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Our response to the National Infrastructure Commission’s consultation on National Infrastructure Assessment

In its plan to establish the National Infrastructure Commission, the government set out a responsibility for the Commission to analyse the UK’s long-term economic infrastructure needs, outline a strategic vision over a 30-year time horizon and set out recommendations for how identified needs should begin to be met, through the publication of a National Infrastructure Assessment once a parliament. The Commission has consulted on the Assessment.

In our response, we provide evidence to support our strongly-held view that energy efficiency should be included firmly within the remit of the National Infrastructure Commission as part of a whole energy system approach to meeting the UK’s demand for energy services in a cost-effective way whilst meeting our climate change targets.

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Brexit,European Energy Efficiency Directive,European Energy Performance of Buildings Directive,European Union

New PM must stick to key EU climate change targets for 2020

Irrespective of Brexit, UK Prime Minister Theresa May and her cabinet must commit to critical EU targets for the year 2020 on cutting carbon emissions and transforming the UK’s energy infrastructure.

This is the call made today (Friday) by 30 environmental and energy-related organisations¹ in a letter² to Greg Clark,  the new Secretary of State for Business, Energy and Industrial Strategy. Signatories include leading business associations covering the renewable energy and energy efficiency sectors, two of the UK’s biggest green NGOs and Energy UK, the body representing the  major energy suppliers.

Their letter argues that EU laws and regulations on energy and buildings have played a leading role in enabling the UK to reduce its emissions of greenhouse gases and to provide global leadership on climate change.³

Three EU targets for the year 2020 have paved the way for future emission reductions. The signatories say the UK Government should now declare that it is sticking to these, as it prepares to commence exit negotiations from the union, to give badly-needed confidence to businesses and investors.

The three targets are:

  • 15% of all energy used for electricity, transport and heating should come from renewable energy sources (under the Renewables Energy Directive)
  • UK final energy consumption should fall to 129.2 million tonnes of oil equivalent or less (the Energy Efficiency Directive)
  • All new buildings must be nearly zero energy buildings by the end of 2020 (by the end of 2018 for public buildings) (The Energy Performance of Buildings Directive)

The letter says that a combination of EU and UK laws, regulations and policies have given businesses, investors and consumers the confidence to begin putting the UK on the path towards a low carbon future.

“Following the referendum, it is now critical that Government restores this already-eroded confidence by giving an assurance that, until the terms of leaving the EU are in place, all relevant EU directives and targets are still in place and the UK Government is legally obliged to continue to meet them.”

Dr Joanne Wade, CEO of the Association for the Conservation of Energy, says: “The Brexit vote has caused industry uncertainty. Government must move quickly to confirm it will continue on a clear path to meeting key energy targets.”

Sue Riddlestone, Chief Executive of sustainability charity Bioregional, says: “Cutting emissions is the pathway to secure, affordable energy for the UK in the long term as well as tackling climate change. We need a firm commitment to these long-agreed targets for 2020.”

Dr Nina Skorupska, Chief Executive of the Renewable Energy Association, said: “For the sake of jobs and investor confidence the Government cannot afford to row back on the EU 2020 renewables targets.”

Contacts:

  • Nicholas Schoon, Policy and Communications Manager, Bioregional, 07732 381728
  • Jenny Holland, Campaigns Director, Association for the Conservation of Energy, 0207 359 8000, 07875 629781, jenny@ukace.org

[1] SIGNATORIES

  • Ashden
  • Association for the Conservation of Energy
  • Bioregional
  • British Blind and Shutter Association
  • British Pump Manufacturers Association
  • British Rigid Urethane Foam Manufacturers Association
  • Cavity Insulation Guarantee Agency
  • Centre for Sustainable Energy
  • Chartered Institution of Building Services Engineers
  • E3G
  • Energy Saving Trust
  • Energy Systems Trade Association
  • Energy UK
  • Existing Homes Alliance Scotland
  • Friends of the Earth
  • Glass and Glazing Federation
  • Greenpeace
  • Insulated Render and Cladding Association
  • Lighting Industry Association
  • Mineral Wool Manufacturers Association
  • National Energy Foundation
  • National Insulation Association
  • Oil Firing Technical Association
  • Property and Energy Professionals Association
  • Regen SW
  • Renewable Energy Association
  • Solar Trade Association
  • Sustainable Energy Association
  • Thermal Insulation Consortium
  • Town & Country Planning Association

[2]  TEXT OF LETTER

Dear Mr Clark,

We would like to warmly congratulate you on your appointment as the Secretary of State for Business, Energy and Industrial Strategy, and wish you well in this important new post.

