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Energy Matters
Brought to you by
A discussion about energy in Aberdeen
August 2014
Research by
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.
So, this year I’ve made it my priority to speak to as many people as I can, direct and in
person, to find out about their concerns. 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.
We’ve worked with independent research company BritainThinks to find out what people living
in Aberdeen really think about energy. Unsurprisingly, cost was 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.
We’ve produced this report to give a flavour of the research we did and the events we held in
Aberdeen, along with a few facts about the energy we all use every day. We had some really
interesting discussions with local people and community leaders, so thanks to everyone who
came along. If you didn’t, we’re still very keen to hear from you so please do get involved by
visiting www.myenergymatters.com and have your say.
I hope this is just the start of an energy debate which goes beyond politicians and the media
to include everyone.
Mark Hanafin
Managing Director
International Upstream
Centrica Energy
3
Trust in energy companies is at an all-time low in Aberdeen
Energy Matters is about having a conversation about energy with the people it matters most to - you. Independent research company BritainThinks carried out
research across the Aberdeen 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
• People in Aberdeen described a ‘tale of two cities’: they said that the
energy industry made an important contribution to the city and its
economy, but that local people didn’t always seem to benefit from this.
• We heard that many people in Aberdeen were feeling squeezed by the
cost of living. Against this backdrop, when they thought about energy
specifically, their number one concern was cost.
• Profiteering by energy companies was felt to be one of the key causes
of rising energy bills, though the fact that energy is in such high
demand across the world was also seen as an important factor.
• Although trust in energy companies was very low, most people in
Aberdeen agreed that it was important to talk about energy issues.
More than half of the people we surveyed said they were interested in
hearing what energy companies had to say.
44
Trust in energy companies is at an all-time low in Aberdeen
Energy Matters is about having a conversation about energy with the people it matters most to - you. Independent research company BritainThinks carried out
research across the Aberdeen 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
• People in Aberdeen brought a great deal of interest and knowledge to
the events, and asked a wide range of detailed and topical questions.
• They were especially interested in energy efficiency: how people could
be supported to use less energy, primarily to reduce their bills, but also
to take pressure off energy supplies.
• They also had lots of questions about new ways of producing and
storing energy, including carbon capture, generating energy from
waste, and using the UK’s water resources to produce renewable
energy.
• Independence did not form a major part of the discussions, but there
was some interest in the potential impacts of the referendum on
Scotland’s energy sources and future energy plans.
55
6
Phone polling
• BritainThinks surveyed 500 adults aged
18+ living within 10km of Centrica
Energy’s Exploration & Production
Headquarters in Aberdeen, and the
Glens of Foudland onshore wind farm in
Aberdeenshire.
• 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 held two focus groups with
people living in Aberdeen with an interest
in their local area and community.
• These focus groups took place on
28 January 2014 at the Copthorne Hotel
in Aberdeen.
• 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 27 August 2014, 60 local people
came together in the Aberdeen Maritime
Museum for two ‘town hall’ style meetings
with Mark Hanafi n, the Managing
Director of Centrica Energy’s International
Upstream business.
• Over two hours, the groups discussed
with Mark where our energy comes from,
where it might come from in the future,
and the cost.
Community leaders
• Mark co-hosted a lunch with Colette
Cohen, Senior Vice-President of Centrica
Energy’s Exploration and Production
business in the UK and Netherlands,
to meet local business, political and
community leaders.
• The lunch was attended by senior
representatives from business and the
community including Scottish Enterprise,
Aberdeen City Council, Aberdeen and
Grampian Chamber of Commerce, the
Aberdeen Civic Forum, Aberdeen Citizens
Advice Bureau, SCARF (Save Cash and
Reduce Fuel) and Dame Anne Begg MP.
People in Aberdeen described a ‘tale of two cities’
of Aberdonians surveyed said that they felt optimistic about the local economy
%80
To really understand the wider context of the
energy debate in Aberdeen, we started off
our research by finding out what the top local
issues were.
The vast majority of the people we spoke to
felt that the local economy was booming,
with very high levels of optimism compared
with other parts of the UK.
8
Of the different sectors and industries in
Aberdeen, the public sector was felt to make
the biggest contribution to the local economy
(81% said it made either a ‘big contribution’
or ‘some contribution’), followed by the
energy industry at 73%.
