DECC,Energy Policy,Green Deal,Pay As You Save
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.
Carbon Budgets,Climate Change Targets,Employment,Energy Policy,Fuel Poverty
WWF today published a report from Cambridge Econometrics that sets out the value that reducing carbon emissions will bring to the UK economy. The action needed to meet the UK’s 4th carbon budget, which will include significant investment in energy efficiency, will deliver 190,000 additional jobs, make households better off financially, provide new business opportunities and result in a net increase in annual Government revenue of £5.7bn by 2030.
Average net benefits to households will come close to offsetting the impact of increasing energy prices. These benefits will not be felt equally however, and the report notes that government needs therefore to target support at exposed or vulnerable groups. That is why we – and our allies in the End Fuel Poverty Coalition – are calling for the homes of all low income households to be improved to Energy Performance Certificate Band C by 2025. Improving homes to this standard will result in dramatic improvements to both the energy bill affordability and quality of life of their occupants.
The energy efficiency benefits set out in the WWF report can only be realised, however, if investors are confident in the market for energy efficiency goods and services: a government commitment to making energy efficiency a top infrastructure priority is key to this, together with long-term, rigorously enforced regulation of the energy efficiency of buildings.
Energy Policy,Families,Fuel Poverty
Families in fuel poverty are an important policy issue. ACE research has shown that there are currently 2.23 million children, in 1.08 million families, in fuel poverty (close to half the total number of households, as newly defined) in England. Fuel poverty has severe and long-lasting effects, including on children’s respiratory problems, mental health, hospital admission rates, developmental status, educational attainment and emotional well-being, among other impacts.
Last year, ACE estimated that only 2.9% of energy assistance budgets would reach fuel poor families. The recent “Behind Cold Doors” report by The Children’s Society showed that 1.9 million children living in poverty in the UK were in families that missed out on a Warm Home Discount (a key form of fuel poverty assistance) in 2013/14. For these reasons, take-up of fuel poverty assistance among families is a key concern for policy-makers, service providers and energy companies.
In this context, Eaga Charitable Trust is funding The Children’s Society and the Association for the Conservation of Energy to carry out the project “Reaching fuel poor families: Informing new approaches to promoting take-up of fuel poverty assistance among families with children”. This research will review a range of fuel poverty schemes aimed at families, especially those run through Children’s Centres. It will also involve an in-depth evaluation of one specific scheme based in Mortimer House Children’s Centre, a centre in Bradford run by The Children’s Society.
The project will provide recommendations for this specific scheme, and inform a potential roll-out to other centres. It will also draw lessons of broader relevance to fuel poverty schemes aimed at families, to help in the design and delivery of effective programmes in future.
Domestic Energy Consumption,Energy Efficiency,Energy Policy
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.”
carbon savings,Energy Company Obligation,Energy Policy
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.
Energy Company Obligation,Energy Policy,Green Taxes
It all got started at a rowdy session of Prime Minister’s Questions late last month in the House of Commons. Large price rises had just been announced by many of the energy suppliers. So David Cameron promised to instigate a hard look at the impact green taxes might be having upon fuel bills, with a view to announcing changes in the Chancellor’s Autumn Statement.
This perfectly reasonable announcement instantly prompted a quite unseemly hubbub of misinformation and special pleading. Initially, all the focus was placed upon the specific requirements placed by government upon the large electricity and gas retailers, which the Department of Energy & Climate Change said, categorically, was adding just 7 per cent at most to an average household bill.
DECC continuously examine these figures. These reviews consistently show that these particular “green taxes” ultimately ensure our bills are on average lower in the years to come than they would be without them, thanks to energy efficiency and reduced reliance on imported gas.
Energy Efficiency Targets,Energy Policy,European Commission
How do you know when your energy efficiency strategy has succeeded? Most companies can answer that, because they set themselves very specific savings targets. They recognise that it is rigorous monitoring and targeting which are the key components of any successful drive to reduce fuel wastage.
Shame therefore that our government seems to be deliberately eschewing any such overt measurements of success – or failure. Simply because it refuses to declare any statistical targets for its energy efficiency initiatives.
To be fair, there is one pertinent target that Energy Secretary Edward Davey has been vigorously championing. He is calling for a 40 per cent cut between 1990 and 2030 in CO2 emissions across the 28 countries of the European Union. This should rise to 50 per cent, if an “ambitious global climate deal is struck.”
Energy Efficiency,Energy Policy,Products and Appliances
The Prime Minister is unequivocal: “To those who say we just can’t afford to prioritise the green agenda now, my view is: we can’t afford not to”.
Government energy policy is prioritising that agenda. A significant component of that agenda is electrifying the economy – our transport, our buildings, and most particularly our electricity generation.
Business as usual won’t deliver this. So the government is deliberately stepping in to alter the merit order for generation. Nobody denies that will mean that the cost per kilowatt-hour generated will grow.
Consumer Focus,Domestic Energy Consumption,Energy Bills,Energy Policy,Fuel Poverty
Two reports for Consumer Focus on the impact of environmental and social policies on consumer bills
As part of Consumer Focus’s “Who Pays?” programme, ACE Research was commissioned to produce two reports about the impact of environmental and social policies on consumers’ bills.
With energy prices rising, fuel poverty becoming more widespread, and households struggling to afford their energy bills, some have sought to blame energy and climate change policies that often result in a direct or indirect levy upon energy bills. A lack of transparency over the magnitude and distributional impact of these costs has made it difficult for stakeholders to make considered judgements.
Government and the Committee on Climate Change have responded by publishing assessments of the impact policies currently have on energy bills, and the likely impacts by 2020. Such assessments depend upon a range of assumptions. Using a combination of housing stock and household models, the report entitled “Impact of future energy policy on consumer bills” presents evidence on the potential range of energy bills under different assumptions, the structure of the costs that are passed through to consumers, and explores the distributional impacts of bills in 2020.
The principle of recovering the costs associated with UK environmental and social policies via consumer energy bills or taxes is not a new one. The report entitled “Past and future trends in environmental and social levies” seeks to quantify the historical costs and average cost per household associated with such policies from 1990 to 2010 (see Figure 1), and forecast future costs from 2010 to 2020. In light of the controversy around the Government’s proposal to reduce the support for small scale renewable electricity (Feed-in Tariff rate for photovoltaics), this paper also explores the cost implications of two different tariff scenarios investigated by Government.
[Update, February 23, 2012: Private Eye magazine, not renowned for lavishing praise on anything, has come out as strongly supportive of ‘A Corruption of Governance’. Read ‘Old Sparky’s’ piece here]
This new report from ACE and Unlock Democracy exposes the circumstances in which MPs and Parliament were given incorrect information upon which to make their decisions on national energy policy, specifically in relation to new nuclear power.
The report outlines that, on the basis of the Government’s own evidence, we do not need any more new nuclear power stations in order to ‘keep the lights on’ and reduce CO2 emissions by 80% by 2050. It goes on to show that, on the basis of the Government’s own evidence, electricity generated by nuclear power is the not the least expensive of all lowcarbon technologies. In everyday terms, the building of new nuclear power stations to provide electricity is likely to mean higher fuel bills.
Finally the report attempts to assess what has gone on. Why the seemingly inexplicable decisions documented (i.e. the decisions in favour of new nuclear power stations that are not needed) were taken by successive Governments.
The report concludes that what has gone on is nothing less than a corruption of governance. This corruption of governance can only be rectified if Parliament re-opens this debate, and MPs vote on this issue having seen the correct information.
Download the Executive Summary – Corruption of Governance
Download the full report