energy suppliers and installers of renewable energy equipment to make sure that businesses get the right energy package at the right price. Get in touch with UKEM today.

Energy Efficiency – Applying Energy Efficiency Tactics for a Great ROI

In this blog we are looking at energy efficiency and how even the simplest changes can have a positive effect on a company’s energy efficiency. Just think, with increased energy efficiency you will be better off financially in the long run and compliant with legislation. What’s not to like?

“better off financially in the long run and compliant with legislation. What’s not to like?”

All businesses work using budgets for their costs, and, significantly, part of this is allocated to energy. Anything from lighting, heating, powering equipment and office technologies; all use energy in one form or another. So, the next time you are looking at your energy costs, stop delaying, and instead start to act on your energy efficiency.

There are many simple steps that you can take to analyse what applies to your business. Below we have set out three key areas that you should start with:

Lights

They say that all great ideas start with a light bulb moment so let’s start with lighting. This is often the most visual of energy usage, here you can:

  • Use sensors for areas that aren’t in regular use.
  • Take advantage of natural light
  • Energy efficient lighting such as LED
  • If 100 light bulbs are left on unnecessarily for the same amount of time it could cost £471.12 annually

“All great ideas start with a light bulb moment”

Equipment

The first thing you will think of here is computers which are at the core of most modern businesses but then you will look around and realise there is so much more that can be done, for example;

  • Office computers left unattended for at least two hours every day waste around 200 watts per device, costing around 1.5p per hour – across a workforce of 100, this amounts to nearly £700 of unused power each year
  • With most modern computers they can be put into sleep mode and quickly boot up when needed after you get back from lunch
  • Photocopiers switched on all day but used for only 20% of that time account for £320 in wasted electricity each year, using enough power overnight to produce more than 1,500 copies.
  • Chargers, if they are not needed unplug them. Even the smallest of usage adds up.
  • Does equipment need to be running at peak hours, can tasks be undertaken during off peak hours?

this amounts to nearly £700 of unused power each year

Heating & air-conditioning

Often the battleground of the modern office worker, this is an area of wastage that you need to be ready to take control over:

  • Control that thermostat – get the thermostat programmed so that it remains at a comfortable and cost-efficient level.
  • Avoid having two systems that may be competing to heat or cool the same space.
  • Insulation – ensure you don’t have drafts letting all your costly heat out and instead help retain it
  • Have plants in your building, in the summer they can help keep your workspace cool.
  • On that same thought, but a bigger scale, you could consider making changes to the landscape outside your premises to block cold wind or provide more shade.

“Get the thermostat programmed so that it remains at a comfortable and cost-efficient level”

This is only the start, in order to maximise the benefits of being energy efficient you do need to look at your energy consumption and costs holistically – this doesn’t have to be a task you need to take on yourselves. Using experts such as UK Energy Management can benefit your company and save you time and money. Get in touch today and talk to our expert energy team about your energy efficiency.

Benefiting from Having a Bespoke Energy Procurement Strategy

How do you get the best energy deal?

In our recent blogs we have talked about the many changes in Government legislation and how many companies need the holistic advice we provide to meet these legislative changes positively.

In this blog we will look at energy procurement and providing a bespoke Energy Procurement strategy for our clients. This strategy is designed to meet your business needs & circumstances through our expertise of the UK energy market.

At the core of this strategy is selecting the right energy contract options from the range available to us nowadays.

The breakdown of your energy bill

Understanding your bill is our start to creating our energy strategy. The cost of the energy bill is divided between Non-Commodity costs (network & distribution charges, taxes, etc.) and Commodity costs (the energy itself) – with energy becoming an ever-smaller fraction of what makes up the overall kilowatt hour cost – falling from 50% a few years ago to, in some cases, as little as 30% today.

“Now we can manage all of your energy costs”

Until recently Non-Commodity costs were relatively fixed, and we could only actively manage the Commodity costs. But now we can manage both sides of your energy costs.

What are your Options?

Unlike domestic, your options can be divided between Fixed contracts and variable Pass Through Costs based contracts – known as “flex” or flexible purchasing. Fixed price Non-Commodity contracts allow you to fix the price you pay and therefore offers certainty. Flex contracts, as the name suggests, offers you flexibility, but without the certainty of actual costs over the contract period.

By entering a “flex” contract, you will pay the non-commodity costs at “pass through” rates – which effectively means wholesale cost, with an agreed amount paid to the supplier for billing and facilitation. However, you will need to manage the buying of your commodity costs – the energy itself.

With flex contracts you normally get lower initial energy costs, but there is no guarantee that this situation will remain the same. You could end up paying more if the wholesale rate rises above the fixed rate you could alternatively secure. The same scenario goes for your non-commodity costs.

“Select the right option to meet your bespoke energy strategy”

Once you have decided which contract option suits your energy needs and appetite for risk, we can manage the non-commodity elements of your portfolio – ensuring you aren’t overpaying for things such as your KVA. Your pass-through costs can also be actively managed by monitoring TRIADS – we can also look at balancing your energy usage. A prime example of this could be entering a multi-tiered seasonal time of day contract and adjusting your opening hours or shift patterns to benefit from lower energy costs in off-peak times.

