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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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#LocalStories,Fuel Poverty,Housing,Non-Residential Buildings

Local Story – Energy Efficiency in Penistone and Stocksbridge

As temperatures plummet in Yorkshire once more, our new local story report has shone a spotlight on the energy performance of homes and businesses in Penistone and Stocksbridge.

This is the sixth in our series of constituency-focused local energy efficiency stories. The report – which has been welcomed by local MP Angela Smith and by local businesses and charities – shows how tens of thousands of local residents have benefited in recent years from proper insulation and efficient boilers, making their homes more affordable to heat and safer to live in.  But the report goes on to identify the huge untapped potential for delivering to the remaining Penistone and Stocksbridge residents the benefits their neighbours have already seen.

The release of this report has been timed to coincide with the launch of environmental charity Hubbub’s fuel poverty project “Fuelling Connections” and has been sponsored by Calor. Hubbub’s kick-off roundtable event took place on Friday 13th January in Stocksbridge and brought together key stakeholders in fuel poverty and Angela Smith MP to discuss what has worked to date and what remains to be done.

Angela Smith MP added: “I know that fuel poverty is a significant issue in Yorkshire and that many of my constituents will be concerned about the cost of heating their homes this 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 across the Penistone and Stocksbridge constituency and commend the work that 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. This report does however demonstrate the need for a long term energy efficiency policy to tackle these issues.”

 

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The market is not a black box

Louise Sunderland freelance built environment sustainability consultant. She previously worked as Senior Policy Advisor at UKGBC and before this in both the research and parliamentary teams here at ACE.

The ruling theory governing energy efficiency policy has for some time now been that the ‘market will deliver’ the energy and carbon savings we as a society need. And the guiding framework for national and European policy is based on interventions to enable the market to deliver.

But as we know ‘markets’ are not sentient beings that make decisions. What we actually mean by ‘the market will deliver’ is that huge numbers of diverse consumers will respond to market signals and engage, behave and invest (often) their own money in “rational” ways that deliver against policy goals. They will change energy profligate behaviours, they will undertake disruptive works to their homes and businesses, they will purchase equipment, materials and services in exactly the ways that ‘socially’ we need them to.

In the last decade we have seen headline European buildings policy begin to make useful interventions to enable the consumer overcome market barriers – the building energy information tool, the Energy Performance Certificate (EPC), was introduced about 15 years ago and more recently there has been a focus on energy use awareness through accurate billing and ‘smart meters’, and the provision of finance to overcome investment barriers.

But what we haven’t really cracked is getting under the skin of what consumers really need ‘end to end’ to enable them to do what society needs them to – for example taking on deep renovations of their buildings. There is no definition of consumer information or advice provision in the relevant European energy efficiency directives (the 2010 Energy Performance of Buildings Directive [EPBD] and the 2012 Energy Efficiency Directive [EED]), there is no indication of what level of consumer support might be needed to achieve our existing buildings refurbishment ambitions (stated in the EPBD as incrementally moving the existing stock to nearly zero energy [and sometimes carbon] buildings!), and current advisory services (with a few notable exceptions) across Europe are inadequate to address the needs of consumers to achieve these aims.

Unfortunately, we haven’t thought seriously enough about the consumer journey and how well the policy framework supports every step. We also haven’t given sufficient focus to those few examples of really rigorous energy advice and support ‘one-stop-shops’ in Europe – like those in France and Germany – and evaluated these and other programmes to develop understanding and evidence of what support produces what results. This reveals a major blind spot.

Focussing on the market rather than the consumer allows us to imagine a kind of black box – ‘the market’ – in which the most difficult questions, like how does an uninformed consumer negotiate conceiving, financing, managing and getting feedback on a complex whole building renovation, get answered by undefined forces or market players. Until we open this black box and do the work to figure out exactly what we need to put in – what support consumers actually need – to get out what we know we need to get out then the market can never be expected to deliver sufficiently to meet our long-term climate and energy objectives.

Louise, as a member of the Energy Advice Exchange, has recently published a discussion paper and briefing (downloadable here) on revisions to the European energy efficiency package which aim to stimulate exchange and debate on the subject and propose improvements to the key European Directives. Louise has also recently posted a blog on her reaction to the European Commission’s recent “winter package” on sustainable energy (downloadable here).

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#LocalStories

Local Story – Energy Efficiency in Truro and Falmouth

As people once again begin to turn up their heating, our new local story report has shone a spotlight on the energy performance of homes and businesses in Truro and Falmouth.

This is the fifth in our series of constituency-focused local stories and the first to be launched with a roundtable event. The event occurred on Friday 4th November in Truro, was sponsored by Calor and chaired by Truro and Falmouth MP Sarah Newton. It brought together key stakeholders in fuel poverty to discuss the findings of the report and to speak with Sarah Newton MP about what has worked to date and what remains to be done.

