‘Quite exciting’ energy consultation would pay out for electricity saving

The government has published a set of proposals alongside the energy bill, including a "quite exciting" consultation encouraging firms to save electricity.

The plan would pay firms per kilowatt-hour saved through energy-saving measures such as low-energy lighting and offer incentives to people to install energy-saving equipment in the home.

"Our new consultation is actually quite exciting – we're trying to help the whole of the UK reduce its demand for electricity," energy secretary Ed Davey told BBC Breakfast.

"If we do that, that means we’ll have to build fewer power stations. That saves money – it saves money for businesses, it saves money for households."

The consultation goes some way towards alleviating the concerns of those who criticised the energy bill for failing to show how energy would actually be saved, but campaigners were incensed that it took the form of a consultation rather than finding a place in the bill itself.

The energy bill has been widely criticised for being a victim of backroom coalition disagreements. It kicked a decision on decarbonising the economy into the long grass until 2016 but did allow energy companies to raise more money from consumers to invest in renewable energy such as wind farms.

A ten per cent reduction in electricity demand could save around £4 billion in 2030, ministers said today. That sort of saving would compensate for the cost of efficiency savings upfront.

The consultation comes after new figures showed government programmes helping poorer households become more energy efficient were cut in half.

Just over £500 million of central funds are now earmarked for energy efficiency bills – down from £1 billion in 2009.