June 28, 2008

Conserving Energy and Saving Money

By Jeff Salway

From insulation to smoother driving, we can all cut our costs

THE bosses of the UK's six main energy suppliers confirmed this week that gas and electricity bills are set to rise again. And in a grilling by a committee of MPs over high energy bills, they refused to contradict economist predictions of price hikes of up to 40 per cent, citing rising wholesale gas prices. A hike of this magnitude would take the average household's energy bill to GBP 1,467, more than double the January 2006 average of just GBP 735.

On the same day, fuel price analyst petrolprices.com revealed that the average price of diesel in the UK had broken through the GBP 6 a gallon barrier for the first time, equivalent to 131.9p a litre. Scotland has the highest average diesel price, at 132.8p a litre.

But while there seems little prospect of household bills and motoring costs easing any time soon, there are several simple ways of bringing costs down and reducing the growing financial burden.


With energy bills rising, fixed-rate tariffs, which typically guarantee that prices will not rise for a year or more, have become a more enticing option.

"If you're on a standard tariff you can avoid price increases for at least the next year by moving to a fixed-price tariff," said Scott Byrom, utilities manager at Moneysupermarket.com. "On average, there is only 16p a year difference between standard and fixed tariffs, so consumers should have no excuse for not protecting themselves from future increases to their energy bills."

Among the best fixed-rate deals are ScottishPower's Fixed Price Energy 2009 and a fixed tariff from 31 August this year to 31 December 2009 from British Gas.

Another money saving option if you're on a standard tariff is to switch to an online tariff. This involves paying monthly by direct debit and reporting meter readings on the internet. But they are variable rates, so whether it's worth it depends on your perception of how much prices will rise by. If they increase by around 20 per cent instead of 40 per cent, for example, using an online tariff could be worth considering.

If you haven't switched supplier before, you can save hundreds by shopping around, unless you're on a fixed tariff. Unlike banks, energy companies aren't obliged to tell customers when better rates become available, so it's always worth asking what your supplier can offer and shopping around to see what else is available.

Comparison websites - including www.uswitch.com and www.switch.which.co.uk - allow you to enter your current usage and bill details to work out how much can be saved by switching to a different tariff or supplier.

With more households being pushed into fuel poverty with every energy price increase, pressure is on the government and energy suppliers to help those struggling with the burden of high bills. Assistance is still limited, but Byrom recommends calling your provider and asking if it has any social tariffs, discounts or grants available.

The other approach to cutting bills is to reduce the amount of energy you use in the home. Most energy efficiency measures are not only cheap and environmentally friendly, but simple too. "They seem like small things but the savings they generate can add up significantly over the year," said Harry Mayer, of the Energy Saving Trust in Scotland.

For instance, energy saving light bulbs last up to ten times longer than normal bulbs, with each bulb saving over GBP 100 over its lifetime. Similarly, switching off electrical equipment when it's not being used rather than leaving it on standby can cut bills by around 8 per cent, according to Mayer, while turning the thermostat down by 1C can reduce costs by up to 10 per cent a year.

The biggest single measure you can take is to ensure your home is well insulated, said Mayer. "Look around you for insulation opportunities, as proper insulation can cut energy use by about a third."

While sealing gaps in floors, windows and doors helps, insulating walls and lofts offers the biggest savings. Installing loft insulation is relatively straightforward and the Energy Saving Trust estimates it can save around GBP 155 a year, while filling wall cavities can produce annual savings of around GBP 120.

Likewise, double glazing halves the amount of heat lost through windows, shaving around GBP 110 a year from the average bill.

A less straightforward way of cutting energy wastage - if potentially the most valuable in the long-term - is to replace old fashioned heavyweight boilers. Installing a more modern energy efficient boiler - most of which cost around GBP 1,000 - can save up to GBP 200 a year on energy bills, according to the Energy Saving Trust.

The Scottish government provides Warm Deal grants to help those on certain welfare benefits and some over 60s with the cost of insulation - call 0800 316 6009 for more information. The Energy Saving Trust also has advice centres that can offer assistance on energy efficiency in the home. They can be reached on 0800 512 012.


With pump prices on average 40 per cent higher than a year ago - and rising - motorists are seeking ways to use fuel more efficiently and cut the cost of motoring. While some drivers have changed their travel habits by opting for public transport or car-sharing schemes, that's not feasible for many drivers, particularly in rural areas.

But there are several simple ways of trimming fuel costs. An obvious one is to buy your fuel at the most competitive rate available to you. You can enter your postcode on Petrolprices.com to find out the cheapest place to buy petrol or diesel in your area.

Because the manner of your driving determines fuel efficiency, an economical approach to motoring can save money. For instance, driving at more than 50mph dramatically increases fuel use, according to Mayer, while driving more smoothly by avoiding constant braking and accelerating reduces it.

More obviously, avoiding excessive use of air conditioning helps your fuel last longer, as does keeping your car as aerodynamic as possible, by removing unused roof-racks, for instance.

It's also worth checking your tyre pressure regularly, as fuel consumption can increase by as much as 5 per cent if they are below their recommended pressure level.

"Also avoid taking short journeys where possible, as vehicle engines are at their least efficient when they are cold," said Mayer.

Finally, some drivers - such as our case study Graeme Barrie - have taken the more radical step of switching to vegetable oil. This alternative is available only for diesel vehicles, and some newer models will not be compatible.

But it's not as complicated as it may sound and there are several websites offering information on using vegetable oil as fuel.

Case Study

If you want to go green, go vegetarian in your car

IF CHIP shops have experienced a sharp rise in the number of people asking if they can take some vegetable oil home as well as their supper, soaring fuel prices could be to blame. Because more drivers are putting up with a car smelling like a chippie if it means cutting a good chunk off their fuel bills.

When Graeme Barrie, of Broxburn, explains the difference that powering his cars with vegetable oil has made not only to the environment but his finances, and even how well the cars run, people are usually swayed pretty quickly.

Every three weeks or so, Graeme collects vegetable oil from local outlets such as restaurants, bars and takeout stores. Following a four-stage filtering process that takes up to three hours, he ends up with 300 litres of oil on which he can run both his land rover and his wife's Peugeot 306.

Typically, 20 per cent of the fuel tank will still be diesel, but with vegetable oil making up the rest, the cost of running the vehicles has plummeted. "My wife commutes between Broxburn and Stirling and her spending on fuel has fallen from over GBP 3,000 a year to about GBP 600."

But while the financial savings are impressive, particularly at a time when the cost of fuel is rising, it's also about limiting pollution.

As a health and safety environmental consultant, this is the biggest selling point for Graeme. "Instead of the vegetable oil going to waste we are giving it another life while reducing emissions to virtually nothing.

"So the payback is that we're saving money and doing less harm to the environment."

His advice to drivers keen on following his example is to do their homework first.

"The newer engines aren't all suitable but there's no reason a lot of diesel cars can't run on an alternative fuel - you need to make sure your engine is compatible.

"If it is but you're still not sure, try a small dilution of vegetable oil as it's less likely to cause damage if it doesn't work."

The tax rules on using vegetable oil for fuel changed last year, meaning you can use up to 2,500 litres a year for personal use without having to pay any extra tax.

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