Cold Weather Boosts British Gas Profits

27 February 2013

As British Gas announces an increase in profits, the Government is advising consumers to take energy efficient measures to avoid further financial strain.

British Gas declared this week that it had recorded an 11% increase in year-on-year profits between 2011 and 2012.

The news comes just one month after the Department of Energy and Climate Change (DECC) launched its flagship energy efficiency scheme, the Green Deal, which promotes measures such as Cavity Wall Insulation and Loft Insulation.

Rising Energy Costs

Gas consumption is said to have risen 12% in 2012, as households reached for the central heating to fend off prolonged periods of cold weather. Both of these factors were cited as reasons for the company’s £606m profit last year, although an increase in the cost of energy to consumers was downplayed as having had no impact.

Furthermore, Centrica – the parent company of British Gas – recorded global operating profits of £2.7bn during 2012, a 14% hike on the previous year.

The news is bound to leave a sour taste in the mouth of consumers, particularly in light of suggestions that energy prices could be on the rise again soon.

Under the Green Deal, the Government is urging households to improve the energy efficiency of their property.

The scheme offers a loan, and in some cases a grant, to pay for the upfront costs of measures including Cavity Wall and Loft Insulation, Double Glazing, and Boiler Replacement.

Insulate and Save

Improved insulation is one of the ‘hot’ measures being promoted under the Green Deal scheme.

It is estimated that 35% of all energy lost from a property seeps through the walls. By improving insulation, householders can limit the amount of energy lost and in turn, save money on their bills.

Cavity Wall Insulation is ideal for most brick-built properties constructed between 1924 and 1982. Typically, a ‘glass wool’ or bead material is blown into the cavity between the wall leaves, leading to less energy being lost.

It is estimated that Cavity Wall Insulation can generate up to £135 of savings each year.

Properties built before 1924 and after 1984 can rarely benefit from Cavity Wall Insulation. For earlier properties, householders may need to look into Solid Wall Insulation and later properties should already have been insulated from new.

A further 25% of energy is lost through the roof. This makes Loft Insulation another recommended measure under the Green Deal. Loft Insulation is estimated to save householders up to £175 each year.

Further insulation can be applied by using draught excluders at the foot of doors, switching to double or triple glazing, and by opting for carpet instead of linoleum, slate tiles and laminate flooring.

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