UK retailers will no doubt have noted the recent Energy Bill, which the government published on 29 November and is currently being scrutinised by a Public Bill Committee.
Ed Davey argued the Bill, which the Committee is expected to report on by 12 February, would represent “the biggest transformation to Britain’s electricity market since privatisation”.
And at first glance, it looks as though it would prove a timely arrival for the retail sector. Plans to reward businesses for cutting energy usage appear a welcome step forward, especially during these winter months.
However, when it comes to reducing energy usage, many retailers will feel the government has missed a great opportunity. Too much focus has been placed on renewable power, instead of looking constructively at efficiency-saving measures to reduce the amount of energy a business uses.
It has been estimated that if industry made the simple switch from traditional factory lighting to energy-efficient lighting, Drax power station - the UK’s largest emitter of carbon dioxide - could be closed. Bright, attractive lighting might appeal to customers and help sales, but lighting accounts for 20-60% of a retailer’s total energy costs.
Energy-efficient lighting can provide high light levels for less cost. For example, LED tube lighting typically saves over 70% of electricity costs, while being very low maintenance.
Shrinking margins make it necessary for companies to invest in initiatives that can both reduce energy consumption and maximise profits. Energy-efficient solutions can deliver significant cost savings at a time when businesses are under immense budgetary pressures.
As the climate change minister acknowledged, “The cheapest form of energy is the energy that you don’t use”. This admission makes it all the more baffling as to why proposals related to reducing energy usage have been relegated to a consultation document, rather than forming the main focus of the Bill.
Keith Wyatt is honorary adviser on environmental issues to the UK Warehousing Association and commercial director at Premium Lighting Solutions