BT announced that it was bringing out a new range of home phones with much improved energy efficiency. The claim is that ‘the new handsets boast power units designed specifically to consume around half the power of previous units’. BT said that almost all its extensive home phone range would contain the new energy-saving technology by mid-2008. Its press release gave very precise figures for the amount of CO2 saved – comparing the savings if all home phones incorporated the new technology to taking ‘57,000 cars off the road for a year’.
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In most countries electricity use is rising. The increase is gradual in developed areas, averaging only 1 or 2% a year. In the UK, the pattern was similar but recent years have tended to show declining growth rates, partly perhaps as a result of increasing prices.
One of the most interesting features of recent UK trends has been the flattening in electricity use in the home. This change is somewhat surprising. Improvements in home energy efficiency, through such things as the use of compact fluorescent light bulbs and high quality white goods, have usually been thought to have been outweighed by increases in the number and power use of consumer electronics. Large LCD TVs are, for example, much heavier electricity users than the old-fashioned TVs that they replace. Today’s games consoles are much more powerful than ones of five years ago.
So the reasons are not clear, but monthly year-on-year growth in domestic consumption of electricity has fallen to below zero in the last year or so. Is this a temporary change brought about by the steep increases in prices over the period 2005-6, which will be unwound when people get habituated to higher costs? Or is this a real change in household behaviour?
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| The Lighthouse by Potton |
Carbon Commentary has visited two sites to look at the costs of building houses under the new rules (not yet mandatory) established by the Code for Sustainable Homes (CSH). By 2016, all new UK homes will have to have no net carbon emissions (‘Level 6’) and the implications for construction techniques are profound. Today, most homes are built to about Level 1, or possibly 2. To get to Level 6 will require huge changes in how houses are built, heated, and ventilated. And they will need expensive renewable energy technologies built into the home as well.
At Wimpey’s 145-home development in Milton Keynes, construction costs of houses at Level 3 are running at ‘100-110%’ more than standard. The self-build company Potton is offering a Level 6 design (one of the first in the UK) for an even more expensive £180 a square foot, up from about £75 for a standard Level 3 model. This takes the construction cost of a standard 1,000 sq ft (92 sq metre) home up from £75,000 to £180,000. Much of the increment comes from the need to install large amounts of renewable electricity generation. Some of the cost premium over today’s badly insulated homes will eventually erode as builders get better at building air-tight houses. But we shouldn’t be in any doubt about the huge implications of the CSH for builders, landowners, and buyers.
Inventions that take the breath away with their simplicity and elegance are rare. The new rechargeable batteries from USBCell qualify for this honour. As their name indicates, they are AA batteries that are recharged by the USB port on a laptop or other powered device. They are not cheap, but will repay the investment by being far easier to recharge than conventional rechargeable AAs.
The carbon savings from these batteries are not large. My calculation is that they might save 10kg of CO2 a year in a household full of portable devices. But they will, of course, reduce the waste going into landfill.
The company that makes the batteries has won some important awards for its innovation. More importantly, it also has some extremely interesting views on the evolution of home electricity demand. It correctly points out that a larger and larger fraction of home energy is used in 12V, not 240V appliances. We waste a lot of energy switching 240V AC down to 12V DC. Its next products include a box that will allow all DC devices (phones, handheld consoles, laptops) to be efficiently charged. Eventually, it will be possible to use cheap(-ish) solar power collectors to charge all the battery DC devices in the home. The savings in carbon would be worthwhile (but probably outweighed by the purchase of one extra TV).
The world understands ‘smart metering’ in many different ways. Gordon Brown used the expression in his first speech on climate change. He meant devices that give visual real-time indication of electricity consumption, largely in homes. To the UK Conservative Party (see this issue of Carbon Commentary) it means conventional meters that can record the export of electricity from a house, as well as its use.
Smart meters are much more useful than either of these two definitions suggest. Their primary value will be to adjust the price of electricity depending on the level of demand. This frightens politicians because they fear the backlash from users complaining of the horrendous cost of peak-time electricity use. But if we are to increase the percentage of electricity coming from intermittent and/or unreliable sources, smart meters are a necessity.
After decades of foot-dragging, the UK construction industry has begun to see the importance of good insulation and higher environmental performance. Large housebuilders are beginning voluntarily to build their major developments to a better standard than required by building regulations.
Housebuilders also see the increasing commitment by government to increasing the mandatory standards for home insulation and other environmental characteristics. By 2016, all new homes will have to be ‘zero carbon’.
A report just released by estate agents Knight Frank examines whether buyers are prepared to pay the cost of the eco-improvements. The answer seems to be a cautious ‘yes’.
Energy efficiency improvements often do not deliver reductions in energy use. For example, when a householder installs better insulation, the energy savings are sometimes much less than would have been predicted. Sometimes this is because the insulation was badly fitted, but it is often because the householder runs the heating at a higher temperature when the house is better insulated. This is called the ‘rebound’ effect: when it becomes cheaper or more effective to use energy, people use more of it.
The many studies into this effect have produced a wide variety of different estimates for the size of this effect. Most cluster between 10 and 30%. This means that energy efficiency improvements generally result in a large net benefit. But these studies only capture the direct effect on consumers and businesses. A study from the UK’s Energy Research Centre shows that the economy-wide impact may be much larger. For example, lower heating bills may mean that householders are rich enough to take more flights. At an even higher level of abstraction, better economy-wide energy efficiency (through, say, improvements in steel-making technologies) may encourage more rapid economic growth, which in turn raises energy use.
