How does a heat pump work?

We get a lot of questions on this, so here's the answer. A heat pump does more or less what it says on the tin: it pumps energy from one place (usually outside) to another (usually inside). It turns out that you don't need to work very hard to move large amounts of energy around in this way, so heat pumps are quite efficient. 

The other thing people ask is how you can heat a home to 18 or 20 degress when the heat source, in the air or ground outside, say, is only 4 or 5 degrees. Perhaps the easiest way to think about that is just that the heat pump is also an energy concentrator of sorts - it is harvesting energy from a lot of air (or ground) and using it to warm up smaller amounts of air (or water) in your house.

What's perhaps most interesting about this is the source - How Things Work - The Universal Encyclopedia of Machines - first published in 1967. A reminder that we have been around the energy-saving block at least once before, so far (it has to be said) with no success. Have another look at this year's Godkin lecture by John Deutch of MIT for a first hand account of how frustrating that is for people who were involved in this sector in the 1970s.

Open publication - Free publishing - More refridgerator

PS I am not sure who has the copyright to these pages. I have looked for the original publisher online (Granada) but they are long gone, it is now 40 years since this book was published. There is a US website called How Stuff Works that has a useful (and somewhat more modern) page on heat pumps.

PPS heat pumps are not the best solution for many houses. The typical savings are often not better than a Band A condensing boiler running on mains gas, and the performance (in terms of comfort levels) can be poor, especially in large uninsulated homes with radiator-based central heating.

Energy Flow Chart 2009

I've been meaning to post this for a while. If you've been enjoying the blog so far, then you should enjoy this (which comes from here and uses these as units) without further explanation. Click on the image for a full size view. 

It's not a tube map.

An unbelievable Christmas present

Happy Holidays! Over the past 2 weeks, every member of the US Congress (and every Governor's office around, and every state and local representative...) has received an unusual seasonal gift.

So what's the gift? A board game called This Way To Jobs. You can play it online, but let me save you a few minutes of your valuable time and tell you how it works.

Game Rules

• You choose a counter - CEO, Director, Entrepreneur, etc
• You roll the dice to move around the board - a bit like The Game of Life
• You start in a Ghost Town - tumbleweed blows across the screen
• Your goal is to get to Prosperity Park
• Dodge as many regulations as possible on your way around 
• If you get a regulation card, you move back 3 spaces, etc
• Look out for Financial Reform Falls, Labour Lagoon and Energy Edge ... regulation lurks at every bend in the road

Wow. A truly elaborate and creative campaign and targeting the Environmental Protection Agency in particular. Not surprising in itself, but guess who is behind this campaign, so out of tune with contemporary reality? Maverick Republicans? Big Oil? Swiftboat Veterans for Truth? No, the campaign is run by the US Chamber of Commerce itself. I am truly astonished. 

Have a look at some of the cards you can draw :

"Insulation is sexy" (Who said that?)

Somehow I managed to miss this whole thing, almost a year ago exactly today. So perhaps some of you had missed it too? If so, watch and enjoy!

(Hint: Use the slider to skip ahead to 1 min 50 secs and just watch the last 20 seconds or so. That's all you need!)

November newsletter - True or False

This month we had a True or False policy quiz.

We asked which of the following has NOT happened since our last newsletter.

• The pope endorsed condom use
• The Prime Minister announced an extra Bank Holiday on my birthday
• The government introduced rising block tariffs, a Lib Dem election promise

The answer of course is the last statement is the false one: Rising block tariffs were promised by Nick Clegg in the election debates, but this eminently sensible policy has yet to see the light of day.

You haven't seen the newsletter yet? If you're on the list, a copy is on its way to your inbox. If not, you can read an online version here or sign up to join the mailing list here.

What's it worth to turn off the escalators?

Today I passed through City Thameslink tube station at around 11am. There was nobody else there, but the escalators were all running. It made me think, shouldn't these all be on a stop-start system so they only run when people are there to go up and down them?

