It’s official. Energy consumption in the UK is on the way down

Written by Andrew Warren on . Posted in Articles and Blog, Perspective

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Here is a simple test for everybody. By how much has UK energy consumption already increased during this century? Actually, this isn’t just a question for generalists. I have been regularly trying it out on energy specialists in companies, in trade bodies. Even among the senior civil service. The answer given varies. But almost without exception, the response is that consumption has gone up. Sometimes by 5 per cent, sometimes 10 per cent, sometimes 20 per cent or more.

I then ask: how much do you think the country’s wealth has increased over the same period? And when I tell people that – even despite the recession – Gross Domestic Product (GDP) has risen by no less than 58 per cent between 2000 and 2012, I instantly get a re-evaluation of how much energy consumption has grown.

“Ah well, in that case, we are probably talking about a similarly high figure for energy usage. Not 20 per cent, but 40 per cent. Even 50 per cent.”

DCLG: Review of Property Conditions in the Private-Rented Sector

Written by Pedro Guertler on . Posted in Consultation Responses, Perspective, Private Rented Sector Campaign

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ACE and Friends of the Earth have long been concerned about the poor standards of energy efficiency (and high concentrations of fuel poor and vulnerable households) in the private rented sector (PRS). The PRS is a rapidly growing part of the housing market. Of the 22.8m households in England in 2011, 4 million were privately rented (17.5% of the housing stock). This was an increase of 1.6m in only six years – and is the highest level since the early 1990s. The Department for Communities and Local Government has issued a review of property conditions in the PRS, and invited stakeholder responses; ACE and Friends of the Earth have provided theirs together.

Buy a home and get money back from the government

Written by Andrew Warren on . Posted in Articles and Blog, Perspective

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The Prime Minister was unequivocal. This summer his Government will introduce a new incentive scheme to encourage home movers to invest in energy saving measures.

At his most recent monthly cross-examination by House of Commons Committee chairs, he quite specifically described it as a “stamp duty discount for people who take action to improve the energy performance and energy efficiency of their homes” (Q49).

I only wish that this description had been accurate. Sadly it is not. Because formally the new scheme is not directly related to the stamp duty transaction. And, due to that, it can be argued there is no requirement whatsoever for the key professional groups involved in the buying and selling of homes – specifically, solicitors and licensed conveyancers, and estate agents – to inform anybody about the new scheme.

ECC Committee: ACE evidence submitted to Green Deal watching brief (part 2) inquiry

Written by Pedro Guertler on . Posted in Consultation Responses, Perspective

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ACE has submitted written evidence to the Energy & Climate Change Select Committee’s inquiry into the Green Deal (watching brief part 2). In May 2013, the Committee published its first watching brief report, in which it outlined its concerns about the lack of clarity regarding the outcomes that DECC expected from the Green Deal and how it would measure the its success. The Committee identified key areas in which scrutiny would be beneficial, and outlined its intention to review the performance of the Green Deal and ECO at a later date – hence Part 2 of this Green Deal watching brief inquiry.

Heading in three directions makes a lot more sense

Written by Andrew Warren on . Posted in Articles and Blog, Perspective

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Ever since he took up his post two years ago, UK Energy Secretary Edward Davey has championed tirelessly the need for a binding target across Europe of a 40 per cent cut in carbon dioxide emissions between 1990 and 2030. It now looks pretty certain that his campaign will be successful.

The European Parliament has voted in favour. A large number of national governments are concurring. The European Commission has published a detailed policy paper, endorsing this figure.

So far, so uncontroversial.

But that target, Mr Davey argues, is sufficient by itself. He does not believe it necessary to have any related targets – whether covering renewables or energy efficiency. “Adopting an ambitious and binding greenhouse gas target will provide…a compelling reason for us all to do more on energy efficiency. But we should not prejudge the balance between increasing efficiency and deploying other low carbon measures to meet the greenhouse gas targets,” he maintains.

