logo

The expert voice for energy efficiency in the UK.
Follow us:

Author Archive

Our response to Energy & Climate Change Committee’s inquiry into low carbon network infrastructure

The Energy and Climate Change Committee is investigating what changes are required from today’s electricity infrastructure to build a low carbon, flexible and fair network.

The terms of reference of the Inquiry recognised that for the transition to a low carbon electricity network to occur in a cost-effective way, all elements of our energy infrastructure, including those on the demand side of the meter, will need to be addressed.

We focused on one of the questions defined in the call for evidence: How can we ensure that a low carbon network is designed and operated fairly and in a way that helps to minimise consumer bills?

Read ACE’s submission here.

Continue Reading No Comments

Our response to Energy & Climate Change Committee’s inquiry into investor confidence in the UK energy sector

The Energy & Climate Change Committee is investigating the factors that contribute to investor confidence in the energy sector and wants to build an understanding of how DECC’s policy making process might impact on investor decisions.

DECC estimates that £110 billion investment is needed in our electricity infrastructure over the next decade. Stakeholders’ concerns that policy uncertainty was weakening the case for investment have led the Committee to prioritise the issue of investor confidence – without it, we hamper our ability to meet climate, energy security and affordability objectives. Energy efficiency and demand reduction is the cheapest contributor to these objectives, and this is what we highlight in our written response to the inquiry.

Continue Reading No Comments

Amber Rudd,DECC

Amber_Rudd_MP

Yes Minister, but….

ACE’s Director reflects on some of the comments in the Secretary of State’s speech to the Conservative Party Conference.

In her conference speech, the Secretary of State suggested that ‘our energy policy should once again be driven by the people who pay the bills.’  Yes indeed, but let’s not forget that we already have relatively cheap energy and our dissatisfaction with our bills is more effectively tackled by helping us to use this resource more wisely than by focusing obsessively on marginal reductions in the cost of a kilowatt hour. ‘Getting a grip to protect families from endless worry about their energy bills’ should start with ensuring that their homes are energy efficient, not with providing secure supplies.

We too are delighted that the new National Infrastructure Commission will look at energy: but it must recognise that our energy infrastructure does not stop at the meter.  Investment in demand side infrastructure needs to be fully and fairly considered alongside supply-side options.

We agree that the Government will help some people to keep their bills down by delivering its promise to insulate a million more homes over the next five years, and that is a good thing; but what about their heating systems, lighting and appliances? What if they need more than just the cheaper insulation options? And what about the other 25 million homes, give or take, that aren’t yet as energy efficient as they need to be?

The Secretary of State wants to get ‘the balance right between supporting new, low carbon generation and protecting bill-payers’: so she must enable energy efficiency to help her do this.  If we use less, we can afford to pay a little more for each unit if we need to, without being out of pocket.

She wants to ‘celebrate and back the businesses and innovators who will transform our energy system’: quite right, but why no mention of the high specification insulation systems that have been developed in recent years, of triple glazing systems that enable natural light to flood in without heat flooding out, of LEDs, of smart heating controls and ventilation… I could go on…

In closing, Ms Rudd invoked the spirit of Margaret Thatcher, to demand that we tackle climate change whilst being ‘tough on subsidies […] pro-innovation and pro-consumer’.  The energy efficiency sector is ready to do just this; it now needs the Government to notice this, and get on with setting the policy framework that will let this happen.

Continue Reading No Comments

DECC,energy and climate change committee

Priorities for the Energy and Climate Change Committee: ACE submission to the ECC Inquiry on priorities for holding Government to account

The Energy and Climate Change Committee is holding an inquiry to gather views on what areas of DECC’s policies will require particular scrutiny in the coming years.  Responses to the consultation will help to inform the Committee’s work programme.  Here are ACE’s answers to the two specific question posed.

Which DECC policy areas do you think require particular scrutiny over the next five years?

The balance of affordability, energy security and sustainability is often most effectively addressed by a focus on using less energy.  Work by the Association for the Conservation of Energy, and others, using DECC’s 2050 Calculator (http://2050-calculator-tool.decc.gov.uk/#/calculator/ace-example) demonstrates how an increased focus on demand side actions can reduce the cost of meeting climate change aims.  And, clearly, using less energy results in lower costs for energy consumers.