Here's the math. If you could stop all escalators on the tube from running 25% of the time, you would offset the CO2 produced by about 750 houses.

For comparison, if you wanted to provide renewable electricity for 750 houses, you'd need something like the micro hydro station at Garbhaig (see below) which cost about £1 million quid to build. So my thought would just be this, next time we have a million quid burning a hole in our pockets, let's put stop-start on the escalators instead of building another power station in the beautiful Scottish highlands.

Photo is from Roddy Smith and geograph. Here's the math if anyone wants to follow it through:

• A typical large underground escalator will have a 7500 W motor.
• There are 422 escalators in London tube stations.
• So to run all the escalators on the tube for 1 hour you need 3165 KWh of energy. 
• 1 KWh of energy creates about 500g of CO2 at average rates for the grid
• That's ~1.5 tonnes for all 422 escalators running for 1 hour
• You could perhaps save 6 hours running time per escalor per day
• That's ~10 tonnes CO2 saved per day or 3650 tonnes per annum
• The average UK house emits about 5 tonnes per annum
• So 6 hours saving per day for 422 escalators = 730 houses

It costs 6p to mow the lawn

This weekend I cut the grass with an electric Flymo.

It took 20 minutes and the flymo has a 1500W engine, so I reckon that I

• used 0.5 KWh of energy
• created 250g of CO2
• spent about 6p.

All in all, a good deal for me. I could have used an old fashioned manual mower and saved 6p, but I thought about it and I didn't want to. So what's my point? Well, I suppose the first is just that consuming energy * is not wrong, in fact it's very helpful. We're lucky that it's so easy to get your hands on some when you need it, even for everyday things. The enemy is waste, not usage, so although we do like the novelty of things like the No Impact Project, we're not really in the same camp.

I suppose the second point is just it should be easier to understand what you use. The math on this really isn't so hard. I'll post the methodology one day soon so everyone can have a go.

* OK physicists, don't all start yelping - I do know that I didn't really consume the energy, I just converted into other things, like noise and heat and grass clippings, which I suppose embody the kinetic energy required to get the blades of grass off the lawn and into the collector. But you can't say that kind of thing on a blog or it slows you down.

Snake Oil Awards will not help very much

Well, I used to enjoy David Mackay's Hot Air Oscars. So it made me chuckle to see that the US has come up with a bigger and better equivalent: Official 2010 Snake Oil Awards for Public Deception. Perhaps not surprising that BP is a nominee.

In general I am a fan of Repower America, the organisation behind the awards. But I wonder if what the clean energy movement needs right now is Corporate Villains? Clearly some movements for social change have benefited  from creating villains (e.g. anti-smoking), but others haven't needed to (e.g. road safety). Some  in fact have seemed to hold back on the blame game, even when there was more of a case for advancing it (e.g. Civil Rights, Quit India).

So what do we think? Is clean energy hard to deliver because Bad People in Big Companies have conspired to hide the truth from us (as perhaps was the case with smoking)? Or is it because we have behavioural habits that are deeply engrained (like speeding and drink driving)? I believe the latter, therefore Snake Oil awards, though potentially amusing, will not help much.

Lightbulb propaganda from the EU

Who'd have thought it? Some reasonably entertaining lightbulb propaganda from the EU. Very Batfink (those of a certain generation will know exactly what I mean by that).



The source for this one is Philip Sellwood's blog at The Energy Saving Trust.

A useful thing to do with Carbon

In case anybody missed it, two smart guys from The University of Manchester just got a Nobel Prize for Physics. The prize was for their work on graphene, a material composed of a single layer of carbon atoms in a chicken-wire formation. (Chicken wire - that's a technical term, by the way.)

Graphene is 200 times stronger than steel, if you scaled it up to the thickness of cling film and stretched it over a cup of coffee, it could hold up the weight of a truck bearing down on the point of a pencil.

