U.K. energy regulator Ofgem said Monday that 5.1 million customers switched gas and electricity suppliers in 2007, the highest level of switching in five years. Customers are switching in order to save money after all of the U.K.’s six major energy suppliers raised their energy bills this year, Ofgem said. Ofgem said customers who have yet to switch could still save on average GBP92 a year if they pay by standard credit, or rather by check or credit card. Customers could save even more if they also switched to cheaper payment methods, such as direct debit, Ofgem said.

http://www.home-save-energy.co.uk/

It will cost every household in the UK at least £2,000 to comply with the new European Union target of producing 15 per cent of all energy from renewable sources by 2020, according to a report commissioned by the government. The report also says the UK will have to spend far more to meet the target than other EU countries, because the UK lags behind the rest of Europe on renewables and is a heavy energy user. According to energy consultancy Pöyry, the bill for the UK to meet the target would be at least €5bn a year for more than a decade, compared with just over €3bn a year for France and Germany, and well under €500m for most other countries. Energy companies are expected to pass on to consumers - who already face soaring utility bills - the costs of building the necessary wind farms, biomass plants and solar generators.

Chris Goodall, author of How to Live a Low-Carbon Life, says even these estimates are conservative, and fail to take into account the huge investment needed to connect new renewable and micro-generators to the national grid. A government spokeswoman admitted that meeting the EU target would be challenging, but added: ‘We must make these hard choices if we are to tackle climate change.’ Tomorrow, German firms Eon and RWE, Spanish-owned Scottish Power, and Scottish and Southern Energy will enter the government’s competition to build the world’s first large carbon capture and storage test plant. Centrica has already dropped out.

The company, which owns British Gas, has joined Gaz de France and First Oil to study the feasibility of converting the Bains gas field, in the Irish Sea, into a storage site. advertisementBritain’s lack of storage capacity is blamed for contributing to high domestic gas prices. British Gas has to buy in the wholesale market more frequently during peak winter demand, when “spot” prices are at their highest. More storage would help Centrica manage demand, enabling it to buy and store more gas in the summer when wholesale prices are lower, the company says. However, the proposed site, close to Centrica’s Morecambe Bay gas fields, is only one fifth the size of Rough, the UK’s largest storage site, which accounts for 70pc of the UK’s total capacity. And the UK’s total storage capacity can meet only 5pc of annual gas demand. France and Germany have enough capacity to store about 20pc of their needs. Sam Laidlaw, Centrica’s chief executive, said: “We believe Bains has real potential as a new gas storage facility, being close to existing infrastructure and having the right reservoir characteristics. “As the UK becomes increasingly reliant on imported gas and flexibility from North Sea fields declines in the coming years, investing in much-needed storage facilities, which will boost this country’s security of supply, forms part of Centrica’s long term programme of investing in a range of gas, power and renewable projects to supply our British Gas customers.” The company estimates that the cost of the project would be between £300m-£350m, and be online by the winter of 2011-12. The gas field is named after John Bains, the geologist who discovered the Morecambe Bay gas fields in the 1970s.

Cambridge based Zigbee specialist, Ember has teamed up with Energy Optimisers in Grimsby to develop a new wireless plug-in electricity meter that the partners say could help companies and households shave hundreds to thousands of pounds off their electricity bills. The device, called the plogg, allows home and building owners to monitor how much electricity is being used by individual appliances and electronic devices so that energy efficiency can be improved. Recent studies by the British government and the Carbon Trust show that people can save five to 15 percent of the electricity they use by using smart meters to manage energy demands. The plogg is a combined smart meter plug and data logger, based on Ember’s ZigBee wireless technology running on a Telegesis module. It can be attached to any electrical appliance or device that uses a standard UK 13 Amp or European 16 Amp plug. A plogg for the North American market is currently under evaluation. The plogg stores the measured electricity data and wirelessly communicates this information to a PC, mobile phone or building management system anywhere in the world through an Internet-linked Ethernet gateway. One possible application according to the two companies, is in the catering industry, where ploggs could be used to monitor energy use by refrigeration and air conditioning units, with all the information collected at a central point via the internet. Upon discovering that some air conditioners were left on after business hours, the plogg would allow them to switch off air conditioning units by remote activation, or alert a manager that a unit needs servicing. The plogg meters can support a range of other wireless-based energy saving devices as well, such as temperature and light level sensors. Using Ember’s EM250 ZigBee “system-on-chip” transceiver and EmberZNet PRO wireless mesh networking software running on a Telegesis module, a network of ploggs can self organize to provide robust coverage of the home or building. The plogg can act as an end device, a router or ZigBee coordinator. It is available as a stand-alone end-user device, or part of an energy reporting network, or as an embeddable device for OEM products. Ember is headquartered in Boston in the US and has its radio development center in Cambridge. The Cambridge operation was formed after the company acquired ZigBee intellectual property, along with the development team behind it, from Cambridge Consultants in 2004. The company reported a record year in 2007 in product shipments, new customer wins and widespread commercial deployment of its technology.