The report was welcomed by Truro and Falmouth MP Sarah Newton who added: “I know that fuel poverty is a significant issue in Cornwall and that, as we approach winter, many of my constituents will be concerned about the cost of heating their homes. I am delighted to have been able to work with UKACE and organisations in Cornwall to discuss what more we can do to combat this problem”

CalorPaul Worth, Area Sales Manager from Calor, said: “This is an excellent report which helps shine a spotlight on the fact that Government energy efficiency schemes have repeatedly missed households living in rural off gas grid areas. Having this sort of detailed information will help target future help to those who most need it.”

CEPDr Tim Jones, Chief Executive of Community Energy Plus, said: “A stable and long term investment plan to improve the energy efficiency of Cornwall’s coldest homes is currently desperately needed from the government in order to help eradicate fuel poverty.  It was helpful to make this case directly to Sarah Newton MP and I hope that we can work with her and the other roundtable participants to find solutions so that misery of cold and damp homes can be consigned to part of Cornwall’s history instead of our future.”

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5th Carbon Budget,Climate Change Act

The UK will miss its climate targets without a step-change in buildings energy efficiency

The last 18 months have been a major set-back in the British policy landscape affecting carbon emissions from buildings: the trajectory to zero carbon new build has been paused; Government support for Green Deal finance was withdrawn with no alternative mechanisms in place to encourage and enable investment by able-to-pay households; government announced that funding from the Energy Company Obligation will be reduced again; and a review of business energy taxes has led to proposals for a new tax structure but, as yet, no coherent supporting framework to encourage energy efficiency action.

This is despite the fact that an increase in policy action is required: In June, the 5th Carbon Budget was adopted by Government setting firm carbon targets for the period from 2028 to 2032. Parliament approved them in July. Reaching those targets will require bold and ambitious policy action across all sectors.

However, new research by the Association for the Conservation of Energy and the Regulatory Assistance Project paints a worrying picture of the UK’s prospects for achieving its carbon targets in the building sector: the Government’s own projections for abatement show that the UK will not meet the 5th Carbon Budget in buildings. Taken together, policies as they currently stand are projected by the Department of Business, Energy & Industrial Strategy (BEIS) to achieve a 21% cut in direct emissions from buildings by 2030 compared to 1990, just 12% below the ‘business as usual’ emissions for 2030. This means that the UK’s emissions from buildings will exceed those recommended by the Committee on Climate Change for the 5th Carbon Budget, in 2030, by 18%.

Worryingly, a large part of the projected abatement from buildings (85%) is considered by the Committee on Climate Change to be ‘at-risk’, and after the vote to leave the EU there is uncertainty around which previously EU driven policies driven will remain. In other words, the majority of projected emissions abatement from buildings is seen as uncertain and may not be achieved. It may not be technically possible, and it is certainly not economical, to close this abatement gap in the power, transport and industrial sectors instead.

Consequently, we need to de-risk, reform, extend and expand existing policies, but also introduce new instruments in order to speed up carbon abatement in the buildings sector. Additional regulatory policies such as Energy Efficiency Standards at point-of-sale (as is currently being implemented in France and considered in Scotland) are needed and new build standards need to be tightened towards zero carbon or nearly zero energy. Alongside, a substantial financing scheme offering low-interest loans is required to enable households and businesses to upgrade their properties and make them fit for a low-carbon future.

Our research shows that the benefits of meeting the 5th Carbon Budget in buildings justify considerable public and private investment to capture them. We quantified the main costs and benefits generally considered for formal policy impact assessments, calculated in accordance with official guidance. The result is that the benefits exceed the costs to a similar degree as High Speed 2 (a planned high-speed railway linking London to the north of the UK) and the smart meter rollout. This means that there is a strong economic case for investing in upgrading the UK’s building stock.

We estimate the net benefit from energy savings, emissions savings, improved air quality and health, and comfort and productivity to be in excess of £45bn. And this figure does not include the value of employment needed across the country to deliver the 5th Carbon Budget in buildings, the value of avoided gas imports and improved energy security, the GDP boost it would deliver nor the additional revenue it would generate for the public coffers.

Ensuring this happens depends on the creation of a robust and long-term policy framework that supports the development of sustainable markets for low carbon retrofit and construction. The most strategic opportunity at which such a step-change can be signalled is in the forthcoming Carbon Plan; the Building Renovation Strategy due next spring also presents an opportunity.