We welcome the 29 June statement of Amber Rudd, Secretary of State for Energy and Climate Change, that the UK government would not step back from international leadership in acting on climate change.

We agree that both the UK and the EU have been world leaders in addressing the enormous challenge posed by climate change. UK leadership has stemmed from the combination of EU and UK laws,  regulations and policies. Together these have given businesses, investors and consumers the confidence to begin putting the UK economy and infrastructure on the path towards a low carbon future.

Following the referendum, it is now critical that Government restores this already-eroded confidence by giving an assurance that, until the terms of leaving the EU are in place, all relevant EU directives and targets are still in place and the UK Government is legally obliged to continue to meet them.

In particular, we call upon the Government to commit to hitting 2020 targets under the Renewable Energy Directive, the Energy Efficiency Directive and the Energy Performance of Buildings Directive:

  • 15% of all energy used for electricity, transport and heating should come from renewable energy sources
  • UK final energy consumption should fall to 129.2 million tonnes of oil equivalent or less
  • All new buildings must be nearly zero energy buildings by the end of 2020 (by the end of 2018 for public buildings)

These targets make a key contribution towards implementing the UK’s world-leading Climate Change Act 2008 – pioneering legislation which requires ever-lower UK emissions in successive five-year carbon budgets. The policies and regulations required to meet these budgets have all been set in the context of EU law and policies on energy and climate.

Yours sincerely,

[3]  Between 1990 and 2014, the latest year for which final figures are available, UK territorial emissions of greenhouse gases fell by 35%. Between 2000 and 2014 they fell by 28%.

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Treasury slammed following 9,000 cold home deaths

The Treasury was strongly criticised this week after a Panorama investigation revealed that over 9,000 people in England and Wales died from living in cold homes last winter.

The Panorama programme, ‘Too Poor to Stay Warm’, broadcast on Monday, cited research by academics at UCL which shows that a fifth of the 43,900 Excess Winter Deaths in Winter 2014/15 were due to people living in cold homes.

Yet Government support for energy efficiency has crashed by 80%. Making homes energy efficient is considered by experts as the only long term solution to fuel poverty, which affects over 4 million households in the UK.  The UK has one of the oldest and least energy efficient building stocks in Europe.

In our own research published earlier this week, also reported in The Guardian, we found that:

  • the number of energy efficiency measures installed in British homes has fallen by 80% since 2012
  • the number of households helped with energy efficiency measures has crashed by 76%
  • investment in home energy efficiency has declined by over 50%

We also found that the very low level of energy efficiency support now on offer is set to continue for the rest of this Parliament. During the last Parliament 5 million households were helped but we estimate that only 1.2 million households will receive energy efficiency measures this Parliament.

The Government axed Warm Front during the last Parliament, and the Green Deal and Green Deal Home Improvement Fund last year.  It also axed the UK’s zero carbon policy for new homes. Only the Energy Company Obligation is left, a levy on energy bills that was slashed in the Spending Review in December 2015.

A major alliance of 200 organisations and businesses under the Energy Bill Revolution banner is calling on the Government to make home energy efficiency an infrastructure priority. It is the most popular energy solution in the UK today with support across Parliament.

But the Treasury has refused to allocate one penny of the £120bn infrastructure budget to make homes energy efficient, despite the fact energy efficiency is classified as infrastructure by both the International Energy Agency and the European Investment Bank. According to the Government’s own economic data, making homes energy efficient also provides comparable economic returns to other infrastructure projects like roads and railways.

Jenny Holland, Head of Campaigns at ACE, said: “Our research findings are truly shocking. The UK has some of the worst housing stock in Europe, with levels of fuel poverty unheard of in much colder countries like Sweden. And UCL’s findings make clear that our cold homes were responsible for 9,000 avoidable deaths last winter. But Treasury help to upgrade our freezing homes has been slashed to the bone. The Government has pledged to make all fuel poor homes energy efficient by 2030, but without new funding, it will take them 94 years to meet their pledge. This is simply not good enough. By making energy efficiency an infrastructure priority, the Treasury could transform the lives of some of our most vulnerable citizens, making their fuel bills affordable and greatly reducing the risk of cold-related illness.

