12 June 2015
Last year, the Department of Energy & Climate Change (DECC) launched an initiative aimed at improving the security and affordability of Great Britain’s electricity supply. Electricity Market Reform (EMR) is the Government’s policy to incentivise investment in secure, low-carbon electricity and encourage greater energy efficiency from both producers and consumers. Simon Sjenitzer, Associate Director, Energy & Climate Change Business Development, explains.
On the supply side, this includes a Capacity Market that offers energy generators a guaranteed revenue stream as long as they deliver energy when it is needed. The intention is to “ensure security of electricity supply at the least cost to the consumer” and there are penalties should providers fail to do so.
This capacity will be in place by 2018 and, in advance of this, the Government is running two competitive auctions as part of the Electricity Demand Reduction Pilot (EDRP). The EDRP provides financial support to organisations that deliver permanent energy savings, of at least 50kW, by installing more efficient equipment or increasing the efficiency of existing electrical systems. The benefit to those taking part is twofold, with savings made to electricity bills and funding for the measures being met by Government (or tax payer depending on your perspective).
In the first of these auctions earlier this year only £1.28m of a potential £10m pot was allocated to just 18 different organisations on 22 projects, but the target was for a minimum 100kW saving. It is unlikely that these were the only projects to reach that qualification threshold which suggests that there were disappointingly few applicants for the scheme. Additionally, almost all of the winning projects were for LED lighting replacement which perhaps shows a lack of knowledge of the options for reducing electricity consumption and the cost savings that can be achieved.
Many organisations may have been put off by a new scheme, with relatively heavy paperwork and some nasty penalty clauses, but the real reason is probably more worrying. They are simply too busy doing what they do, without the resources or expertise to investigate where, when and how electricity is consumed by their operations, let alone to implement energy efficiency measures.
DECC have just announced the revised, second round of the EDRP, and organisations are well advised to consider looking for outside help. WYG has a national capability and expertise in the provision of energy audits and compliance services. Our work with major commercial organisations, SMEs and public sector bodies on ESOS and ISO 50001 compliance puts us in a strong position to help with EDRP applications and, hopefully, we can encourage greater uptake of this opportunity.
For more information, contact Simon Sjenitzer.