Expert warns of post-Brexit gas supply shortages

The EU could reduce winter energy exports to Britain after Brexit, warns industry leader.

According to European energy mogul, Marco Alvera, Brexit may place the UK at danger of gas supply shortages and increasing winter prices.

Alvera presently heads the GasNaturally European sector group and is CEO of Snam, Europe’s largest natural gas utility.

Nearly half of the gas supply consumed in the United Kingdom comes from Europe and public statistics state that in 2018, 39% of the country’s total energy supply was produced by natural gas.

However, Alvera informed the BBC that during cold spells gas exports to Britain could be limited.

He said: “We’ve spoken to several ministers and civil servants over the last two years. Energy has not been discussed enough.

“I would make [energy] a high priority in the discussions, and I haven’t seen it be like that.”

Tariff tip-off

Alvera also advised that despite UK dependence on imported natural gas resources over the winter, the introduction of tariffs on its gas and electricity exports after Brexit may not be prevented by EU nations.

He added: “In the week [last year] when we had the ‘Beast from the East’ cold spell, the system was already under a lot of strain, and the UK was taking a lot of gas from Europe that was stored in Europe”.

Alvera also pointed to the decrease in the UK’s own North Sea gas supplies and the shutdown of components of its gas storage facilities as problems that exacerbated European energy dependence.

Storage solution

He thinks, however, that converting unused gas fields in the North Sea into storage facilities could help to solve the problem.

In 2017, British Gas statistics showed that 44% of UK gas is generated domestically, with 47% coming from Europe (Russia and Norway) and the remaining 9% coming from LNG exports.

Since then, the numbers have raised concerns about UK dependence on Russian power sources while diplomatic relations stay tense.

In Norway’s case, although it is not an EU member state, it falls within the internal market for energy and is therefore bound by EU regulations.

A 2017 House of Lords report on the problem proclaimed it “unlikely” that the EU would place tariffs on gas and electricity provided to Britain after Brexit, even if the UK leaves with no deal.

However, it stated that tariffs could take place elsewhere in the energy industry, including on products commonly used in the construction and maintenance of the energy system.

How the National Grid tripped up

The UK National Grid’s vulnerability to unforeseen circumstances was no better demonstrated last Friday when millions of homes – mainly in London and the South East – were affected by a power cut.

Up until then, most of us in the United Kingdom thought that this sort of problem only occurred in other less well-developed nations, unless, of course, you are old enough to remember the blackouts of the 1970s.

So why did the outage occur?

Just as people were clocking off work and looking forward to the weekend, two power stations disconnected simultaneously, both of which were completely separate and coincidental incidents.

The gas-generated Little Bedford plant was the first to go down at 4.58pm and then Hornsea Windfarm in the North Sea followed two minutes later.

As renewable energy cannot be generated on demand (no-one has the ability to make the wind blow, after all), there was a shortfall of available power on the grid.

The National Grid runs at a frequency of 50Hz, and when supply falls and demand for energy remains high, the frequency drops, in this case to 48.9Hz.

Drops in frequency cause substantial infrastructure damage and to safeguard against this an automated system shuts down part of the grid to cut demand, which in turn increases frequency back up.

The big problem lies with the demand cutting process. If automated, why is it automated to shut down hospitals, like the one in Ipswich and key transport hubs such as Clapham Junction in South London?

A government investigation has now been launched into the incident, the first of its kind since 2008, and the National Grid must review and report to OFGEM.

One of the obvious conclusions to draw from this is that the power network has little resilience, especially when it goes wrong at 5pm on a Friday afternoon.

 

 

Will Boris Johnson warm to the challenges around climate change and energy?

Energy Management’s Jac Stone says Boris Johnson must put climate change and energy at the top of his long ‘to-do list’.

Last week saw the arrival of Boris Johnson as Prime Minister, a Brexiteer hellbent on delivering the public vote and leaving the European Union on 31 October, 2019.

While the focus is on the here and the now as people contemplate just how the new man in charge of the country proposes to keep his promise in such a short space of time, his policies over the next few years – presuming he stays at No.10 – will be critical for the Energy Industry.

What next?

