The energy crisis | advice on how to reduce your bills

Home > The energy crisis | advice on how to reduce your bills

By Dr Nigel Hargreaves CEng MIET

Energy bills in the UK have risen dramatically since Putin decided to invade Ukraine and sanctions were placed on Russian fossil fuel exports to Europe. The resulting tightening of the international energy market for gas then sent the price soaring as countries, including the UK, competed for supplies. Even though the gas we burn to generate electricity, cook and heat some of our buildings (not everyone is on the gas grid) comes from multiple sources, including Norway, Kuwait and UK North Sea territory, as its price is set in accordance with international benchmarks, we have been exposed to severe price hikes seen in recent months. Not only that, but under our own arcane energy market rules, the most expensive wholesale price paid for gas dictates the base value of all forms of UK electricity, whether or not gas was actually used in its generation – including renewables. This is then topped-up by various additional charges, which include use of the networks and balancing the electricity system, metering costs and VAT.

Domestic customers

Domestic customers have seen a tripling of their gas and electricity tariffs since the winter of 2020/21 which would have placed typical dual fuel bills at around £3,549 in the winter of 2022. However, government interventions have acted in two ways to dampen these increases through the Energy Bills Support Scheme discount for winter 2022 and the Energy Price Guarantee announced in September, which will last for two years. Both of these schemes will come into effect from October 2022. Their net result will be to save around £1,000 off the predicted price rise for a typical domestic bill by limiting gas to 10.3p/kWh and electricity to 34p/kWh. Daily standing charges will vary by location and be added to the cost of units (kWh) consumed to make up the bill, but typically these are around £270 per year at present.

Commercial customers

Commercial customers vary enormously in the demand they have for electricity and gas which is often negotiated on a fixed price deal lasting one to three years. Many contracts are renegotiated in September or October and there have been reports that new tariffs have quintupled, with electricity tariffs reaching 80p/kWh and gas around 27p/kWh. Under the Energy Bill Relief Scheme, the government has stepped-in to offer temporary support from October 2022, by capping these tariffs for 6 months at 21.1p/kWh for electricity and 7.5p/kWh for gas. It isn’t possible to generalise on the standing charge as this is related to individual energy supply arrangements.

Advice on domestic energy reduction and where to get support

There is some excellent advice already published on reducing electricity and gas costs to domestic customers as well as a new government website that tailors information to your home. It is worth entering your details in the government advice site, even if you do not own the property, because the advice contains information about where financial support can be found to help implement some of the energy saving measures that are suggested. For example, people receiving benefits and state pensioners could be eligible for support through their Local Council and energy supplier under the Energy Company Obligation (ECO) scheme, the Boiler Upgrade Scheme, Cold Weather Payments and Winter Fuel Payments. Your Local Council may also offer additional support options that includes those living in social housing. Councils should apply for funds from central government through a range of channels including:

Individuals seeking help should start with knowing the Energy Performance Certificate (EPC) rating of your dwelling and how much energy you are using from understanding the details in the bills from your supplier. Smart meters can be requested from your supplier for free, if not already fitted, and will offer accurate billing as well as an in-home energy display that gives precise indication on gas and electricity use. A useful feature is the ability to set a daily budget indicator so you can see how your consumption compares with your average daily target spend, if paying by direct debit.

The Centre for Sustainable Energy (CSE) has published a good guide to bills with additional information for customers in the Western Power Distribution supply area on their website. UK Power Networks, the network operator for East Anglia, have also published advice on how to save money on energy and water. Their page on reducing electricity bills links to additional services they provide for vulnerable customers. Switching suppliers may still bring savings. For example, Octopus Energy are still offering incentives to switch your account over to them (at the time of writing), through a referral link supplied by an existing customer. Comparison of energy deals can be found through links in this guide together with details of the information you require to switch and the process involved.

Building energy demand reduction measures

Whether you are in a domestic or commercial context, the remainder of this article offers advice on measures to reduce energy demand from your building. These measures range in their cost of implementation and the length of time required to pay back on the investment from the savings they help you make. If considering a whole building retrofit scheme, even if it is not carried out all at once, understanding a hierarchical approach to implementing different measures will aid with planning. CSE offers a useful guide to key considerations when contemplating a full retrofit programme.

Comfort levels are related to the temperature in your room, as illustrated in this guide, recommending a temperature range between 19ºC to 21ºC for occupied rooms. In older houses, achieving these temperatures while keeping bills down will depend on measures, ranging from the simplest draft-stopping (fix any broken windows or ill-fitting doors, for example) to retrofitting comprehensive insulation to your existing building envelope. In the list below we arrange the kinds of interventions possible in roughly increasing order of cost. The measures will have differing impacts on saving energy, which is also dependent on your circumstances and behaviour with energy.

Damp patches, condensation and mould are issues in many homes that have reduced ventilation or are unheated in places. As well as saving your heating bills this needs to be addressed quickly, especially where draft proofing has reduced ventilation to a minimum.

Synfo is working to help businesses and individuals reduce their energy demand to save money and reduce carbon emissions contributing to global warming.

Contact Synfo for:

  • energy systems consultancy
  • design for sustainable solutions
  • ​research, process modelling, analysis and evaluation
  • project management
  • interim leadership and training

For tailored business solutions Synfo offers help in:

  • Developing a system-thinking culture
  • Mapping and quantifying energy demand and usage
  • Identifying savings from introducing more sustainable solutions and practice
  • Advising on technologies, regenerative solutions and circular economy
You can view the original article here

Gold and Strategic Partners