As we have all been concentrating on the events in the credit markets, and the woes of the world's financial institutions - perhaps we have paid less attention than we might otherwise have done to the unwelcome developments in the energy markets which have also been unfolding.

Over recent months the cost of energy has started to rise at an almost alarming rate, and this needs to be put in context: energy is one of the major factors that drives the economy. Historically, significant and/or rapid rises in the cost of energy have consistently and inevitably had a major adverse economic impact.

We are also now in a position where it might be argued that we have particularly poor strategic energy security - all of which adds up to a very risky situation.

This situation has, at least to some extent, been the result of a consistent lack of coherent long-term thinking, and a lack of proper strategic planning and risk management. When things go wrong, 'the market' is often blamed, and the difficult questions are often simply avoided, or postponed indefinitely by interminable consultancy processes.

This is a big and complex, though not insurmountable problem. Here is just one simple technology which could make quite a significant difference in the long-term, if it were embraced as widely as the author believes that it should be: heat pumps.

This is a technology which has been around for quite some time, but whose time might now have come. It is notable that over the last 15 years or so, whenever I have casually advocated this technology, most people have either never heard of it, or have regarded it as something of an expensive technological eccentricity - instead of what it could be: a major contributor to heating us in the 21st century.

In simple terms a heat pump works in the same way as a conventional household refrigerator - it 'pumps' heat from one place to another. In the case of a fridge, heat is taken from inside the fridge to outside it - so that the inside stays cold.

A domestic heat pump works in the same way - heat is pumped from outside a house to the inside - and then released - thus helping to heat the house. The process of pumping the heat into the house requires some energy - but the point is that the total amount of energy that is released into the house is more than that which is required to run the pump - and this extra energy is essentially free.

Since we are not accustomed to things being available free - particularly energy - it is natural to ask - 'so where is the catch?' - The simple answer is that there isn't one, but there are a few things that need to be got right for this technology to work effectively.

The first point to make is that this technology is based on real science - and does not violate the laws of physics. The energy that is released in the house is simply being relocated from elsewhere, where it is not needed. This process is governed by the laws of 'Thermodynamics' - part of the staple diet of any university physics course.

These laws place strict limits on the efficiency of the pumping process. In simple terms, the science places a limit on the amount of energy that we can get for free.

So why hasn't this technology taken off ? - In some other countries it is becoming increasingly popular, but in the UK it is often still often just a curiosity. The practical reasons are partly down to hard science, and partly to a lack of any strategy to facilitate its adoption.

As mentioned previously, the laws of thermodynamics place a fundamental limitation on how much of a 'free lunch' this technology can give us. In common sense terms, the more 'up hill' the pump has to push, the more energy it has to use itself, and the less we get for free. In this context 'up hill' refers to the temperature difference across which the heat has to be pumped.

In other words - you get less and less energy for free as the target environment becomes warmer and warmer. At first sight this looks like a serious flaw for a heating system - but this is not necessarily the case - and this is because of the way that our houses and heating systems are typically designed.

In most houses radiators are relatively small - and hot water is pumped though them quite quickly. A small, hot, radiator gives off a lot of heat, which then warms up a room. An alternative approach is to have much larger 'radiators' - perhaps built into floors and walls - which have warm (rather than hot) water moving though them at slower rates. Such an arrangement can also release a large amount of energy into a room, and maintain its temperature just as effectively.

A major advantage of this arrangement is that, although the same overall heating effect is achieved, the temperature of the water flowing though the system is significantly lower than in a conventional radiator. This means that if a heat pump is used, then it is much more efficient, and a significant amount of the energy released into the room is then obtained free.

The problem of course is that, even where there is a will, it is currently both difficult and expensive to install such units operating at anything like their potential efficiency. This is for three main reasons:

• Houses are not designed in a way that can easily utilise this type of technology properly.
• Heating systems are usually designed to run 'small and hot'.
• These technologies are not currently widely used - so there are no economies of scale.

However, since government seems quite content to intrude on, and regulate, almost every aspect of our lives - whilst letting some of the major national strategic problems continue unchecked - it seems to me that this would be one area where some serious thought might be given to changing the relevant legislation and planning processes to 'make it happen'.