£7.7 billion lost ignoring energy efficiency measures

Last week EON published the findings of a survey that nearly four million of the UK’s 4.8 million small businesses are potentially missing out on £7.7 billion every year by not implementing energy efficiency measures.

Over 4 million  don’t have lighting timers or motion sensors in their workplace;

Over 600,000 admit to leaving the windows open when the air conditioning or heating is on;

Over 3.5 million don’t have an energy monitor installed in the office but nearly 750,000 have a smart meter.

There are many ways to implement energy efficiency within a business and if the following seems a little daunting then Auditel can help companies by offering practical help and support in achieving their goals;

1. Understand your utility tariffs and charge rates

2. Carry out Energy Audits. Know what is being used, when it is being used and by which department.

3. Implement meaningful management reporting on utilisation and performance management against reduction targets.

4. Where appropriate make changes to your building infrastructure, low energy lighting, power factor correction etc.

The full EON report can be found here; http://pressreleases.eon-uk.com/blogs/eonukpressreleases/archive/2011/10/24/1753.aspx

SSE shakes up the UK power market

SSE has announced bold moves to improve the liquidity of the UK power market by auctioning all of its electricity output and purchasing all of its electricity requirements in the day ahead market.

The company is the first of big six to break ranks over the way it manages its electricity trading. Its initiative will begin in earnest on 14 October with the expectation that it will reach 25 per cent during November. The aim is that all of SSE’s electricity supply and demand will be traded in the day ahead market by the end of the current financial year.

SSE argued that this move will significantly improve the liquidity, depth and credibility of the market, and assist in the creation of a robust and tangible pricing index.

SSE is the second largest electricity generator in the UK and last year generated over 47,500GWh of electricity, which represents almost 15 per cent of the UK electricity demand.

Alistair Phillips-Davies, SSE’s generation and supply director, said: “If other energy companies adopt a similar approach, this commitment could lead to a transformation in the wholesale electricity market in Great Britain.
“We believe this commitment represents the most significant change to the GB electricity market since the market arrangements were amended in 2005, to form the current market arrangements known as BETTA.

“Customers have demanded greater transparency around how we operate in the wholesale market. As well as improving liquidity, this approach will also improve the transparency of SSE’s activity in the wholesale market.”
Source: Utility Week

Energy – A Burning Issue

How Financial Directors can Regain Power Over Rising Energy Costs Impacting Their Organisations’ Profits

Wholesale energy prices have soared in the last six months as high oil prices continue, the Middle East is uncertain and the nuclear disaster in Japan causes concern. The major energy providers have passed these price increases on to their business customers. Many face energy bills which could be 50% higher than they were paying only two years ago.

In June 2011, the FT and The Economist Business Barometer Research found that leaders foresee the biggest risks to their businesses to be rising costs of oil, commodities prices and interest rates. This prompts greater scrutiny of their profit margins and higher expectation for financial directors to perform in challenging times.

In July, after a second major British energy supplier announced double-digit tariff increases, RWE npower reported: ‘Three hundred major and small energy user companies counted energy as a top risk concern, next to sales and legislation, in their Business Energy Index 2011. Only 66 percent said they had a strategy to manage it.’

Read more…

Automatically Renewable Contracts – End of the Line

Ofcom today announced a decision to amend General Condition 9 in order to prohibit Automatically Renewable Contracts (ARCs also referred to as rollover contracts or rollovers) to residential customers and small businesses with no more than ten employees in the fixed voice and broadband sectors.

For fixed voice and fixed broadband residential and small business ARCs the prohibition on the sale of new ARCs will take effect on 31 December 2011. This means that the sale of new ARCs will be prohibited from that date.

Now all we need is a similar decision from Ofgem for Utility supplies!

Further details of the Ofcom decision can be found here including provisions for existing contracts:

Small Businesses suffer at the Hands of the Energy Giants

Following similar announcements from some of the other big six energy suppliers, I notice that Energy Secretary Chris Huhne took an unexpectedly tough line in his response to Scottish and Southern’s statement of its intention to raise prices last month by reportedly saying this was “disappointing”. Go Chris, fighting the good fight for the embattled consumer! Disappointing is something of an understatement methinks compared to the typical reaction to the circa 18% increase in gas prices and 11% increase in electricity prices that will be impacting on bills from this September. I shouldn’t mock though – I know he’s had big problems lately getting his ‘points’ across… (allegedly)

The energy companies are citing increases in wholesale prices as the reason for the latest rises, driven in part by world events such as those in Japan and North Africa/Libya. But it seems to many that they have been making excessive profits at their customers’ expense and there have been calls on the Government and the Regulator (OFGEM) to act. Dumfries and Galloway MP Russell Brown has said that this explanation given by the energy companies “rings utterly hollow” because “wholesale gas and electricity costs are over a third cheaper than in 2008 but the energy companies are charging their customers hundreds of pounds more.” And it seems like OFGEM might at last have been listening. In March this year the regulator published the findings of its ‘Retail Market Review’ – an investigation it started towards the end of 2010 into the markets for electricity and gas for households and small businesses in Great Britain.

