Is it a bird? Is it a plane? No, it’s Chris Huhne driving past in his car. Whoops, sorry, my mistake, I think it was his wife. Or was I right the first time?

This photo opportunity doesn't seem like such a good idea now...Image by DECCgovuk via Flickr

The path of a political figurehead never runs smooth, especially when one is charged with perverting the course of justice. Yes, I’m referring to the news that Chris Huhne the Liberal Democrat MP and (ex) Energy Secretary has resigned his cabinet post. The well-publicised reason for his resignation is the allegation that in 2003 he persuaded his then wife to take three points on her driving license for a speeding offence.

Now as interesting as the charges against Mr Huhne are, that is not the main purpose of this blog post. We are, after all, an energy broker, so the real issue is the credentials and background of the new Energy Secretary, Ed Davey.

So who is Ed Davey?

Edward Jonathan Davey has a degree in Philosophy, Politics and Economics from Oxford and has been in parliament since 1997, when he defeated the Tory MP Richard Tracey in the constituency of Surbiton. Under the coalition, Davey was appointed Parliamentary Under Secretary of State in the Department for Business, Innovation and Skills (BIS) with responsibility for Employment Relations, Consumer and Postal Affairs.

Davey has a reputation for falling on the green side of the spectrum; he campaigned on environmental issue at university and his voting record shows support for new laws to tackle climate change. 

We will watch developments over the next few months with interest to see if there is a particular change in energy policy as result of the change in personnel, but the reality is that both Huhne and Davey are Lib Dems through and through and very little is likely change. 

The water industry in the UK was privatised 20 years ago, but when you compare it to the energy industry - which was only privatised just over a decade ago - the difference is clear to see.

Image by WhatMeWorry101 via Flickr.

Businesses can - and do - switch their energy supplier, but when it comes to water, it’s almost unheard of. 

Given how central a reliable, affordable water supply is to our economy (it’s essential for industry, agriculture, energy production and more) it’s surprising that it’s often taken for granted, particularly given that climate change could mean water scarcity becomes an even bigger issue in the future. 

It was against this backdrop that Defra released its Water for Life White Paper last month. It presents a vision for the future of the water sector, including some interesting proposals for businesses, which fall in two main areas: water abstraction and competition.

Water abstraction

Businesses that take water from rivers, lakes, streams etc (more than more than 20 cubic metres a day) need an abstraction license. But Defra acknowledges that currently it can be difficult for businesses that want to start water abstratcion or increase their water abstraction to get a year-round reliable license.

The White Paper proposes that a better market in abstraction licenses would make it easier for businesses to access water in the volume and the location they need.

Competition

At the moment, only business customers in England that use 50m litres or more of water a year can switch their water or sewerage supplier under the ‘inset’, ‘water supply licensing’ or’ ‘new appointments and variations’ regimes - but it doesn’t happen often. In fact, only one business has switched supplier under the water supply licensing regime.

In Scotland, there’s an alternative regulatory regime, which is much more like the energy market. It has seen over 40% of businesses renegotiate the terms of their contract with their water supplier to get better prices and/or service, including discounts for paying by Direct Debit, aggregated purchasing, more information on water usage, and innovative schemes like rainwater harvesting. There have been estimated savings of £20m in three years, and apparently it makes businesses more water-efficient too. The report cited an example of one business with multiple sites which saved an impressive £80,000 a year just by aggregating the 4000 paper bills it used to receive into one e-bill.

To help get businesses switching, Defra has introduced new legislation which will lower the switching threshold to 5m litres - which will mean that the number of businesses which are eligible to switch water supplier will increase from 2,200 to 26,000. The White Paper says that further deregulation is on the way.  

There are also proposals for ways to get new players to enter the market, so that business customers have a greater selection of water companies to choose from.

What do you think of these proposals? Would you ever consider switching your business’s water supplier? Let me know your thoughts and experiences in the comments.

The Feed-in Tariff rate is being cut in half, but there's still time to get the higher rate - just.

Image by uSwitch via Flickr

On the 12th December 2011, the government will cut Feed-in Tariff rates for both domestic and small business installations by 50%, from 43p per kWh to just 21p per kWh. 