"Carbon, the basis of all known life on earth, has surprised us once again" said the Royal Academy.

(PS Did you notice that one of the recipients also won The Ig Nobel Prize - for levitating frogs in a magnetic field? I kid you not. The image below is for real, you can download the research paper here.)

October 2010: Chart of the Month

(Looking for the September Chart of the Month? Click here )

At this time of year, everyone is turning the heat on.

I've already written about how we're also turning the heat up. I used some research data from BRE to show that we've been cranking up the thermostat for about 30 years now, and as a result the average temperature inside a British home has gone up from about 13°C in 1970 to about 20°C today. As a result, I said that Britain had gone soft.

But that's only half the story. The truth is, Britain has gone very soft. The part I was missing out is what has happened to the temperature outdoors over the same period.

So guess what? It turns out that, using a more or less accepted method for measuring these things, it is a lot warmer these days than it was 40 years ago - warmer, that is, in the sense of how many days a year you'd need to turn the heating on.

Have a look at the chart below and you'll get the picture. There are about 10-15% fewer heating days per year than when our parents were our age.

Conclusion? We need less heat, but we are using more. If you can figure that one out, please post a comment below.

(Click on the image to enlarge the view.)

The raw data is from the Met Office, although access is only after an authorisation process. And here is a bit more on the methodology for Heating Degree Days. In the chart, I have taken a simple average across all UK weather stations and shown the hi/lo bands in the shaded area.

Watch the latest video from Al Gore

Interesting video from Repower America, the environmental campaign group backed by Al Gore. More evidence that US organisations of this type are far ahead of their counterparts in the UK, where 1 in 3 of us still believe the whole climate change thing is bunkum. Watch the video, and look out for a cameo appearance by Alec Baldwin (from The Departed) and a few other celebs you know. Kris Kristofferson is in there too.

We are now a Social Enterprise

A couple of quick updates. First, our registration as a Social Enterprise is now official, under a scheme run for the Cabinet Office. Note the handsome new logo up above.

Second, a new design for the blog, just to ring the changes. You'll see we also now have proper "sharing" buttons on each post - to get this working, just hover over the word SHARE at the bottom of each post, and up will pop your options. Those with gmail can just click on the red "M" logo to send a link. OK, sorry if that was obvious - apparently this little gadget has been used 1 billion times already on the web.

So, onwards and upwards ... we will be relaunching co2census.com very shortly, more news on that soon.

Our electricity could be gone for months

Earlier this summer I blogged about High Impact, Low Frequency events, unlikely occurrences but which could knock out the power grid. It sounds fanciful, but it's a real issue - dangerous electro-magnetic pulses could be caused by solar flares, electro-magnetic storms or by man-made nuclear explosions at high altitude.

So, very pleased to hear  Radio 4's Today Programme covering this topic today, with an interview of Avi Schnurr at the EMP Coalition. It's a risk we face that didn't exist a hundred years ago. The interview has not been posted yet, but should appear soon on the i-player (but for UK internauts only I believe).

The oil is still there (under the sand)

A colleague in the US writes:

I was recently at a presentation of the damage that BP has done to the Gulf of Mexico. BP has spent $100 million on PR and is saying that the beaches are clean, that the oil has evaporated, been digested or otherwise dispersed.

However, finding the pollution is as simple as digging a couple of inches into the sand on the barrier islands, where you'll find about a foot of coagulated oil. [see photo] We're very concerned that BP is about to declare victory and avoid doing a full cleanup.

Well, I don't know exactly what to make of this - it certainly seems as though there's a lot of oil still out there. But in general I don't think bashing BP over the oil spill has helped a great deal - they drill for oil in the gulf because we buy it off them afterwards, so the problem of getting off fossil fuels (and away from the risks of drilling) is one that we all share responsibility for solving. 

Even so, the photos are striking. They are by Shawn Carey, a photographer who works for the Massachusetts Audubon Society, and who is campaigning to extend the clean-up. 

