Friday, 24 August 2012

Saving your energy

I've just watched the news on T.V., where people were being interviewed about price increases for electricity and gas. There seemed to be a lot of blame apportioned to the energy companies, but I'm not sure that's the whole story.

We could endlessly debate the merits of profit-making private energy suppliers versus the old system of public-sector gas and electricity boards. But we'd still be watching T.V. news stories about price increases.

The profits of the energy companies are the most obvious and visible aspect. The less obvious one is that the gas we use in our homes, and to fuel our power stations, is increasingly coming from abroad. The U.K. isn't self-sufficient in gas, even though we have all the North Sea oil and gas rigs. They can't meet the demand on their own, so the gas we use is being piped from further and further afield.

The longer the pipeline, the more it costs to operate and maintain it. Also, when you deal with overseas countries, you often deal in overseas currencies that can change in value - as you'll know if you've been abroad on holiday. More importantly, when the energy companies buy the gas, they're only a middleman. The foreign gas supplier can put their prices up when they want, and if the energy companies or their customers (that's you and me) aren't willing to pay the extra, then the supplier doesn't have to give it to us. But because there are limited places to obtain gas, the choice of alternative supplier is also limited.

Obviously, if the supplier's price is too high, then few energy companies would buy from them at all. But the point I'm trying to make is that your home energy supplier doesn't have as much influence on prices as you might think.

So the way to pay less for your household energy in the long term is to cut back on use. Changing supplier might also save you save you some money, but the wholesale price to your supplier will likely be the same, and it's the one thing you can't change.

You could also look at more efficient appliances when it comes time to buy replacements. For example, wood burning stoves are touted as a cheaper and more environmentally friendly alternative to a gas fire. We're still trying to figure out if a wood burner is cheaper overall though, as the cheapest log burner we can find is around £400, plus fitting and some necessary building works. When an electric fire costs around £100, and a basic electric heater is less than £20, then I'm not really sure which is the cheapest option overall. Will the increased cost of electricity outweigh the low purchase price? I don't know, but I think I'd need my calculator to work it out!

In the meantime, the cost of energy will increase, and unfortunately, none of us will have much choice but to carry on paying for it. The best we can do is try to use less, which will help the environment too.

Image: Gas Flame by George Shuklin, Public Domain. Obtained via

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