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What is Energy Matters?
2
Energy is something that matters to each and every one of us. Yet conversations
about energy are often had between politicians and in the media, and feel far
removed from the people they have the biggest impact on.
When independent research company BritainThinks asked people living in Grimsby to share
their thoughts and concerns about energy, cost was unsurprisingly front of mind.
You said that you wanted to understand why your energy bills keep going up, what energy
companies were doing with their profits, and where the UK’s energy will come from in the
future.
So, this year, I’m coming to speak to as many people as I can, direct and in person. I’m not
expecting everyone to agree with everything I have to say, but I want us all to have an open
and honest debate about energy.
This report will give a flavour of the research we did and the events we’ve held in Grimsby,
along with a few facts about the energy each of us uses every day. We had some really
interesting discussions with local people and community leaders in Grimsby, so thanks to
everyone who came along. If you didn’t, we’re still very keen to hear from you so please get
involved at myenergymatters.com.
I hope this is just the start of an energy debate which extends past politicians and the media
to include everyone.
Mark Hanafin
Managing Director
International Upstream
Centrica Energy
Trust in energy companies is at an all-time low in Grimsby
Energy Matters is about having a conversation on energy with the people it matters most to - you. Independent research company BritainThinks carried out research
across the Grimsby area to get a feel for your questions and concerns. We then held a series of meetings in the local area to discuss these further.
What you told us
• The local economy in Grimsby is felt to be stalling and there is
real concern around unemployment and jobs.
• Against this background, the single biggest energy issue for
people in the area is the cost of energy.
• People in Grimsby think that the biggest factor pushing up energy
prices is energy companies’ drive to increase their profits.
• Trust in the energy companies is low, but many people in the area
acknowledge that the subject is a complex one, and are prepared
to listen to what energy companies have to say.
44
Trust in energy companies is at an all-time low in Grimsby
Energy Matters is about having a conversation on energy with the people it matters most to - you. Independent research company BritainThinks carried out research
across the Grimsby area to get a feel for your questions and concerns. We then held a series of meetings in the local area to discuss these further.
What we discussed
• We talked about the complexity of the energy debate - the fact
that any decision we make has to balance the three competing
challenges of cost, security of supply and climate change.
• We also discussed the pros and cons of different forms of energy
and how our energy sources might change in the future.
• There was real interest in natural gas from shale and fracking.
What it is, whether it’s safe and what it might mean for costs
in the future.
• We also talked about the cost of energy, and how energy
companies’ profits are spent.
55
6
Phone polling
• BritainThinks surveyed 502 adults aged
18+ living within 10km of the Killingholme,
South Humber or Brigg Power Stations,
or the Renewables Operations and
Maintenance Base in Grimsby.
• Interviews were conducted by telephone
between 18 December 2013 and
13 January 2014 and each lasted around
15 minutes.
• The data were then weighted to be
demographically representative of the
local population by gender, age and
socioeconomic grade.
Focus groups
• BritainThinks then held two focus groups
with people living in Grimsby with an
interest in their local area and community.
• Focus groups took place on 3 February
2014 at the St James Hotel in central
Grimsby.
• All research was conducted in line with
the Market Research Society’s Code of
Conduct.
How we found out your views
7
Public events
• On 8 July 2014, more than 40 local
people came together in the Humber
Royal Hotel for two ‘town hall’ style
meetings with Mark Hanafin, the
Managing Director of Centrica Energy’s
International Upstream Business,
and Tony Lyon, Head of Renewables
Operation and Maintenance in Grimsby.
• Over two hours, local people discussed
with Mark where our energy comes from,
where it might come from in the future,
and the cost of energy.
Business lunch
• Mark and Tony also took the opportunity
to talk to local business and community
leaders in Grimsby, discussing similar
issues, as well as the role of the energy
industry in the local area.
There is deep concern about the local economy
of people from Grimsby feel pessimistic about work and employment opportunities in the area in the next few years
%58
When we asked people in Grimsby what
they felt were the top local issues, the state
of the local economy and availability of jobs
were never far from mind, as were problems
relating to crime and anti-social behaviour.
8
• The single most commonly mentioned
issue was (un)employment and the
local economy. This was mentioned
spontaneously as the top local issue by
25% of people.
• When they thought about employment
opportunities in Grimsby in the next few
years, they were far more likely to be
pessimistic than optimistic.
There is deep concern about the local economy
9
Pic
ture
Cre
dit :
Rob
Fau
lkne
r
People in Grimsby expressed concern
that newer industries in the area weren’t
felt to be having the same local impact as
‘traditional’ industries like fishing, as they
relied on contractors from outside the area
rather than employing local people.
However, there was also some cause for
optimism in the area: Many people believe
that the development of wind energy
locally could bring hundreds of jobs to the
area over the next few years, and help put
Grimsby ‘back on the map’.