We should charge electric cars at petrol stations

Just a short post to link to my article on electric cars in the Guardian today. Seems to have caused a bit of a stir - in any case, it currently has the second highest number of comments on the environment pages, just behind "Live online: Post your questions to No Impact Man".

Hard to compete with that, I guess ... but let's see if we can catch up by tomorrow morning.

September 2010: Chart of the Month

For reasons that don't bear explaining I have found myself looking into the latest government data on light bulbs. It was quite an illuminating exercise. For instance, I learned that we have cut our energy usage for lighting by 4% in the last 20 years, although on average the light bulbs we use are 43% more efficient. Hmmm, something up with that. The explanation must be that there are more of us, and we have more bulbs each. I chewed through the data and sure enough, the picture is as follows:

(Click on the image for a full size view)

To me, the column of interest in this chart is the third. It shows that we're each using more light bulbs, which is weird. But sure enough, that's exactly what we're doing. Think of a classic kitchen refurb: you take out a 100 watt centrally suspended bulb and replace it with 8 or 10 halogen spotlights, at 35 or 50 watts each. So the total energy requirement triples, at least. Sometimes it quintuples. There are now 170 million halogen lights in UK homes, more than the total number of energy saving light bulbs in the whole country.


Some people hope to solve this problem with LED lights, but I am not convinced. A 4 watt LED from Philips costs £22, compared to 99p for a 50W halogen spotlight . The LED lasts 20 times as long, and at 10p / KWh I estimate the cost of ownership is 6 times less per hour the bulb is used. But since the halogen spot only costs 0.5p per hour, and produces nearly 10 times more lumens  than the LED version, I'm not surprised if most people just can't be bothered with the calculation.


As usual, the source data is here for anyone who wants to check the maths. But more interesting than the raw data is the moral of the story: to make the kind of reductions in energy usage that we are currently targeting, we need the third column of this chart to start working for us, not against us. In this example, we need to stop ripping out low energy solutions and replacing them with high energy solutions. It just doesn't make sense. Perhaps we should introduce a tax (or a pox!) on halogen spots.

100 years to get off the planet

Worth watching this 2 minute video from Stephen Hawking and the Big Think. Hawking says: "If we are the only intelligent beings in the galaxy, we should make sure we survive and continue ... we have made remarkable progress in the last 100 years, but if we want to continue beyond the next 100 years, our future is in space." Wow.



There is more background on the Big Think website, which has been publishing 'one radical new idea' each day this month. You might also want to have a read of Big Idea #16 (Parents Don't Matter), or #1 (Drug our Drinking Water).

Welcome to ... the Altruistic Vigilante

This blog has mostly been about economics, so for a change let's have a crack at some philosophy. Political philosophy, at least.

Norman Lewis has drawn my attention to an FT article about wilful damage. Activists break into an arms factory, smash the place up, but are acquitted in court. The logic is that harm was done, but to prevent further harm, and in the eyes of the law that is acceptable.

So far so good. But what's interesting here is that guilt is established subjectively. The test is not whether your action has actually minimised the damage, but whether you believed that it would. It doesn't matter if you were right, just whether you honestly thought that you were.

Let's drag this back to energy and climate change. What are the implications? Could you break into my house and turn out my lights or smash my tumble dryer? Could you slash the tyres of my car? Or sneak in secretly at night and insulate my loft?

I think we have just invented the Altruistic Vigilante. The floodgates are open. Remember, you read it first here.

Oil prices down 10% since the BP spill

We all know what the oil spill is doing to the environment. But have you seen what it's done to the market? I thought I'd take a look, and the answer is ... wait a minute, nothing at all??

The explosion was on April 20. On April 16, a barrel of light sweet crude cost $83. And 140 million spilled gallons later, it costs $75. Contracts for 2015 have also come down about 10% (see chart). 

