Renewable Energy Leaders Share Their Thoughts On The Energy Crisis
The UK is currently gripped by soaring energy prices and unfortunately there are no signs of it slowing down anytime soon. Experts predict the infamous price cap will increase yet again this October, plunging more families into fuel poverty. Many have slammed the governments initial help package but nobody knows the answer.
Renewable energy leaders Gary Fredson, CEO at ESE Group and Rebecca Dibb-Simkin, CMO at Octopus Energy share their thoughts on possible solutions and more…
Gary Fredson - CEO at ESE Group
What's the best model to resolve the energy crisis?
The installation of solar and battery storage systems would allow people to self generate and store their own energy which would allow them to reduce their energy bills upto 70%, this would completely solve the current energy crisis and avert a future one.
You only have to look at people who’ve already invested in renewable technologies, they are generating their own energy, meaning little to no reliance on the grid and therefore keeping bills to a minimum. For example, I checked this morning and thanks to my own solar panels and battery storage my family home hasn’t used anything from the grid for the past 2 weeks.
I find it frustrating when I see the headlines around government PPE scandals. In a recent study, Transparency International UK concluded that between February and November 2020, 98.9 percent of COVID-19 related contracts by value (£17.8 billion) were awarded without any form of competition, many without adequate justification.
To put this in perspective, the cost of installing an average UK home with solar panels is £4,800, meaning over 3.7 million households could now be generating their own energy. There are an estimated 3.16 million households that are currently in fuel poverty, so we could’ve prevented the energy crisis not just now, but for the foreseeable future. When you piece together these kinds of numbers it’s little wonder that people have such an abhorrent attitude towards the government.
What can the government do to assist more?
The government's windfall tax is a short term fix to a long term problem sadly. What happens next year when this inevitably resurfaces? I think they’ve got the strategy wrong which could magnify the problem next time when the government can't afford to keep bailing people out.
The proverb “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime” is very relatable here. At the moment the government's one-off payments are that fish, it doesn't help anyone in the long run.
I think the most suitable remedy would’ve been to roll out a solar initiative to the most vulnerable, enabling them to generate their own energy and be completely self-sufficient. This would prevent the recurrence of fuel poverty in the future but importantly, would create a decrease in demand, thus lowering the price for everyone else.
In the meantime, something the government can do right now is bring forward the delayed legislation for the next iteration of the Energy Company Obligation (ECO4) scheme to support low-income households with vital energy-saving insulation measures. This has to be a priority failure to do so could see up to 50,000 households miss out on such measures ahead of another difficult winter.
What advice does Gary Fredson have for the public during this time?
Firstly, I advise everyone to look at what tariff they’re on and shop around to see if you can make some instant savings. Secondly, appliances like tumble dryers and even lightbulbs can consume a lot of energy so make sure to use tumble dryers sparingly and double check your lightbulbs are energy efficient ones. These small changes in our behavioral habits can make a big difference to your energy bills.
A common mistake people make is switching their heating on from zero to high, it uses a lot of unnecessary energy. It’s like start-stopping in your car instead of driving at a constant speed, it uses more fuel and that’s how our heating works. These simple measures all help to keep energy bills to a minimum.
ESE Group is one of the leading suppliers of green energy solutions, how can these help during the crisis?
Our mission is to get people as close to net zero as possible using renewable technologies. Our data shows clients with good storage and habitable behaviours are completely net zero across the summer months. Even during the winter months solar panels still work, which is a common misconception. We’re seeing existing clients upgrading their current systems by increasing their battery capacity or additional panels.
Renewable technologies have been proven to increase the value of your property. Solar Energy UK, a solar non-profit trade association conducted a study of more than five million property sales and concluded that installing PV on a typical home could increase its value by 0.9%—2%, effectively slashing the initial cost of installation, let alone the amount saved on energy bills.
Is this the wakeup call we needed to focus on renewable technology?
Unfortunately it’s the domestic consumers that are being hit hardest now, but energy companies and the likes of myself have seen this coming for the last 18 months. The biggest indicator of this eventuality was when energy companies like Bulb started going but nothing was done.
Creating your own energy to become almost completely self-sufficient has always been logical but we’ve been too reliant on other means. The problem is clear and so is the solution, action needs to be taken.
Sadly a lot of people are going to suffer this coming winter, the cost of energy has had an enormous impact on inflation. Almost everything requires some form of energy during its production, and with those costs spiraling out of control this has got to be the wakeup call humanity needed to permanently move away from fossil fuels and embrace green energy technologies to preserve our planet for future generations.