Although the UK has recently committed in law to reduced greenhouse gas emissions to net-zero by 2050, the route to achieve this is completely new territory. In order to meet this ambitious target, work needs to start immediately otherwise we’ll run the risk of missing  out. Couple this with the UK’s outdated energy policy and it’s obvious we cannot afford any delays.

Top of the tree for tasks to complete at Downing Street will be deciding whether to accept the recommendations made by the arrival of the Energy White Paper. The paper, due to arrive imminently, will set out a new framework designed to tackle pressing issues such as developing carbon capture projects, investment in renewable energy and funding of nuclear power stations. All contributing to the aim of meeting net-zero targets.

Making energy and climate change a priority, despite Brexit, would offer greater clarity and support across the whole of Britain. Businesses have already been hit by soaring non-commodity cost rises due to funding for government subsidies and these are projected to continue as the UK experiences its energy transition.

Boris’ Background

To say Johnson’s previous approach to climate change was sub-standard would be an understatement. As an MP he consistently voted against climate change measures and in December 2015, following the signing of the Paris Agreement, Johnson wrote a column for The Daily Telegraph praising the work of notorious climate science denier and brother of the Labour leader, Piers Corbyn, who he called a “great physicist and meteorologist”.

However, the new Prime Minister’s stance seems to have altered as of late. During his stint as Foreign Secretary, he said he would, ‘continue to lobby the U.S. at all levels to continue to take climate change extremely seriously’. He has also voiced his support for the net-zero 2050 target as well as discussing falls in the cost of renewable technologies – and its subsequent growth in the UK.

Where now?

It’s impossible to say where Boris Johnson will head with energy and climate change policy in the next few weeks and months. It will be vital that Brexit does not eclipse upcoming decisions which will be crucial to the net-zero 2050 target.

The new Prime Minister must maintain the momentum that has been building towards achieving the net-zero 2050 target and identify the pathway that will keep the U.K on track. Sufficient government support would ensure a swift and cost-effective transition for everyone.

Restore take up the Energy Management challenge

Leading document management services provider, Restore, is running an internal energy-saving competition after teaming up with Energy Management.

Energy is one of the largest controllable overheads in commercial buildings which means there are many opportunities to make savings.

As an environmentally friendly company keen to cut its energy bills, Restore PLC has teamed up with Energy Management to deliver a scheme which aims to reduce energy consumption across their entire UK operation.

Using some of the methods listed below, each of Restore’s 50 plus sites will compete against each other to see which one can achieve the largest drop in measurable consumption over a rolling three-month period.

Energy saving tips

  • Shutdown your computer out of office hours – you could save up to £50 a year per computer shut down
  • Be aware of your surroundings – if you think something needs to change, raise it with senior staff
  • Unplug idle electronics – it is estimated that energy consumed by idle electronics amounts to the annual output of 12 power stations
  • Use air conditioning sparingly
  • Turn off the lights when not in use
  • Only boil the water you need when making your team a cuppa

If your company would like to adopt a similar challenge or needs an energy audit conducting by a certified member of our team, please get in touch on 01225-867722

Exciting partnership gets the green light

Leading energy management consultancy, Energy Management has teamed up with Measure My Energy to help businesses reduce their carbon footprint and save on energy costs.

With people blockading bridges and glueing themselves to vehicles amidst a range of protests designed to accelerate the continued drive towards zero carbonisation, it is hard to escape conversations around energy efficiency at the moment.

For financial and environmental reasons more and more companies are focusing on ways in which they can contribute to the green revolution.

Essential to this goal is the ability to identify when and where energy is spent within a factory or office, across single or multiple sites, which is why Energy Management is delighted to announce our partnership with Measure My Energy.

Acting on our behalf, Measure My Energy install Power Distribution Monitors (PDM’s) that accurately measure consumption to a level of detail that help organisations account for every single pound and pence.

PDM’s enable granularity down to an individual appliance, for example, a furnace – in the case of the high-energy using Cast Metal Industry, giving consumers a real-time picture of the most costly aspects of their day-to-day business.

Energy Management’s highly-trained staff of chartered engineers and energy consultants then analyse and evaluate the data before devising and implementing energy efficiency measures that offer a very quick return on investment.

For instance, one borough council saw a 37% reduction in energy usage after just one month.

Every day the partnership between Energy Management and Measure My Energy is helping businesses to reduce their carbon footprint, increase profits and have a better understanding of energy patterns within their buildings.