How is that possible? The answer is: although the spill is massive, the market is massiver. I estimate that the spill so far is worth about 1% of 1% of the 21 billion barrels of proven reserves in the US alone. And of course Deepwater Horizon was an exploratory well, so the market never even knew this oil was there.  

I think traders are more interested in global economics. If prices have cooled off since April, it must mean the outlook for global growth has done the same. (Think public sector deficits, Greek debt crisis, Chinese currency appreciation ... ). 

All this makes sense, but there is one more observation. Prices for December 2015 are about $10 ahead of today's spot prices, so the market does expect oil to be more expensive in 5 years time. For most of June, this gap looked like it was rising to about $15, presumably because a proper approach to safety would make production costlier in the future. 

But in the last few days, the gap from spot price to Dec 2015 price has dropped back to $10 again. So much for talk of a safety premium. Happy 4th of July folks.

Energy prices are from the EIA and futures are from nymex.

Black cabs running on chip fat

So, I don't know enough about biofuels. But I think from what I do know, we'd be better off with Plain Old Electric Vehicles.

Even so I can't help liking Uptown Oil, a company which collects used chip fat from restaurants, cleans it up and sells it back to cabbies for about 10% less than diesel. At least it stops all that bad stuff going down the plughole: apparently we're pouring 400 tonnes of fat down London drains each month, and 500 tonnes at Christmas. So that's the market size right there, if they can collect it.

Somewhat disgustingly, Thames Water have put a video of this on youtube. Follow the link if you want to see what 400 tonnes of Turkey dripping looks like from the inside of a London sewer.

Eeyughk.

Tax breaks for fossil fuels worth $9.1 billion

You couldn't make it up! A report from the OECD shows we're spending $9.1 billion on tax subsidies for fossil fuels. That's about $7.50 / year for each of us, just in the few selected industries that the report has looked at.

They're still working on figuring out the total, which is likely to be much larger. See the helpful comment below from Ron Steenblik, one of the authors.

Similarly, The Global Subsidies Initiative (an interesting institution in itself ...) suggests that fossil fuel subsidies outside the OECD are worth around $400 million, or getting on for $15 per person every year. As shown in the table, that's nearly 10 times the total subsidy available for renewables.

Finally, the OECD team has also estimated that removing subsidies to fossil fuels across all developing and emerging economies (I think this is the region where they have the best data) could cut global greenhouse gas emissions by 10%. And as we've seen before on this blog there are not many policies with that kind of potential.

Click here for the report this table comes from.

It's official - we've gone soft

June 2010 Chart of the Month


For over 30 years now, our partners at BRE have been collecting data on average indoor temperatures in the UK. What they've found is that over time we're heating our homes to higher and higher temperatures, from about 13° C in 1970 to over 20° C in recent years. And all this during a period where the weather, if anything, has been slightly warmer than it used to be.


Of course, one thing that has changed since 1970 is that a lot more people have central heating. So what I like about this chart is that it separates out this effect: all else equal, the chart shows that the spread of central heating would have increased indoor temperatures only to about 15° C by 1970 standards. The rest of the increase (by rough calculation about 70% of it) is just behaviour. We've gone soft!

The Energy Saving Trust says that turning down the thermostat down by 1° C cuts your heating bill by 10% on average. So what we're really seeing here is the long run trend of rising incomes and falling relative costs of energy. Which if you're worried about these things, would get you thinking again about pricing.


The data source is here for those that are interested. 

First fall in energy use since 1982

The source is BP's Statistical Review of World Energy. You can read an interesting if cynical critique of this report by Jeremy Leggett in the Financial Times, arguing that the statistics are a cover up and that an 'energy crunch' is upon us.

Relatedly, BP do publish some data about Jeremy's area, solar PV. Solar PV grew nearly 50% in 2009, which is surely good news. But total capacity is still only enough to meet about one twentieth of 1% of global demand for electricity. So Jeremy's article just offers a reminder of how little protection we really have against the energy-crunch scenario.