As a result, people who want to take advantage of the current rate are rushing to have their renewwable energy technology installed before the deadline. As a result, many solar panel installation companies in particular are struggling to meet the increased demand. 

Renewable energy supplier Good Energy has reacted to this tariff deadline by opening its Chippenham offices for the weekend on the 10th and 11th of December, so that more people can register before the closing date which is at midnight. 

Anyone interested in getting small-scale solar electricity generation for their home or business will be able to visit the office over the weekend to submit their applications in person, or call in and get any last minute advice over the telephone. Those who have installed projects will also be able to pop in to the offices and sort out any outstanding paperwork they may have before the deadline passes.

Some businesses feel that the government’s new reduced tariff will mean it will now take longer for them to earn back their investment and a lot less cost-effective for anyone interested in protecting the environment by installing solar panels.

Could the launch of the Renewable Heat Incentive mean biomass boilers become a familiar site?

Image by London Permaculture via Flickr

From Monday, businesses can start earning money for any renewable heat they generate under the Renewable Heat Incentive.

Businesses that install renewable heat technologies like biomass boilers, solar and heat pumps (or installed them after 15 July 2009) will be paid for each kWh of energy they generate.

Businesses can earn up to:

• 7.9p per kWh for biomass boilers; 
• 8.5p per kWh for solar thermal;
• 4.5p per kWh for heat pumps.

Payments are fixed, will be adjusted annually with inflation and will be made every quarter over a 20-year period. Ofgem will deal with applications and make the incentive payments.

The government hopes that the Renewable Heat Incentive will encourage as many as 14,000 businesses to install renewable heat technology by 2020 because the payment should bridge the financial gap between the cost of conventional and renewable heat systems.

The initiative should also cut emissions by 43 million tonnes of carbon by 2020 - which is equivalent to the annual carbon emissions of 19 new gas power stations.  

The payments are significantly smaller than those made under the Feed-in Tariff, which currently pays 43.3p per kWh (although this is set to drop to 21p per kWh soon). However, the renewable heat generated is replacing gas consumption rather than electricity, and gas is cheaper per kWh, which goes some way to explain the difference.

Are you tempted to install renewable heat equipment because of the initiative? Do you think it will make a difference? Is this more attractive than the Green Deal? Let us know what you think in the comments.

DECC has today published a new consultation on the Green Deal, a government initiative which will invest £14bn in energy efficiency from October 2012.

Although the domestic market is the main beneficiary of the green deal, there are some benefits for businesses too.

The consultation says that every British business will be able to install energy-saving measures like insulation with no upfront cost; the repayments will be made from the savings the business makes on its energy bills.

While help with eenrgy efficiency is likely to be welcomed by many businesses, there is a flipside: the cost. The money to pay for the Green Deal has to come from somewhere and the consultation also includes an analysis of what impact the Green Deal will have on on business energy prices and bills:

Image courtesy of DECC

As the graphic shows, while policy will mean an eventual reduction in energy bills for domestic customers, it will lead to an increase for businesses.

The consultation emphasised that while it’s important that businesses play their part in the transition to a low-carbon economy, it’s vital that they remain competitive too. So before the end of the year, the government will be announcing a package of measures to help energy-intensive businesses. 

I asked our director, James Constant for his take on the Green Deal consultation:

“Any help to enable businesses to reduce their energy overheads and protect the environment is to be welcomed, however this should not be at the expense of increasing the transparency of the market and fair pricing for businesses.

“For too long domestic customers have been the sole focus of market improvements and businesses have been left to suffer in hopeless silence; as a way to raise business energy up the agenda this move is welcomed, but there shouldn’t a sting in the tail of price rises to support the benefit for the few who are able to make use of the energy efficiency measures being proposed.

“It would be far better would be to increase market transparency, encourage innovative new suppliers to enter the market and make smart meters and active energy management the cornerstone of business energy efficiency. This would not only reduce unnecessary energy costs, but also boost businesses’ cashflow with accurate billing.”

1. The Gulf Oil Fires

2. The Gulf Of Mexico Oil Spill

3. The Exxon Valdez Oil Spill

4. Amoco Cadiz Oil Spill

5. Ixtoc Oil Spill

To find out why, the report is well worth a read.