This week’s briefs

There are many short news items that you should enjoy. There is a new report from the IEA on SMEs, a survey on the importance of energy efficiency for home buyers and a news item about a project trying to integrate energy efficiency considerations into mortgage affordability calculations.


• New IEA Policy Pathway report

Meeting multiple policy objectives through accelerating energy efficiency in SMEs

Energy efficiency is central to tackling climate change, but also provides many other economic, social and environmental benefits. Improvements in efficiency can boost business productivity and raise economic growth. Small and medium-sized enterprises (SMEs) are a central part of economies worldwide, comprising 99% of enterprises and providing about 60% of employment. The IEA estimates that SMEs use more than 13% of global total final energy demand, around 74 exajoules (EJ) and that cost-effective energy efficiency measures can save SMEs up to 22 EJ – more energy than Japan and Korea consume per year combined. Improvements in energy efficiency offers considerable value for economies, societies and SMEs themselves, but efficiency investment is lagging because of a lack of information, resources, technical expertise and funding. This Policy Pathway describes how well-designed energy efficiency programmes can address these barriers, unlocking a wide range of benefits.

The IEA Policy Pathway series aims to help policy makers implement the IEA 25 Energy Efficiency Policy Recommendations endorsed by the IEA Ministers in 2011. The Policy Pathway builds on lessons learned from country experiences and provides actionable guidance on how to plan and design, implement, monitor and evaluate energy efficiency programmes targeting SMEs.

There is a free download on the IEA website.


Energy efficiency ‘deal breaker’ for many home buyers, poll shows

Jocelyn Timperley writes on the businessGreen website that sixteen per cent of respondents said a low energy rating would lead them to pull the plug on an offer entirely

A poor energy efficiency rating on a property could be a deal breaker for house buyers, a new survey by Populus has found.

A survey conducted for the website Selling Up last week conducted by Populus, asked more than 1,000 people what “hidden” factors would make them reduce their offer or entirely lose interest in buying a property.

Significantly, three- quarters of respondents said a poor energy efficiency rating would lead them to either reduce their offer price or withdraw from the sale.

More than one in three – 36 per cent – said a poor energy efficiency score would lead them to cut thousands of pounds from their offer price, while a further 23 per cent said they would reduce their offer by a few hundred pounds. Another 16 per cent said a low rating would lead them to withdraw the offer entirely.

The findings suggest Energy Performance Certificates are a factor in a house purchase, alongside concerns over energy bills.

The survey found that energy efficiency ratings would have more effect on respondents’ offers than a poor or unreliable mobile phone signal, a property severely in need of cleaning and bad taste or out of date kitchens or bathrooms.


• Energy efficiency and mortgage affordability calculations

Ryan Bembridge writes on the Mortgage Introducer website about Nationwide Building Society, leading a research group in the UK looking at whether energy efficient homes can be incorporated into mortgage affordability calculations.

Nationwide chairs energy efficiency group

Nationwide is chairing the LENDERS project, which is comprised of lenders, building industry experts, green energy groups and sustainability bodies.

The project will use the Energy Performance Certificate to estimate energy costs on individual homes and look at the whether they can be incorporated into affordability calculations.

The research group is supported and part funded by Innovate UK, while it will comprise of Principality Building Society, UK Green Building Council, Zero Carbon Hub, Constructing Excellence in Wales, BRE, Energy Saving Trust, Arup and University College London.

Andrew Baddeley-Chappell, head of mortgage policy at Nationwide, said: “The research will look at ways of moving away from current estimates of energy costs and towards more detailed affordability calculations based on the individual property.

“Fuel charges are the largest unavoidable household costs and may vary by a large degree. Such detailed data could allow lenders to acknowledge that smaller fuel costs could allow more to be borrowed on the mortgage, nudge buyers towards more efficient buildings and potentially reflect the added value of such properties.”

Nationwide is already a proponent of ‘green mortgage lending. The society’s Green Further Advance allows all existing mortgage customers to take out loans of between £5,000 and £20,000 to undertake approved energy efficiency measures such as cavity wall insulation, rated boiler installation and solar panels.

Loans have a 0.25% rate reduction from Nationwide’s existing range of 2-year fixed rate and tracker further advance deals, with current rates starting from 1.64% and 1.49% respectively.
• New report by consortium led by Fraunhofer ISI on energy efficiency’s role in decarbonisation

Elisa Wood writes a good post on the energyefficiencymarkets website about the impact of energy efficiency in our decarbonising efforts.

Energy Efficiency Could Cut Decarbonizing Costs by $2.8 Trillion

Energy efficiency can reduce the cost of decarbonizing the economies of the U.S. Brazil, China, Europe, India, and Mexico by up to $250 billion per year, according to a new report. “How Energy Efficiency Cuts Costs for a 2° C Future.”

The report estimates savings of $2.8 trillion by 2030 if the countries use a high energy efficiency pathway to decarbonize. This approach would reduce carbon at no net cost to society, said the report funded by ClimateWorks and conducted by a consortium of groups led by Fraunhofer ISI.

In all, energy efficiency could reduce carbon emissions by 11 billion metric tons in 2030 — roughly two-thirds of the cuts needed to limit warming to 2° C, said the report.

Savings varied by nation, ranging from 0.1 to 0.4 percent of annual GDP. The savings was not sensitive to macroeconomic shifts or to changes in fuel price.

“It is of the utmost importance to address why many of the cost savings due to EE are not yet being realized by markets, private investors and households,” the report said.

Eliminating subsidies for fossil fuels and putting a price on carbon would accelerate use of energy efficiency. The report also suggested using internal rate of return rather than payback to calculate the economics of efficiency measures.

The report also pointed out that by combining energy efficiency and low-cost renewables, for the next 15 years nations could avoid broad use of carbon capture and sequestration – a costly way to reduce carbon in power plants.

On the positive side. the U.S. is positioned to reduce carbon through fuel economy standards and the Clean Power Plan, the Obama administration’s new rule that requires an 870 million ton cut in carbon from power plants by 2030, a 32 percent drop over 2005 levels. But the nation could do more by creating greater incentives for building retrofits and reductions in fuel use by energy-intensive industries, the report said.

ClimateWorks suggests that the nations apply the cost savings achieved through energy efficiency toward bringing electricity to the energy poor. The World Bank shows that the world can achieve universal access to electricity through investments between $40 billion and $100 billion annually. The $250 billion saved in the regions studied could help finance this critical goal.

The report is available here.


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