High Impact, Low Frequency?

The BP oil spill has got us all thinking about low frequency, high impact events. But some people have been thinking about these things for quite a while, including the team at NERC - the North American Electric Reliability Corporation. Who knew such an institution even existed? Their job apparently is to worry about unlikely events that would be really, really bad if they ever came about.

The latest NERC report includes a detailed section on geomagnetic storms:

The analysis indicates that the [geomagnetically induced current] in over 350 transformers will exceed levels where the transformer is at risk of irreparable damage...  Such large scale damage could lead to prolonged restoration and long-term chronic shortages of electricity supply capability to the impacted regions, arguably for multiple years.

In other words, a really big storm could roast enough components (70-80% of transformers in some states) to put the lights out for years. A version of this event happened in March 1989 and knocked out parts of the Canadian grid for most of a day. But since then, the grid has been developed in ways that make it more vulnerable than before: essentially, higher voltage transmission means geomagnetically induced currents can travel further and do more damage.

From a different angle, we could perhaps get a similar effect from a high altitude nuclear explosion. Here's a photo of the last time we had a go at one of those. This one was 400km in the air but the electromagnetic pulse was enough to blow out the streetlights in Hawaii, 1500km away.

(This is the 1962 Starfish Prime explosion.)

Why energy policy has failed

This year's Godkin lecture by John Deutch is worth watching. Deutch was US Undersecretary for Energy in the 1970s, so he has some interesting long term perspectives. He reminds us for example of Carter's target for 20% of energy to be generated from renewables by the year 2000. We continue to set similar targets as if this was a new idea. As Deutch says: "Aspirational goals are rarely accompanied by serious analysis that indicates how the goals will be credibly achieved."

Vive la France!

Congratulations to France, which has de loin the lowest per capita CO2 emissions in the G8. Good news for those who think the future is nuclear. Of course some of us think that the future will not be nuclear. If anyone has a G8 league table of hazardous waste per capita please post the link.

PS I am guessing France benefits from a bit of warm weather too, from a quick look at the Canada column. The dataset comes from here if you are after the source.

1 in 3 Brits say climate change is bunkum

The BBC published a poll in February showing 25% of British people think Climate Change is not happening. Another 10% believe it is happening, but it isn't man made. So it's official: 1 in 3 Brits do not believe in man-made Climate Change.

Well, I for one am one of the other two. I doubt I could express my reasons as well as Peter Gleick in his letter to Science magazine this month, signed by 250 members of the US National Academy of Sciences. Sensible, straightforward stuff.




Source: http://news.bbc.co.uk/1/hi/8500443.stm 

We're saving £5 of energy a year - that's all

In March we posted that UK residential CO2 emissions were 500 years off target. Apologies. It turns out that we are in fact only 369 years off target - as shown below. The trend rate of improvement since the year 2000 is 0.4% per annum. In other words, since there are 27 million households in the UK, we're cutting our actual CO2 emissions by about 25 kg per household per year. 

Another way of looking at this: the total impact of all UK energy saving policies is about £5 of energy saved per household, per annum. Now, that's not a figure you'll hear quoted very often in the House of Commons.

What to learn from the Australian EPC?

Here is an Australian Energy Performance Certificate. You can compare the UK version here. Some obvious differences are:

• More, small scale / easy recommendations (good)
• Includes water efficiency (good)
• Linked to a govt loan programme (good in principle)
• Happy-smiley design (bad!)

Oh, and wait a minute - worth mentioning that the Australian government pays ~£120 for each certificate. Sounds good, but in practice it's been a nightmare for everyone involved. The $10,000 loan element has since been withdrawn - too expensive and too complicated, apparently. A lesson for any new UK government thinking of launching a similar scheme.

Carbon Census Song

So here it is, the Carbon Census Song - our contribution to the Take One Small Step competition. If you'd like to support us click here to watch the 1 minute video and give us your vote. Many thanks to Joy Mills for putting this together.

