U.K. pilot pits power plants against energy efficiency

July 22, 2014 | By Barbara Vergetis Lundin

Business, industry and other organizations will get help to cut their energy costs with £10 million made available this year to improve efficiency and reduce energy demand, according to U.K. Energy and Climate Change Secretary Ed Davey, who has unveiled new plans that will remove barriers to investment in energy infrastructure.

Secretary of State for Energy and Climate Change Ed Davey. Credit: Department of Energy and Climate Change

The U.K. energy sector has seen £45 billion of investment between January 2010 and December 2013, with nearly £8 billion investment in renewable technologies in 2013 alone. This investment counteracts a history of underinvestment in Britain's energy sector that threatened energy supplies.

"Our plan is powering growth and jobs in the UK economy. We are building a secure, sustainable energy system for the future, dealing with an historic legacy of underinvestment and neglect that threatened to undermine the whole economy. The funds we invest now in keeping the lights on could, in the future, be available to support cheaper projects that deliver lasting reductions in peak electricity demand," Davey said at the CBI Energy Conference. "I want to unlock the untapped potential of better efficiency in electricity use -- so that more efficient kit can compete with building new power stations in the future."

Electrical efficiency could mean savings equivalent to 9 percent of total demand by 2030 -- reducing the need for new power stations. The government is testing whether projects that deliver lasting electricity savings at peak times -- like replacing old light bulbs with LEDs or improving motors and pumps -- could compete with generation, demand response and storage in the U.K. Capacity Market.

The changes are part of the government's strategy to create an energy secure, energy-efficient economy. The government also plans to remove unnecessary barriers to investment in infrastructure by amending the rules that prevent the same companies investing and exercising rights in both generation and transmission networks at the same time.

In addition, the government has announced safeguards to ensure more electricity is available at peak times and to allow mothballed plants to be used if necessary in order to further improve energy security and deal with the problem of tightening electricity margins up to 2018.

The new regulations are expected to come in early 2015.

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