Acknowledging the impact that PDM’s have had on his organisation, one Facilities Manager said: “We have used the system to map our energy throughout our organisation, allowing us to pinpoint areas we can make a further saving in the future and giving us details on usage to prove the possible savings before moving forward.”

If you would like to benefit from this service, email: sales@energymanagementltd.com or call one of our team on 01225-867722

NHS energy spend estimated to be £500m

Research carried out by leading energy consultancy Energy Management LLP has revealed that NHS Trusts spend an estimated half-a-billion pounds a year on gas and electricity.

Powering the public sector is a costly business.

Keeping offices, hospital wards, classrooms and leisure centres heated, lit, ventilated and air-conditioned can be a major drain on finances.

And information obtained under the Freedom of Information act by Energy Management LLP, one of the country’s leading energy and water management consultancies, has revealed the true extent of the cost in some of these key sectors.

Of the 237 NHS Trusts contacted by Energy Management, 64 per cent responded with their estimated annual energy consumption figures for both gas and electricity across all their sites coupled with the financial cost.

The combined total spent on energy for the financial year up to 2017 was an eye-watering £375 million. If you take the average amount per Trust and apply it across the board to all 237 Trusts, the figure would pass through the half-a-billion mark.

Big spenders

Unsurprisingly Barts Health, the largest NHS Trust in the country with a turnover of over £1.4 billion and a workforce of 16,000, topped the energy spend table with an estimated 12.6 million. Manchester University NHS Foundation Trust, with 76 hospitals and clinics, came a close second with £11.4 million.

For Councils too, many of whom are under severe financial pressure, energy accounts for a large proportion of their overall spend. Taking England, Scotland and Wales into consideration, the overall combined spend of 23 Councils (out of 79) that responded was an estimated £93.6 million. In Nottinghamshire County Councils alone, £4 million was spent on electricity in 2016/17 for street lighting, signs and signals.

Increasingly there is a need for public sector organisations to lower energy bills, hedge against future volatility and adopt measures that help comply with green energy legislation.

Decarbonisation and government taxes and levies (third-party costs) now account for the majority share of energy bills (over 60% and rising), placing as much emphasis on energy efficiency as procurement. The phrase ‘the cheapest unit of energy is the one you never use’ is well-liked at Energy Management LLP for good reason.

Skills gap

For many organisations, time poverty means that managing the work required to reduce their energy consumption is an undesirable distraction from their day-to-day core activities. To further compound this, there may also be a lack of energy expertise and distinct skills gap creating barriers to finding savings and implementing reduction initiatives. This is where an expert reputable energy management consultancy can step in to remove these barriers and ease the way forward to achieve effective reductions.

It has never been more important to understand and control your energy costs and our bespoke energy management portal, EM-Powered, enables customers to do that. If you would like more information on EM-Powered and its wide range of features and benefits, please get in touch with Ian Scattergood on 01225 867722 or email is@energymanagementltd.com

Case Study: North Somerset Council

Energy Management and North Somerset Council have enjoyed a profitable relationship over many years.

The background

Faced with budget cuts, North Somerset Council (NSC) contacted us because they were looking for a reputable energy consultancy to help them find savings on one of their biggest overheads – energy.

Our relationship with NSC started in 2009 and it is set to continue into a third decade due to the high levels of customer satisfaction.

NSC benefits from the full range of our energy management services including Invoice Validation. More than £350,000 has been recouped from suppliers in the last six-and-a-half years after our team discovered the Council had been billed incorrectly.

Services offered

  • Procurement
  • Dedicated account management
  • Market analysis
  • Invoice Validation
  • Engineering Advice
  • EM-Powered energy management portal

Benefits

  • Accurate invoicing
  • Procurement of contracts at competitive rates
  • Ease of service for technical issues e.g.; new meter installs, change of tenancy application

What NSC say about us?

“Energy Management provides unrivalled expert advice, which has resulted in significant cost savings for the Council. We are extremely happy with the service we receive from Energy Management LLP and would recommend them without hesitation.” – Commercial & Compliance Officer for the Council.