Others differ. Among those acknowledging the need for further statutory, as opposed to just aspirational, objectives are his opposite numbers from most of the western European governments: France, Germany, Denmark, Austria, Ireland, and many others.

 Three energy targets

At present, the European Union does have three energy-related targets for 2020. Each is based upon an emblematic 20 per cent reduction. These are to cut greenhouse gases by 20 per cent; to boost the proportion of renewable energy to 20 per cent; and to improve energy efficiency by 20 per cent.

These may appear equal in timescale and objective. But they are not equal in stature. The first two both have the force of Community law behind them, effectively compelling each government to adopt appropriate policies. In contrast, the energy-saving target does not have the same status at all. It is far from compulsory, just an indicative aspiration.

Does this distinction matter in practice? You bet it does. The consequence of this “also ran” status is plain. Whereas there is confidence that the first two targets are on track to being met (indeed exceeded), you can find nobody who right now believes the 2020 energy efficiency “target” will be met.

The European Commission is due to publish in June its best forecast as to just how significant the under performance is likely to be.

But even before then, it has published some very telling evidence that suggests that those who pursue only a single 2030 target may well be guilty of deliberately frustrating many other worthwhile objectives.

It is official European policy that all new proposals must be capable of being justified via the accompanying economic impact assessment. Each new European Commission policy document is rightly required now to have a detailed Impact Assessment published alongside it.

This one demonstrates clearly that adopting complementary targets covering energy efficiency and renewables, as well as greenhouse gas emissions, would result in higher benefits relating to a whole variety of other public policies.

It is clear from this analysis that concentrating upon greenhouse gases alone means approaching the entire policy area from too narrow a standpoint. Granted the threat of runaway climate change requires effective action to contain its worst excesses. But there are a number of other policy priorities out with carbon abatement that all of Europe is seeking to address simultaneously.

The conclusion of the Impact Assessment is stark. And it is unequivocal. There would be many further benefits, above and beyond the climate changes ones, which would be obtained only via the adoption of new and very specific targets for both energy efficiency and for renewable energy.

These are adumbrated succinctly. To quote paragraph 85 of the Executive Summary of the Impact Assessment, they include: “improvements in fuel efficiency, security of supply, reduction of the negative trade balance for fossil fuels, localised environmental impacts, and health benefits.”

 Fear of ‘lower GDP’

To cap it all, those who seek to limit Europe to a single, solely ecological, target – in the objective view of the Impact Assessment – are endorsing a policy that will “result in lower GDP and employment, compared to a framework based on more ambitious targets for renewables and energy efficiency.”

As you can see, the conclusion is pellucid. European climate policy should not be developed in a silo, concentrating upon just a single climate-oriented policy outcome.

We need also to be concerned about improving public health. And increasing Europe’s competitiveness. And creating new jobs, new industries. And reducing levels of energy imports. And indeed ensuring that we can keep the lights on.

For all these reasons, when later this year all the European institutions do formally agree a policy framework for both climate and energy policy in the period from 2020 to 2030, there can be no question as to the best outcome. Three places to head are better than one.

 

Replacing all that ‘green crap’ won’t be an easy task

Written by Andrew Warren on . Posted in Articles and Blog, Perspective

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As most EiBI readers will know, the only nationwide subsidy programme for residential energy efficiency, the Energy Company Obligation (ECO), took a hammering in last month’s Autumn Statement. Its main energy/carbon saving component was cut overnight by 34 per cent.

This occurred in the wake of the Prime Minister’s pledge to reduce environmental levies (“all that green crap,” as the Sun’s front page quoted him as saying), in order to cut domestic fuel bills. Perversely, the only such policy to be cut happened to be the only programme specifically designed to cut fuel bills.

However, the government intends to introduce this April some new schemes, which Energy Secretary Edward Davey maintains will entirely restore the carbon dioxide savings of 2.9m tonnes which the scrapped part of ECO had been set to deliver.