People in Aberdeen described a ‘tale of two cities’
9
However, we also heard real frustration that
economic prosperity in Aberdeen doesn’t
always seem to benefit the local people,
and that it hadn’t led to enough investment
in the city.
• For many, improving the quality of local
roads and reducing congestion was
felt to be the top priority (at 12%, this
issue was more likely to be mentioned
spontaneously than any other issue).
• People were also concerned about
the rising cost of living in Aberdeen,
especially for families and people trying
to get on to the property ladder (9% of
people surveyed mentioned this issue
spontaneously).
• And for others, the city centre was felt to
be in need of regeneration. Union Street
was often described as ‘run-down’,
especially compared with high streets in
Edinburgh and Glasgow.
“People seem to think we’re rich up here, but the cost
of living is so much higher.”
“For the amount of money that’s in
Aberdeen, it’s a dirty place. Just look down
Union Street.”
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10
People in Aberdeen are concerned about the rising cost of energy
“To me the biggest issue with energy is the cost and knowing what
I’m actually paying for.”
“Energy supply is running out – there’s more
demand and less supply of it.”
When we asked people in Aberdeen what
they felt were the top two issues relating to
energy, cost was by far the most important.
• Three in 10 Aberdonians surveyed rated
their concern about the cost of their energy
bill as 10 out of 10 (30%).
• And two thirds agreed with the statement
‘I think consumers in the UK pay higher
prices for energy compared with other
European countries’ (66%).
What are the two biggest issues that come to mind when you think about energy?
Each bar shows the % of people in the Aberdeen area 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 67%16%
14%7%6%
4%3%3%
1%1%
19%10%
Sustainability of energy supply / future energy
Not enough renewable energy production
Negative impact of wind farms
Concerns about nuclear energy
Too much renewable energy production
Lack of competition in the energy sector
Concerns about fracking
The green debate, pollution and environmental impact
Not enough nuclear energy production
Other
None / don’t know
19%
25%
54%
11
People in Aberdeen are concerned about the rising cost of energy
People in Aberdeen were more likely to
blame high and rising energy prices on
profiteering by energy companies than
any other cause (54%). The rising cost of
wholesale prices was also felt to be an
important factor, selected as the single
biggest cause by 25% of Aberdonians
surveyed.
There wasn’t any real sense that the ‘lights will
go out’ soon (64% agreed that this was unlikely
to happen in the near future) but most people
were conscious that some of our current energy
sources were running out.
There was strong interest in where our energy
will come from in the future, and in alternative,
more environmentally friendly sources of energy.
Each segment shows the % of people in the Aberdeen area 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?
67% 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
1%1%
%
%
6964
of people surveyed in Aberdeen disagreed with the statement ‘I trust the energy companies to make decisions that are in my interests as a consumer.’
of people surveyed in Aberdeen disagreed with the statement ‘I trust the energy companies to make decisions that are in the country’s long-term interests.’
Almost 7 in 10 people surveyed in Aberdeen disagreed that energy
companies can be trusted.
12
People are interested in hearing more about energy
We also asked people in Aberdeen what
they thought about energy companies and
the energy industry. They told us that, while
they didn’t really trust energy companies,
they would be interested in hearing more
from them about the top energy issues.
“Energy companies are worrying too much about their profi ts when they should be worrying
about the future.”
13
People are interested in hearing more about energy
of people surveyed in Aberdeen area agreed with the statement ‘I would be interested in listening to the energy companies and hearing their perspective.’
%57Although trust in the energy industry is at an
all-time low, over half of the people we spoke
to in Aberdeen said that they were open to
hearing more from the industry. More than
anything, they wanted to fi nd out the reasons
why prices were rising, where our energy will
come from in the future, and what impact
this would have on Aberdeen.
“I would like to know what energy
companies actually do, who they supply to.”
14
Mark Hanafin, Centrica Energy’s Managing Director, hosted two
‘town hall’ style events at the Maritime Museum in Aberdeen. The
events brought together 60 local people to discuss all the big issues
relating to energy, from the factors making up a consumer’s typical
energy bill to where we get our gas from.
After introducing themselves, people were asked what topics they
wanted to discuss during the two-hour events. Mark wrote a list
to capture the issues on people’s minds when they thought about
energy. People had lots to say and raised a diverse set of issues,
from bills and customer service to creative ideas about how energy
might be generated and stored in the future.