 

SECR – all you need to know

With the new SECR regulations coming into effect on 1st April 2019, Energy Management explains how the changes may affect certain businesses …

As of April 1st 2019, Streamlined Energy & Carbon Reporting (SECR) commenced, with the aim of simplifying carbon and energy reporting and promoting energy efficiency. SECR requires businesses to publish all energy and transport consumption and carbon emissions information.

The changes to the previous methods of reporting align SECR with the government’s new Clean Growth Strategy, which targets a 20% improvement in business and industry energy productivity by 2030.

You will need to comply if:

  • In the past, you were required to comply with mandatory Greenhouse Gas (GHG) reporting
  • Or you meet two or more of the following;

a.) Turnover of £36 million or over

b.) Balance sheet totalling £18 million or over

c.) Number of employees 250 or over

How will this affect your business?

All businesses are now required to publish electricity, gas and transport energy consumption and carbon emissions information alongside annual directors’ reports for financial years beginning on or after April 1st, 2019. As well as this, businesses will need to disclose any energy efficiency action taken in the previous financial year. The government has stated that, as it stands, you will not be required to disclose ESOS recommendations and the implementation of these. It is important to note that this intends to be revisited following evaluation of ESOS phase one.

How do I report?

SECR reporting is due annually and is published alongside annual directors’ reports.

Within the legislation, no specific method of reporting has been stipulated. However, the government will outline what is deemed to be ‘good practice’ when reporting.

Contact us on 01225 867722 and we will work with you to achieve SECR compliance.

In the meantime, please have a look at our SECR Checker Tool to see if you need to comply.

Mitigating against CCL rises

Non-energy costs (often referred to as thirty-party costs) have consistently been on the rise in recent times and they now account for around 60 per cent of a company’s overall energy bill, and everything points to this trend continuing in the future.

This month has seen an increase in rates for Climate Change Levy (CCL, affecting electricity, natural gas, LPG and other taxable commodities. 

The CCL rate – an environmental tax on energy delivered to non-domestic users – has been raised to recover the revenue from abolishing the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) at the end of the 2018/19 compliance year.

One way to keep a check on these increases is by ensuring compliance and reducing energy consumption; energy efficiency is now every bit as important as procurement in terms of energy management.

Alternatively, your business may currently be in a Climate Change Agreement (CCA). Businesses who hold a CCA will see their CCL discount increase from 90% up to a 93% reduction in electricity costs and from 65% up to a 78% discount on gas, LPG and any other taxable commodity.

Taxable Commodity April 2018 Rate April 2019 Rate
Electricity (£/kWh) 0.00583 0.00847
Gas (£/kWh) 0.00203 0.00339
LPG (£/kg) 0.01591 0.02175

At Energy Management, we have an experienced team of energy consultants and chartered engineers who are highly-skilled at devising and implementing cost-reduction solutions including the introduction of energy-saving technologies. We are also have years of experience in guiding clients through the CCA process, ensuring all relevant procedures are followed to ensure CCL discount.

Our bespoke energy management portal, EM-Powered, is also an invaluable tool is accurately monitoring and reporting energy consumption so that businesses have a proper understanding of their consumption.

If you need help in managing your CCA, please get in contact on 01225-867722.

Membership of ESTA approved

ESTA - Energy Services and Technology Association

Energy Management LLP is pleased to announce it is now an approved member of the Energy Services and Technology Association (ESTA).

By joining the UK’s leading energy management industry association, Energy Management has underscored its commitment to assist organisations, designers and constructors to reduce energy running costs and carbon footprint.

With over 150 years’ industry experience, Energy Management’s team is already highly-skilled and experienced in energy matters but membership of ESTA will serve to improve our offering to customers further.

ESTA’s strategic objectives:

  • Promote the economic benefits of energy demand reduction, energy efficiency and management to all demand-side users and professionals.
  • Raise awareness of energy reduction, efficiency and management with bodies of influence.
  • Ensure that membership enhances the business proposition of member companies.
  • Market knowledge

ESTA members provide:

  • Unrivalled expertise and are best placed to provide independent advice to energy end-users.
  • Market-leading energy management products, technology and services.
  • Significant levels of energy and carbon savings to energy end-users in the public and private sectors.
  • Full ESCO (Energy Contracting) services which guarantee significant energy savings.
  • In-depth knowledge of funding mechanisms for the purchase of energy and energy efficient products and services.