Our Top 5 Tips For Saving Energy This Winter
Concerned about saving energy?
It’s no secret that bill this year are rising. Many people will struggle to afford gas and electricity this year, homes, and businesses alike. Here at the College of Contract Management we understand that a sudden rise in costs can be very stressful for those running small to medium construction companies. In order to help combat the costs, we have compiled a list of seven helpful tips to help you save energy. Saving energy is one huge step you can take towards keeping the costs down this winter.
Why has saving energy become such a massive focus?
This autumn the UK announced what is now a household term, the “cost of living crisis”. Across the internet you can find discussions and angry outbursts at the current state of living here in the UK, and not without reason. Many households are enduring the cold weather as opposed to heating their homes as they would have done in previous years. Although this may sound overdramatic, the case for some people this year will be devastating. It is estimated that over 3 million people will be impacted by fuel poverty this year, making saving energy costs a top priority.
Fuel poverty is when a household’s required costs are above median level and making payments to cover such costs leaves their income below the “poverty line”. There are multiple causes behind fuel poverty. The most notable of which are low income, rising energy prices and poorly insulated housing. If the estimated 3 million people suffering from fuel poverty wasn’t enough, this number is set to rise over the course of the next few years. Highlighting the importance of saving energy wherever possible to limit those effected.
What has caused this need for energy saving?
There are multiple parts at play to consider when trying to pinpoint the increased need to save energy. Each individual reason would be bad enough on its own and is a serious point we need to consider. Yet all together it means that saving energy is no longer an ideal, it is a necessity.
The Covid-19 Pandemic
The current energy crisis is not just a problem for the UK, it is in fact an ongoing global shortage of energy. Many countries are feeling the impact of this crisis, each to its own extent. Following the Coronavirus-19 pandemic of 2020, demand of gas began to increase. This may seem almost backwards, as most people were isolating at home throughout the pandemic, therefore they would be using more energy. However, that is only on a household basis. Once working from home began to end, more companies returned to offices with larger scale heating appliances. Meaning that the demand for gas increased, but due to shortages, couldn’t be met. This meant that in 2021, we saw an increase in the average gas price.
Winter Weather
This increased demand for gas was then made worse by the winter months. Unfortunately, due to weather changes, renewable energy sources became less reliable. With the winter weather starting to kick in, many then turned their heating up, again, increasing UK gas use. Additionally, due to the surge in use and the increase in price, many energy supplies throughout Great Britain struggled to meet demand. By the end of December 2021, a total of 28 energy companies had gone bust.
Supply threats
In addition to an increased demand, increased pricing and lack of resource, there is also the threat on existing supplies. Following the invasion of Ukraine, we saw an increase of threat on our existing energy supplies. This in turn, again, meant a rise in cost. Throughout 2021, Russia supplied the EU with 40% of its total gas. With the current situation, we now need to look at sourcing gas without increasing spending. Oil and gas are subject to worldwide exchange. Following the invasion, many countries chose to no longer use Russian gas resource. This means fewer suppliers, bargaining over fewer supplies. Furthermore, fewer suppliers means an increase in demand for those still offer said resource, which in turn, means increased prices.
Why can’t we source our energy elsewhere?
With 40% of the EU’s gas previously coming from Russia, you may wonder where we get the rest of our supplies from. Historically we have imported gas from multiple countries across the globe, including Norway and the United States. Gas imports from these countries equates to approximately 50%. Now we need to look at where we resource the remaining 50%. As it stands the UK currently sources the remaining gas supplies from closer to home. The North Sea accommodates this remaining percentage, yet cannot be relied upon forever. In total there are 2,754,685,000 barrels of oil reserves within the North Sea. As a whole, the UK consumes roughly 578,000,000 barrels of oil per year. Meaning, if we were to rely solely on the North Sea, we would exasperate this resource within just five years. Again, another driving force behind the importance of saving energy.
What is the UK doing about energy saving and decreasing costs?
The need to tackle the rising fuel poverty rate has been a focal point within media, applying pressure on appropriate bodies to help alleviate the costs. OFGEM, Britain’s independent energy regulator, is working alongside the Government to protect energy consumers. Although energy usage is a concern that none of us should brush off, the main concern for the British household is their electricity and heating bills. Therefore, whilst a continued focus is held on energy conservation, OFGEM have also introduced pricing caps, to help homes save on their energy bills.
What is a price cap?
In far simpler terms, the price cap sets a maximum price that energy suppliers can charge on energy usage. It does not necessarily mean your monthly bill will be capped at a certain amount, as you will still be charged for the energy you consume, just at a lower cost.