“What’s going to change in the future?”
“Is fracking safe?”
“Why are energy bills so confusing?”
“What’s carbon capture and
why aren’t we doing it?”
“How can we be more energy
efficient?”“Are renewables cost-effective?”
People want to know what their money is being spent on
15
DID YOU KNOW?
We need to ensure that we
have just the right amount
of energy 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 � ngertips.
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.
Mark explained how these three things were in
confl ict 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, which
have an impact on prices. The one thing that was
made clear was that we needed to discuss these
challenges, and work together to try to resolve them.
“How can we be more energy
effi cient?”
People want to know what their money is being spent on
Gas
Oil Other C
oal
Renewables Nuclear
36%27%
15%20%
Source: Department of Energy and Climate Change
16
People are really interested in hearing more about where our energy comes from
The groups talked about where the UK gets its
energy from at the moment and estimated how
our current energy mix was made up. Even though
people were very knowledgeable about different
types of energy and how our reliance on them has
changed over time, there was a wide range of views.
Coal
Most people in Aberdeen were
aware that we used much less
coal in the UK now than we did
in the past. While the majority
guessed that coal’s contribution
to the energy mix would be
about 35%, some expected the
fi gure to be much lower because
of its environmental impact.
“The amount of coal is surprising given
the damage to the environment.”
“I remember off-peak electricity.
Does that still exist?”
DID YOU KNOW?
Coal
Coal is currently the
cheapest way of generating
electricity but is being
phased out in the UK
because the stations
produce emissions that are
harmful to the environment
and our health.
17
People are really interested in hearing more about where our energy comes from
Nuclear
People were much less certain
about how much nuclear energy
currently contributed to the mix,
with estimates ranging from 10%
to 60%. Several people were
interested to know if there were any
plans for investment in new nuclear
power stations in Scotland in the
future.
Renewables
People were aware that renewable
energy made up a smaller
proportion of our electricity supply
than coal or gas. Attitudes towards
renewable energy were positive,
as people recognised it’s growing
presence in Aberdeen, but some
wanted to know how we could
make sure that it was cost-effective.
“What’s going wrong with nuclear?
Why is it taking so long?”
“I’ve read that wind farms actually
waste us a lot of money.”
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-fi red 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
signifi cant investment is needed
to build new ones.
Source: National Grid
18
People at the events were aware that the UK was
now less self-suffi cient in gas than it used to be,
and some were surprised that we still produced
nearly half of the gas we use ourselves from the
North Sea and East Irish Sea. There was real
interest in understanding what would happen to this
supply if Scotland voted in favour of independence.
There was surprise that we didn’t import any
energy from Russia or the African continent directly
like other European countries, and that as much as
36% of the UK’s gas comes from Norway.
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%
“We need to stay friends with Norway
then!”
“I would think that we get most of our gas from Russia.”
DID YOU KNOW?
Gas
Gas is a much lower-carbon fuel than coal –
producing around half of the carbon emissions.
Gas-� red power stations can provide
guaranteed electricity at any time of year.
But, to generate electricity by burning gas,
the UK � rst needs to buy the gas,
which is proving increasingly expensive.
WHERE THE UK’S GAS COMES FROM TODAY
Gas has a big role to play, but where do we get it from?
19
While people were familiar with underground
gas pipelines connected to the European
continent as a means of transporting gas,
few had considered how we import gas from
further afi eld. Few had heard about Liquefi ed
Natural Gas (LNG) and were interested to
fi nd out more about how it works and why it
was so important.
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%
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 � nd on
Saturn, the frozen planet. This creates
Lique� ed 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.
Gas has a big role to play, but where do we get it from?
20
Most people in the sessions had heard
or read something in the media about
fracking, but they felt that they were
missing the key facts about how it
actually worked. People had lots of
questions, in particular about safety, but
also about whether fracking could have
any impact on energy bills.
The groups were invited to see for themselves
how shale rock differed from sandstone.
Each participant looked at two pieces of
rock – one sandstone and one shale – and
dropped 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 was because,
unlike sandstone, the air pockets in shale
are extremely small, making it much harder
to get the gas out compared with rocks like
sandstone.
