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The UK is targeting a 23% reduction in household energy bills. This is how they’ll get there.

This week, Opower will join more than 350 utility industry leaders at European Utility Week in Amsterdam to tackle the major energy issues facing Europe.

As we’ve previously reported, the continent is confronted by a trilemma of energy challenges: the need to increase investment in renewable and low carbon generation; the need to ensure a security of energy supply; and, the need to maintain affordable energy prices.

As part of a comprehensive framework to address these challenges, the European Union recently set an aggressive, overarching emissions reduction target of 40% below 1990 levels, to be achieved by 2030.

Meeting this overarching goal will require a number of actions by an ensemble of European nations, with the United Kingdom playing a central role. The UK has already announced a related target for lowering annual household energy consumption by 2020. The UK’s Department of Energy and Climate Change (DECC) currently aims to reduce the nation’s average annual household energy bill in 2020 by about 23% relative to its expected level in that year.

In October, PricewaterhouseCoopers (PwC) released a report to shed some light on the UK’s progress towards this goal. The report -- Energy 2020 Tracker: Keeping Energy in Balance -- finds that a multitude of stakeholders will need to take a variety of steps to reduce the nation’s energy demand and hit DECC’s 2020 goal.

Indeed, it will require an unprecedented and concerted effort, especially on the part of policymakers, utilities, and energy consumers. The PwC report highlights specific actions that all three players will have to take: policymakers will need to implement policies that further incentivize energy efficiency for utilities and consumers; utilities will need to employ innovative technology to better engage their customers; and, consumers will need to significantly reduce their energy use.

 

Before demand reductions, the 2020 average annual energy bill for British households is estimated to be £1,736, £405 more than the current 2020 annual bill target. (Source: PwC)

There will be a particularly heavy reliance on energy consumers to meet the 2020 bill target. Fortunately, data clearly shows that customers want to reduce their energy use -- but they do expect some personalized guidance and resources from their energy provider to make it happen.

To this end, leading European utilities like E.ON UK are taking some innovative steps to help engage their customers and empower them to reduce their bills. Last year, E.ON launched the Saving Energy Toolkit to more than 5 million customers in the UK. Among other things, the program allows customers to see how their energy usage compares to other similar E.ON customers’ homes, understand their energy use patterns throughout the year, and view a breakdown of monthly energy costs.

So far, the program is showing great success in elevating the level of engagement among E.ON customers. In late 2013, E.ON UK was getting about 250,000 hits per week on its consumer-facing website. Within three weeks, the website was receiving a whopping 500,000 hits per week. This successful approach has already garnered E.ON several accolades, including EURELECTRIC's Company of the Year and European Cleantech Corporation of the Year.

E.ON shows that great work is being done to meet the UK’s and Europe’s energy goals as a whole. But, there's still a long way to go -- for policymakers, utilities, and energy consumers alike -- to achieve the UK's 2020 bill target and Europe's overarching 2030 goal.

 

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