“The wind farms are all everyone’s
talking about. They’re going to totally
change the area.”
“A job in the fishing industry
used to be a job for life, but now with the new plants and factories we don’t even get
a look in.”
10
People in Grimsby are concerned about the rising cost of energy
“People are generally struggling. Why do they (energy companies) have to
make such big profits? Some of that profit could
go into reducing bills for people.”
When we asked people in Grimsby what they
felt were the top issues relating to energy,
cost was overwhelmingly front of mind.
• 37% of people in Grimsby rate their
concern over the cost of their energy bill
as 10 out of 10.
• More than two thirds of people in Grimsby
agreed with the statement ‘I think that
consumers in the UK pay higher prices
for energy compared with other European
countries’ (70%).
What are the two biggest issues that come to mind when you think about energy?
Each bar shows the % of people in Grimsby mentioning this issue spontaneously as one of their top two issues when they are asked to think about energy.
High / rising cost of energy prices and heating 71%14%
12%10%
5%2%2%2%2%1%
18%11%
Sustainability of energy supply / future energy
Not enough renewable energy production
The green debate, pollution and environmental impact
Lack of competition in the energy sector
Concerns around nuclear energy
Too much renewable energy production
Not enough nuclear energy production
Negative impact of wind farms
Concerns about fracking
Other
None / don’t know
11
People in Grimsby are concerned about the rising cost of energy
“I don’t think anyone knows how much
energy we have left in the UK. They just say it might be running out to scare you.”
People in Grimsby were more likely to blame
high and rising energy prices on profiteering
by energy companies than any other cause.
While security of supply is felt to be a concern,
there isn’t a real sense that ‘the lights will go
out’ any time soon. However, people said
that if we can get more of our energy from the
UK then we should do so, because it doesn’t
make sense to be reliant on other countries for
something so important.
Each bar shows the % of people in Grimsby mentioning this issue spontaneously as one of their top two issues when they are asked to think about energy. Each segment shows the % of people in Grimsby selecting this option. Respondents were allowed to select one option only.
Which of the following do you think is the main cause of the rising cost of energy bills in the UK?
16% 22%
58%
22%
58%16%
71% Energy companies trying to get as much profit as they can
The rising cost of oil and gas across the world pushing up wholesale prices
Taxes and green levies from the Government
None of these
Don’t know
2%2%
%
%
7369
of people in Grimsby disagreed with the statement ‘I trust the energy companies to make decisions that are in my interests as a consumer’.
of people in Grimsby disagreed with the statement ‘I trust the energy companies to make decisions that are in the country’s long-term interests’.
7 in 10 people in Grimsby disagreed
that energy companies can be
trusted
12
People want to know more about energy
We also asked people in Grimsby what they
thought about energy companies and the
energy industry. They told us that, while they
don’t currently trust energy companies, they
were interested in hearing more from them
and having an open and honest debate.
“The energy companies are greedy –
they don’t care about the customers, it’s just about making money
for them.”
13
People want to know more about energy
of people in Grimsby agreed with the statement ‘I would be interested in listening to the energy companies and hearing their perspective’.
%47Although trust in the energy industry
is at an all-time low, half of the people
we spoke to in Grimsby said that they
were open to hearing more from the
industry. More than anything, they
wanted to find out the reasons why
prices are rising and what’s going to
happen in the future.
“I’d like to learn a bit more
about what energy companies are actually
doing before I make a decision about
them.”
14
People want to know what their money is being spent on
Mark Hanafin, Centrica Energy’s Managing Director,
hosted two, two-hour ‘town hall meeting’ style events at
the Humber Royal Hotel in Grimsby. The events brought
together more than 40 local people and saw lively debates
about energy.
After briefly introducing themselves, people were asked what they
would like to discuss to set the agenda of the sessions. Mark wrote
a list to capture what’s on people’s minds when they think about
energy. Questions and concerns ranged from new forms of energy
and fracking to complicated bills and Smart Meters.
“What are you actually
getting for your money?”
“Energy companies don’t seem to have any
principles.”
“Prices are going up, but why?”
“Fracking – is it safe?”
“The power of the electricity
companies and gas companies is
too high.”
“Are we too reliant on fossil fuels?”
15
People want to know what their money is being spent on
DID YOU KNOW - POWER
We need to ensure that we
have just the right amount of
electricity being produced to
meet the needs of 24 million
homes and businesses every
minute of every day, 365
days a year.
The world hasn’t yet invented
technology to store electricity
in large quantities, so we
need to have exactly the right
number of power stations
running or wind farms
operating at any one time to
make sure each of us has
power at our finger tips.
To explain what’s driving the cost of energy, Mark
showed how many of the issues that people had
raised could be summarised in three main areas:
costs, keeping the lights on and climate change. Most
importantly, these three things are in conflict with one
another, creating a ‘trilemma’ of energy challenges.
