This post is based on Green Alliance’s new infographic The power of negawatts
We need to cut the emissions of the power sector. We can do this by building new low carbon power stations, or by using less energy – otherwise known as generating ‘negawatts’.
Imagine a 15 watt lightbulb replacing a 100 watt bulb. The 85 watts saved can be used elsewhere: these are negawatts.
Over the course of a year, investing in negawatts could save us all a lot of money
We all pay for new power stations through our bills, but by saving energy we can generate enough negawatts to create virtual negawatt ‘power stations’. This is much cheaper, so why don’t we pay for this from our bills instead?
How do we get negawatt power stations?
Under the government’s electricity market reforms, a levy will be added to consumer electricity bills to meet the cost of low carbon power stations.
This is a good way of supporting investment in low carbon power, but doesn’t allow cheaper negawatts to compete with new power stations. By contrast, if negawatts are used too, some of the power can come from negawatt ‘power stations’ which receives a Feed in Tariff just like a low carbon electricity generator.
If a household is buying 4 MWh of electricity, one MWh of energy (costing £80) could be replaced with a cheaper MWh of avoided energy (costing £28) with a net saving to the consumer of £52. So, even though the consumer levy rises to pay for energy efficiency, this cost is outweighed by much lower electricity bills overall.
Is this really possible?
Yes. Even in the oil boom state of Texas, they’ve been paying for negawatts instead of building new power stations since 1999.
Negawatts mean new power stations don’t need to be built, and less fuel is used in existing power stations.
Demand reduction and energy efficiency schemes have saved Texans three times as much money as they have invested in them.
For our full assessment of the policy options proposed for reducing energy demand, including the electricity efficiency feed-in tariff, read our report Creating a market for electricity savings.