£9.5 billion a year lost – more than half the total UK homes pay for their electricity.
UK businesses could receive boost with £570 million cost savings.
A report released today features new analysis showing how the UK electricity system wastes a staggering £9.5 billion from the loss of energy before it reaches homes and businesses.
Less Waste, More Growth: Boosting energy productivity is published today by an unlikely coalition of 14 organisations, including those that represent industrial manufacturers such as EEF and leading environmental groups such as Greenpeace.
These organisations have been united by a shared vision of creating a more efficient, competitive, low carbon Britain through a common purpose to cut this waste.
The new report calls for an increase in Government ambition on energy productivity and sets out three recommendations, which if implemented, could transform this wasteful inefficiency into a huge growth opportunity for the UK economy.
The analysis, led by the ADE, identifies the total loss of energy is worth the equivalent of £354 per household, more than half the average UK annual electricity bill (£592). This waste equals the power generated by: 37 nuclear power stations; a landmass the size of England of Bioenergy crops; or wind turbines covering 40% of Scotland.
All this waste undermines efforts to create a competitive, modern economy as both consumers and businesses are faced with higher energy costs.
The report outlines a number of immediate, practical and cost-effective ways of reducing this waste, which could save the equivalent of £116 on every householder’s energy bill; a total of over £3 billion a year.
Inherited from the public system of the 1960s and 70s, less than 10% of UK power stations currently recover waste heat, and this represents a missed opportunity to save £2 billion annually.
The UK could save the equivalent of £23 per household just by upgrading our electricity network's efficiency to match that of Germany's.
Appropriate, long term policy support could cost-effectively reduce business and public sector bills by £570 million, improving competitiveness and investment.
The report outlines three main recommendations to help achieve these savings.
1. Government should aim to improve energy system productivity year on year as is done in competitor countries like the United States and Germany, with the purpose of reducing energy costs for users.
2. Electricity generators, networks and businesses should be able to contribute to a strong, more productive economy. For business, this means combining a revised energy tax regime with clear, simple and investable policy to leverage improvements in energy productivity
3. Government should enhance the natural market direction with a more solution-based approach to its energy policy assessments, allowing the demand side and the supply side to compete equally.
Tim Rotheray, Director at the Association for Decentralised Energy, commented: “The fact that we waste enough energy to pay half the electricity bill of every home in Britain should be a national embarrassment. Wasted energy reduces our productivity, undermines efforts to create a competitive economy on a global level and causes unnecessary emissions. It does not have to be this way. The productivity review is a great opportunity for Government to focus on how it can support investment in cutting energy waste.”
Dr Douglas Parr, Policy Director at Greenpeace UK, said: “Cutting energy waste wherever possible should be a no-brainer. You can lower energy bills, cut carbon emissions, and boost energy security at a single stroke. Whatever our differences on clean energy the Government must surely realise the obvious benefits of making our energy system more efficient. The broad sweep of organisations supporting this initiative shows that a genuine welcome awaits an effort in this direction.”
Paul Raynes, EEF Policy Director, said: “British firms and British consumers are paying swingeing surcharges on their power bills whilst these far lower cost options remain untapped. The sinful waste of energy before it before it even reaches those bill payers isn't fair on them, or the planet. We should prioritise opportunities to cut carbon emissions in ways that don't hurt consumers or competitiveness."
Louise Kingham, chief executive of the Energy Institute (EI), commented: "Our own research among EI members has highlighted the need for a systemic and more efficient approach to generating energy and therefore reducing waste – better balancing the energy system as a whole, across both supply and demand. There is also a call for greater policy continuity to ensure there is a long term ambition by Government to achieve those goals. It is a huge challenge, but one that, together, I believe we can meet for the benefit of all.”