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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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Time to wake up to the reality

Amazement, shock and concern greeted the news that energy use has declined over the last 50 years. But will the Government finally catch on to the benefits of energy efficiency?

In September, Energy in Buildings & Industry’s Warren Report was headlined “The Silent Revolution in UK Energy Use”. In it, I revealed that over the past fifty years UK GDP wealth has increased by almost threefold while at the same time overall energy consumption across the economy has actually fallen (by about 5 per cent).

The level of interest in this simple juxtaposition of two trends, heading in opposite directions, was astonishing. I have been writing monthly columns on energy for over 30 years but I can honestly report that never before has a single column of mine stimulated quite so much interest.

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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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Amber Rudd,DECC

Amber_Rudd_MP

Yes Minister, but….

ACE’s Director reflects on some of the comments in the Secretary of State’s speech to the Conservative Party Conference.

In her conference speech, the Secretary of State suggested that ‘our energy policy should once again be driven by the people who pay the bills.’  Yes indeed, but let’s not forget that we already have relatively cheap energy and our dissatisfaction with our bills is more effectively tackled by helping us to use this resource more wisely than by focusing obsessively on marginal reductions in the cost of a kilowatt hour. ‘Getting a grip to protect families from endless worry about their energy bills’ should start with ensuring that their homes are energy efficient, not with providing secure supplies.

We too are delighted that the new National Infrastructure Commission will look at energy: but it must recognise that our energy infrastructure does not stop at the meter.  Investment in demand side infrastructure needs to be fully and fairly considered alongside supply-side options.

We agree that the Government will help some people to keep their bills down by delivering its promise to insulate a million more homes over the next five years, and that is a good thing; but what about their heating systems, lighting and appliances? What if they need more than just the cheaper insulation options? And what about the other 25 million homes, give or take, that aren’t yet as energy efficient as they need to be?

The Secretary of State wants to get ‘the balance right between supporting new, low carbon generation and protecting bill-payers’: so she must enable energy efficiency to help her do this.  If we use less, we can afford to pay a little more for each unit if we need to, without being out of pocket.

She wants to ‘celebrate and back the businesses and innovators who will transform our energy system’: quite right, but why no mention of the high specification insulation systems that have been developed in recent years, of triple glazing systems that enable natural light to flood in without heat flooding out, of LEDs, of smart heating controls and ventilation… I could go on…

In closing, Ms Rudd invoked the spirit of Margaret Thatcher, to demand that we tackle climate change whilst being ‘tough on subsidies […] pro-innovation and pro-consumer’.  The energy efficiency sector is ready to do just this; it now needs the Government to notice this, and get on with setting the policy framework that will let this happen.

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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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Behaviour,Domestic Energy Consumption,heritage,historic buildings

Building on the Past: energy efficiency in historic buildings

Dr Thomas Yarrow is a Senior Lecturer at Durham University.  In this perspective piece, he shares some findings and implications from his current project, Building on the Past.

In the UK we are obsessed with the past. Old buildings are all around us, valued in different ways, as symbols of history and tradition. They contribute to our sense of identity and place, and have a range of social and economic values. However, preservation of these buildings does not always sit easily alongside the aim of improved energy efficiency. Micro-renewables, double-glazing and improved insulation can all contribute to improved energy performance but can also adversely affect the aesthetic qualities and historic materials that we value. Around 20% of English homes were built before 1919, and older homes tend to be less efficient than those built more recently.  Making improvements to historic buildings poses challenges, so it is important to understand what these homes mean to the people who live in them, and work with them.

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DECC,energy and climate change committee

Priorities for the Energy and Climate Change Committee: ACE submission to the ECC Inquiry on priorities for holding Government to account

The Energy and Climate Change Committee is holding an inquiry to gather views on what areas of DECC’s policies will require particular scrutiny in the coming years.  Responses to the consultation will help to inform the Committee’s work programme.  Here are ACE’s answers to the two specific question posed.

Which DECC policy areas do you think require particular scrutiny over the next five years?

