U.K. to Consult on Energy Demand Reduction, Minister Says

The U.K. will seek the public’s opinion on measures to cut energy demand before the end of the year as part of a program to curb fossil fuel use.

“Demand reduction is the most important thing that we can do, because the cheapest energy of all has to be the energy that we don’t use,” Energy Minister Greg Barker said today in an interview.

He spoke after announcing a 39 million-pound ($62 million) fund for five university-led research centers to help businesses and households examine their energy use. Investing in power efficiency could save as much energy as 22 power stations by 2020, Barker said.

Britain’s government wants to encourage consumers and industry to curb their power use to reduce emissions and keep a lid on bills which are already set to rise. Centrica Plc’s British Gas, RWE Npower Plc and EDF Energy Plc have detailed plans to raise charges with some coming into force this month.

“We’ve poured billions into generating assets and ignored the potential for investment in energy efficiency beyond quite simple measures,” Barker said. The Department of Energy and Climate Change today released a strategy on how to increase efficiency and overcome financial and other barriers to consumer or business uptake of programs to install equipment. Energy efficiency is the “heart” of energy policy, Barker said.

Demand Reduction

The government will consult on its demand reduction plans “in tandem” with legislation designed to reform the electricity market, Barker said. The demand reduction policies will be introduced as the Energy Bill, due before Parliament this month, passes through the House of Commons, he said.

Prime Minister David Cameron said in October he would use the Bill to ensure consumers get the lowest tariffs from energy companies. Barker said the government is still deciding on the details of those measures.

“Ofgem have published their recommendations for four tariffs in the retail market review,” Barker said. “This is very much in line with the Prime Minister’s thinking, so we are looking at that”. The U.K.’s energy regulator Oct. 19 proposed forcing suppliers to inform customers of the cheapest gas and electricity tariffs. Suppliers would only be able to use four tariffs for each fuel, avoiding complex “multi-tier” charges, according to the proposals.

Energy companies including Npower have said their price increases were in part due to the added cost of government programs to encourage customers to install energy efficiency equipment, as well as in response to higher wholesale prices.

The government will also publish an energy security strategy before the end of the year, Energy Secretary Ed Davey said Nov. 1.

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