Some 54% of the energy used to produce electricity in the UK is lost by the time it arrives at a home or business, where further losses occur.
This is the conclusion of a new analysis from Association for Decentralised Energy (ADE) which notes this lost energy is worth some £9.5 billion ($15 billion) a year or more than half the average home’s annual electricity bill. It also represents the annual carbon emissions equivalent to every car in the UK.
While some losses in the energy system are inevitable, specific policy measures could reduce those losses and as a result lower energy costs by billions of pounds, while improving energy security and cutting emissions. UK energy productivity, measured as GDP per unit of energy, has improved by 79% since 1990. However, power generation efficiency has improved by only 7% and electricity networks efficiency has improved by only 0.2%.
ADE argues there is an immense opportunity to improve energy productivity, cutting energy bills, creating jobs and building a stronger economy, notying that if all cost-effective opportunities to recover heat from power stations were taken, it would save £2 billion a year.
However, currently less than 10% of UK thermal power stations capture their heat, just a third of the cost-effective potential.
ADE calls on the UK government to improve energy system productivity year on year as is done in competitor countries like the United States and Germany, with the purpose of reducing energy costs for users.