A clear priority for the Committee over the next five years should therefore be to scrutinise the extent to which all elements of energy infrastructure, including those on the demand side of the meter, are treated fairly in the policy decision-making process, and that investment in the demand side of the system is adequately supported by Government policy.

What should be the Committee’s scrutiny priorities over the next twelve months?

Many of DECC’s previous policies to support energy efficiency (for example, support for the Green Deal Finance Company and the scheduled timetable to zero carbon new buildings) have already been withdrawn.  Energy efficiency investments supported through the Energy Company Obligation will largely be delivered by the end of 2015, with no further obligation currently scheduled until April 2017.  And Treasury is currently reviewing the main planks of energy efficiency policy for non-domestic buildings.

The need for early action is therefore particularly acute in relation to energy efficiency policy: investor confidence in this sector is very low despite an energy sector-wide view that investment in energy efficiency has to increase significantly (https://www.energyinst.org/information-centre/energy-barometer) and this has the potential to compromise future delivery of carbon emissions and fuel poverty targets.  Ensuring that action on energy efficiency policy is taken soon, and taken effectively, should therefore be a priority for the Committee.

Continue Reading No Comments

DECC,Energy Policy,Green Deal,Pay As You Save

If not the Green Deal, then what?

The Government announced yesterday that no further public funding will be provided to the Green Deal Finance Company.  This leaves the energy efficiency supply chain at a loss to understand how the Government thinks it will meet its fuel poverty and climate change targets.  Yes, the Green Deal has not been as effective as the Government originally forecast, but the principle of a Pay as You Save mechanism to support energy efficiency investment remains sound.  Working to build on the existing framework, not pulling the rug from under it, was the way forward.

DECC are aiming to develop and establish a more stable, long-term, coherent framework for home energy efficiency: it is difficult to see how they can achieve this without finance options for the ‘able-to-pay’.  And we should not forget that this will include those on modest incomes who do not qualify as fuel poor: are we expecting them to turn to payday lenders?

The energy efficiency industry has invested significantly in the development of the Green Deal.  Government’s decision to undermine this core plank of home energy efficiency policy without first developing an alternative will in turn undermine the confidence of industry and its willingness to support whatever new framework is developed.

Energy efficiency investment remains the single most affordable way for Government to deliver on fuel poverty and climate change objectives.  So, yes, we will be working with DECC to develop a better framework for the future of home energy efficiency policy; but as of yesterday, our job and theirs became a lot harder.

Continue Reading 1 Comment

Subsidy cuts; VAT increases: threat or opportunity?

The news for energy efficiency in the past week has seemed grim: an EU ruling on VAT rates that will increase the cost of energy efficiency investments by 14% and the announcement of a £40 million cut in DECC’s subsidies for energy efficiency.

But let’s not despair. The French treat the issue of VAT differently; using general refurbishment of domestic buildings serving as an economic stimulus as their rationale for lower rates of VAT (10% for all retrofit works instead of France’s standard 20%), rather than the social benefits argument that the UK has used. If we adopt their approach, which additionally stimulates energy efficiency investment by lowering the rate of VAT even further (from 10% to 5.5% in France’s case) for energy-related retrofit, we’ll incentivise more action on the energy performance of our homes than the 5% VAT rate alone has done.

And there are better ways for DECC to deliver its energy security and climate change objectives, through cost-effective energy efficiency investments, rather than handing out market-distorting subsidies. ACE has long called for a more long-term, robust framework that will enable the market for energy efficiency to develop sustainably, and now is the perfect opportunity for DECC to develop this.

The French VAT reduction scheme is just one example of a more systemic incentive that could be offered. Revenue neutral stamp duty or council tax incentives for the domestic sector could lead to between 650,000 and 1.75 million additional retrofits every year. Similarly, differential business rates could encourage small business owners to invest in improving the energy performance of their buildings. If these incentives are combined with a long-term plan for minimum energy efficiency standards for all buildings, together with improved access to a range of finance options, we could begin to see the change in market demand for these measures that is needed.