The balance of affordability, energy security and sustainability is often most effectively addressed by a focus on using less energy.  Work by the Association for the Conservation of Energy, and others, using DECC’s 2050 Calculator (http://2050-calculator-tool.decc.gov.uk/#/calculator/ace-example) demonstrates how an increased focus on demand side actions can reduce the cost of meeting climate change aims.  And, clearly, using less energy results in lower costs for energy consumers.

A clear priority for the Committee over the next five years should therefore be to scrutinise the extent to which all elements of energy infrastructure, including those on the demand side of the meter, are treated fairly in the policy decision-making process, and that investment in the demand side of the system is adequately supported by Government policy.

What should be the Committee’s scrutiny priorities over the next twelve months?

Many of DECC’s previous policies to support energy efficiency (for example, support for the Green Deal Finance Company and the scheduled timetable to zero carbon new buildings) have already been withdrawn.  Energy efficiency investments supported through the Energy Company Obligation will largely be delivered by the end of 2015, with no further obligation currently scheduled until April 2017.  And Treasury is currently reviewing the main planks of energy efficiency policy for non-domestic buildings.

The need for early action is therefore particularly acute in relation to energy efficiency policy: investor confidence in this sector is very low despite an energy sector-wide view that investment in energy efficiency has to increase significantly (https://www.energyinst.org/information-centre/energy-barometer) and this has the potential to compromise future delivery of carbon emissions and fuel poverty targets.  Ensuring that action on energy efficiency policy is taken soon, and taken effectively, should therefore be a priority for the Committee.

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DECC,Energy Policy,Green Deal,Pay As You Save

If not the Green Deal, then what?

The Government announced yesterday that no further public funding will be provided to the Green Deal Finance Company.  This leaves the energy efficiency supply chain at a loss to understand how the Government thinks it will meet its fuel poverty and climate change targets.  Yes, the Green Deal has not been as effective as the Government originally forecast, but the principle of a Pay as You Save mechanism to support energy efficiency investment remains sound.  Working to build on the existing framework, not pulling the rug from under it, was the way forward.

DECC are aiming to develop and establish a more stable, long-term, coherent framework for home energy efficiency: it is difficult to see how they can achieve this without finance options for the ‘able-to-pay’.  And we should not forget that this will include those on modest incomes who do not qualify as fuel poor: are we expecting them to turn to payday lenders?

The energy efficiency industry has invested significantly in the development of the Green Deal.  Government’s decision to undermine this core plank of home energy efficiency policy without first developing an alternative will in turn undermine the confidence of industry and its willingness to support whatever new framework is developed.

Energy efficiency investment remains the single most affordable way for Government to deliver on fuel poverty and climate change objectives.  So, yes, we will be working with DECC to develop a better framework for the future of home energy efficiency policy; but as of yesterday, our job and theirs became a lot harder.

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Subsidy cuts; VAT increases: threat or opportunity?

The news for energy efficiency in the past week has seemed grim: an EU ruling on VAT rates that will increase the cost of energy efficiency investments by 14% and the announcement of a £40 million cut in DECC’s subsidies for energy efficiency.

But let’s not despair. The French treat the issue of VAT differently; using general refurbishment of domestic buildings serving as an economic stimulus as their rationale for lower rates of VAT (10% for all retrofit works instead of France’s standard 20%), rather than the social benefits argument that the UK has used. If we adopt their approach, which additionally stimulates energy efficiency investment by lowering the rate of VAT even further (from 10% to 5.5% in France’s case) for energy-related retrofit, we’ll incentivise more action on the energy performance of our homes than the 5% VAT rate alone has done.

And there are better ways for DECC to deliver its energy security and climate change objectives, through cost-effective energy efficiency investments, rather than handing out market-distorting subsidies. ACE has long called for a more long-term, robust framework that will enable the market for energy efficiency to develop sustainably, and now is the perfect opportunity for DECC to develop this.

The French VAT reduction scheme is just one example of a more systemic incentive that could be offered. Revenue neutral stamp duty or council tax incentives for the domestic sector could lead to between 650,000 and 1.75 million additional retrofits every year. Similarly, differential business rates could encourage small business owners to invest in improving the energy performance of their buildings. If these incentives are combined with a long-term plan for minimum energy efficiency standards for all buildings, together with improved access to a range of finance options, we could begin to see the change in market demand for these measures that is needed.

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