A disaster for energy efficiency inside DCLG

Written by Andrew Warren on . Posted in Articles and Blog, Perspective

The following is a piece written by Andrew Warren and published in ENDS Report 467, January 2014, pp. 30-31.

The past three and a half years for Eric Pickles appears to have been a litany of failure, countering the prime minister’s energy efficiency aim for Britain.

Prime minister David Cameron has set a challenge for his cabinet: “I want Britain to be the most energy-efficient nation in Europe.” But seemingly there is one member working in the opposite direction.

Eric Pickles has been the secretary of state for the Department for Communities and Local Government since the coalition took office in May 2010. During that time, he has presided over, indeed sometimes personally made, a series of policy decisions which completely undermine Cameron’s objective.

The list of failures is as consistent as it is long. In each case Pickles seems wilfully to have sought to obstruct progress. This is despite his having been the chairman of the Conservative Party which promoted the catchphrase “vote blue, go green”.

At the start of the century, the government and the building sector came together to agree a pathway to higher new-building energy standards, at a time when they were many years behind European countries with similar climates. In exchange for a roadmap providing relative certainty on timing and extent of change, the construction industry invested in training and product development, towards zero-carbon (or very low-carbon) buildings.

The deal stuck. In 2006 and 2010, the improvements were made smoothly. The next round of changes were due to start last April – the final round before zero-carbon homes were due to be introduced in 2016. Despite issuing a consultation document in January 2012 promising these upgrades, they did not go ahead as scheduled. Instead they will come into force 12 months late, in April 2014.

Even when they do proceed, they will deliver far less than intended: a 6% rather than a 25% improvement for new homes and a 9% rather than a 20% improvement in non-residential buildings, based on 2010 levels.

But it has long been established that vast numbers of new homes fail to comply with the minimum building regulation standards. Almost inexplicably, there appears to be no government system for monitoring compliance.

If a washing machine or refrigerator is put on the market that does not deliver the promised energy savings, the National Measurement Office can take out criminal proceedings. Yet nobody has ever been prosecuted for failing to comply with the energy conservation parts of the building regulations. And countless independent studies have revealed that, once you get beyond one or two bedroom apartments, it is a minority of homes that meet even the minimum energy standards. The rest are all breaking the law and Pickles is apparently wholly unconcerned.

The position is, if anything, worse for existing buildings. New EU laws state that all advertising for a building sold or leased should include its A-G energy label. And each new occupant must receive energy performance details and how it can be improved.

Independent surveys have revealed that these legal requirements are seldom observed. Pickles’ department has not only failed to adequately monitor compliance, it has not ensured that council trading standards officers are monitoring the advertising requirements – so buyers and lessors are not informed of buildings’ energy efficiency standards. But last September Pickles had to compensate the scheme administrators, Landmark (a Daily Mail subsidiary), with a whopping £5.7m from public funds, because at least six million lodgement fees of £5.36 for energy certificates had not been paid.

An earlier EU directive had led to display energy certificates being displayed in the foyers of 42,000 public buildings. Renewed annually and reflecting annual energy usage, they were stimulating big efficiency improvements. But since 2010 there has been no pressure to keep these updated: so many are not, in part because now Pickles has also whimsically decided that smaller buildings need only renew every ten years. And he is not requiring the commercial sector to display such certificates, but instead mandating that “in a prominent place” there will only be details of a building’s theoretical performance. His department has been unable to cite any support for such a perverse interpretation of a European directive.

Such idiocy occurred largely because he omitted to consult about how the final text of the new buildings directive should be implemented. Perhaps it is because he knows that, even if he does run a public consultation, he may subsequently reverse his position – even if 82% of respondents endorse his original proposal. This is what happened in the case of his infamous ‘consequential improvements’ consultation – a policy he now rejects despite having initially claimed an £11bn saving to the economy and the stimulation of 2.2 million Green Deals.