“We find the right strategy for your business”

The need to work with a trusted adviser

Most businesses are too busy with day to day tasks to think about their energy usage, and only really notice it once it starts to hit cash flow and the bottom line. Energy is a key part of any business’ planning; if you don’t have an in-house expert, you need to work with an expert energy management team such as UK Energy Management (UKEM).

We will tailor your Energy Procurement strategy through our holistic approach to your complete energy infrastructure, monitoring how and when the business is consuming energy, increasing energy efficiency, reducing your carbon footprint, etc. to save your business money.

UK Energy Management deliver:

    • Expert Impartial Advice
    • Monitoring, Targeting, Analysis, and Procurement Services
    • Established and Trusted Suppliers and Installers

 

“We provide the expertise you need”

We are your hub throughout the process, utilising our well-established relationships with energy experts who cover the whole energy spectrum. Your business can be energy efficient and cost effective with our help.

If you are unsure where you stand regarding this legislation, then contact us for an initial consultation on 020 3893 8108 or contactus@ukenergymanagers.com today.

 

Streamlined Energy and Carbon Reporting Scheme – Is Your Business Ready?

Increasing the number of companies reporting!

This month we’re considering the future introduction of the Streamlined Energy and Carbon Reporting scheme (SECR). This scheme will be a requirement for large businesses; is your business ‘large’ and what reporting will be required?

Measuring through reporting

As we have seen in our previous blogs, the government has shown a lot of focus in producing and implementing legislation to help reduce energy waste and encourage efficiency. The aim is to meet their targets for reducing pollution, benefitting our environment and finances through the reduction of energy used.

To help monitor the success of this legislation the government has put in place reporting requirements for the largest companies affected. As the scope of energy legislation has increased, there has been a decision by the government to also increase the number of companies reporting too. Their ethos is that ‘what gets measured gets managed’!

The output of the most recent consultation on reporting was announced in the March 2016 budget: The Streamlined Energy and Carbon Reporting (SECR) scheme.

“What gets measured gets managed”

When will the new legislation come into force?

The new SECR scheme will come into force in April 2019 when it will replace the CRC Energy Efficiency Scheme (CRC EES). It will align with and extend the scope of the Mandatory Carbon Reporting (MCR) regulations for listed companies to include all large companies.

This will see the number of companies undertaking this annual reporting from 1,200 to 11,900 in line with those companies coming under the ESOS legislation.

“Is my company classed as ‘large’?”

Which companies will need to report?

As stated the scheme will mean that all ‘large’ companies will need to undertake this reporting. So the first question is what qualifies as a large company:

  • All UK quoted companies will be included
  • Any company with 250 or more employees qualifies
  • Companies with an annual turnover greater than £36million
  • An annual balance sheet of more than £18million

As ever there are exemptions for those companies using very small amounts of energy, i.e. less than 40,000kWh, and companies not registered in the United Kingdom.

“What will I need to report?”

What needs to be included in the reporting?

The main elements of the information that companies will need to report changes little; the big change is the increase in the number of companies that now must begin reporting or face consequences. All of the companies coming under the scheme will need to include a section on energy and carbon within their annual director’s report. This will include the following information:

  • Data from the current and previous financial years
  • An intensity metric; a measure of resources needed in production
  • To include Scope 1 & 2 emissions, Scope 3 will be voluntary
  • As a minimum details of electricity, gas and transport must be included
  • Quote companies will need to report on global emissions
  • Unquoted companies will only need to report on UK emissions

There should also be a summary on energy efficiency and actions taken in the financial year

There is no requirement to set out the ESOS recommendations or how they have been advanced. However, including the information could be something that you choose to do as a part of the company’s all-round energy planning.

Of course, the exemption for information that is simply not practical to find remains in place.

“This will be a part of the company’s all-round energy planning”

What does this mean for me?

The impact of the SECR will depend upon your current position:

Already reporting under Mandatory Carbon Reporting Only the inclusion of energy use and efficiency measures
Reporting & purchasing credits in the CRC EES New SECR scheme will replace with most CRC costs moved to the Climate Change Levy
Those companies newly needing to report Will need to report under the new scheme disclosing UK energy usage

The SECR scheme requirements will be an additional action to many businesses. UK Energy Management view this as an opportunity for businesses not currently reporting to begin applying best practice and review their energy planning.

“This is an opportunity to review your energy usage and save your business money”

Most businesses are too busy with day to day tasks to think about their energy usage, and only really notice it once it starts to hit cash flow and the bottom line. Energy is a key part of any business’ planning; if you don’t have an in-house expert, you need to work with an expert energy management team such as UK Energy Management (UKEM).

We will look at the new reporting required; plus take a holistic approach to your complete energy infrastructure, monitoring how and when the business is consuming energy, increasing energy efficiency, reducing your carbon footprint, etc. to save your business money.

