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ACE’s initial response to the Clean Growth Strategy

Dr Joanne Wade, CEO of the Association for the Conservation of Energy (ACE) welcomes the aims, targets and aspirations outlined within the Clean Growth Strategy. There is recognition of the value of energy efficiency at very core of the strategy and a commitment to further developing policies, and we see the strategy as a clear step in the right direction.

The scale of the opportunity of energy efficiency in buildings is huge. ACE research shows that the net present value of energy efficiency to the UK is at least £45 billion in energy efficiency savings[1]. The UK’s building stock is in dire need of urgent action. Therefore, we welcome the government’s intervention to stimulate energy efficiency markets in both the domestic and non-domestic sectors – to deliver the scale and pace of change that is required to meet current and future carbon budgets. However, there is a lot of work still to be done to drive energy efficiency in the UK and to develop a low carbon economy that works for everyone.

We welcome the government’s proposals surrounding the energy performance of domestic buildings, especially the proposal to further consult on the Minimum Energy Efficiency Standards (MEES) regulations, an enhanced trajectory for the regulations – taking homes in the private rented sector to band C by 2030 – and a commitment to looking at replicating the target in the social housing sector.

We are also pleased that the Energy Company Obligation (ECO) will be extended to 2028, providing longer term certainty for the energy efficiency industry. While it is right that ECO will focus on eradicating fuel poverty, ACE questions whether the investment needed in this area needs to be higher.

The Government have demonstrated leadership in enacting a target to reduce carbon emissions from the public sector, however we are disappointed that the target is voluntary rather than mandatory. We welcome the call for evidence consultation to further develop policies and programmes.

The team at ACE are taking the time over the coming days to analyse the Clean Growth Strategy and supporting documents to identify where there are still gaps in the market, and will then begin to develop the evidence base that the government have called for, thus ensuring that the voice of the energy efficiency industry is heard.

 

[1] £26 billion for homes, and £20 billion for business, ACE & RAP (2016) Buildings and the 5th Carbon Budget.

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MEES: a missed opportunity?

Our Research Director, Kelly Greer, reflects on the publication of guidance on the minimum efficiency standards for homes in the Private Rented Sector.

BEIS has finally published the guidance for landlords and local authorities on the minimum level of energy efficiency required to let domestic property under the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015. We welcome the publication of the guidance and the clear message that it sends about the benefits to landlords and tenants of improved energy performance. But we worry that it contains loopholes that will mean that action to eradicate fuel poverty and improve the energy efficiency of properties may not be taken.

The legislation sought to improve the energy performance of the worst properties to an acceptable standard of energy efficiency (EPC band ‘E’ or above) and thus to improve living conditions for around 300,000 private sector rented households across England and Wales. However, the potential for landlords to claim an exemption and the reliance on local authority enforcement suggest that the regulations in their present form could potentially have little effect.

This is particularly worrying since the guidance’s introduction highlights that ‘Living in private rented accommodation significantly increases the likelihood of a household being fuel poor, so much so that around a third of all fuel-poor households in England live in the private rented sector, despite the sector accounting for only around a fifth of all households in England and a seventh of the households in Wales.
Amongst EPC F and G rated properties in the sector, recent data shows that 45% of households are classified as fuel poor. Put simply, the PRS has a disproportionate share of the UK’s least energy-efficient properties and fuel-poor households. Installation of energy efficiency measures can help address this’.

Inaction will therefore leave thousands of tenants paying higher energy bills for years to come. Climate Action charity 10:10 estimates that this could leave tenants paying an extra £1bn in energy bills every year.

ACE, with other key stakeholders in the sector, fought for the introduction of a cost cap within the regulations, below which landlords would be expected to fund improvements to bring their properties up to an EPC E standard, in place of the current ‘no cost’ provisions.