Other examples of bad faith include the failure to set any energy efficiency targets in the revised guidance for local authorities for the Home Energy and Conservation Act. And it is an open question whether landlords really believe that DCLG is committed to enforcing the requirement of the Energy Act 2011 that F and G-rated properties cannot be leased after 2018.

Pickles is currently consulting on removing from the statute book the Planning and Energy Act. This permits local authorities to set higher minimum standards for new buildings – an act much deployed by the London mayor Boris Johnson, who requires new commercial and residential buildings to deliver 40% better energy performance than the regulations mandate.

A damaging u-turn
This act was an unusual one. It was put onto the statute book in 2008 by opposition Conservative backbencher Michael Fallon (now an energy minister) cheered on by his then party chairman as an excellent mix of localism and environmentalism. Who was this chairman? Why, Eric Pickles, who five years on is apparently seeking another personal u-turn, further damaging the environment.

I am not qualified to form a judgment on Eric Pickles’ effectiveness in other policy areas but what I do know is that to date his period in office has been an almost unmitigated disaster so far as the energy efficiency agenda is concerned – and certainly so far as achieving the prime minister’s declared objectives.

As Cameron reminds us: “In a race for limited resources, it is the energy efficient that will win the race.” Perhaps Pickles should be donning his running shoes?

Questions for DECC on proposals tabled 2.12.2013

Written by Andrew Warren on . Posted in Articles and Blog, Consultation Responses, Perspective

In response to recent announcements regarding changes to energy efficiency policies (including this DECC press release), ACE have asked DECC to answer the following questions:

1.  On the announcement of a “Stamp duty rebate” for home-movers who install efficiency measures:

  • Is this really a stamp duty rebate (implying a return of money at some point after purchase for homeowners who can prove they have installed measures) or is it just a cashback by another name?  What will the delivery mechanism be?
  • Does this money come out of the existing £200m cashback pot, or does it come from somewhere else?  Is this Exchequer funding?
  • It is anticipated that 60,000 homes a year will be helped.  But what if a large number of homeowners opt to have more expensive measures installed?
  • If the share of the £450m allocated to this scheme runs out prior to April 2017, does this mean that the scheme will be closed?

2.  Help for private landlords:

  • The press release talks of a “scheme to support private landlords” and promises a share (unspecified) of £450m will be available to fund this.  However, the press release goes on to say that this scheme will  consist of “funding available through the Green Deal”.  It is therefore confusing as to whether this will be Government funding channelled through the Green Deal, or else some “tweaking” of Green Deal finance, or else some extension of the LESA scheme?
  • In an article in The Sun newspaper (1st December), Nick Clegg and David Cameron refer to “cash incentives to landlords of the least energy efficient properties”; the press release meanwhile talks of “helping landlords bring their properties up to minimum standards” – the implication of both of these statements is that the funding for landlords will only be available to landlords of F and G rated properties.  Can this be clarified/confirmed?
  • In the article in The Sun, Nick Clegg and David Cameron talk about the incentive being available to landlords “when they are between tenants” – will the incentive only be available during void periods?
  • Government is claiming this will deliver 1.8Mt of carbon savings .  If it is geared to existing F and G-rated homes,  surely all these savings must already be built into Government carbon estimates from the time the Energy Bill 2011 made it mandatory to outlaw F & G rated properties.  Therefore there will be no new carbon saved – it will just be a sweetener for landlords to get them to obey the law.
  • There are 440,000 F & G rated properties in the private rental sector. The new scheme will incentivise just 45,000 of them over three years,  e.g 10% of the total.  Can this be confirmed?

3. Spending breakdown:

  •  We’re told that there will be £450m of new investment for the two new measures above.  What is the breakdown of spending as between the two measures?

4. Carbon savings and public buildings:

  • What are the carbon savings associated with each of the above, and how much additional carbon saving is assumed to come from the £90m being allocated to schools, hospitals and other public buildings? What shape is deployment of this £90m – is it a grant? Or an extension of a finance mechanism (presumably Salix)?

