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Our response to Public Accounts Committee Inquiry into Household Energy Efficiency Schemes

In 2013, the Department of Energy and Climate Change (DECC) launched two complementary schemes—the Green Deal and Energy Company Obligation (ECO)—to improve the energy efficiency of the UK’s housing stock. ECO obligates energy suppliers to install efficiency measures, such as loft or wall insulation, with the cost passed on to energy bill payers.

Through the Green Deal, homeowners funded installations by taking out loans, which they repaid through their energy bills. The Department of Energy and Climate Change made the decision in July 2015 to not invest further public funds in Green Deal loans.

The National Audit Office (NAO) examined what the schemes have achieved, and at what cost, the design and implementation of the schemes and whether DECC is learning lessons to feed into future energy efficiency schemes. The Public Accounts Committee have followed this up with an inquiry, to which we have provided a concise response.

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Our response to HMRC’s consultation on reduced rate of VAT for Energy Saving Materials

ACE has submitted its response to HMRC’s consultation on proposed changes to the reduced rate of VAT for the installation of energy saving materials in compliance with a recent decision by the European Court. In the summer of 2012, ACE took the lead in convening a broad coalition of interested organisations who were concerned about the implications of the Reasoned Opinion sent by the European Commission to the UK Government to the effect that its 5% reduced rate of VAT on energy saving materials went beyond the scope of the 2006 European VAT Directive. Over subsequent years we have led the coalition in:

  • encouraging the UK Government to respond robustly to the Commission in defence of its reduced rate;
  • providing the Government with a detailed report setting out the reasons we believed that the UK’s reduced rate did in fact form part of a social policy;
  • liaising closely with officials both before and after the CJEU judgment, setting out our view that the UK Government should use the vires in both Category 10 and Category 10(a) of Annex III of the VAT Directive to retain as much as possible of the reduced rate.

Notwithstanding a few concerns, we broadly welcome the Government’s proposals.

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Our response to HMT and DECC’s consultation on reforming the business energy efficiency tax landscape

ACE has submitted its response to HM Treasury and DECC’s consultation on reforming the business energy efficiency tax landscape. We agree there is scope to simplify the landscape, but stress that in doing so, there is real emphasis on reporting publicly with board approval and ensure that cost-effective energy efficiency recommendations are acted upon.

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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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Display Energy Certificates,Energy Performance Certificates,European Energy Performance of Buildings Directive,Zero Carbon Homes

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Our response to the European Commission’s consultation on the Energy Performance of Buildings Directive

This consultation forms part of the evaluation of the Energy Performance of Buildings Directive. Under the terms of the Directive, the Commission is required to carry out this evaluation by 1 January 2017, with assistance from a Committee of Member States’ representatives. The evaluation should reflect the experience gained and progress made since the adoption of the Directive. If necessary, the Commission should make proposals on the basis of the evaluation.

The evaluation also follows on from the Energy Efficiency Communication of July 2014, which indicated that additional measures to be introduced to improve energy efficiency would need to primarily address the energy efficiency of buildings and products if progress is to be made by 2030. The Energy Performance of Buildings Directive is the main legislative instrument in force at EU level covering the energy efficiency of buildings.

With a primary focus the UK energy efficiency market, our response to the consultation highlights: the uncertainty following the abandonment of the zero carbon trajectory; the missed opportunities with respect to driving higher rates of renovation; the low level of compliance with EPBD’s provisions and the virtual absence of enforcement; the question marks hanging over Display Energy Certificates; the need to make EPC data more widely accessible; and the need to plug skills and capacity shortages in the energy services and energy auditing sectors.

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Our response to APPG for the private-rented sector’s inquiry into energy efficiency in private-rented housing

The All-Party Parliamentary Group for the private-rented sector launched an inquiry into energy efficiency in private-rented housing. Along with Friends of the Earth and Citizens Advice, ACE led a widely supported civil society campaign in 2010/2011, which led to the 2011 Energy Act placing a duty on the Secretary of State to introduce a minimum energy efficiency standard for private rented housing from April 2018 at the latest. We were also a member of the DECC advisory working group which met throughout 2013 to advise Ministers on the detail of the regulations that would be needed to bring the minimum standard into force.

The group’s inquiry follows the government’s decision not to renew the landlord energy savings allowance in the March budget. This had originally been introduced to encourage landlords to improve the energy efficiency of the properties they let but was dropped because of low take up.

Announcing the inquiry, the group’s chairman, Oliver Colvile, member of parliament for Plymouth Sutton and Devonport said: “With the winter months just around the corner, improving the energy efficiency of rented housing is a crucial issue.

“The group’s inquiry will look to develop new ideas that will support landlords to meet their new target; save tenants money on their bills and help improve standards. I would encourage all those with an interest to submit their suggestions.”

Read ACE’s response to the inquiry.

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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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Our response to Environmental Audit Committee inquiry into Government’s approach to sustainable development

The Environmental Audit Committee says that promoting sustainable development – which for the purposes of this inquiry includes protecting the environment, supporting the low carbon economy and improving wellbeing – could be worth billions of pounds to the UK economy. In 2013, the low carbon economy generated over £120 billion in turnover. The 2015-20 period will be crucial for ensuring the Government continues to promote sustainable development, with many key policies coming to an end and due for renewal or replacement.

The Committee is exploring what impact the new Government’s fiscal and legislative agenda will have on sustainable development. It is looking to establish themes for its work during the Parliament and measures against which the Government’s success can be judged. The evidence received for this inquiry will feed into the Committees work over the course of this Parliament.

ACE’s evidence, submitted to the Committee, focuses on the role energy efficiency does, can and should play within the wider sustainable development agenda:

  • Increasing energy efficiency is a key prerequisite for meeting the country’s carbon emissions reduction and fuel poverty alleviation targets and will at the same time deliver increased business productivity, public sector efficiency improvements, and a comfortable and healthy indoor environment that promotes wellbeing for all;
  • Current government policy on energy efficiency is inadequate, and will not result in carbon targets or fuel poverty targets being met;
  • Over the course of this Parliament, the Government must put in place a clear and coherent framework of targets, incentives and regulations that require and support investment in cost-effective energy efficiency improvements;
  • Government should be encouraged to better monitor and report on the effectiveness of its policies, including through the collection and use of improved data on building energy efficiency.

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