Introducing the Carbon Census Rule of Thumb

How much power do you use when you're not using any power? Surprisingly, not zero. Take my house for example: it's a quiet Saturday afternoon, the family has gone out and everything is turned off, but our power monitor is reading 170 watts. How so? After 5 minutes poking around I found the culprits: microwave, radio, TV, DVD and a list of other things.

These devices draw a tiny amount of power, but they draw it all the time. That's the problem. So I spent another 5 minutes figuring out how much this 'background demand' is costing me. According to a really rather elegant coincidence, it turns out that 170 watts of background demand will cost about £170 a year. That's about 1 tonne of CO2 or 30% of the average UK electricity bill, just for stuff I'm not even using.

Let's call this the Carbon Census Rule Of Thumb: 1 watt of background power costs £1 a year.

(Interested in why this works? There are about 10,000 hours in a year, and a kilowatt hour of electricity costs about 10p. Well, just under 10,000 hours actually and just over 10p, but the rounding cancels out making the answer nice and easy.)

Lib Dems adopt Reverse Pricing

Great news, the Lib Dems have committed to introduce reverse pricing in energy. I believe they are the first major political party to do so, let's hope the other parties follow suit.  Here's what the Lib Dems say:

Protecting low income households is a good idea, but not with a social tariff. It would be better to help low income households consume less energy (e.g. by switching away from electric heating) than to subsidise prices. For more info read our article of 26 March which introduces the reverse pricing idea.

Undercover Economist

Tim Harford has picked up our arguments on energy pricing on the Undercover Economist website.

Energy prices double, but suppliers lose money for 5 years. So how on Earth does that work?

A picture is worth a thousand words. Have a look at this, an excellent piece of work from Ofgem:

The chart shows the average net margin on a dual fuel energy account, and goes a long way to explaining the mysterious behaviour of the UK energy market. It's a classic case study in sticky prices: the retailer is 'caught out' by steeply rising prices in the wholesale market, and can't push prices up to consumers quickly enough. Net margins turn negative around August 2004 ... and they don't recover for nearly 5 years.

Horrendous industry, you might think. But the flip side is a 20-fold increase in generation profits. So as long as you are in generation and retail, none of the above matters. What the chart really tells you is that energy retail is just a hedging option for generators, against inevitable periods of low wholesale prices.

So what of the sticky prices thing? One way to think about those is as a barrier to entry for future competitors. As the chart shows, a challenger must be prepared to lose money for a pretty long time. And who's got the cash to do that, if you don't happen to have a generation business in your back pocket? If you saw what happened to BizzEnergy then you know the rest of the story. 

10% of households use 1/3 of our electricity

Last week we posted our Financial Times article on reverse pricing. We said this policy could double the marginal cost of energy without making households worse off overall. There would be winners and losers, and people asked us how many: the answer is about 2/3 of households would benefit, and about 1/3 would pay higher bills.

But here's what's really interesting: to get to this answer we had to crunch the data on 26 million domestic electricity meter points, producing the chart below as a by product. Wow. The top 10% of households use nearly 1/3 of all domestic electricity in the UK. The top 20% use 44%. For whatever reason, there are about 5 million households who consume up to 6 times the national average every year. So we really do need policies - like reverse pricing - that make energy saving more attractive for high volume users.


You can see the source data in DECC's Energy Trends, March 2009 (p24 and after).

Can we make CO2 into fuel?

Here's some interesting science. It may be possible to turn CO2 into methanol, a useful fuel. There is a good article about this in the New Scientist and you can find a summary of the science here.

Nobody believes the strategy will work

We do like the new government strategy for household energy management, we just don't think it's going to make much difference. But who cares about us, what does everyone else think?