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Our response to BEIS’s consultation on ECO: Help to Heat

The Energy Company Obligation (ECO) is a programme to deliver energy efficiency measures in homes across Great Britain in order to reduce carbon emissions and improve the ability of low income and vulnerable consumers to heat their homes to comfortable levels. ECO was launched in January 2013 and is currently in its second obligation period (ECO2), which is due to end on 31 March 2017. The Government’s Spending Review 2015 announced plans for a supplier obligation to run for 5 years from April 2017 at an estimated level of £640 million per year. This consultation is on the shape of a transitional year from April 2017 to March 2018, paving the way for a subsequent 4-year scheme

While the overall size of the supplier obligation from 2017 is too small, many of the changes proposed appear sensible. However, under the proposals, there will be significant under-delivery to households during the transition year. This is due to the progress made to date under ECO2, the potential for over-delivery and carryover of excess work into the transition year, and the fact that proposed deemed scores are approximately one third lower than the evidence from RdSAP assessments under ECO2. We therefore strongly recommend that the extended CERO target is increased from 3MtCO2 to at least 4.1MtCO2, and the HHCRO target from £1.84bn to at least £2.08bn. This would comfortably keep the transition year’s delivery costs within its notional spending limits, and make sure BEIS and ECO’s stakeholders deliver what is possible with the (too modest) budget limits established by the last Comprehensive Spending Review.

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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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#LocalStories

London Local Story: A world-class city, but its buildings lag behind

ACE’s latest Local Story, on energy efficiency in London, has found that despite London’s world status, many of its homes and workplaces are highly inefficient, leading to inflated fuel bills, squeezed family budgets, ill health and reduced business competitiveness.

The challenge London set itself in its 2011 Climate Change and Energy Strategy is ambitious. To reduce the city’s CO2 emissions, the target for buildings is to retrofit 2.9 million homes; retrofit public buildings comprising a total of 11 million m2 of floor space; and retrofit 44 million m2 worth of private sector workplaces by 2025. These 55 million m2 constitute two thirds of London’s current non-domestic stock of buildings. Currently, London is falling well behind on its milestones to 2025, and the rewards of stepping up energy efficiency action in the capital are too good to miss.

Heating, cooling and powering London’s homes and workplaces is costly

  • London’s 3.35 million homes account for 36% of its CO2 emissions, and every household spends on average £1,175 on gas and electricity bills every year – a total of £3.9 billion. Workplaces – 265,000 buildings – account for 42% of London’s emissions, and companies pay a total of £4 billion each year in gas and electricity bills.
  • 830,000 homes (a quarter) and 37% of non-domestic buildings that have been given an Energy Performance Certificate since 2009 have the worst energy ratings of E, F or G and are therefore wasting a large proportion of their energy.
  • 348,000 London households are considered to be fuel poor. This means they can’t afford to keep their homes warm due to a combination of low incomes and high energy costs. In addition to being below the poverty line, each year, they are estimated to have to spend £336 more on their energy than a typical household needs to.

Significant upgrades to the efficiency of London’s buildings have been made in recent years

  • In homes, energy efficiency programmes have helped to insulate 350,000 lofts and 257,000 cavity walls in London. 803,000 efficient boilers have been installed. Also, London’s RE:NEW programme has helped to underpin energy efficiency improvements through advice provision and delivery support in 119,000 homes to date. 400 households have taken up low carbon heating, and 19,000 have installed solar photovoltaic panels.
  • Less is known about improvements made in workplaces. Public buildings’ Display Energy Certificate ratings have been steadily improving since 2009, and London’s RE:FIT programme has underpinned £93m investment in 619 public buildings, cutting annual energy costs by £6.9m. The amount of energy London uses per unit of its economic output has reduced by 40% and its energy consumption has fallen by 16% since 2005.

These improvements bring a wide range of benefits to London

  • London’s homes and workplaces spend upwards of £7.9 billion on energy bills every year – money which doesn’t stay in London’s economy. Improving efficiency and cutting energy costs means more invested in and spent on London’s economy, while further improving its energy productivity and competitiveness
  • Many of these efficiency improvements are delivered by London businesses. An ambitious national retrofit programme for homes, with London taking up its fair share, would support 10,300 jobs in the capital.
  • Thermal comfort in the work environment is now well-established as a real boon to workers’ health, wellbeing and productivity, and cold homes have been shown to be damaging to both physical and mental health. For every £1 invested in renovating cold homes the NHS saves 42 pence in reduced hospital admissions and GP visits.

Millions of homes and businesses still stand to gain from energy efficiency upgrades. A step-change in delivery is needed, combined with a panoramic view and thorough understanding of all the benefits it can bring. Capturing the above benefits simultaneously, by investing in the energy performance of our buildings, will help London to meet its targets, maintain its economic competitiveness and to be a place that people want – and can afford – to live and work.

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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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Please ask Ballot MPs to adopt Leasehold Reform (Energy Efficiency) Bill

In today’s House of Commons Private Members’ Ballot, some fortunate MPs got the chance to introduce a Bill of their own in Parliament.  ACE – along with, among others, the Energy Saving Trust and the London Association of Local Energy Officers – is promoting the Leasehold Reform (Energy Efficiency) Bill, and we’d be grateful for your help in getting an MP to take it up!  The Bill would sweep away outdated provisions in property leases to enable freeholders and leaseholders alike to make their homes warmer, healthier and more comfortable.  Here is a full briefing about the Bill.  And here is a list of the successful MPs for you to use.  Thank you!

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