 

We hope DECC will soon provide clarification on these important points.

 

Statement on the 50% reduction in the Energy Company Obligations

Written by Andrew Warren on . Posted in Articles and Blog, Perspective

It is absolutely disgraceful that the big energy companies have orchestrated this unscrupulous campaign, that appears to be succeeding in blackmailing the UK government into cutting by half its established policy to require energy companies to help customers stop wasting money by wasting fuel.

There has been no increase whatsoever in the levels of social and energy saving obligations placed upon the Big Six this year. This concerted attack on the Energy Company Obligation is predominantly a distraction technique, designed to draw attention from the price gouging they are practising. The extent to which the Big Six currently overcharge customers is estimated by the founder of one of their smaller competitors, Ovo, at £3.7bn a year.

Home energy use has dropped by a quarter since 2005, largely owing to the installation of energy saving measures. This has cut the energy companies’ turnover badly. That is why they are trying to destroy the only nationwide energy saving programme. But because the costs per kilowatt hour have more than doubled over the same period, the proportion of household budgets spent with the Big Six energy companies has risen sharply.

It is completely perverse logic , to help cut fuel bills, to cut the one programme that helps householders cut fuel bills. There are already 7,000 fewer people employed today than in November 2012 in delivering energy efficiency in homes. The result of halving the ECO programme will be that at least 10,000, possibly 13,000, fewer people will be employed in our sector next year than anticipated. These are mostly not in household name companies, nor even in SMEs. Decimating the ECO hits hardest at precisely the kind of micro start-up businesses which the UK has been dependent upon to lead us out of recession.

Andrew Warren
Director
Association for the Conservation of Energy
Westgate House, 2a Prebend Street
London N1 8PT
Tel: +44 20 7359 8000
Fax: +44 20 7359 0863
Email: andrew@ukace.org
Web: www.ukace.org

Retrofitting the Green Deal

Written by Andrew Warren on . Posted in Articles and Blog, Perspective

retrofitting-the-green-deal-large-thumbnail

retrofitting-the-green-deal-large-thumbnailProperly executed, the Government’s new Green Deal energy saving loan scheme has the potential to transform energy saving in Britain’s homes, bringing in big gains to the economy, household budgets and the environment at the same time.

But it has got off to a disappointingly slow start and seems on course to deliver a few tens of thousands of home retrofits a year, at most. Given all of the time and effort that has gone into creating the scheme from government and the private sector and the scale of the original ambition behind it, this is a tiny sum.

The Green Deal ought to be delivering several 100,000 retrofits a year. A goal of more than one million homes per annum would be reasonable given the size of the task of improving the UK’s still highly energy-inefficient housing stock.

The benefits in carbon savings, energy bill reductions, maintaining and creating jobs and enhancing welfare and health from this level of retrofits would be enormous.

The most important problem with the Green Deal, as it now stands, concerns a funding gap caused by its so-called ‘golden rule’ which places limits on how much a household can borrow under the Green Deal. Most households which might be interested in taking out a Green Deal would find themselves having to pay at least £1,000 upfront.

Green Deal assessments, the starting point for the scheme, need improving and the bulk of them need to be provided free of charge.

In this report we make several recommendations which, taken together, represent a retrofit for the Green Deal – one which would enable it to fulfil its great potential.

The Green Deal interest rate needs to be lowered; we suggest how it could be. We also argue for a government-backed incentive scheme for Green Deal retrofits. This would help to close the Green Deal funding gap, but it would also encourage many households to use the Green Deal as an assurance scheme without having to use Green Deal finance.

We make recommendations for improving the assessment process, for encouraging more small businesses and traders to be engaged in the scheme, and for the Green Deal to have a stronger impact in streets and local communities.

This report was written by Nicholas Schoon on behalf of BioRegional and The Association for the Conservation of Energy.

BioRegional ACE Retrofitting the Green Deal Report