Giving control of your thermostat – and the on-switch for your fridge – to your power company could save you 20 per cent on your bills
So here’s the deal. Hand over control of your home’s heating and power to an outside company. In return, your bills will be slashed and you should get a warm glow from helping to keep the nation’s lights on.
Attracted? Appalled? Next month, Britons will be able to choose. Some experts believe this is the shape of energy consumption to come, putting into practice one of the better ideas among the controversial proposals advanced by Owen Paterson, former environment secretary – to ease strains on the national grid and cut the need to build new power stations by flattening fluctuations in demand.
The revolutionary new deal is based on the fact that, unknown to most of us, the price of electricity changes at half-hourly intervals throughout the day, depending on how much of what is produced is actually consumed.
Demand has, of course, always varied, reaching a peak in the early evening and a trough in the early hours of the morning, and the half‑hourly price of power naturally follows suit. But the increasing use of intermittent renewable energy – especially wind power – has greatly added to this thanks to variability in supply. Germany gets about a quarter of its power from renewables, and at times of blustery glut the price of electricity has even briefly gone negative, suggesting that utilities would actually be prepared to pay consumers to use power.
Householders don’t notice the half-hourly price swings because the cost of electricity supplied to them is averaged out, if that is the right word for something that many believe is actually weighted on the high side. Indeed, different parts of the big energy companies both generate the power and sell it to us, with prices fixed between their producing and supplying arms – an arrangement open to abuse, especially in the absence of effective competition.
Most British electricity is subject to this cosy arrangement, but some is traded on the open market, and that is where a new company, Tempus Energy, plans to come in – buying the electricity at the half-hourly rates and passing those on to customers. It will advise them how to make the best use of the cheapest periods and avoid the most expensive ones and will install special equipment enabling it to switch their heating, fridges, washing machines and dishwashers on and off accordingly.
It is thought that, in the all-electric buildings to which it is best suited, this could cut bills by 20 per cent. The company will aim to make money by saving rather more than that and hanging on to the difference, but its customers should still be substantially in pocket. The arrangement would be voluntary and the company insists that if families are unhappy or find themselves short of energy when they need it, they will always be able to override it to get immediate power.
The plan is the brainchild of Sara Bell, a financial risk manager turned energy entrepreneur, to whom I was introduced this week by the newly formed Energy and Climate Intelligence Unit, which boasts the former Tory leader, Michael Howard, on a blue-chip advisory board. She has guts, for she risks all-out attack by the none-too-scrupulous Big Six energy companies, whose interests she will be directly challenging.
She also chairs the UK Demand Response Association, a newish grouping of companies involved in managing demand for electricity by smoothing out its peaks, a practice that Mr Paterson estimated could obviate the need to build “seven major nuclear power plants”. It has already been successful in America, where it helps save Texan consumers more than $300 million a year and kept the lights burning in the east of the country last winter when extreme cold knocked out almost a fifth of local power plants.
Many energy experts and environmentalists have long argued that it would be quicker, cheaper and more climate-friendly to use these methods in Britain than to build extra generating capacity. Indeed, the Government has now begun to employ them, by striking contracts with businesses which find it profitable to reduce demand between four and eight on weekday evenings in return for a fee. And it has embarked on a two-year pilot project to see if they can be incorporated in its “energy capacity market”, designed to see the country through a period of tight supplies.
So far it only offers companies willing to reduce demand one‑year contracts (as opposed to up to 15 years for generators), which many find too short to justify changing their practices. If this were to be amended then one new report concludes another £359 million could be saved in the first year alone. That sounds like a good deal to me.
Our inspiring cathedral cities need a little protection, too
Back in January one of Downing Street’s favourite MPs – Nadhim Zahawi of Stratford-upon-Avon, a member of No 10’s policy board – warned that “the physical harm” that planning policies are having on the countryside will “become the defining legacy of this Government”. Beautiful villages all over Britain are under siege from unscrupulous developers taking advantage of a free-for-all sanctioned in Whitehall.
Mr Zahawi could now add to this the damage being done to our cathedral cities – national treasures which not only speak of the past but offer promise for the future economy, with new businesses anxious to locate in fine, historic surroundings.
The Government needs to protect both. It has begun, belatedly, to speak up for the green belt, but needs to make sure that countryside development goes on in the right places. And it should introduce a new conservation designation for historic towns and cities, along the lines of the rural Areas of Outstanding Natural Beauty.
Ministers may object that this contradicts the deregulatory spirit of the times. But do they want to be remembered for protecting, or destroying, so much of what makes our country special?
Tolkien’s favourite black pine casts a dark cloud over us
Stock market jitters. Power stations aflame. Hurricane Gonzalo. Nick Clegg. You might well ask why Britain is being hit by so many troubles at once, and why they seem to be increasing.
I did – until I heard the other day that, as we forecast in early August, a special tree in Oxford University’s Botanical Gardens had been cut down. The black pine was a particular favourite of JRR Tolkien, who used to write in its shadow. Indeed, the last photograph taken of the author has him standing by it with his hand on its trunk, and it is thought to have inspired his creation of Ents in The Lord of the Rings.
The tree came down, appropriately enough, for “elf and safety” reasons: a couple of its branches fell off just before the garden was to hold a picnic underneath them. But, as Tolkien fans will remember, Ents don’t take felling lying down. As their leader, Treebeard, puts it they become “roused” when “it is clear to us that our trees and our lives are in great danger”. They then succeed in bringing “doom” to the “tree-slayers”. I rest my case.