Energy Matters

Brought to you by

A discussion about energy in Grimsby

July 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.

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

3

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.

Brought to you byResearch by

myenergymatters.com /myenergymatters @energy_matters