Some economists think that the economy-wide rebound from energy efficiency gains is very large – perhaps over 100%. A figure over 100% suggests that total energy consumption rises after energy efficiency improvements. The tentatively stated view of a new report by the UK Energy Research Centre is that the true number is somewhat lower than this and may be around 50%, although it could be a great deal higher.
Government projections for the impact of energy saving measures never take the rebound effect into account. Policy-makers trying to reduce global emissions need to adjust their thinking to reflect the much lower than expected efficacy of energy saving programmes.
A recent Henley Centre survey suggested that 86% of people were eager to buy goods with less packaging, up 20% in the last two years. Nothing arouses as much spontaneous anger among British householders as the ‘over-packaging’ of foods. Recent newspaper headlines conveyed righteous indignation about the policies of UK retailers, in particular the failure to make all packaging recyclable.
The newspapers completely missed the point. Three issues need to be emphasised:
- Food packaging is a vanishingly small fraction of UK waste. Waste food is far more important.
- Good packaging is vital: it helps protect food from damage and helps lengthen its shelf life.
- Recyclable food packaging may actually be bad for climate change.
Making these points too loudly can get you lynched in some middle-class areas of Britain. Nevertheless, it needs to be said repeatedly that packaging, particularly of food, is not the environmental disaster it is made out to be.
Ceres Power, a £150m AIM-listed company, recently demonstrated its new Combined Heat and Power product. This power plant is targeted at ordinary domestic homes. Combining an efficient central heating boiler with a fuel cell that converts gas to electricity, the new product has excited the City. Ceres is extremely optimistic about sales of the device, based on the cash and carbon dioxide savings it says can be achieved.
The Ceres fuel cell (on the left) is incorporated into an ordinary domestic condensing boiler (on the right)
Ceres promises reductions in utility bills of £300 a year and 2.5 tonnes savings in carbon dioxide for the typical UK house. Our short report shows why we think that these savings are unlikely even in the most appropriate UK installation. In fact, the emissions reductions are likely to be minimal and the reductions in the electricity bill will not easily justify the approximately £1,000 extra cost of the CHP cell.
Micro CHP is a difficult proposition. Other companies have found that it is hard to make substantial savings in domestic installations. CHP is not well suited to rapidly fluctuating and unpredictable demand for electricity and hot water.
New UK housing has insulation standards that do not come close to matching the best northern European levels. Individual homeowners and ethical investors have built single ‘eco-homes’ but a small new development in Bladon, Oxfordshire is among the first to be speculatively built by a mainstream housebuilder.
The new houses are not ‘zero-carbon’ and do not use the Passiv Haus technologies pioneered for low-emissions housing in Germany. But they are a substantial improvement on most mass-produced homes. Will they make the builder more money? No, says the company, but the experience it has gained will enable it to build eco-homes at a more competitive price in the future. These nine houses each cost over £40,000 more than their draughty Persimmon equivalents. The builder expects the price premium to be slightly less.
Both the Conservative and Lib Dem parties have produced position papers on climate change in the last few weeks. The Conservative document is over 500 pages long but contains very few specific proposals. To be harsh, it is little more than a prolonged agonising over whether the climate change problem can be addressed using conventional free-market mechanisms. The Lib Dem paper is a tenth of the length but does contain the outlines of a coherent set of policies.
This article analyses the Lib Dem proposals. It shows that the Lib Dems are prepared to use the price mechanism to choke off increasing demand for aviation. The party also contemplates extending the Emissions Trading Scheme beyond the 50% of the economy currently covered. On the other hand, it makes completely clear that it has no intention of raising the prices of energy and fuels to domestic consumers.
Although the party presents itself as the only UK political institution ready to grasp the need for an economy-wide carbon price that will bring down emissions by 30% in 2020, the detailed proposals are far less radical. In the material that follows, I try to tabulate the Lib Dem ideas, focusing on whether they use price, regulatory fiat or pious hope as the proposed means of emissions reductions. As in the Conservative paper, estimates of the costs and benefits of their policies are almost completely absent from the Lib Dem paper. It is a shocking commentary on British politics that no major party is prepared to quantify exactly how it proposes to shift taxes towards polluting activities and away from other sources.
British Gas has launched a consumer gas and electricity tariff that will cost 10% more than its standard rates but which offers better green credentials than any other consumer utility tariff in the UK market.
The product has the following important features:
- The electricity is derived from renewable sources. The company says that this is not the key ingredient of the tariff. Later in this note I try to explain why.
- British Gas will buy and retire Renewable Energy Certificates for 12% of the electricity it supplies. This is probably the most important aspect of the proposition.
- British Gas will ‘offset’ all of the carbon dioxide produced as a result of each household’s purchases. This is the most expensive part of the deal for British Gas.
- There will be a small donation to a green education fund for schools.
BG says that it makes no extra money from the sale of its Zero Carbon product. This looks a justifiable statement to us. The important other questions to ask are:
- Why did BG decide that 10% was the appropriate premium to its main tariff? It could have designed a less costly offering with reasonably strong green features. Do mainstream ‘concerned consumers’ regard 10% as an acceptable price increment? Did BG need to ‘gold plate’ the new product to avoid any criticism that it was a proper green tariff?
- How will the company manage to ensure that it buys high quality offsets, and not the dubious offerings sold by consumer offsetting companies?
- The product is slightly complex and difficult to explain. Can BG cut through the competing claims of other green suppliers to build a large customer base for this high quality offering?
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