As an integrated energy group, Centrica – owner of British Gas and
operator of gas and electricity assets – knows that global warming is a
huge challenge to its business. But as an energy provider to 30 million
customers worldwide, the company has come to believe that it can use
its influence and expertise to deliver both environmental and
commercial benefits.
With around 16 million customer accounts and more than 8500 engineers
working in the field, British Gas is the largest energy supplier in the
UK. This presents the company with an opportunity not only to offer
low-carbon products and services but to encourage consumers to make
behavioural changes that will cut both their carbon footprint and their
energy bills.
Much of Centrica’s energy efficiency work with customers is carried out
under the UK government’s Energy Efficiency Commitment (EEC), which
requires energy suppliers to invest in domestic energy efficiency
improvements. However, Centrica is going well beyond the provisions of
the EEC by exploring innovative ways of involving its customers and
changing how they think about energy efficiency.
As part of this effort, the group has set up a new business unit to
lead its low carbon strategy – British Gas New Energy – which offers
energy efficient products such as loft and cavity wall insulation,
helps customers to measure their carbon footprint and energy use, and
invests in fuel-cell powered boilers and other new technologies.
An energy company that is actively encouraging consumers to use less of
its core products – gas and electricity – might reasonably be
considered to be working against its commercial interests. But energy
consumption in Centrica’s principal markets is falling – a trend that
is likely to continue as global warming causes average temperatures to
increase – and Centrica recognises the opportunity to play a major role
in the delivery of a low carbon economy.
Besides, industry estimates indicate that by providing energy
efficiency advice and selling goods such as solar heating panels and
energy efficient boilers, companies such as Centrica can earn billions
of pounds a year in the future as well as help to tackle climate
change. ‘Our view is that climate change is happening and human
activity is contributing to it,’ says Gearóid Lane, managing director
of British Gas New Energy. ‘As an energy company I believe we have a
responsibility to adopt a leadership position. We’re tackling climate
change by minimizing our own operational emissions, maintaining the low
carbon intensity of the electricity we produce and helping our
customers and employees to reduce their carbon footprint.’ Through its
council tax rebate scheme, for example, British Gas works in
partnership with district councils across the country to offer
discounts of up to £100 ($200) on cavity wall insulation. After a
successful pilot, the scheme has been adopted by 55 local authorities
covering around 2.5 million households in Britain. The company is also
trialling a scheme that offers householders up to £500 off the cost of
installing solar technology.
Advice and auditing is another area that can lead to huge energy
savings. British Gas customers are encouraged to complete an Energy
Savers Report – a domestic audit that highlights wasteful energy use in
the home and suggests remedies. More than 1.5 million householders did
so in 2006 and this free service is now available to every household in
the country.
In addition, the company’s energy advice helpline dispenses free
guidance on how to cut bills, and a team of ‘community energy advisers’
works with local authorities and housing associations to promote energy
efficiency and generate referrals to energy efficiency grant schemes.
Changing habits is one thing, but the company acknowledges that
consumers also need to be offered cost-effective ways of reducing their
footprint. Last year it spent £93million on subsidizing more than 13
million individual energy efficiency products, such as fitting cavity
wall insulation and low energy light bulbs, in more than six million
households. This amounted to an equivalent lifetime carbon saving of
one million tonnes and led to total energy savings equivalent to £41m.
British Gas has also teamed up with other companies, such as the
electrical retailer Currys and DIY chain B&Q, to promote low-cost
energy efficiency products. Thanks to driect subsidies from British
Gas, customers at these stores receive savings on a range of products,
including loft insulation and low energy lighting.
But the company recognizes the importance of influencing the behaviour
of the next generation of potential customers as well as existing ones.
Its ‘Think Energy’ online educational programme encourages young people
to be aware of the environmental impact of the energy they consume.
Based on the national curriculum, it has been developed for children
aged from seven to 18, with downloads available from a recently
revamped Think Energy website that features cartoon characters such as
Bella Buzz. Since the programme began four years ago, just over half of
all UK schools have used its services.
British Gas’s main website also provides information on saving energy
in the home, gives practical tips, offers discounts on energy-saving
measures, and has links to the latest ‘green gadgets’ that can be
bought online, such as solar powered iPod and mobile phone chargers. If
consumers want to take things a step further, the company’s ‘Climate
Aware’ initiative gives them an opportunity to offset their household
carbon emissions by making a payment to Climate Care, a carbon offset
trust.
The company is also helping its hundreds of thousands of business
customers to improve their energy efficiency and environmental
performance. British Gas Business (BGB) has stepped up its programme of
switching businesses to ‘smart’, or automated, metering, which removes
the need for regular meter reader visits or estimated bills and allows
companies to manage energy consumption more effectively because they
can see, in real time, how much they are consuming. Already BGB has
installed more than 6000 smart meters, mostly in small companies, and
all new gas connections at businesses will soon have smart meters
fitted as a matter of course. BGB also provides renewable
electricity to several well-known household names, among them BT and
Vodafone.
Centrica acknowledges that all this work on the demand side has to be
backed up by progress on the supply side too. It currently has the
lowest carbon intensity of all the major UK power suppliers and is
investing £750m in the development of renewable energy assets. It
already has interests in two operational wind farms, and a third will
begin operating this year. It is also constructing the UK’s largest
offshore wind farm in the Greater Wash, and is looking at innovative
technology such as a proposed ‘clean coal’ power station at Teeside.
With progress therefore being made on both the supply and demand side,
the group hopes it is beginning to make a meaningful contribution to
the battle against climate change.
