Tax breaks and one-off payments may be helping homes and businesses to cope with the drastic rise in energy prices now, but what more could the government be doing? How can we ensure both emission reduction and energy security for the future? This week, we will be discussing all things energy strategy.

The energy crisis coupled with the cost-of-living crisis is hitting households and small businesses hard. Many European countries are tackling high-energy prices with a mixture of subsidies, price caps, one-off payments and tax relief. 

While this is good news for those struggling, cost-cutting energy measures such as these are only short-term solutions that don’t address our reliance on fossil fuels. Consequently, we’re at the mercy of fluctuating gas prices that have recently reached all-time highs. 

In Germany, the government has introduced several measures, including gas rationing. One of the most significant is to scrap the EEG surcharge – a charge used to finance renewables – on electricity from 1 July 2022. Another is to give employed people who pay tax a one-off €300 payment. Others include cutting the cost of public transport from June, and a heating cost subsidy for lower-income households.

Like Germany, the Austrian government is taking steps to ration natural gas. In addition, it’s introducing a €1.7bn package of measures that include a one-off payment to the unemployed and reducing taxes on fossil gas and electricity. 

Interestingly, Italy will fund its latest raft of measures – for both consumers and businesses – by taking extra profits from energy firms. The most recent government package is worth about €4.4bn, which comes on top of a raft of other relief measures that stretch back to last summer. Some of the steps taken include a VAT reduction in gas bills as well as contributing 25 cents per litre at the fuel pump. 

In the UK, businesses will receive no help with spiralling energy costs but millions of households will receive up to £350. Domestic electricity customers will get £200 off their electricity bill, which will need to be paid back over five years. Meanwhile, 80% of households will also get a £150 rebate off their council tax bill if they’re in bands A to D. Additionally, the poorest households will get a warm homes discount worth £150 from October. 

As welcome as these initiatives are, they are ultimately unsustainable. Many of these initiatives will finish before the energy crisis is even over. And then of course there’s always the risk that another crisis is lurking around the corner. 

What we need is three-fold: to reduce overall consumption and eliminate waste; to change our behaviour; and to automate certain functions, such as heating and cooling. 

Energy Use and Our Behaviour

Global energy consumption is expected to nearly double by 2050, led by growth in Asia – a startling figure that seems to run counter to our need to battle climate change. 

Most of us are aware that reducing our overall energy consumption is a good thing. But we simply can’t do that without altering something about our behaviour. While it might not be popular to say it, Al Gore was right – we need to be inconvenienced to save the planet. To put it another way, we can’t continue to have the same ingrained habits and expect to reduce our reliance on fossil fuels. 

We all need to change, whether that means driving less often or offsetting some of our carbon emissions. Energy waste costs the planet and us. One of the easiest things you can do is shut everything off completely at the end of the day, from lights through to kettles. 

Do you know what an energy vampire is? These devices continue to use power and drain energy even when they are turned off. Think of charging cables for laptops, phone chargers, coffee makers and cable boxes. Research from British Gas suggests that people can save nearly £150 a year on average just by not leaving devices on standby. 

So don’t just turn it off, switch everything off at the wall or unplug it. This is harder to do if you’re a business running multiple sites. We have previously put together some energy-saving tips for smaller businesses and suggested how you can reduce energy waste over the summer. 

Automation 

In the race to save the planet from the worst effects of climate change and reduce our carbon footprint, technology is on our side. By automating certain functions, such as heating/cooling and switching things on/off, you’ll eliminate unnecessary energy waste. Moreover, you will have more control over your energy consumption. 

We have a virtual thermometer at GridDuck HQ and many of our clients control their heating and cooling through our online dashboard remotely. To save on costs, only heat or cool rooms and storage units that you are using and turn down the thermometer in the colder months to what is just comfortable. For every one-degree increase in the thermostat, you will be consuming roughly 10% more energy. 

Investing in Renewables 

In recognition that we need to use more renewables, the UK government has introduced new grants for people who want to switch to air or ground source heat pumps. While a heat pump will cut your carbon footprint significantly and save money on your energy bills, many older homes might not be suitable because of poor insulation. If your home qualifies, the Boiler Upgrade Scheme will cut the cost of an air source heat pump by £5,000, taking the overall cost to about £10,000.

Likewise, electric car owners have also benefited from government grants to bring the cost closer to that of a conventional petrol car. Currently, if you buy a low-emission vehicle in the UK you can claim up to a £1500 discount, which, let’s be honest, doesn’t sound like a lot.    

Schemes such as these encourage people to take up new technology when the economics are still up for debate. As more people install heat pumps, the cost will inevitably start coming down. The cost of solar panels, for example, dropped by 82% between 2010 and 2019, according to a report by the International Renewable Energy Association. 

Currently, a heat pump will pay for itself about six to eight years before the end of its life span – typically 20 years. However, that might not be enough to convince a majority of us to jump on board, even with the energy crisis accelerating takeup. 

While most of us wait for the economics to catch up, the best thing you can do is to reduce your own energy use and eliminate inefficiencies as much as possible.  

If you’re worried about energy costs, GridDuck can help – talk to us about becoming a more energy-efficient business, saving money and reducing overall carbon emissions.