Continue Reading No Comments

Cost-effective carbon emissions reduction and resource efficiency

The incoming government promised in their manifesto to cut carbon emissions as cost-effectively as possible.  As energy efficiency remains the most cost-effective source of emissions cuts, can we therefore look forward to a much needed shift in policy focus?

At first glance, it may seem not: there is little explicit mention of energy efficiency in the Conservative Party manifesto, and absolutely no recognition of how its multiple benefits can contribute to other government policy aims.

But increased energy efficiency can help deliver more competitive businesses and less wasteful public sector organisations. Investment in warmer homes helps families to stay healthy.  And local energy efficiency investment can stimulate local economies, creating worthwhile jobs for local people.

These are all arguments that should make sense to the government: it is up to us to make them persuasively and show how our sector can help them deliver on their election promises.

Continue Reading No Comments

Directorate

Joanne Wade – Chief Executive

Dr Joanne Wade has led the ACE team since September 2014.  Prior to this she worked for a number of years as a freelance consultant.  From 2004 to 2009, she was a director of energy and environmental consultancy, Impetus Consulting and before this was for nine years the Research Director at ACE.  She has also worked at the University of Oxford’s Environmental Change Institute and for Price Waterhouse in the energy division of their consultancy business.

Joanne is an Honorary Senior Research Fellow at Imperial College London, and lectures to MSc students at Imperial, Surrey and City.  She is a Fellow and Council Member of the Energy Institute, and chairs its Energy Advisory Panel.  She is also a member of the Board of the European Council for an Energy Efficient Economy and an Advisory group member for the Centre for Innovation and Energy Demand at the University of Sussex.

Continue Reading

Infrastructure

‘Building the Future’ hits the nail on the head

ACE today welcomed the publication of ‘Building the Future: the economic and fiscal impacts of making homes energy efficient‘.  This report, by Verco and Cambridge Econometrics for the Energy Bill Revolution, sets out clearly how making our homes more energy efficient is an infrastructure investment that delivers high Value for Money through reduced energy bills and NHS costs, increased tax revenue for the Government, higher employment, increases in company profits and carbon emissions reductions.

When the Prime Minister tried to justify the government’s decision to block a binding European energy efficiency target last week, he focused on the need to reduce carbon emissions ‘at the lowest possible cost for businesses and consumers‘ As demonstrated by the report, energy efficiency investment goes beyond the Prime Minister’s requirement and actually delivers net benefits for businesses (£15bn in cumulative, additional (discounted) profits to 2035, consumers (£8.6 billion per year) and the Government itself (£1.27 in tax revenue for every £1 invested).

Achieving the level of energy efficiency improvement modelled in the report will require policy action to invest on behalf of low income households and to support investment by able-to-pay households, and we urge Mr Cameron to honour his commitment to energy efficiency, and back up his commitment to carbon emissions reduction with the action needed to deliver it at net benefit to the UK.

Continue Reading 2 Comments

Fuel Poverty,Infrastructure,Investment,Labour,Private Rented Sector

Labour conference puts energy efficiency centre stage

ACE welcomes Shadow Secretary for Energy and Climate, Caroline Flint’s pledge at the Labour party conference today to ‘make energy saving a national infrastructure priority’.

We also welcome the commitment to require private rented accommodation to meet a decency standard by 2027: we urge the Labour party to ensure that this standard is set high enough (EPC band C) to deliver homes that are fit for purpose in a low energy, low carbon economy.

Delivering on the infrastructure priority promise requires investment: why then are Labour confining themselves only to a level of action that can be achieved ‘without spending any more money’?

A promise to make 200,000 homes warm every year is good – but not good enough: it could leave families living in dangerously cold homes for a further 30 years. The six million low income families living in homes that are too expensive to heat need real priority to be given to this investment. Using only a very small portion of the £45 billion invested in infrastructure each year would enable the level of action to be increased enormously. We therefore urge Labour to increase the ambition of their implementation plans to match the strength of their pledge.

Continue Reading 2 Comments

CONTACT US | FIND US | US | © 2017 Association for the Conservation of Energy. CAN Mezzanine, Old Street, 49-51 East Road, London N1 6AH. Tel: 020 7250 8410. Registered company number 01650772