This principle of ‘no cost to the landlord’, within the current regulations, means that landlords of F or G rated homes will only be required to make improvements to these properties where they can do so entirely using third party finance from one or more sources.  Sources of funding landlords can access include the Energy Company Obligation (ECO), which has been significantly reduced in size and scope over the past few years; local authority grants, which are somewhat thin on the ground in these times of austerity; and the now privatised Green Deal Finance Company (yet the government’s own impact analysis of the regulations suggest that 30% of private rented sector homes wouldn’t be able to meet the Green Deal’s ‘golden rule’ and therefore wouldn’t be eligible to take up the finance).

The ‘no cost’ requirement also makes the regulations far more administratively complex, both for landlords and for local authorities as enforcement agents.  If a landlord chooses to register an exemption from the regulations on the basis that the changes would involve cost to them, they simply have to provide a self-certified narrative explanation for why no suitable funding could be obtained to fully cover the cost of installing improvements. How can local authorities check the validity of self-certified statements? ACE has recommended to BEIS that more detailed guidance on this area should be produced for both landlords and local authorities.

Local authorities can serve enforcement action on landlords who they believe are not meeting the regulations, and landlords can appeal the decision via the First Tier Tribunal process.  This will be an interesting area to monitor as the regulations come into force in April 2018, as with housing enforcement local authorities take a cautious approach. They will not risk using their resources to robustly defend cases that may be quashed on appeal by tribunal judges. It is therefore essential that any guidance produced is also disseminated to tribunal panels.

ACE also has particular concerns about the 5 year timeframe for exemptions, and how there is no mechanism to take account of changes in the funding landscape within this period. Those working in the energy efficiency sector know that the funding landscape can change dramatically on a frequent basis.  This long exemption timeframe means that chances to access funding are a missed opportunity to maximise the effectiveness of MEES. We must stress that it is important to strike a balance on this timescale – too short and it is too burdensome for landlords, but too long and the effectiveness of MEES is reduced.

We could take a positive view of the situation, and assume that landlords, understanding the benefits to themselves and their tenants of higher energy performance, will simply choose to pay for lower-cost measures themselves rather than seeking funding or an exemption.  For many, the cost could be as little as £600.

Any action by landlords, whether paying for improvements themselves or actively seeking funding sources, relies on landlords assuming that enforcement will be robust, however we believe that it will not.

A key point raised by ACE in the past is whether or not local authorities will enforce the standards. Both Environmental Health and Trading Standards departments, who are set to enforce these regulations, have seen significant cuts to their resources. The fallout from under resourcing local government can be seen in various ways. For example, the decline of living standards in private rented housing as well as the re-emergence of food safety scares. There are suggestions that Trading Standards are not actively enforcing the requirement for rental properties to have EPCs, and we are concerned that this will happen with the MEES regulations.

Another element missing from the guidance is how the government plan to strengthen the energy performance requirements over time. The message to landlords should be to take greater action now – beyond EPC band E – and that they will benefit in the long run by not having to undertake additional works in the future.

The introduction of these standards is a real step in the right direction, and could lead to significant improvement in some of our worst properties.  But unless government make it simpler for landlords to undertake works than to try and avoid the regulations, it risks failing to deliver.

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Local Story – Energy Efficiency in Norwich South

As households begin to switch on their heating, we are releasing our new report Energy Efficiency in Norwich South – the seventh of our series of constituency-focused local energy efficiency stories. The report has been welcomed by Norwich South’s MP Clive Lewis as well as local businesses and charities. Clive Lewis MP added:

Many of my constituents told me they couldn’t afford to heat their homes last winter. I welcome the report by the Association for the Conservation of Energy, which sheds light on the energy efficiency of the housing stock and businesses in Norwich South constituency and commend the work that the City Council, local installers and programme managers have done in recent years to implement energy saving features in homes, such as better insulation and more efficient boilers. 

The report shows that there is a huge need to improve the efficiency of almost three quarters of workplaces and over 40,000 homes in Norwich South. But current national policy commitments would see a paltry 343 homes helped each year to 2020.

Not only is this selling our environment short, it’s such a false economy for our public finances. For example, for every £1 invested in renovating cold homes the NHS saves 42 pence in reduced hospital admissions and GP visits.

