U.K. utilities must have future carbon cutting role


Ian Pearson,
Environment &
Climate Change Minister,
United Kingdom
London, U.K. — (METERING.COM) — June 20, 2007 – The energy supplier of the future should not just be selling units of energy, but should be marketing a broader range of energy-related services to improve energy efficiency and to reduce carbon emissions.

This is the view of the U.K. government in a new discussion paper, “The Household Energy Supplier Obligation from 2011: A Call for Evidence,” that has been released by the Department for Environment, Food and Rural Affairs (Defra), following the release of the energy White Paper last month.

The paper says that U.K. homes account for over a quarter of the country’s carbon emissions and that improving the energy standards of homes must play a crucial part in reducing the emissions. If the long term target of a reduction of 60 percent in carbon emissions by 2050 is to be met, household emissions must decline from 40 MtC today to less than 30 MtC by 2020 for the sector to remain on track.

The vision put forward in the paper is for a transformation of the market for the supply of domestic energy, with suppliers and consumers both having a shared incentive to reduce carbon emissions from homes. The climate change impacts of customers’ energy usage should become more of an integral part of suppliers’ businesses rather than just a compliance issue. Consumers also must become more aware and informed about the energy they use at home and seek opportunities to reduce it.

The widespread development of zero-carbon homes and the availability of real-time energy displays and smart meters should all play a key role, says the paper.

According to the paper government has been exploring the broad design options for the supplier obligation and two leading options have emerged – an evolution of the existing measures-based approach, or a transition to an outcome-based scheme that would set overall targets to reduce carbon emissions or delivered energy. Comments on these, and other alternatives that may be proposed, are now sought.

The paper notes that emission reductions can be achieved by taking the carbon out of energy, but this can only ever provide part of the answer. A reduction of carbon emissions on the scale proposed means that household energy suppliers will sell fewer units of energy, year on year – an outcome that has not yet been achieved anywhere as a consequence of a climate change policy.

Launching the proposals Environment and Climate Change Minister Ian Pearson commented that the shape of energy companies in the future could be radically different from today.

“We want to see a shift from selling units of energy to increasingly providing energy services, such as energy efficient lighting or solar water heating,” said Pearson. “Energy companies are already playing an important role in helping consumers become more energy efficient. For the future, it’s clear that there must be business opportunities in selling less energy.”

Comments on the proposals are sought by September 14, 2007.