Fighting Energy Costs – my journey

A big part of retiring early is reducing running costs. When you are working, and assuming you a living a little below your means, there’s no great incentive to save energy usage, and indeed there are a lot of things about working that mitigate against saving energy. You are usually cash-rich and time poor, and much about saving energy is time consuming.

And yet it is a parasitic cost which is worth attacking, and attack it I have done. My total power bill was at a peak of £1030 in 2007 and 2008 and by attacking my electricity usage I have brought down my usage to about 1/4 of what it was in the early 2000s. I am trying to do the same to my gas bill by substituting the use of a log burner for heating but this is a much harder fight. I haven’t been helped by the fact that the last couple of winters have been quite cold. My combined power bill was £650 for 2010 (gas + electricity)

Bringing down electricity usage is more complex – there are a lot more things connected to the AC mains than there are connected to the gas. I live in a very average three-bed semi of 1960s construction, and I have gas central heating with a boiler that’s over 15 years old and a reasonably modern all gas cooker, hob and oven. That’s it for gas usage.

My gas costs and usage

The low start is because I haven’t got all the data for 2003. Although I have managed to push down gas usage over the years since 2004, the cost of gas has sky rocketed, it has almost tripled since 2003. This sort of headwind is likely to continue in future, and is a major hazard for my annual running costs because a) I haven’t had much success getting it down and b) gas is by far the largest financial component of my power bill.

On the electricity front I have had a lot more success

My electricity costs and usage

Most of the success has been in driving down consumption which has paid handsome dividends, to the point that most of my focus in this area needs to go on the gas bill.

As far as the actual unit costs of power are concerned, there has been a steady increase, reversed in the last year when I switched from using two different suppliers to getting both from EDF. You usually save by taking both from one supplier, but extablishing how much is deliberately made fiendishly complicated. The companies effectively work as a cartel, obfuscating what should be a pretty simple calculation using all sorts of exceptions, such as a standing charge hidden in a higher price for the first few units, promotions for direct debit and attempts to lock customers in to a tariff for extended periods, charging them a switching fee. I was offered a 2% discount by EDF to switch to a lock-in tariff for 18 months. I passed, on the general principle that what’s good for them isn’t likely to be good for me. They’ll probably jack prices up by more than the norm in the next few months, so I’ll pass on the switching fee, thanks. If they’re good boys and girls then I won’t take the sucker punch and lose £13 a year. I’ll take the risk of eating the loss to avoid taking the switching fee of four times that if they aren’t the nice guys they pretend to be.

Electricity and gas per unit (=1kWh) costs

I regard my usage as careful, but not hair-shirt. It takes some effort to achieve, but is not unreasonable for a couple in a three-bed semi. We don’t wear coats indoors in winter or use torches in the dark, but on the other hand we don’t run a hot tub or 10 halogen lamps in the kitchen and bathroom just because they look nice. Don’t get me wrong, halogen lamps do look very nice indeed and a lot better than those awful CFL things. I use regular light bulbs in the bog and for reading, except for a couple of LED lamps for reading lamps.

The average utility bills for guys in the office I work with are much higher – two of them are running £2500 and anther is £1500. However, they do all live in larger, and in the two £2500 cases very poorly designed from a heat POV older properties. I haven’t managed to track down the average utility bill for the UK but I think I am on the right track at £650. However, that gas bill is a future liability and needs to come down at some point…