This government needs to stop handing out multi-billion pound tax cuts for a selected few. Instead it should invest in energy efficiency measures which benefit all of us now and by reducing carbon emissions will benefit all of our children in the future too.

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Cost of Energy Review: will it deliver lower bills?

Yesterday, BEIS announced details of its ‘Independent review to ensure energy is affordable for households and businesses’.  Here are my initial thoughts on whether or not it will deliver lowest cost, sustainable energy services for consumers.

First the ambition: the government defines this as ‘for the UK to have the lowest energy costs in Europe, for both households and businesses’.  Assuming that they mean energy service costs, rather than fuel costs, I have no problem with that as a starting point.  But, looking at the detail, I do have one or two concerns.

The review will be led by Prof. Dieter Helm and will look at how the cost of electricity can be kept as low as possible, as we meet our climate targets.  Which is my first concern: is electricity really the only form of energy that we should be concerned about?

No, it isn’t.  Electricity use accounted for only 17.5% of final energy use in 2016 (DUKES, 2017), whilst gas accounted for nearly 30% and petroleum products almost half of total use.  Of course, for this review we are interested in the cost to the consumer, rather than the amount used.  And electricity costs are dominant for industrial and commercial users.  But in homes, expenditure on gas and electricity account for roughly equal shares of the money spent.  And for our transport, virtually all our fuel expenditure is on petroleum products.  So, shouldn’t the review be looking at the costs to consumers of all energy services, not of any given fuel?

Perhaps those who defined the scope of the review believe that the future is all-electric.  Indeed, a report published last Thursday by Forum for the Future included the following quote from Prof. Helm:

‘Decarbonisation should eventually bring about the end of fossil fuels, but they face a much more immediate threat.  That threat is digitalisation. Everything digital is electric.  The future of energy is therefore electric too.’

And we have seen recent government announcements of future bans for fossil-fuelled vehicles, albeit 20 years hence.  So, perhaps we are heading towards an all-electric energy system.  But what about heat?  Will this become all-electric?  And, if so, how quickly?  National Grid’s Future Energy Scenarios 2017 offers four future scenarios, and in only one of these (admittedly, the one in which we meet our climate aims) does gas use in homes decrease dramatically.  Even in this scenario, the replacement of gas takes more than 30 years. And, surely, the next 30 years of consumers’ energy bills is something that we should be thinking about.

Which brings us to my second concern: the review ‘will consider the whole electricity supply chain – generation, transmission, distribution and supply’.  What about demand?  As we all know, one of the most cost-effective ways to reduce consumers’ energy costs is to reduce the amount of energy they have to buy.  Indeed, in the National Grid scenario, one of the main drivers that reduces gas demand is the fact that consumers ‘live in housing stock that is good at retaining heat’.

The terms of reference do give some hope.  They state that the review will consider ‘the key factors affecting energy bills’, and energy efficiency is included in the list.  The question is whether demand reduction and response – particularly for heat and transport – will be given sufficient weight, given the clear emphasis on the electricity supply system in the minds of those who have shaped the review.

If the review does not fully consider the costs and benefits of energy demand reduction, it will not deliver on the government’s aim of the lowest bills for consumers.

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Mind the Gap

Higher energy efficiency makes mortgage repayments more affordable, because less money spent on fuel means more money available for other bills. This is the core message that inspired the LENDERS project to explore how the energy performance of a home could be included in calculations of mortgage affordability.

The UK has the largest mortgage market in the world, with £234bn lent in 2016. At today’s launch of the project’s final report, BEIS Minister Claire Perry urged the mortgage industry to maintain the UK’s leading reputation for financial innovation and grasp the opportunity that improved home energy performance offers. She pointed out that higher energy efficiency improves and protects the collateral against which mortgage providers are lending, and improves home-owners’ ability to repay their debt.

