Ed Davey the Energy and Climate Change Secretary announced details of a new Electricity Demand Reduction auction in which £10m will be available this year to help businesses reduce their energy costs, improve efficiency and reduce energy demand.
The Energy Institute states that businesses will have to compete to gain funding for projects that reduce the demand of electricity that they couldn’t have afforded to implement if it wasn’t for the upfront funding. The money allocated to this scheme will save businesses money on electricity bills as well as reducing carbon emissions and demand on the National Grid. The expressions of interest were opened on 29 July.
By 2030 just through the use of electrical efficiency alone, savings of 9% of total demand could be made, in turn decreasing the need for new power stations, reports the Energy Institute. Projects that deliver long lasting electricity are being tested by the government to see if, for example, replacing old light bulbs with LEDs or improving motors and pumps would be able to compete with generation, demand side response (DSR) and storage in the UK Capacity Market.
The Department of Energy and Climate Change (DECC) has spoken of over 300 organisations with various functions, such as airports, supermarket chains and hospitals, having already come forward to indicate they are considering taking part in the auction.
Ed Davey announced in July at the CBI’s Energy Conference that there are plans that will remove barriers to investment in energy infrastructure. Whilst he published the government’s first report on energy investment in the UK he said the energy sector has seen £45bn of investment between January 2010 and December 2013 alone. The report published demonstrates energy projects make up roughly 60% of the UK’s total infrastructure project pipeline, which is worth around £200bn in its entirety.
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