For example, previously, electricity was charged at 28p/kWh (kilowatt hour). This means a 28p charge for using 1kW (1 kilowatt or 1000 watts) per hour of use. Lets say you have an electric heater that uses 1000 watts, and you leave that heater running for 8 hours through the course of your workday. Using 1 kW for 8 hours, costing 28p per kWh means the total cost for running the heater for 8 hours is £2.24. You then use this heater 5 days a week to heat your workspace at home, over the course of 4 weeks and that has cost you £44.80.
That may already seem like a lot to just heat your office space for 8 hours a day using a portable electric heater. However, as we all now know, the cost for electricity and gas is rising. On the whole, electricity has now risen to (and is capped at) 34pkWh. Meaning, for the exact same scenario, a year down the line, it would cost you £54.40. OFGEM’s price cap means these the price of a kilowatt per hour is set to a maximum price, disallowing energy companies to raise these any further, saving you money on your energy use.
More on the work by OFGEM
Now we know what a price cap is, it is worth exploring how it will be put into motion by OFGEM. This calculated price cap is protected by UK Government, meaning it cannot be overthrown by any individual energy company. The cap itself is a regulation of energy supplier costs, not of the oil or gas production, and so the cap ensures the profit gained by suppliers is lesser than it would be had no cap been put in place.
Given that gas and electricity prices have still risen and will still require increased spending or rationing per household, it may not initially have much of an effect. Yet, it is predicted that with the price cap, Great Britain could be saving approximately £2,500 annually on their utility bills. Moreover, this price cap is applicable to everyone, so every household will feel the benefit without the need for a complication application.
So what energy saving precautions can you put in place this winter?
Without a doubt, the expense of utilities shall rise for companies over the next few months. For some larger companies, this will have a small amount of damage, but for smaller companies this could be breaking point. As the cold weather begins to settle here in the UK, a lot of companies will be feeling the chill and looking for alternative ways to keep employees comfortable. The Energy Savings Trust estimate that SME (small and medium enterprises) could reduce their overall energy bills by up to 25% through the implementation of behavioural changes. We at the College of Contract Management have looked at these energy saving behaviours and put them into a list for you.
Be heating considerate
We all know how cold it can get in the depths of winter. Your first impulse upon arrival at work may be to turn the heating up to full blast to warm the place up but you need to be considerate. Firstly, think about how long you will be keeping the heating on for. It may be more cost effective to have the heating on a timer, so once the building has heated up, you can turn the heaters off and work on heat retention. Heat retention in itself plays an important part in energy saving. How well insulated are your surroundings? Look for any holes or gaps in which warm air can escape and be replaced by cold air. Then you want to consider how high you turn the heating. Turning the heating up to full doesn’t speed up the heating process but may effect your energy usage.
Energy saving appliances
Next up you want to have a look at the appliances you use throughout your workplace. A lot of the machinery used within construction can be quite draining on your energy funds. It may be worth looking at investing in more economical equipment. Older appliances tend to be less energy efficient, so if you were thinking about upgrading, now is the perfect time. Furthermore, most appliances still use energy whilst in standby mode. Get into the habit of turning things off at the plug when not in use to avoid additional losses. In addition to more efficient equipment, you also want to think about lighting. LED lightbulbs are a much cheaper alternative, so it may be time for you to change those bulbs.
Take advantage of tax relief
UK Government has set out guidance for businesses that may be eligible for potential tax relief. Businesses pay environmental taxes based on energy usage. Depending on the size of your business and your energy usage, you may be eligible for tax relief. In addition to reduced charges, saving energy also impacts the environment. The use of energy efficient technology and machinery may also mean you can apply for tax relief. This is filed under regulations in line with the Climate Change levy.
Educate your employees
Then, you want to inform your team of any planned changes. This could be simple things such as not running the heating if a window is open or changing appliances. Once these changes have been made, you want to educate your team regarding their new expectations. There is a somewhat bittersweet relief knowing that we are all in the same boat here, so your employees will hopefully understand the changes you are putting in place.
Monitor your bills
Finally, you want to keep a close eye on your outgoings. Although it may seem a tedious and time-consuming task, this will help highlight any discrepancies. Through careful monitoring, you will be able to highlight any areas in which you are spending significantly more. Once highlighted, you can begin to revisit your changes and make further amendments. It is important that you continue to monitor your usage regularly. In doing so you may be able to highlight key factors that affect your energy saving tactics. Once identified you can then assess and, if needs be, amend your current processes.
Saving energy with the College of Contract Management
We understand that the majority of you who study with us here at the College of Contract Management are progressing within your career. You may even be small business owners following qualification from one of our courses. We want to give you the best possible understanding of how this energy crisis came about and what you can do to reduce your cost.
Saving energy is, and will continue to be, a big focus here in the UK. If you begin to manage your energy usage now, it will put you in the best position for the next few months. Even steps as small as closing the windows when the heating is on will have a big impact in your energy saving. There will likely be many people this year with concerns regarding their energy bills. If you are concerned, reach out to your energy supplier for assistance.