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 Express, Mail 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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