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    UK State Entities can Save Billions through Tech

Summary

Energy technology is the key to saving the goverment billions of pounds on energy procurement and use, says a report by Centrica. However, the public generally has been slow to modernise.

by: William Powell

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UK State Entities can Save Billions through Tech

The  UK public sector could save more than £375mn ($470mn) every year by adopting modern energy technology, according to new research released September 16 by Centrica Business Solutions.

The technology upgrades listed include combined heat and power units, roof-mounted solar panels, new LED fittings, better air-conditioning and energy-efficient boilers.

The saving, which amounts to over £5.6bn over a typical 15 year energy contract, is identified in a new study that aims to assess the economic opportunity of the healthcare, universities and Ministry of Defence property. Investment in this area would also drive an additional positive impact for the UK economy, supporting 25,000 jobs.

Powering Britain’s Public Sector found that if just half of public sector organisations within these three sectors updated their energy infrastructure, they would reduce emissions by 8% and save 660,000 metric tons of carbon each year. This could be doubled with the injection of around 20% green gas – a type of gas created from biodegradable material – into the fuel mix.

The NHS has the lion’s share of potential savings, with a total annual savings opportunity of £187mn, enough to pay the salaries of more than 5,800 nurses, Centrica said.

Combined, the three public sector estates are responsible for more than 7.8mn mt/yr of carbon emissions and have been challenged by the government to reduce emissions by 30% by 2020/21 and to hit net zero by 2050.

Centrica said government bodies have two very clear challenges: to operate more cost effectively and more sustainably. New energy technologies, adopted aggressively, have the potential to unlock both. “The government has announced £1.8bn of extra capital funding for the NHS. Investing a fraction of this in distributed energy technology would not only improve the resilience of trusts but would create long term savings that could be redirected towards new nurses, new infrastructure and protecting vital front-line services," the utility said, adding that government and public sector leaders should work together on making this opportunity a reality.

Centrica has committed to helping the public sector deliver £300mn in energy efficiency savings by 2030 as part of its responsible business ambitions. To read the report in full, click here.

Smart meter fiasco

The report coincides with UK government's announcement of plans to enforce the installation of smart meters nationwide, as many households have declined the offer, even though they are free at the point of installation. Energy suppliers are forecasting up to 30mn devices being installed by the end of next year, which is a sizeable proportion of the total number of households. The government is threatening to fine suppliers for failure.

When energy companies were given the 2020 deadline, they used old, Smets1, technology, which could not handle a change of supplier, making them 'dumb' if the customer switched – and switching is an essential part of competitive retail energy markets.

According to a report in trade magazine Computing, customers with first-generation devices will be bottom of the list for an upgrade. "After all, technically speaking, they now have smart meters and upgrading them won't take suppliers anywhere nearer their targets," it said.

There were 12.1mn smart meters in the UK as of end-2018, so with 39mn still to fit the new target, 2024, is therefore more realistic, Computing said.

The government believes that smart meters will enable carbon emission reductions and lower household bills. In addition the Committee on Climate Change says that without a more flexible energy system, which smart meters are a key part of delivering, the cost of reaching net-zero emissions by 2050 could be up to £16bn/year higher. But smart meters without smart grids are of limited use. 

The government said that "millions of energy consumers are already benefiting from smart meters" and its figures showed that more than one in ten had been dissatisfied with the installation process.