Ed Matthew, Director of the Energy Bill Revolution alliance said: “The decision by Treasury to decimate energy efficiency support will cost lives. Yet making UK homes energy efficient provides strong economic returns, as much as any other infrastructure project. But Osborne has chosen to invest £50 billion in HS2, £30 billion in road building and not one penny of the infrastructure budget in retrofitting the crumbling UK building stock. Perhaps he thinks there are more votes for the Conservatives by shaving a few minutes off a railway ride than saving the lives of the fuel poor.

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Press Release: ‘Scandalous’ – winter deaths surge, but Chancellor slashes help for cold homes by 42%

Press Release, for immediate release

ACE’s reaction to Excess Winter Deaths figures and Comprehensive Spending Review

On the same day that official figures reveal that last winter’s Excess Winter Deaths were at their highest level for 15 years, ACE has described as ‘scandalous’ the Chancellor’s announcement of a 42% cut in the help available to households living in dangerously cold homes. They have also expressed disappointment that, despite allocating £100 billion for infrastructure projects, Mr Osborne has chosen to spend not one penny of this pot to make the UK housing stock more energy efficient.

Jenny Holland, Head of the Parliamentary Team, said:

“The appalling state of our housing stock is one of the key causes of excess winter deaths, which today’s figures show surged last winter to their highest level in 15 years.  Yet despite this, the Chancellor has today ignored industry-wide pleas to release infrastructure funding for an energy efficiency programme.  Instead, he has announced that the Energy Company Obligation – the only remaining help for householders living in cold homes – will be slashed to £640m a year from 2017, a drop of 42% on annual ECO spending to date.

”The Chancellor boasts that households benefitting from the ECO are expected to save £300 on their bills. But these lucky few will amount to just 200,000 per year. The other 5 million poorest households who struggle with their basic living costs won’t even get a look in until April 2022.”

In addition, while welcoming the proposal to build 40,000 ‘affordable’ homes by 2020, ACE points out that, having ditched the zero carbon homes standard earlier in the year, the Chancellor has needlessly saddled these homes with higher fuel bills.  ACE also describes as a missed opportunity the Chancellor’s refusal to announce variable rates of stamp duty based on a home’s energy efficiency.

Jenny Holland continued:

“It’s a bit rich for the Chancellor to trumpet these new homes as ‘affordable’ when he was the one who, without warning, ditched the zero carbon homes standard in July.  This means that these new homes will be needlessly saddled with higher running costs – or householders will be forced to have expensive and messy retrofits at some later stage to bring their homes up to scratch.

“Meanwhile, the Chancellor has again shown a willingness to adjust stamp duty as a policy lever, increasing it by 3% for buy-to-let purchasers.  But he has once again failed to incentivise energy efficiency investment by introducing a revenue-neutral adjustment to stamp duty based on homes’ energy performance.”

For more information, contact: Jenny Holland, jenny@ukace.org, 07875 629781

PDF version of press release

Notes for Editors:

The new Energy Company Obligation, to run for 5 years from April 2017, will cost £640m per year.  That represents a 42% reduction in the ECO’s actual expenditure to date (£1.1bn per annum on average over the 2.5 years to the end of June 2015, according to the latest available official statistics).

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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.

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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.

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Our response to Energy & Climate Change Committee’s inquiry into home energy efficiency and demand reduction

The Energy & Climate Change Committee says that energy efficiency and demand reduction is one of the most cost effective ways to cut carbon emissions, improve energy security and reduce consumer bills. It adds that the Government has announced the end of two key policies – Zero Carbon Homes and the Green Deal – without bringing forward any replacement schemes – and that the Energy Company Obligation is also due to come to an end in March 2017.

The Committee is investigating what lessons can be learnt from these and previous energy efficiency schemes.  The evidence received will feed into its scrutiny of energy efficiency policies over the course of this Parliament.

ACE has submitted its written evidence, highlighting the successes of past programmes, the weaknesses of recent schemes and lessons that can be learned from them, including lessons from the US and elsewhere in Europe.

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A jobs tragedy that could have been avoided

Yesterday saw the sad announcement that energy efficiency and renewables employers Mark Group and Climate Energy had gone into administration. Many hundreds of people have lost their jobs. This is a direct consequence of the uncertain and unstable investment environment created by Government. A long-term policy framework is now DECC’s stated aim – and the newly announced Infrastructure Commission has a remit to consider energy infrastructure needs. But for these companies this is too little, far too late. Since May the Government has jettisoned policy after policy – playing havoc with industry’s confidence and longer term expectations.

