What is on the horizon for 2013?

What can we expect in 2013?2013

Looking forward to the coming year a couple of developments can be spotted on the horizon which could have a major impact on energy for business and for the consumer.

1. The Green Deal. This should gather pace during the year and allow small and medium sized businesses and householders the opportunity to invest in the infrastructure to improve the energy efficiency of their buildings without any upfront capital investment. The promise, The "Golden Rule", is of a deal where the energy savings are greater than the premiums to be charged on the electricity bill to cover the capital cost and financing over the lifetime of the investment. In other words homes and businesses will save money from day one of any Green Deal investment. It should be a no-brainer, however the devil, as always, is in the detail. To truly take-off the interest rate applied will need to be low enough to make the "Golden Rule" work and there will need to be enough interested Green Deal providers and authorised installers to make the market take off.

Birth and infancy are always beset by hiccups and teething problems so whether these will be serious or not is to be seen. However the program will be taking off in 2013, and will be supported by an initial kick-off fund of £2.5 million from government, and subsidies from energy suppliers under the new ECO scheme (targetted at fuel poor vulnerable customers). So maybe the trick is to get in early rather like the PV experience - the initial deals may well be the best.

Larger businesses too may well find 2013 the year of opportunity as the energy service contract market starts to develop in the UK. Businesses will more and more opt to buy in lighting and heating, rather than gas and electricity, from a third party who will provide the capital investment to improve building infrastructure to improve energy efficiency delivering the heating and lighting required at much lower overall cost. The outcome will be lower bills for businesses and a profit margin for the successful energy services contract provider given the scale of the savings available.

2. The pricing paradigm. We may well see the current assumption of continually rising energy prices challenged during 2013. Whilst investments in renewables and nuclear will bring with them additional costs in terms of generation and network upgrade the world of gas may be turned upside down if Shale Gas becomes exploited both globally, and potentially in the UK. One third of US gas is now sourced from this route and it has caused gas prices to tumble across the pond. The same could happen in the UK. All is not certain since there are a number of groups who do not welcome this development seeing it as either a direct risk to the environment through the creation of earth tremors and contamination of water supplies, or as a roll-back of decarbonisation policies and hence a lowering of defences against climate change. The Shale gas protagonists counter by demonstrating that the technology has been in use since 1947 in the US, and the 1970's in the UK - and with the appropriate regulatory framework in place is as safe as any previous on-shore exploration and production. 2013 will no doubt see this debate unfold.

Published by: Enstra Consulting

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The Internet of Energy

Read the recent article by Ian Campbell of Enstra on the coming of age of the Internet of Energy based on his insights from being chair of the Smarter Homes and Buildings group at the EUA.  You can read the article by clicking here.

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