Global demand is forcing LNG suppliers to divert tankers from Britain to countries happy to pay more, which will have knock-on effects on homeowners’ power costs. When the Ramdane Abane set sail from the Algerian port of Arzew on February 5 with a £15m shipment of liquefied natural gas, the captain thought he was heading for Kent. The 300 metre-long tanker had been booked into the National Grid’s Isle of Grain terminal, where the cargo would be pumped into Britain’s gas network. But she did not get far into her four-day voyage before being forced into a three-point turn. A message reached the bridge from Sonotrach, the Algerian gas producer that owned the cargo. Don’t go to Britain, it said, go to Turkey instead. Iran had cut off Turkey’s gas supplies and Turkey was now willing to pay twice the market rate. The customers in Britain would have to wait. The story is a familiar one. The Isle of Grain is Britain’s only import terminal for LNG. Although the Kent plant is set up to receive at least one shipment a week, the last ship that actually turned up docked on January 29. LNG shipments that had been expected to help smooth Britain’s winter heating demand simply have not turned up. The gas has gone to higher bidders elsewhere. Japan has been paying over the odds for gas to keep its power plants running since an earthquake last year knocked out much of the country’s nuclear power stations. Korea, China and Taiwan are also offering better prices. Only four years ago there was more than enough gas being pumped from the North Sea to meet our domestic demands, with the excess being piped to customers in continental Europe. In two years’ time, roughly 40% of the UK’s gas supplies will need to be sourced from overseas as North Sea stocks run dry. LNG imports from Qatar and Algeria are expected to account for roughly 11% of our supplies. By 2020, it is hoped that more than 30% of Britain’s gas supplies will be sourced from LNG with tankers arriving from other producers such as Egypt, Nigeria, Trinidad and Oman. As Britain becomes more dependent on these supplies, the cost of keeping the lights on could well be dictated by events on the other side of the world. “Ten years ago, there was no way that a Japanese earthquake would have had any impact on gas prices in the UK,” said David Cox, managing director of Pöyry Energy Consulting in Oxford, an adviser on energy affairs to the government. “But now, as the market shifts to being more global, that potential exists.” Billions of pounds are being invested in new LNG terminals around Britain and by next winter’s coldest days, the capacity to import gas will have increased almost sevenfold. Simon Fairman, manager of the Isle of Grain terminal, gestures towards one of four enormous concrete storage tanks being built on the Medway marshes to support a huge expansion of his empire. “You could fit the Albert Hall in one of them, with room to spare,” he said. “One of those tanks would be able to keep the whole of the West Midlands supplied for about five days, if they were five cool spring days like this.” National Grid is spending £800m on the development of the Isle of Grain, where construction will continue until 2010. More than 1,500 people are working on the site, one of the country’s biggest civil-engineer-ing projects. Once completed, it will be able to receive 240 ships a year, four-and-a-half times present capacity. By 2010, the site alone will supply up to 20% of Britain’s gas. On the opposite side of the country, two huge new terminals are being built at Milford Haven, in South Wales, both of which are due to come on stream this year. BG Group and Petronas, the Malaysian oil company, are investing £250m in the Dragon LNG project, which could meet about 5% of Britain’s annual gas demands. The neighbouring South Hook development is part of a $13 billion (£6.5 billion) project led by Qatar Petroleum, with backing from Exxon Mobil and Total. South Hook will also be capable of providing as much as 20% of the UK’s gas supplies.

Everything related to LNG comes in extreme proportions. The gas itself is cooled to -161C for transportation. Before it can be pumped into the British grid it needs to be piped through an industrial-sized Jacuzzi-type facility that warms it up to 5C, converting it back into gas. The equipment needed at both ends is very expensive, leading to huge costs in building LNG terminals. Just one pipe fitting that connects an LNG tanker to shore costs about £1.5m. LNG is potent stuff. One cubic metre creates 600 cubic metres of natural gas, so a shipment of LNG is an extremely valuable cargo. The newest tankers have a cargo worth about £30m. “There’s quite a lot of kudos attached to being the captain of one of these LNG tankers,” said one shipping-industry source. “It’s about one rung down from being captain of a cruise liner.” In the boatyards of South Korea, the slipways are full of half-built LNG tankers. Across the world there are 258 LNG tankers in circulation, and there are 129 new ones on order, waiting to be delivered, according to data from the ship broker Braemar Shipping Services.