Rebecca Dibb-Simkin, Chief Marketing Officer at Octopus Energy
What's the best model to resolve the energy crisis?
We have over 3.1 million customers in the UK and speak to around 40,000 of them a day - helping them get through this crisis is our highest priority, because nobody knows better than us that many people are struggling to pay their energy bills at the moment.
There are two paths we need to take in parallel to resolve the energy crisis and make sure something like this doesn’t happen again: in the short term, we need to cushion the impact on consumers as much as possible; in the mid to long term, we need to set the course for an independent energy future.
Protecting consumers in this situation is the responsibility of the Government and energy retailers alike.
Octopus supports the Government’s plan to cushion the blow on consumers by crediting energy bills £200 and providing another £150 targeted support for the households that need it the most, but of course we had hoped for more. We are therefore going to work with the Government to see if help can be extended - most importantly the targeted support for the most vulnerable households - as it’s becoming increasingly clear that more support is needed as the energy crisis continues.
At the same time we are doing everything we can to help our customers who are struggling with their bills. We’re the only large energy supplier to price below the energy price cap for existing customers. This £50 rebate, which amounts to £50 million for the current price cap period, together with the £100 million in cost increases we’ve already absorbed on behalf of our customers means we are effectively supporting our customers with £150 million.
In addition, we set up a financial hardship fund, Octo Assist, which we’ve recently doubled to £5m. This is open to all of our customers who need it and has helped over 36,000 people so far. There are also a number of things we’ve been doing since the start of the crisis to smoothen the impact of rising energy prices on customers such as providing free electric blankets and offering helpful energy-saving tips.
In the long term, we need to invest in British renewable electricity to deliver cheap energy security for the UK and wean ourselves off global gas. Gas should remain a backup energy source for times when we don’t have enough renewable electricity, but if we work hard enough, we can power the UK with homegrown green energy.
Historically, the creation, testing and licensing of a vaccine took around 15 years. With Covid, we managed to get the 15-year process of developing a vaccine down to one year. We need to do the same with wind energy. Due to planning approvals and grid connections, it can take up to seven years to build and connect a wind farm. This could be done in one year. Do that now and we will literally start seeing bills come down next winter.
What advice does Miss Dibb-Simkin have for the general public during this time?
Most importantly, customers should get in touch with their energy supplier if they are struggling with their bills. We recently doubled the size of our Octo Assist fund to £5 million to have enough money to support all our customers in need. And we are not the only ones, most large companies have similar support schemes in place.
It’s hard for us to offer advice on energy tariffs. Energy prices are changing daily, and we are currently seeing extreme price fluctuations due to the unprecedented energy crisis, which is driven by global events. It’s impossible to predict how prices will develop so it’s difficult for us to recommend tariffs. We think that customers need to consider what works best for them. If a customer is looking for security and prefers to know how much they will pay for energy each month until the end of the year, it makes sense for them to fix their prices. If a customer prefers to wait to see if energy prices come down again over the next months, they could stay on our standard variable tariff, and fix at a later date.
What can the government do to assist more?
Again, the government is already making the right moves with their plan to credit energy bills £200, and to provide another £150 targeted support. We’d prefer the amount of money provided to be higher and council tax bill rebates are not the most obvious way of paying for energy, but the ideas are sound. But we will work with the Government to see how the already announced support package could potentially be expanded.
Octopus became the first UK supplier to offer a rate below the price cap, tell us more about why you've done this?
Our proprietary technology platform Kraken allows us to run our business much more efficiently than other energy retailers. Our operating costs are up to 75% lower than some rivals. This means that we entered this crisis at a much lower cost base than other UK energy retailers.
Another important factor is that, unlike many of our competitors, we’re very well hedged which means that we buy all the energy of our customers when they enter a contract with us, whether that’s a 12-month or a 36-month contract.
Because of this stringent attitude to finances, and our laser focus on ensuring customers are looked after in the transition to a green energy future, we have been able to offer a discount for all customers, and a significant discount for our loyal customers.
Is now the wakeup call we needed to focus on renewable energy?
The sooner we start building more wind energy, the easier and faster we will create an energy system that is sustainable - both for the environment and for our pockets. Recent surveys by MoneySavingExpert and Opinion Matters show that 9 out of 10 people would support a wind turbine in their local area if this meant lower bills in return, so there’s no reason we shouldn’t build them.
The question used to be “Can we afford to switch to green energy?”. Now it’s clear - we can’t afford not to. But we need to sort out the process to make it real. We need to go hell for leather on building more green energy.