A report released this week has called for the government to adopt a renewed focus on energy efficiency over the next decade as a way to reduce energy demand and costs to consumers.
The Energy UK report compiles interviews with ‘senior leaders in the energy industry’ on what they see as the possible ‘pathways for the GB electricity sector to 2030’ and the related policy priorities for the UK government going forward.
The report claims there is huge potential for energy efficiency to help reduce the increased need for investment over the next several years as a result of expected increases in energy demand. However, it suggests this is not possible under the current policy landscape, with respondents calling for a whole systems approach that includes measures to boost energy efficiency in both the domestic and commercial sectors.
The report stated that more policies would be needed to realise the potential of energy efficiency, which it says can be delivered through a “long-term policy framework that is based on competitive market signals”.
The current strategy of stimulating activity through subsidies raised through consumer bills was criticised as not being the right approach. Many believed a top-down approach through obligations on suppliers had tended to lead to the supply chain over relying on subsidies rather than developing innovative ways to promote measures to consumers. This approach has also reportedly fostered an attitude that efficiency measures should be delivered free of charge, undermining the value of these measures to the wider public.
Instead, respondents claimed efficiency gains could be delivered through the adoption of long lead time regulation to reduce usage in new and existing building stock, supported by targeted incentives.
Respondents compared this to the use of efficiency standards for boilers and vehicles, believing that similar standards should be applied for new builds across all sectors.
The government was due to introduce a zero carbon homes standard this year that would achieve significant efficiency savings for both electricity and carbon. However, this was scrapped in an attempt to increase domestic construction and ease the housing crisis, prompting criticism from across the energy efficiency sector.
The only energy efficiency standards now in place for domestic properties are in the 2013 Building Regulations, which are likely to remain the leading standard until the end of 2020 when European Standards for near zero energy buildings are introduced.
The report also reflected the wide industry view that energy efficiency would be essential to the take-up of low carbon heat to 2030. It claims delivering energy efficiency measures within the right framework would act as a precursor to effective deployment of low-carbon heat, as well as reduce the cost of energy.
Lawrence Slade, chief executive of Energy UK, said: “The cheapest electricity will always be what we don’t use. Energy efficiency remains the most cost-effective way to help cut energy bills and carbon emissions. And much more can still be done. Government needs to put policies in place that: encourage improvement; help people struggling with their bills; and kick-start – by a combination of fiscal and regulatory measures – the-able-to-pay market.”
The future of energy efficiency policy in the UK is currently unclear, with only the Energy Company Obligation scheme due for renewal in 2017, when it will be replaced with a streamlined and cheaper version targeting the fuel poor.
Business are expected to receive an indication of new energy efficiency tax relief and reporting guidelines in the upcoming Budget, while industry is waiting to see if the measures recommended during the ESOS audit process will be taken up.