The new tankers are being built to the highest standards. The 30-strong crew can expect single bedrooms with en-suite facilities and satellite TV. Hiring one of these ships costs about $50,000 a day. Qatar is building bigger and better ships than anyone else to shift its vast LNG reserves. Six of eight so-called Q-Flex vessels are already in use; they are roughly 60% bigger than other LNG tankers. Even bigger ships, Q-Max tankers are being built in Korea’s Samsung yards. These $290m ships will carry some 265,000 cubic metres of LNG, twice as much as standard tankers today, and are due to begin docking at Milford Haven by the end of the year. “We saw UK gas prices come under pressure a bit last year,” said Frank Harris, head of LNG at Wood Mackenzie, the energy consultancy. “There was a view that as the terminals in Wales come on stream and the capacity at Grain increases that prices would crash. That was based on the simple economics of supply and demand. But the way the global fundamentals are moving mean that nothing like the volumes of LNG that could potentially flow through the UK are actually going to arrive.

“Look at South Hook, where you have these new facilities that are going to be capable of taking 15.6m tonnes a year. I reckon, realistically, we’re not going to see more than about half of that come to the UK. The rest will be sent to meet higher spot prices all over the world.” Expectations of an LNG-led gas-price slump have well and truly abated. Next winter, wholesale gas prices are expected to jump 25% to about 69p a therm, based on today’s forward prices. The gas price has a straight feed through to the electricity price. Britain’s gas consumption has soared about 70% since 1992, largely due to an increased dependency on gas-fired power stations. Gas now generates about 40% of the UK’s electricity. National Grid forecasts that UK gas demand will continue to rise by 2% a year until 2015 and presumably beyond. Meanwhile, Britain’s own gas supplies continue to fall. North Sea gas production slipped 12% last year, according to Oil & Gas UK, an industry trade body.

While there are several gas pipelines linking Britain to the Continent, these are still being used primarily to export British gas. Most of the gas in countries such as Germany and the Nether-lands is secured from the likes of Russia’s Gazprom on long-term contracts that are priced relative to oil. Soaring crude costs have pushed gas prices higher across continental Europe. So European utilities have been sourcing UK gas at lower prices via the pipelines.

But if remaining North Sea supplies are being exported, the nation’s dependence on imported gas can only increase. “A lot of what happens to the gas price in the UK depends on what is happening to the price of gas on the Continent,” said Cox at Pöyry. “That in turn will have a say in how much LNG actually turns up in the UK.” Trading LNG cargos is a lucrative business for the world’s energy companies. BG Group, which has global LNG interests, has contracts to ship most of its supplies into the American gas market through its Lake Charles terminal in Louisiana.

BG was scheduled to bring 48 LNG shipments into the US in the fourth quarter of last year. Only 11 actually reached Louisiana, with the rest diverted to other points around the globe. BG’s profits from LNG jumped 48% last year to £521m, partly as a result of this type of trading. In spite of all the money being ploughed into the UK’s new LNG terminals, they are not guaranteed to receive gas. The financing of these plants has been structured so that terminal owners get paid for each available unloading slot, irrespective of whethera tanker turns up or not. The likes of BP and Centrica have signed 20-year deals ensuring that they have access to the Grain terminal whether they need it or not. As Ofgem, the gas regulator, continues its probe into the UK gas market, after recent record price rises, one thing seems clear.

“The unfortunate truth for British consumers is that we are about to enter a period of much more expensive energy,” said Mike Tholen, economics director of Oil & Gas UK. “That’s going to feed back to everyone’s gas and electricity bills.”

UK homeowners have been urged to prepare for a further squeeze on their household budgets, with the news that energy bills could be set to rise for a second time by the end of the year. Since March all of the UK’s big six energy providers have announced double digit price increases on gas and electricity tariffs, prompting outrage from consumer groups. However, with wholesale energy costs set to rise throughout the year, it now looks increasingly likely that a second round of price increases could be due, according to Tim Wolfenden of uSwitch.com. Moreover, these could be as high as ten per cent, bringing the average bill up from £1,048 to £1,153, he added. Mr Wolfenden said: “Increases in the cost of gas on the forward market will make further price rises inevitable before the end of the year - the industry has margins to protect and shareholders to satisfy. “It will not meet all the cost out of its own pockets and is likely to ask customers to help cover the burden.”

Can you imagine a situation where your grocery shopping involved you having to guess the cost of food you were buying, with an accurate bill not arriving until three months later?  It may sound ludicrous and yet this is the way that the vast majority of us currently shop for our gas and electricity! Our latest Green Barometer IV research report, launched yesterday, highlighted that nearly eight out of ten Brits don’t know what they’re paying for their gas and electricity. I am not surprised – have you ever tried to read your electricity or gas meters? Normally they’re hidden away in a cupboard under the stairs, in the garage or in my case at the bottom of the food cupboard - hardly conducive for helping you to keep track of your energy usage!