For example, while we need to reduce our carbon
emissions to limit our impact on the environment,
many of the low carbon technologies - such as
offshore wind - are the most expensive, so have an
impact on bills. The one thing that was made clear
was that we needed to discuss these challenges, and
work together to try to resolve them.
LNG arrivingby ship
Gas piped from theContinent
Gas from Norway
Gas from North Sea and East Irish Sea G
as
Other C
oal
Renew
ables Nuclear
Oil
36%
42%
12%
9%
36%27%
15%20%
Source: DECC
16
People are surprised about where their energy comes from
People talked about where the UK gets its energy
from at the moment and estimated how our
current energy mix is made up. The wide range
of guesses revealed the variety of views which
people have about where our energy comes from
and how far we rely on different types of energy.
Coal
While people in Grimsby
were clear that the UK used
to rely on coal, they found it
hard to guess how much we
are using today. Estimates
ranged from 10% to 80% of
our energy.
“Is it not possible to clean
up the coal, if there’s so much of it?”
“I just think we’re always looking at the quick fix, instead of
the long term.”
DID YOU KNOW - COAL
Coal is currently the
cheapest way of generating
electricity but it is being
phased out in the UK
because the power stations
produce emissions that are
harmful to the environment
and our health.
17
People are surprised about where their energy comes from
Nuclear
Local people underestimated
the proportion of UK energy
produced by nuclear,
expecting that it only made
up a small proportion of our
energy mix.
Renewables
People in Grimsby were surprised to
discover that we already get 15% of
our energy from renewable sources.
Although they had heard a lot about
the potential benefits of renewables,
people were less aware about how
expensive they were.
“Really surprised that
it’s [nuclear] 20%, I thought it was
much less.”
“I have to eat humble pie.
Renewables is more than I thought
it’d be.”
DID YOU KNOW - WIND
Renewables provide a
great carbon-free source of
electricity, but wind farms need
wind, and solar farms need
light to work. This means they
need to be backed up by gas-
fired power stations to ensure
we have power on a cold, still
winter’s night.
DID YOU KNOW - NUCLEAR
Nuclear offers steady
production of electricity
without generating any carbon
emissions, but the UK’s current
nuclear power stations are
getting old and significant
investment is needed to build
new ones.
Source: National Grid
18
Gas has a big role to play, but where do we get it from?
People at the events were aware that
much of the gas we use in the UK was
imported from abroad, but many were
surprised to hear that the UK doesn’t
actually use much Russian gas.
Many people were concerned that we
rely too heavily on others for our gas.
LNG arrivingby ship
Gas piped from theContinent
Gas from Norway
Gas from North Sea and East Irish Sea G
as
Other C
oal
Renew
ables Nuclear
Oil
36%
42%
12%
9%
36%27%
15%20%
“What’s happening in Russia, are we going to
be in a position of higher prices because of the politics that surround
the industry?”
DID YOU KNOW - GAS
Gas is a much lower-carbon fuel than
coal – producing around half of the
carbon emissions. Gas-fired power
stations can provide guaranteed
electricity at any time of year. But, to
generate electricity by burning gas, the
UK first needs to buy the gas, which is
proving increasingly expensive.
WHERE THE UK’S GAS COMES FROM TODAY
19
Gas has a big role to play, but where do we get it from?
Local people knew very little about ways
of transporting gas other than through
pipelines under the ground and were
surprised to hear about how LNG is
shipped to the UK. While many were
aware that we get gas from Qatar, few had
considered how this was transported.
DID YOU KNOW - LNG
In order to transport gas from other
countries we super chill it to -160°c
- the same temperature as you’d find
on Saturn, the frozen planet. This
creates Liquefied Natural Gas (LNG),
which reduces the volume of the gas by
600 times, allowing us to ship it around
the world. However, the UK isn’t the
only country which wants LNG so we
need to compete with other countries,
many of which are willing to pay more
to buy it.
20
What about shale gas and ‘fracking’?
Local people said that they had
heard and read a lot about fracking,
but felt that the debate was very
polarised. They had a lot of questions,
in particular around safety and the
impact on the local environment.
The groups were invited to see for themselves
what was involved, taking part in an
‘experiment’ to show how shale rock differs
from sandstone. Each participant was invited to
look at two pieces of rock – one sandstone and
one shale – and drop some water onto each
rock. When participants dropped water onto
sandstone, it was quickly absorbed into the
rock, but when they did so for shale, the water
ran off the surface. Mark explained that this
is because, unlike sandstone, the air pockets
in shale are extremely small, making it much
harder to get the gas out compared to rocks
like sandstone.
“People don’t tell you what’s happening at the
beginning, you get a load of leaflets at the end, but
you feel like they’ve already made the decision.”
“There’s lots of controversy around it, isn’t
there?”