Read more…

MOD in Hot Water

Now it is the turn of the Ministry of Defence to come under fire for its approach towards cost cutting in the recession. It was reported in The Times on August 18th that:

“Private consultants are being paid £4,000 a day by the Ministry of Defence to help it to cut the costs of its contracts…

Under an agreement described as “extraordinary” by one MP yesterday, eight consultants will also receive a 30 per cent “success fee”, pushing their daily pay to more than £5,000 each.

It is also understood that the MoD departed from normal practice in awarding the contract, worth up to £12 million, by failing to advertise it before recruiting Alix Partners, a US-based company with a London office.

Industry experts criticised the deal, saying that the fees were unusually high and that the failure to advertise the contract might have led to an unnecessarily high bill for the taxpayer. The details have come to light as the Armed Forces pension scheme is cut and hundreds of redundancies are made.”

You can go here to read more.http://www.thetimes.co.uk/tto/news/uk/defence/article3137644.ece

Read more…

24 billion Euros of fuel costs avoided from wind energy in 2015

Expectations of wind energy have been substantially increased in recent months due to the combination of rising fossil fuel prices, devastating oil spills and the shelving or downsizing of several nuclear programmes following the crisis at Fukushima.

Every month in 2009 and 2010, the global wind energy industry installed new capacity equivalent to the output of 1.2 average nuclear reactors. According to the EWEA^*, expectations are that in 2015 wind power will avoid € 23.7Bn of fossil fuel costs – € 15.1Bn of coal costs, €6.4Bn of gas costs and €1.7Bn of oil costs – to produce electricity. This is based on a moderate development of wind power, with 460 GW of global cumulative wind power capacity installed by 2015, compared to 200 GW last year

Figures for 2020 will be even more substantial (€87Bn of fuel costs saved), whilst for 2030, EWEA forecasts that wind energy will meet 26-34% of Europe’s electricity demand, with almost as much electricity coming from offshore turbines as from those onshore.

Read more…

18% of SME’s don’t understand energy contracts or energy options

Small businesses must be protected by electricity market safeguards to prevent energy bills from escalating further as small firms say they are concerned about the rising cost of energy, the Federation of Small Businesses (FSB) said in a new report.

In the 2011 Budget, the Government announced plans to reform the electricity market and introduce carbon pricing – a mechanism that artificially increases the prices of electricity generated from fossil fuels – in order to make renewable and nuclear energy more attractive energy sources and decrease the UK’s dependence on fossil fuel energy.

But, ahead of the White Paper on Electricity Market Reform due tomorrow (Tuesday 12), the FSB is raising concern that electricity generators will pass on the extra costs to consumers. In a new report, ‘Small business and infrastructure: Energy‘, the FSB is arguing that while it supports the idea of incentives to invest in low carbon infrastructure, there needs to be safeguards in place to prevent electricity generators from passing the carbon price on to end users by pushing prices up further.

Read more…

SMEs feel slighted by Energy suppliers

Ofgem recently completed a Harris-commissioned study, polling 90 SMEs and enquiring about their use of energy and their experience of the energy market. Although this segment of the market represents comparatively low revenues for the suppliers -notwithstanding that little revenue times many SMEs still represents a fair few bob – it is a sector they should heed, as some of these SMEs may one day become significant PLCs with proportionate clout.

And the current views are damming. Energy suppliers are perceived as undifferentiated, offering in essence a commodity. There are claims of profiteering, of little or no proactivity when it comes to contract renewal, rollover or issuing of renewal letters, and of insufficient transparency concerning bill management, tariff rates and contract terms.

The bill is often found to be difficult to understand. In general there is a feeling that suppliers should be more honest and proactive. The concept of backbilling is intensely disliked, being described as ‘unfair’ and ‘diabolical’. Conversely, overpayments, sometimes involving large sums of money, take a considerable amount of time to be repaid by some suppliers.

Auditel affiliates will not be surprised by these gripes, but comforted by the fact that they bring genuine help to these stranded SMEs, not just on the financial side but also with decrypting a series of unfathomable hieroglyphics and possibly even with managing emotions!

This survey should be bedside reading for the CEO of all energy suppliers.

New OFCOM rules for Business

OFCOM (The Telecoms industry regulator) has announced some changes that affect business customers:

Shorter Contracts – The maximum contract length for new contracts is now 24 months and a potential customer MUST be offered a 12 month option.  The aim is to promote competition and ease of switching.  However it doesn’t appear to state what notice periods are allowable.  We’ve recently seen one telecoms company that sold a 12 month contract but with a 36 month notice period i.e. in effect a 36 month contract.  Not exactly fair and a perfect example of sharp practices in the industry and why you should always read the T&C’s no matter how long, how boring or how much you trust the salesman (alternatively let us read the T&C’s for you!)

Porting Mobile Numbers to take a maximum of 1 working day – The penalty OFCOM has suggested is compensation of at least the daily line rental rate however providers are free to design their own compensation schemes.

Emergency SMS – Under new European regulations, disabled consumers should have the same access to emergency services as other consumers. The emergency SMS scheme, allows registered users to text 999 in an emergency instead of making a phone call. The scheme currently has around 14,500 registered users and predominantly used by hearing and speech-impaired people.  Mobile providers are now required to make the scheme available on a permanent basis for hearing and speech-impaired consumers.  So if you have any hearing or visually impaired staff with mobiles you need to ensure that they have access to this service.

Read the full OFCOM press release