The project has developed a tool that estimates the energy costs of a given property more accurately than the methods currently used by the mortgage industry. The tool can be used to show home buyers how the energy efficiency of their chosen home will affect their monthly fuel bills, and it could also be used in full mortgage affordability calculations, potentially affecting the maximum amount people can borrow – increasing this for more energy efficient properties and decreasing it for those with worse energy performance.

The ability to borrow additional money on a more efficient property will only affect directly the minority of borrowers who actually borrow close to their maximum mortgage amount. But the bigger prize is the potential effect on homebuyer perceptions: the option to borrow more on a given property could increase its attractiveness to buyers, whether or not they actually take up the larger mortgage amount; this in turn could lead to faster sales of more efficient properties and eventually to higher prices.

The Minister is clearly looking to industry to play a leading role in building demand for energy efficiency investment. And – to an extent – industry is willing to respond, as evidenced by the active involvement of mortgage lenders in the project.

However, the report acknowledges that making changes to affordability calculations is a significant process change and could take the industry some time, although promotion of the existing stand-alone tool by lenders and estate agents could begin now. The key question is: will either of these things happen?

Is the potential for additional mortgage lending to those who currently take up the maximum loan available to them a big enough financial incentive for lenders? Probably not.

Is the longer-term increase in lending on higher value energy efficient homes (together with a possible decrease in lending on less valuable inefficient properties) any incentive at all?

And is the ‘improvement in, and protection of, collateral’ that the Minister identified a clear enough motivator for lenders to invest time and money in promoting this new information to home buyers and in changing their systems?

If the answer to any or all of these questions is ‘no’, then there may well be a large gap between government’s expectations of an industry response and what actually happens, which would be a real opportunity missed. The questions then are: how do we close this gap? And whose job is it to do this?

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Our response to Scottish Government’s consultation on energy efficiency and condition standards in private rented housing – a Scotland Energy Efficiency Programme Consultation

We welcome the Scottish Government’s consultation on the topic of minimum energy efficiency standards in the Private Rented Sector and consider that this is a vital first step to ensure that all homes in Scotland are energy efficient, enabling tenants to be warmer in their homes and use less energy. Fuel poverty remains a significant issue in Scotland, and across the wider UK, particularly in the private rented sector. Increasing the energy efficiency of these properties is key to reducing this problem

To realise these benefits, the Scottish Energy Efficiency Programme must be an ambitious programme for low-carbon refurbishment of Scotland’s exiting homes, including a package of measures – attractive finance; the provision of free advice and support; and the introduction of a minimum energy performance standard for all privately rented homes.

This consultation on standards for the private rented sector represents an important step towards realising this vision.

Read our response to the consultation here

See the Scottish Government’s consultation site here

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Our response to Scottish Government’s consultation on Scotland’s Energy Efficiency Programme

We welcome the Scottish Government’s commitment to prioritise energy efficiency as a national infrastructure priority through a large-scale SEEP programme over the next 20 years. This activity will help to:

  • Meet climate change targets.
  • Eliminate energy performance of domestic buildings as a cause of fuel poverty and enable measurable health and early years improvements.
  • Increase productivity, and therefore the competitiveness of the Scottish economy, through the improvement of energy performance of non-domestic buildings.
  • Create a substantial Scottish market and supply chain for energy efficiency and heat decarbonisation technologies, delivering local jobs across Scotland.
  • Regenerate communities through upgraded building stock.

As part of this consultation response ACE recommends that the Scottish Government should:

  • Set both interim milestones and final targets to set a clear direction of travel.
  • Prioritise the early implementation of energy efficiency measures while continuing to work on the decarbonisation plans for Scottish homes.
  • Implement minimum energy efficiency standards in both domestic and non-domestic buildings,
  • Implement financial and fiscal incentives to support minimum energy efficiency standards in both domestic and non-domestic buildings.

Read our response to the consultation here

See the Scottish Government’s consultation site here

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Energy Efficient Buildings,Non-domestic building,Public Buildings

Energy efficiency policy for workplaces: quick wins for the next Government?