UK Energy Management deliver:

    • Expert Impartial Advice
    • Monitoring, Targeting, Analysis, and Procurement Services
    • Established and Trusted Suppliers and Installers

“We provide the expertise you need”

We are your hub throughout the process, utilising our well-established relationships with energy experts who cover the whole energy spectrum. Your business can be energy efficient and cost effective with our help.

If you are unsure where you stand regarding this legislation, then contact us for an initial consultation on 020 3893 8108 or contactus@ukenergymanagers.com

Energy Metering – are all of your ducks in a row?

Ofgem Legislation

This month we’re exploring Ofgem legislation P272 and DCP161, how they may affect your business, what you need do to ensure you’re meeting the rules, and where you can benefit from them.

P272- Let’s Review the Facts

P272 is a piece of Ofgem legislation and is considered one of the biggest changes in the business electricity market since the deregulation of the energy sector.

The change is seen as being a key step towards a smarter and more energy efficient economy. It achieves this through changing the way all electricity suppliers settle electricity consumption for businesses; in particular resulting in sites being migrated from non-half hourly meters (NHH) to half hourly meters (HH), enabling suppliers to produce more accurate bills.

“Suppliers can produce more accurate bills”

When did this come into effect?

From 5th November 2015
If you have Profile Class 05-08 supply contracts up for renewal after this date must be migrated to HH (half hourly) Settlement within 45 days of renewal. (Profile Class can be found as the first two digits in the top line of the MPAN)
By 1st April 2017
All relevant metering systems must be migrated to the HH market by 1st April 2017 – although some supplies are only just falling out of contract still…

Does my business need to appoint a Data Collector?

The legislation was put on electricity suppliers to ensure that the new meters are in place. There was no onus to make sure:

  • That you are on the right tariff
  • That you are being efficient with your energy supply
  • That you are correctly predicting your energy usage
  • That you are with the best energy supplier

 

So, when considering external Data Collectors, rather than the supplier’s own panel collector (conflict of interest?), make an informed choice and do plenty of research, choose one that can provide you with an all-round impartial service including reviewing your energy usage, tariff and supplier.

“Are you on the right tariff?”

If you appoint UK Energy Manager (UKEM) as your Data Collector the process can be managed for you. as well as receiving energy planning advice from an experienced adviser.

The alternative is that your supplier can appoint a Data Collector from their panel of providers; the main drawback being that many such appointed providers have little experience and may not be able to provide you with that all-round service to meet your requirements.

DCP161- What is It?

DCP161 was introduced by Ofgem on 1st April 2018 as the next step in its drive for energy efficiency.

It is a change to the existing Distribution Connection and Use of System Agreement (DCUSA) where those with Half Hourly (HH) electricity meters, greatly increased following the implementation of P272, who exceed their agreed capacity from the energy supplier will now have to pay excess capacity charges.

What does this mean for your business?

If you have a half hourly (HH) meter installed, your energy consumption data is automatically sent to your energy supplier and they can see exactly what your consumption is and when it is being consumed. So the supplier can clearly see whether you are meeting the agreed timing and level of energy consumption.

“Before if a business exceeded their capacity level, only Standard Capacity rates applied”

Before the introduction of DCP161, if a business exceeded their capacity level, only the excess usage charge would apply (charged at the standard capacity rate). With the implementation of DCP161 there is now the ability for the suppliers to recover the higher cost of supplying that unexpected excess at a punitive rate of up to three times the standard rate.

This pushes the responsibility on managing capacity to the end user. Where they only had to pay standard rates for any excess, there was no incentive for businesses to review their usage. That has now changed, with higher bills being received from April, and there is a clear need for businesses to manage their usage and to ensure they have arranged it at the right capacity level.

Businesses also need to bear in mind the need to avoid setting the capacity level too high, you might avoid paying the penalties, but you’ll still have to pay for the expected demand.

Get help

Quite simply this need to balance your capacity level to avoid hefty fines and paying for unused capacity leads to the need to work with an expert. Our expertise in this area means we can help our clients achieve the best outcome. We’ll review your set capacity levels with your provider to ensure you’re not hit with high penalty rates and that you have the right energy contract and supplier for your business.

“You need to regularly review your capacity to avoid paying hefty fines”

Most of businesses are too busy with day to day tasks to think about their energy usage, and only really notice it once it starts to hit cash flow and the bottom line. Energy is a key part of any business’s planning; if you don’t have an in house expert you need to work with an expert such as UK Energy Management (UKEM). We will look at the points we have already covered but also take a holistic approach such as looking to see whether you can change how and when the business is consuming energy, increase energy efficiency, etc. to save the business money.

UK Energy Management deliver:

    • Expert impartial advice
    • Established and trusted suppliers and installers

 

“We can provide the expertise you need”

We will be your hub throughout the process utilising the relationships we have with other experts who may need to be involved. Your business can be energy efficient and cost effective with our help.

If you are unsure where you stand regarding this legislation, then contact us for an initial consultation on 020 3893 8108 or contactus@ukenergymanagers.com today.