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Energy reduction from visibility

13 December 2010 #Environment

Over the next decade it is predicted that more power capacity will be decommissioned than new capacity will become available.  This points us to the conclusion that in order to ‘keep the lights on` we will have to reduce our domestic, commercial and industrial power consumption.  There are a range of measures designed to help this need: for industrial users the EU-ETS incentivises stakeholders to emit fewer greenhouse gases; for commercial users the Carbon Reduction Commitment encourages businesses to reduce their energy consumption; and for households the Green Deal will help meet the upfront cost of improving energy efficiency in the home. 

Whilst the only subsidy in these packages is for households, there is in fact a huge opportunity for all sectors to save money by reducing their energy demand.  In 2003 Vattenfall and McKinsey co-wrote a study into the cost of decarbonising energy supplies.  In what has now become known as the McKinsey Curve it puts a cost per tonne of carbon abated on a raft of measures from adding insulation to buildings, to developing carbon capture and storage.  The main outcome of this graph is that there are a number of low hanging fruits which actually have a net negative cost, that is, they save more money over their lifetime than they cost.  Chief among these are energy reduction measures such as insulation and more efficient appliances/machinery. 

However, all of these measures have an upfront cost which can be an initial hurdle.  One method that is useful in overcoming this hurdle is to introduce more visibility to our energy consumption.  This is what the current crop of smart meters are designed to do - display to consumers exactly how much energy and what the cost of the energy is at any given time or period.  Eventually smart meters will also be able to control appliances and learn from usage patterns, so for instance a fridge will be allowed to warm up during the night or dishwashers turn on when energy prices are low.  In addition, many corporations and government departments are now displaying their real time energy usage and carbon emissions in the receptions of buildings - giving an instant awareness to visitors that energy efficiency is taken seriously. 

The key to all of this is the collection and analysis of consumption data.  The CRC covers all half-hourly meter readers and publicising this consumption data directly to employees is a simple task.  More than this though, when data is allowed to be transmitted back to energy companies in real time, the scale of information which they are analysing allows trends to be determined and can bring real efficiency savings to their customers` and their own businesses. 

Behavioural change is one of the most difficult aspects of realising a low carbon economy.  Initiatives are afoot to make consumers more aware of their carbon responsibility.  For instance, many councils now tax parking permits based on a cars emissions performance, thereby incentivising more efficient vehicles.  But drivers are still very much unaware of the climate impacts of their actions, perhaps on board computers could display their periodic emissions or we could have an emissions calculator in the same way as a mileage record?  In order to incentivise behavioural change, a whole scope of data will need to be collected and presented to consumers in an easy to understand format. 

McKinsey Abatement Curve
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