We all know that there is no single ‘magic policy bullet’ that will support the growth of a self-sustaining market for energy efficiency investments, and that a jigsaw of policy pieces is needed to build the necessary framework.

This is the first in a series of blogs looking at ACE’s new policy tracker, and it considers commercial buildings.  It asks, are all the jigsaw pieces in place?  What more can we do easily? And what is going to be a little more difficult?

Where we are now

The Committee on Climate Change identified a least-cost pathway to meeting the 5th carbon budget.  Our analysis of the gap between this and the Government’s projection of emissions given the current policy landscape, shows that – by 2030 – commercial buildings will be emitting 42% more carbon than the ideal, and public sector buildings 34% more.  And the excess energy use involved is costing businesses a lot of money: in London alone, businesses spend over £4 billion per year on gas and electricity; if they could reduce their energy use by a third, that would mean over £1.3 billion every year for these businesses to use on something more productive.

In policy terms, a quick look at the policy tracker clearly shows that we’re really not doing very well.  We don’t appear to have a vision for our commercial buildings, nor do we have an overall target for their energy efficiency.  And we’re not very good at celebrating the achievements of those companies that are working hard to improve their energy productivity.

We have no comprehensive and engaging tax incentives to encourage energy efficiency investments, and there is little action by government to encourage the development of attractive finance offerings.

On a more positive note, the minimum efficiency standards for offices in the Private Rented Sector will result in improvements to our worst commercial buildings, making them better workplaces and hence supporting happier and more productive workers.  We do have energy performance certificates to give organisations information about the premises they are buying or renting, although the requirement for these could be better enforced.  And, in the past, central and local government has taken the lead, through energy demand reduction targets and National Indicators on carbon emissions.

And finally the good(ish) news: products policy has driven up the minimum efficiency standards of widely used appliances, and ESOS has ensured that larger business at least have the tools to understand their energy use and the potential for improvement.  Both these success stories are potentially at risk during Brexit, but we can act to avoid this.

The quick wins

There are some politically and practically easy steps that government and business can and should take right now. The Clean Growth Plan needs to set a high level of ambition for our offices, offering a vision of healthy, comfortable workplaces that support increased productivity; setting a target for commercial buildings energy efficiency and a trajectory towards achieving that target.

The public sector needs to once again set an example: we need targets for energy efficiency in the sector, and public reporting on progress towards these.  Implementing this will help Government achieve the efficiency improvements that it is looking for from the sector without taking money away from public services.

We need a clear message from Government that existing minimum efficiency standards for products, and requirements for energy auditing, will be retained as we exit the EU; and indeed that these policies, which have reduced business energy bills, will be enhanced in the future.

And we as businesses should collaborate on schemes that recognise those companies that are taking a lead in managing their energy use and celebrate their success.

Next steps

Beyond these easy wins, there are other things that won’t be quite as straightforward, but which really do need to happen.

Our existing minimum energy performance requirements for new buildings should be strengthened – by reinstating the trajectory to zero carbon – and our requirements to report on the energy performance of all buildings better enforced.

The review of business energy efficiency taxation has simplified the system but we are still not at the point where all fuels for all users are taxed equitably according to their impact on the climate; and we need to complement the tax with a requirement for public reporting on energy performance for larger companies.

And Government needs to work with the finance sector to ensure that all businesses wishing to invest in energy efficiency (including SMEs) can access attractive finance offerings to support these investments.

If we get these things right, and if we work with the construction trades, we could begin to tap into the already significant market for building refurbishment to ensure that energy performance improvement is a core part of any refurbishment project.

Difficult to do, but we must work out how

Expanding the use of minimum energy performance standards in existing buildings seems to be very difficult politically, and yet business is quite able to deal with regulation in all sorts of areas, provided that it is given sufficient warning and helped to understand how best to respond.  So we should be looking at how we can widen these standards out from the Private Rented Sector and how we can strengthen them.

And we need to bring energy efficiency investments to the top of the pile for business decision-makers: tax incentives for businesses to invest in energy efficiency again seem to be something that Government is reluctant to think about and yet, without them, energy audit recommendations risk being nice projects that get left on the shelf when something more interesting comes along.