Our study finds that energy bills are the most difficult for us to understand of any household bill: twice as hard as phone bills and four times as difficult as bank statements or credit card bills. This lack of transparency surrounding energy usage is one of the biggest problems holding back the UK’s fight against climate change.  This is where smart meters come in. They include a portable display unit that can be taken anywhere in the house and which would allow you to monitor how much energy was being used at any time – as well as over days, weeks, or even months.

All well and good you might be thinking, but how will simply knowing energy consumption help people to save energy? Well, this is where I believe that the energy suppliers will have an important role to play. Unlike so-called clip-on displays, smart meters offer a two way communication system between the householder and the energy supplier. What does this mean? Well, it would allow the energy supplier to monitor and assess your home energy use, and then based on this they could offer tailored energy saving recommendations that were relevant to your needs and situation.

International trials, in places such as Sweden and the United States have shown smart meters offer an energy saving potential of between 5 and 10 per cent.  Even, using a conservative five per cent baseline, if everyone in the UK switched to smart meters British householders could save £1.2bn a year and the equivalent of 7.4 million tonnes of CO2 emissions – figures that can’t be ignored. 

Gas and electricity giant Centrica is reported to be examining a £10 billion bid for nuclear power generator British Energy. British Gas owner Centrica hopes it can provide a “British solution” for the future of the energy provider, which last week confirmed it was in talks with potential suitors, the Sunday Times said. Among the possible bidders for British Energy (BE) - whose eight nuclear sites produce around one sixth of the UK’s electricity - are French nuclear giant EDF, Germany’s RWE and Spanish industrial group Iberdrola. The company is Britain’s main nuclear power provider and will play a major role in any development of the country’s nuclear power supply. Its current market capitalisation is £6.4 billion. Last week the Government announced it was considering selling its 36% stake in BE, with Centrica, understood to have been one of several companies contacted on behalf of ministers about the proposal. A spokesman for Centrica declined to comment about any proposed bid for BE. The group’s eight nuclear power stations are Dungeness B in Kent, Hartlepool, Heysham 1 and 2 in Lancashire, Hinkley Point B in Somerset, Hunterston B in Ayrshire, Sizewell B in Suffolk and Torness in East Lothian. Decommissioning dates for nuclear sites range between 2014 and 2035. BE also owns a coal-fired power station at Eggborough, East Yorkshire. Last year the Government sold a 25% stake in the company, raising £2.08 billion. Chancellor Alistair Darling said the money would go towards the Nuclear Liabilities Fund, which will help meet the cost of decommissioning the group’s nuclear power stations.

Gazprom, the world’s biggest gas group, has bought a stake in a British smart meter supply company, hoping the energy efficiency product will make its supplies more attractive to UK customers. The Russian company, which yesterday ended another damaging stand-off with Ukraine over wholesale gas supplies, said the stake in TruRead would help it “differentiate” itself by offering innovative services, though it refused to disclose the size of the stake or its cost. “With rising public and regulatory concern about the need to reduce carbon emissions, this proprietary technology will enable multi-commodity consumers to be more energy efficient and to control their energy use more easily and cost effectively,” said Vitaly Vasiliev, chief executive of Gazprom Marketing & Trading. This is the first acquisition in Britain since the summer of 2006 when Gazprom bought a small Cheshire gas supply firm, Pennine Natural Gas, which has recruited 10,000 UK customers, including the steelmaker Sheffield Forgemasters. Gazprom says it expects to expand further although expectations that it would soon buy a major utility such as Centrica have faded. The British government is keen to encourage the use of smart meters to reduce carbon emissions. Wednesday’s budget statement included a commitment to introduce them in medium and large companies over the next five years, by providing greater incentives for businesses to reduce the energy they consume. Simon Slater, managing director of TruRead, said Gazprom’s involvement gave it the green light to develop its products and services further, in the UK and globally. In the longer term the government would like to see 45m gas and electricity meters replaced by smart equivalents, which can be read remotely by energy companies and allow users to monitor consumption.

British Energy is in talks with a number of rivals, which could lead to a tie-up or a takeover offer that some say would value the country’s main nuclear power generator at more than US$14 billion. Shares in the British company soared by nearly 20% after it confirmed the discussions but declined to identify any of the potential partners or predators. EDF of France, E.ON of Germany and Centrica, owner of British Gas, are among the key players known to have been holding partnership talks that have turned into something more substantial. British Energy is in demand because it generates about a sixth of Britain’s electricity but, more importantly ,has the most attractive potential sites to build a new generation of nuclear plants. The move comes as the UK government announced that the four new designs being considered for future nuclear reactors in the UK (the European Pressurised Reactor, Westinghouse’s AP1000, ESBWR and Atomic Energy of Canada’s ACR1000) have all passed initial safety tests.