Here's one way to find out. Today's chart shows the Centrica (i.e. British Gas) stock price since Ed Milliband launched the Warm Homes strategy on 2 March. According to the Minister, we are going to cut household energy demand - about 1/3 of Centrica Group profits - by 29% in 10 years. What did the market make of that? Hmmm. Centrica stock is up 4%.

(OK, so I admit, this one is just for fun. We could have looked at SSE, whose stock price has gone the other way in the same period. But the point is that the new strategy doesn't seem to have made a jot of difference to utility stocks. I'm pretty sure this wouldn't be the case, if analysts really believed that household energy demand was going to be down 30% within 10 years. Or if they expected the government to introduce a policy with a more dramatic impact, such as reverse pricing.)

Time to Reverse Pricing

So, what to do about the fact that household CO2 continues to increase? We posted a statement of the problem yesterday, so today we post a suggestion on what to do about it. We think the government should require that domestic energy prices increase as you consume more energy, not the opposite as happens at present. Look at the charts: the left hand side shows how electricity tariffs work today, the right hand chart shows how they would work under reverse pricing. The average price is the same for the average user (4-5 MWh / year), but the marginal price would be 2 x higher - halving the payback time of a typical energy saving investment.

You can read more in our article on this in The Financial Times, or click here to download a more detailed explanation of the idea. We would welcome your comments!

Household CO2 is 500 years off target

The latest CO2 statistics were published today. Not good news. Residential emissions grew by 3 million tonnes in 2008, despite the economy being in recession for most of the year. This is why we say that current policies are not working in this sector: the average reduction in household CO2 emissions since 2002, when the flagship EEC/CERT program began, is now 0.3% per year, meaning it would take 500 years to achieve an 80% reduction. That's supposed to be our target for 2050, by the way.

You can download the data for yourself on the DECC website. The picture looks better for 2009, but DECC attribute the improvement to warmer weather in 2009 and the full dataset won't be published for another year or so.

£1 billion bank is nothing new

So, yesterday we heard the Chancellor put £1 billion of our money into a green investment bank.

But did you know we already spend much more than this? The Carbon Emissions Reduction Target (CERT) creates an obligation for energy companies to spend money every year to encourage us to buy less energy from them. The cost of this program (paid for by each of us, with small increases in our energy bills) is about £1.3 bn every year. It's mostly spent on subsidising loft and cavity wall insulation and a few hundred million low energy light bulbs.

Unfortunately this very expensive program isn't working: we'll do a post to explain why that's the case later on. I don't know why nobody writes about this in the press.

What is a tonne of CO2?

About as much as

• 100 trees can absorb in a year 
• Driving across America in a car 
• A 10,000km long haul flight, per passenger
• £175 of gas and electricity at current UK prices

The Carbon Trust publish some useful conversion ratios for this kind of thing. We use a figure of about 10kg per tree which is widely quoted on the internet; the United Nations Environment Programme puts it at about 12kg a year, but 10 kg / tree (or 100 trees per tonne) is a pretty good rule of thumb.

How much CO2 can I save?

Well, here's the answer from all properties in the Carbon Census to date :

On average a UK household can save 2 - 6 tonnes of CO2 each year by implementing all of the measures identified in an official Energy Performance Certificate. About a third of the saving can be achieved with relatively cost effective measures - lighting, insulation, thermostats, heating system and so on - and about two thirds from more expensive improvements such as installing solar thermal hot water, solar panels or solid wall insulation. That said, solar panels are one of the more cost effective investments now that feed-in tariffs have been introduced. A typical installation saves about 1 tonne of CO2 per household per year.

Why the Carbon Census?

So, let's use our first post to answer the first question: why do we need a carbon census? The answer is easy: 27 million homes in the UK; 142 million tonnes of CO2; each of our homes is producing 5-6 tonnes of CO2 every year. That's just from using the gas and electricity that's piped into our homes every day. Altogether home energy use creates a quarter of all CO2 emissions in the UK, more than all road transport combined. It's a huge deal. We definitely need a census. The official emissions statistics are published here for those who are interested.