While we believe it is possible – and necessary – to rebuild investor and supply chain confidence, without swift and clear indications of a stable, long-term policy framework, there is a significant risk that the UK will be written off as a place to invest in energy efficiency and renewables.  This would mean tens of thousands of jobs forgone, energy security undermined, competitiveness reduced, fuel poverty exacerbated and CO2 reductions made more expensive.

Current Government policy is recasting energy efficiency as Cinderella, whereas it is – as the International Energy Agency puts it – the First Fuel.  If we are to avoid further tragedies such as yesterday’s and reap energy efficiency’s rich rewards, it is high time for the whole Government to treat it as such.

Related reading / listening:

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Energy Company Obligation,Supplier Commitment

Delivering the best deal for energy consumers: options for the next supplier commitment

For the benefit of consumers and the supply chain, and unlike the Energy Company Obligation (ECO), longevity, simplicity and flexibility must be at the heart of the next supplier commitment’s design (read full position paper). Its objective must be to serve as an important and stable plank to meeting carbon budgets within a wider framework of policies and measures that support a nationwide transformation of the housing stock through staged deep retrofits. It should be capable of delivering a wide range of measures to a large number of households, and drive the best possible outcome for consumers by lowering their bills and improving their health and comfort, both in the medium and long-term. A separate and new fuel poverty programme should be established alongside it, delivered in every locality by working with the devolution agenda and preferably funded through public expenditure. This must be fit for the purpose of meeting England’s new fuel poverty targets and flexible enough to mesh with existing fuel poverty programmes in Scotland and Wales. The next supplier commitment (SC) needs to:

  • Inter-operate with a long-term policy framework for low carbon housing (which is currently lacking with respect to finance, structural tax incentives (e.g. Stamp Duty, Council Tax) and regulation) – which must also be characterised by longevity, simplicity and flexibility
  • Be set in lifetime carbon terms over a five-year time horizon, to 2022, with the five-year time horizon extended every 2.5 years and transparent penalties for non-compliance
  • Be required to satisfy customers, not respond to tick boxes in over-long and costly paper trails
  • Include the able-to-pay and have a robust but broad distributional safeguard for fairness
  • Use deemed carbon scores to enable consistent and stable offers to be made to consumers while reducing administrative cost
  • Deliver and employ individual home retrofit roadmaps to make staged deep retrofit a reality
  • Not constrain any part of the SC to only particular measure classes (such as the Carbon Emissions Reduction Obligation and insulation) and be allowed to install any Green Deal approved measure across insulation, heating and controls, lighting and renewables
  • Deliver an ambitious solid wall insulation programme with a minimum of 500,000 installations for the first five-year period, concentrating on houses and guided by quality of installation
  • Include mandatory minimum delivery through brokerage, the level of which should be kept under review

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‘Chilled to death’: the human cost of cold homes

New research by ACE for the Energy Bill Revolution campaign has found that in the last five years, 46,700 people in the UK have died due to living in a cold home.

Our research used official data on Excess Winter Deaths.  This is an assessment of how many more people die in the winter than at other times of year. These deaths are primarily due to illnesses brought on by the cold.  It is estimated by the World Health Organisation that 30% of Excess Winter Deaths are due to people living in cold homes.

We found that since the coalition Government came to power in 2010:

  • 155,720 Excess Winter Deaths have occurred in the UK over the last five winters
  • Around 46,700 of these deaths in the last five winters are due to people living in cold homes
  • This winter will have seen the highest rate of Excess Winter Deaths and cold home deaths in the last five years. We estimate that there will have been 46,100 Excess Winter Deaths this winter, of which around 13,800 are due to people living in cold homes.
  • The average number of Excess Winter Deaths over the previous five years is 27,830, of which around 8,350 are due to cold homes. So this winter has seen an increase in Excess Winter Deaths of 66% above the average.

In 2013, in England and Wales, cold homes killed over four times as many people as road and rail accidents; nearly four times as many people as drug misuse; and about as many people as alcohol.

Cold housing is one of a number of important issues for public health and safety.  Focusing more resources on tackling this crisis does not mean taking resources away from tackling other health problems, such as those mentioned here.  In fact it may free up resources to address them.

Cold home deaths can be prevented by improving the energy efficiency of the UK’s draughty, leaky housing stock.  The UK Treasury has plans to spend £100 billion of public money on infrastructure over the course of the next Parliament.  Investing just 3% of this budget in making homes highly energy efficient, alongside existing energy efficiency budgets, can bring two million UK low income homes up to a high standard of energy efficiency (EPC Band C) by 2020. The Energy Bill Revolution is calling for all six million low income homes to be brought up to this standard by 2025.

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