 

We’re really not doing that well at the moment, but surely it is time now for Government to act on some of the easy wins whilst working with us on plans for the next steps.  And we should not shy away from the more difficult steps  – the prize: more competitive businesses, a happier and healthier workforce, and greater energy resilience, is too important!

 

Do have a look at the details in our snapshop policy tracker and let us know what your view is.  And if you are interested in finding out more about why we think some policy changes are easier than others, have a look at Chapter 6 in our 2016 report on Buildings and the 5th Carbon Budget.

We look forward to policies developing over the coming months and we will be updating the tracker in response to these changes.

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Brexit: will consumer energy savings survive?

According to official UK government statistics, the most cost-effective energy efficiency policy for every category of energy consumer covers energy-using products.

But it is clear that, regardless of the fuel bill savings forgone, there are many zealots who wish many of these product standards to be abolished in the UK: witness those vituperative stories regarding high-efficiency vacuum cleaners and energy saving lightbulbs – let alone the toasters that were never included in the EU rules – printed in the xenophobic Daily ExpressMail and Telegraph newspapers.

The financial savings are not stopping those determined, like the the Sun’s similar effort last year to say Up Yours to the EU, to demand a whole clutch of energy efficiency standards are now revoked.

According to the UK’s best selling newspaper its readers will be able to “see the light” best by “bringing back the incandescent lightbulbs, phased out by EU regs”. Never mind that changing these bulbs across our economy is one of the main reasons why UK electricity consumption has fallen by over 15 per cent over the past decade.

Similarly The Sun demands we should be “swapping weak EU-regulated vacuum cleaners for powerful ones”. And that we must have “dryer hair by avoiding EU energy rules on powerful hairdyers”.

Indeed this ‘Newspaper of Record’ is demanding that we must return to”using appliances free of energy constraints”.

Let us just stop there, and consider what doing what The Sun and the other deregulatory champions want, would mean. In practice, rather than in rhetoric.

Products policy covering electricity consuming producers is exclusively controlled by the European Union. Formal involvement with which the UK is set to sever two years from now.

The EU Ecodesign Directive establishes a framework under which manufacturers of energy-using products are obliged to reduce the energy consumption and other negative environmental impacts occurring throughout the product life cycle. The Energy Labeling Directive complements it, providing standardised product information for prospective consumers, under the familiar CE marking.

The genesis of both directives goes back 25 years, to 1992, when the European Single Market for products was first created – ironically with strong backing from a (then as now) Conservative UK government.

Its scope currently covers more than 40 product groups. Such as air conditioning equipment, ventilation units, computers and TVs, boilers, lighting, domestic white goods like fridges and washing machines.

Between them, these products had historically been responsible for around 40 per cent of all EU greenhouse gas emissions.

Official UK government figures show just how much the existence of these directives is saving all of us money on our electricity bills. This is worth repeating. We are dealing here with an environmental  policy that is actually saving us all a great deal of money every single year.

The current estimate is that these policies alone are already saving the average household some £67 a year. Given what is in the pipeline the official estimate for 2020 for each household’s electricity savings each year is £153, including VAT. That will be cutting the assumed average electricity bill by 20 per cent.

These are savings currently enjoyed by households that The Sun and its Little England allies seems to be perfectly content to see removed, in order to satisfy their xenophobic dogma.

What about the classic tabloid hero, white van man? He and his fellow small business entrepreneurs currently benefit even more from European products policy.

The savings for the average small business are reckoned currently to be £700 a year off electricity bills. To put that into context, the annual cost to such businesses of the UK’s unilateral Carbon Floor Price tax is £1,100. By 2020 the product policy will be delivering £1,700 off electricity bills for the average small business.

For larger businesses, of a size to be involved with the Carbon Reduction Commitment, the European product policy is now taking an average of £24,000 a year off electricity bills. By 2020 that average is officially reckoned to have soared to £62,000 annually. In contrast, the yearly cost to such businesses by 2020 of the UK government’s unique Contracts for Difference and Capacity Market Auctions policies is due to be £133,000.