21
What about shale gas and ‘fracking’?
Most people’s concerns around fracking
focused on the potential risks and whether
or not fracking is safe. In response, the
groups discussed how fracking in the UK
would be much more closely regulated than
in other countries where onshore fracking
takes place, as we already have some of
the strictest regulations in the world when it
comes to safety. This will include:
• Seismic monitoring equipment to keep
a close eye on any tremors, which
would stop any operations in an area if
they happened.
• Sealing the well to prevent any leakage of
water, and disposal of all water in double-
skinned tanks for treatment.
DID YOU KNOW - SHALE GAS
There is actually no such thing as ‘shale
gas’, it’s the same natural gas we get
from the North Sea but is found in shale
rock, so it’s much harder to produce.
We use a process called hydraulic
fracturing, known as fracking, which
creates small cracks in the shale rock
held open by grains of sand to allow the
gas to flow out.
“You don’t feel like you’re getting all the information – it depends
on what you read, their political slant,
it’s all biased.”
22
So what about bills, prices and profits?
“My suspicion is that you want
UK gas because it means more profit
for you.”
“When it comes to cost, we are held to
ransom, we have to buy it.”
Having set out all the wider issues that have
an impact on the cost of energy, Mark then
came on to talk about energy bills.
• The largest section in the average energy
bill is the cost of buying the energy
itself, however that only gets the gas or
electricity as far as the UK’s ‘grid’ system
and not to individual homes. After that, the
second largest cost is in getting gas and
electricity to our homes – transporting it
through pipes and pylons.
Local people’s views about the cost of
energy were heavily coloured by their beliefs
about the proportion of their bill that goes
towards energy companies’ profits.
The groups discussed how people could be
encouraged to use less energy, and Mark
described how Smart Meters could help
families to use electricity when it’s cheaper,
and keep an eye on how much they’re using.
“What really does gall me is when you
hear about the amount energy companies have
earned - billions.”
23
So what about bills, prices and profits?
• Then there are the costs that the
government requires energy companies
to include: subsidising the cost of
renewable energy, which is important
for the environment but still expensive,
and funding important schemes to help
vulnerable customers. Energy companies
also pay taxes directly to government.
• The last part of the average bill is made
up of energy companies’ operating costs
– around 9% in the case of British Gas –
and their profits – around 4%, or about
£4 per household per month.
Some of these profits go back to
shareholders, who invest their own money in
different energy companies to get a return.
The rest goes into investing for the future,
helping the UK explore for gas, build power
stations, develop new technologies and, of
course, create jobs.
Base: Breakdown of the average British Gas domestic gas and electricity bill in 2013
24
Local leaders are also concerned about energy
Mark also took the opportunity to discuss
the issues involved with a number of
Grimsby’s community leaders along with
Tony Lyon, Head of Renewables Operation
and Maintenance in Grimsby. These included
local councillors and representatives from
local businesses and organisations.
They had a strong understanding of the
complexity of the energy debate, and felt
that concerns around security of supply
and climate change are overlooked in the
mainstream media, which often focuses only
on prices.
There was, however, real concern about the
cost of energy for people and businesses
in the local area. In particular, community
leaders were concerned about older people
in the area struggling to keep up with rising
prices.
“There are a whole range of energy
issues that are important in Grimsby - from security of supply for new businesses
through to fuel poverty for local residents.”
“Energy is such a vital component in
all of our lives, so it is important we understand
the whole picture.”
25
Local leaders are also concerned about energy
Community leaders were interested in
understanding more about a range of
different technologies and sources of energy.
The conversation covered:
• The high costs of building, operating and
maintaining many of the most promising
forms of renewable energy – in particular
offshore wind, but also tidal power.
• The technological barriers that need to be
overcome to make carbon capture and
storage a reality.
• Public and media concern around
fracking and new nuclear energy.
Community leaders spoke about a range
of initiatives around energy issues in the
local area. They were especially interested
in initiatives to equip young people with the
capabilities to work in the sector, and also
work with school children to build knowledge
around using less energy.
“It is important to invest in research and
develop the latest technologies because the UK can then be a
world leader in that area.”
“There needs to be plans for the
delivery of skills locally, where industry works together
better to think ahead and find solutions for
the future.”
We want to hear from you
26
This report has been produced by BritainThinks,
an independent research agency. BritainThinks
carried out all quantitative and qualitative
research, and were independent observers at
the Energy Matters events.
For more information about the research,
contact BritainThinks at www.britainthinks.com
or on 020 7845 5880.
At the end of each event, Mark encouraged
everyone who had given up their time
to talk and find out more about energy
to continue the conversation with family,
friends, neighbours and colleagues.
He concluded by saying that energy was
simply too important not to talk about.
myenergymatters.com
/myenergymatters
@energy_matters
There are a number of ways to get
involved and make your voice heard.