The historical link between growth in national wealth and growth in national energy consumption has completely evaporated

For many years, Andrew Warren has been one of the leading thinkers of a holistic approach to energy. While Andrew has headed the UK’s Association for the Conservation of Energy, he has been at the forefront to encourage a positive national awareness of the need for and benefits of energy conservation as well as to help establish a sensible and consistent national energy policy. In this article for the August ENDS report, Andrew looks at the achievements in recent years and the misconceptions that far too many have about those achievements. While his focus is on the UK in this article, many of you will notice similar trends in your own country.

We are achieving a virtuous circle in energy

The UK’s GDP has gone up and its energy consumption has gone down. But what role have tripled fuel costs and poverty played in keeping usage low?

Here is a simple question: how much has UK energy consumption increased this century?

Actually, this is not just a question for non-specialists. Over many months I have been regularly asking energy professionals in companies, trade bodies and even those among the senior civil service to offer their views. The responses vary but almost without exception, people believe consumption has increased. Estimates range from 5-20% and sometimes higher.

And when I tell people that notional GDP has risen by 58% between 2000 and 2012, they instantly re-evaluate how much they think energy consumption has grown. People often say that they would automatically think energy use had grown by a similar amount, perhaps up to 50% in some instances.

They reflect upon the vast expansion of electrical appliances we all use, both at home and at work, combined with the exponential growth in web energy use and the servers in place. They follow their logic to suggest that, quite possibly, energy usage has gone up way over the 58% that GDP has during this century. You can almost see why the media is getting so hyped up about imminent energy shortages, they say.

However, when they ask how much more energy use has soared compared with GDP levels, my answer is simple: it has not grown.

I then tell them that what is happening is really far more extraordinary than they expect. Energy use has actually declined. And not just by a tiny amount. Final energy use in 2012 was 14% lower than it was in 2000. The total amount of consumption, according to the latest Energy Consumption in the UK almanac published by DECC, was 159 million tonnes of oil equivalent in 2000 and 140Mtoe in 2012.

The extraordinary thing is that not many people know this. Few have appreciated the significance of the undeniable fact that the historical link – between growth in national wealth and growth in national energy consumption – has completely evaporated.

It would appear this ignorance even applies to those in the same department of state that provides these statistics. Only recently an article appeared under the byline of energy secretary Edward Davey saying that his department still believes electricity consumption is set to double between now and 2050. Meanwhile, his opposite number in Germany is working on the basis of a 25% drop in electricity use by 2050.

Consumption changes

Davey is of course right to point out that electricity is expected to take a larger share of the overall energy market than the 19.4% it now enjoys (up from 17.8% in 2000). But even so, there have already been some massive changes in the way electricity is used.

Between 2000 and 2012, per capita consumption of electricity in the UK fell by about 10%. In other words, we no longer need one in ten of the kilowatt-hours we were merrily burning at the time of the millennium.

So why is it we often read about the dangers of, as the media inevitably put it, the “lights going out”? Of course none of us will ever hear these remarkable consumption figures publicised by the multitude of spokespersons whose mortgages depend on hyping the need for massive subsidies for big new power stations. The fact remains that, even without any headlines, we have succeeded in increasing our wealth substantially while significantly reducing our overall energy use.

But because average fuel bills have tripled during this period, some of the reductions in the low-income household sector may be due to people being priced out of buying sufficient warmth.

About one in six households now suffer from fuel poverty in the UK. This is still true despite the 2000 Warm Homes Act, which committed future governments to ensuring the abolition of fuel poverty by 2016.

Those who remain confident that the 2008 Climate Change Act guarantees a low-carbon society by 2050 should bear this failure in mind.

But I do not think that reducing fuel usage by going without is true for companies, whether industrial or commercial, otherwise we would not have managed all that GDP growth. Nor is it valid, I am glad to say, for the vast majority of households.

What higher fuel bills may well have stimulated is a greater willingness to cut out unnecessary fuel use. Add to that the judicious stimulus programmes (climate change agreements, the CRC Energy Efficiency Scheme, the Energy Efficiency Commitment and the Carbon Emissions Reduction Target for households, banning the most energy inefficient products and upping building regulation standards) and we see the first results of what can only be described as a virtuous circle.

Something that eventually even DECC’s forward-planning people must surely start to acknowledge.