The Department of Energy and Climate Change (DECC) has
announced their plans to encourage businesses to cut carbon emissions and
reduce the demand on the National Grid.
The scheme allows businesses to compete against one another
for money to fund energy efficiency measures. The budget for the pilot scheme has been set at £20
million. Businesses will bid for the money to fund
lighting renovations which would not be possible without the funding.
The first stage of the scheme is a £10 million Electricity
Demand Reduction auction. The auction will be open to all sectors of the
economy up and down the country. The auction gives businesses the opportunity
to bid for funding for a variety of projects, including LED switch-overs and
improving motors and pumps.
The government has shown particular interest in projects
which promise to deliver up to 100 kilowatts of savings throughout the winter
period. The DECC tells us that over 300 organisations including hospitals, airports and
supermarket chains are considering taking part in the auction.
The pilot auction scheme will run for two years. If the 2014
trial is successful and delivers lasting electricity savings, the government
will continue to offer such funding through the capacity market due to be launched later this year.
It is hoped this will ease the pressure on the National Grid
who, as we reported earlier this month, are expecting blackouts during the
winter of 2015 due to their inability to meet our increasing electricity
demands. Capacity providers will be offered a steady, predictable revenue
stream in return for a guarantee they will deliver energy when needed. This is
likely to result in increased bills for energy consumers, estimated at £13 per
household per year.