What about large energy intensive industries, albeit ones that benefit from all Floor Price exemptions and compensations? Even they are making useful savings. Those with an average £6.4m electricity bill can reckon to be gaining £125,000 each year from these unsung product policies. By 2020 the bonus savings from European product policies is set to be worth some £432,000 a year to companies of this size.

As Brexit doesn’t take place until the financial year 1919/20, all these 2020 savings can reckon to be “in the bank.” But what happens after 2020? Particularly if the UK does quit any formal involvement with the European Single Market?

After all, it has up till now been the exclusive role of the European Commission to police implementation of product policy. Who will replace this role?

As the House of Lords energy and environment committee chair, Lord Robin Teverson, acidly observes, his committee has “found that effective enforcement of existing legislation would be crucial to overcome such ‘short-term vulnerabilities’.”

And of course, what will happen regarding the introduction of any new categories of products?

The Ecodesign Directive is a framework directive, meaning it does not directly set minimum ecological requirements. These are instead adopted through specific implementing measures for each group of products. They are adopted via the so-called comitology procedure, where implementing measures are based on EU internal market rules governing which products may be placed on the market.

Manufacturers who market any energy-using product covered by an implementing measure in the EU area have to ensure it conforms to the energy and environmental standards set out for the measure. And of course from 2019 UK manufacturers are set to be directly excluded from the process of negotiating these standards. In practice, the introduction of any new minimum requirement results in effectively banning all non-compliant products from being sold in the 28 Member States.

The UKIP 2015 manifesto certainly makes hostility to product energy standards clear. Before dismissing this fact, remember that UKIP’s was the only manifesto at the last General Election that now accurately reflects present government policy regarding the European Union.

Be warned. We will need to seriously guard against surrendering those ever-increasing savings on all our electricity bills, once we have “taken back control” of our energy-using product policy.

Andrew Warren is the Honorary President of the Association for the Conservation of Energy and Chairman of the British Energy Efficiency Federation

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Energy efficiency: it’s not so special!

Not perhaps what you would expect me to say… but of course I don’t mean that energy efficiency isn’t a wonderful thing. I mean, we should stop trying to separate it out from the other things people do every day.

The Each Home Counts review talks about setting up a separate quality system for home energy efficiency work. Why? Of course we need excellent quality control and customer assurance. But don’t we need this for all work in people’s homes? Isn’t there a risk that, by highlighting the quality control for energy efficiency work, we make it seem like something inherently more risky than other home improvements?

The Green Deal has a ‘Golden Rule’ for finance that only allows people to borrow to a level that will be covered by energy bill savings. Again, the consumer protection benefits of this approach are clear. But someone lending for any other home improvement would only want to be happy that the client could repay the loan; they wouldn’t care about precisely which budget the repayments were coming from. Pay-As-You-Save has a point, but finance providers may want to sell the fact that energy bill savings will help cover repayments whilst at the same time offering additional money for an investment that also delivers comfort and asset value improvements.

Energy efficiency does indeed have some ‘special’ characteristics: it delivers social benefits (including health sector savings and reduced energy imports) that perhaps far outweigh the immediate private benefits to energy consumers. And it faces some barriers that other home improvements don’t (it’s hard to show off your new wall insulation…). So, there are good reasons to implement policy that specifically supports energy efficiency.

But as we develop this policy, we should think about how we make energy efficiency part of ‘the way we do things here’. Not how we make it special. We want to reach a point where people invest in energy efficiency in the same way that they invest in other building improvements – because they recognise that it will make their home / place of work ‘nicer’ to be in; because they believe that it will add value to their property; because it is ‘the done thing’. Not because it is something special, something they should do, something that will set them apart.
If we change our point of view, perhaps we will start to formulate policy that works with the existing refurbishment market, that takes into account the structure of the existing supply chain, and that is actually deliverable.

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