This is the central message of a report by Greenpeace and backed by the Mayor of London Ken Livingstone this week.

At present, Britain’s centralised model of production and transmission wastes an astonishing two-thirds of its primary energy inputs. Most of this is from the power stations themselves but additional wastage occurs in the transmissions and distribution system and more again through inefficient and un-insulated homes.

In total, the report finds, the energy wasted at the power station and on the wires is equal to the entire water and space heating demands of all buildings in the UK – industrial, commercial, public and domestic.

As an alternative, Greenpeace say that a decentralised system, based on local generation and distribution of both electricity and heat, would be the most efficient way of producing power ad cut emissions of carbon dioxide.

Buildings – once fitted with systems such as solar pv panels, solar water heaters, micro-wind turbines, heat pumps etc – instead of being passive consumers of energy, would become power stations, constituent parts of local energy networks. They could also be linked to commercial or domestic operated combined heat and power systems.

“We have to take bold steps to address global warming and being more efficient in the way we produce, distribute and use energy is key,” said Mayor Livingstone. “We need an energy revolution, overhauling the current regulatory and commercial framework of the electricity industry to encourage the use of CHP and renewable energy.”

He added that the current bureaucracy dissuades all but the most determined individuals from taking action to reduce their own energy usage.

In addition, the report – Decentralising Power: An Energy Revolution for the 21st Century – claims that this transformation would save money in the long run.

A centralised network of cables is an old technology, it says, – and a phenomenally expensive one at that. New low-carbon technologies dictate a different infrastructure. According to the International Energy Agency, the European Union will spend US$648 billion on modernising and replacing the transmission and distribution networks

Decentralised energy also offers a way forward for developing nations and for the emerging economic giants like China and India. It is sometimes claimed, fatalistically, that efforts to stabilise the climate will be overwhelmed by China burning its coal reserves. But developing a decentralised energy system in response to its growth in demand for power would enable China to reduce associated carbon emissions by 56% as compared to the centralised scenario – and costs would be reduced by 40% as well – the report says.

Greenpeace also see no future in the debate over nuclear power. “Nuclear power is the epitome of centralised, outdated electricity generation. Replacing existing nuclear stations with new ones would perpetuate the centralised system, entrenching all the costs and inefficiencies that implies. Such inefficiencies currently waste three times as much energy as would be contributed by new nuclear power stations. It is only because of technological apathy – failure by government and industry to invest in real innovative alternatives – that nuclear power is given any serious consideration,” the report states.

Mr Livingstone added that cities like London have a responsibility to reduce their carbon emissions, and by virtue of their large high density population, the greatest opportunity to take advantage of new energy systems and renewable energy.

By David Hopkins

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