Promising signs for Britain’s energy efficiency policies?

Andrew Warren reveals in an article on the Business Green website how three years after the Energy Efficiency Deployment Office was scrapped, a new directorate has been quietly launched within government to drive forward UK energy efficiency efforts. Andrew, a regular contributor to EiD, is a former special advisor to the House of Commons environment select committee.

 

Is UK energy efficiency policy finally turning a corner?

A new £315m industrial energy transformation project is being created. From 2020, this will replace long-established schemes designed to encourage businesses to become more energy efficient, like Enhanced Capital Allowances and First Year Tax Credits.

To deliver this new initiative, Business Secretary Greg Clark has established a new directorate in his department, charged with overseeing overall energy efficiency policy. It is being headed by newly promoted Ben Golding, who was previously overseeing residential energy efficiency policy within the Business department.

Unlike its predecessor, the Energy Efficiency Deployment Office (EEDO), it has been launched with absolutely no razzmatazz. In contrast, in 2012 the then Secretary of State, Ed Davey, called a large business/press conference to launch the Office, describing the issue as his “number one priority”.

However, the EEDO was never favoured by the old-guard Whitehall energy policy mandarins who, just as the 2015 general election was called, unceremoniously abolished it – without ever bothering to inform the outside world.

No strategic oversight

Since then there has been no strategic policy oversight for energy efficiency in the UK in any Ministry. Administrators have dealt only with the few remaining detailed programmes, the budgets for many of which were reduced.

This absence has been the subject of considerable criticism, from Parliamentary Select Committees, academics and from the official watchdog, the Committee on Climate Change. Its chairman, former environment secretary Lord Deben (formerly John Gummer) has drawn attention to the consequent 95 per cent decrease in insulation installations in households.

All this neglect occurred even though successful energy efficiency programmes and campaigns had resulted in a consistent drop in the amount of fuel being consumed over the previous decade. Between 2005 and 2015 overall annual final consumption of energy across the UK had fallen from 159,676mtoe (million tonnes of oil equivalent) to 137,430 mtoe. A drop of 16.2 per cent.

The biggest fall was in gas consumption (down 32.8 per cent – helped by programmes to replace boilers and install insulation cutting gas heating). Electricity usage fell 15.2 per cent, thanks to improved industrial motors and more energy efficient lighting. Motor fuel also decreased, by 13.1 per cent, helped by the spread of diesel cars with their superior mileage per gallon.

Changing the momentum

Hopefully now the momentum can change. With 80 civil servants now attached to the new directorate, Golding’s energy efficiency team will oversee policy areas dealing with business, public sector, products and residential usage. Special co-ordinating working parties have been created with the Department of Transport and with those within the Communities Department who oversee buildings.

Long delayed initiatives to require landlords to improve the most gas-guzzling buildings have at last begun, with standards set to be tightened regularly – hopefully accompanied by effective statutory powers to ensure implementation. Such powers need to be extended to owner-occupiers, particularly at times of sale.

A priority policy covers a new Business Energy Efficiency Scheme focused on smaller businesses, which it is said will “over time” reduce business energy bills and carbon emissions.

Fuel poverty numbers keep growing

Another key area will be addressing the growing problem of fuel poverty. Since 2015, when the former EEDO was so unceremoniously abandoned, the number of households suffering fuel poverty in England has continued to increase by a further 210,000, up to 2.55 million households.

In the Clean Growth Strategy issued a year ago, the government re-endorsed its declared statutory target that by 2030 “as many fuel poverty households as reasonably practicable should achieve a minimum energy efficiency rating of a Band C energy performance certificate”. Two interim milestones of Band D by 2020 and Band E by 2020 were cited.

In its 2017 Annual Report, the official advisory Committee on Fuel Poverty had reckoned that to deliver these objectives £15.4bn worth of investment would be required. Given the absence of any subsequent response from government, the Committee’s 2018 annual report-issued last month now estimates that £17.1bn will be needed. That is the true cost of prevarication.

Even to match that modest Band E 2020 milestone, the Treasury will need to find an extra £1bn next year. There is as yet no sign of that being forthcoming. But with the Treasury signalling  an average of 1.2 per cent real increases in revenue expenditure in the next Spending Round, starting 2020, it must be anticipated that providing substantial increases in funding to eliminate fuel poverty will feature strongly amongst priorities.

Above all the new directorate is a belated recognition that, throughout this century, the UK has been reducing overall consumption each year. Under the Clean Growth Strategy launched by the Prime Minister a year ago, building on that success should move back to become centre stage again. Much is now expected from the new Energy Efficiency Directorate.

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