“I want the lights to stay on, so I say go for it!”
“You hear horror stories about the environmental
damage it’s causing.”
What about shale gas and ‘fracking’?
21
Most people’s concerns about fracking
focused on the potential risks to the
environment and the safety of communities
living nearby. Several people had heard
concerning stories about safety from the US,
so Mark explained that the UK had some of
the strictest regulations in the world when
it came to safety, which would include any
fracking activities.
While some participants remained concerned
about safety, several people were of the
opinion that, if it is regulated in the right way,
fracking was worth exploring.
DID YOU KNOW?
Shale Gas
There is actually no such thing as
‘shale gas’, it’s the same natural gas
we get from beneath the North Sea
but it’s trapped 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 � ow out.
“There’s not enough information about it in layman’s
terms.”
What about shale gas and ‘fracking’?
22
“Why is the Government not
investing to teach people to use less
energy?”
“They say you can save money by switching, but
I think it’s just marketing.”
Having set out all the wider issues that had
an impact on the cost of energy, Mark talked
about the makeup of energy bills.
• The largest part of 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.
People were in agreement that the cost of
energy bills was one of the most pressing
issues when they thought about energy, and
were keen to discuss how their bills were
calculated and why prices kept rising.
There was real interest in how people could
be supported to use less energy to reduce
their bills, and a strong belief that there was
more work to be done in improving housing in
Scotland to make it more energy effi cient.
Mark explained how our relationship with
energy was likely to change signifi cantly with
the introduction of Smart Meters, which will
help families work out exactly how much
energy they’re using, and to use electricity at
off-peak times when it’s cheaper.
“I have a smart meter already and it monitors everything
– it’s excellent.”
So what about bills, prices and profi ts?
23
• 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 profi ts – around 4%, or about
£4 per household per month.
Some of these profi ts go back to
shareholders, who invest their own money
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
So what about bills, prices and profi ts?
24
Mark and Colette Cohen, Senior Vice-President
of Centrica Energy’s Exploration and Production
business in the UK and Netherlands, also met
with a number of Aberdeen’s business, political
and community leaders.
They had a deep understanding of the
complexity of the energy debate, and agreed
that it could be challenging to have an open
and honest discussion about energy when the
media was so dominated by the issues of
prices and profits. The group also felt that
there was a conflict in people’s priorities for
the future: most wanted their bills to go down,
but they also wanted to see more investment
in cost-intensive sources of energy, such as
renewables.
Several community leaders felt that people’s
experiences of energy companies as
consumers were critically important in
building and keeping trust in the industry.
In particular, they felt that examples of poor
customer service had led to people feeling
let down by energy companies, and that the
shift away from meter readers and paper
bills meant that some people didn’t feel that
they had any relationship with their supplier
anymore. There was agreement around
the table that younger people and children
should be the priority in building knowledge
and relationships for the future.
“We want lower bills but we want
the most expensive source of energy.”
“What about the younger generation?”
Local community leaders share people’s concerns about energy
25
The group also discussed the idea that
Aberdeen was often seen as being ‘two
cities’: oil and gas Aberdeen and the ‘real’
Aberdeen. They were concerned about
social inequality and pockets of poverty in
the city, and welcomed schemes such as the
Combined Heat and Power scheme, which
provides energy efficient, low cost heating
to tower block flats. They also felt that
employees in the industry, many of whom
only spent a short time living in the city,
should be encouraged to build stronger local
networks.
There was interest in the next big energy
debate being around security of supply, and
in different forms of energy that might form
an important part of the future energy mix.
Some leaders were keen to know how our
energy policies and prices compared with
other European countries, and whether there
was anything we could learn from their plans
for the future.
“Senior people move on quickly and don’t invest locally. People who could make a difference
aren’t engaging.”“Poverty is relative and inequality
in Aberdeen is massive.”
Local community leaders share people’s concerns about energy
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. Hopefully, by
meeting with people and explaining the issues
that energy companies face on a daily basis,
there will be greater understanding of some of
the challenges and decisions we face in the UK.
We really want to keep the conversation going
so please visit www.myenergymatters.com.
www.myenergymatters.com
/myenergymatters
@energy_matters
There are a number of ways to get
involved and make your voice heard.
Brought to you byResearch by
www.myenergymatters.com /myenergymatters @energy_matters