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UK energy efficiency policy – snapshot

by Mel Starrs on May 31, 2011

in Policy Landscape

Via the ACE a fascinating report on European energy efficiency policy:

Prepared by ACE and Dr Joanne Wade, the new eceee report is based on a survey completed by eceee members and other contacts in most Member States together with an online stakeholder consultation. The report is designed to help decision-makers and relevant stakeholders appreciate how targets are currently used and how effective they can be. It is hoped that this report will provide evidence to be used in upcoming policy development discussions – particularly surrounding the upcoming draft energy efficiency directive and the European Commission’s review of whether targets need to be made mandatory for the EU to meet its objective of a 20% primary energy saving by 2020.

I’ve had trouble downloading the main report (can someone post a link in the comments if possible?) but the supplementary report (pdf, 42 pages) which goes into each country detail has the following to say about the UK:

In its National Energy Efficiency Action Plan the UK adopts a nine per cent target for 2016, but indicates that it expects savings from key policies and measures to be equivalent to 18% by 2016 without formally committing to this higher target. The UK has however adopted a nine per cent intermediate energy savings target for 2010.

The UK has historically set itself binding targets for energy efficiency. The Home Energy Conservation target required Local Authorities to improve energy efficiency in the housing stock by 30% over the period 1996 to 2011 however reporting against this target has lapsed and Government have been seeking to repeal the Act that set the target. In addition, approximately 10 years ago the Government set a target to double CHP installed capacity to 10 GWe by 2010 but the failure to obligate a party meant the target remained aspirational and was not met. Recent activity is driven by the legally binding carbon targets the UK has set itself under the Kyoto protocol and has focused on the buildings public sectors. In 2010 central government set itself a non-binding target to reduce carbon emissions by 10% in 12 months but the trend currently is to move away from binding targets.

The move away from binding targets is one reason why the Green Deal has yet to have any metrics put against it. I’m not entirely convinced by this approach. See below.

The UK has three different schemes placing requirements on businesses to deliver energy savings (measured in Carbon) in the commercial and domestic sectors.

The first is a target of 293MtCO2 of lifetime savings over the programme is placed on all energy suppliers over a threshold size. The primary aim of the target is to make a contribution to the UK’s legally binding target under the Kyoto protocol but secondary drivers also include reducing energy demand, energy security, household energy bill reduction, alleviation of fuel poverty and green jobs. The target is achievable through energy saving measures installed in homes to which an ex-ante score is applied. Similar energy company obligations date back to 1994, though these were measured in GWh. The target is enshrined in legislation, it is monitored and reported on (quarterly) by the national regulator Ofgem and fines are payable to the government if the target is not reached unsurprisingly therefore all historic targets have been met by suppliers, individually and collectively. The targets have been increased over the years, responding to the known deliverables in the previous scheme meaning that the targets are considered to be ambitious.

So when targets are set, with penalties for not acheiving them, they are met. Interesting, given the above trend away from binding targets.

The second scheme is another mandatory scheme, the CRC Energy Efficiency Scheme (commenced in 2010), placing responsibilities on all large public and private sector organisations (measured through annual electricity consumption). Individual targets are set on qualifying companies and cover all CO2 emissions (energy use converted to CO2) except those from domestic accommodation, transport, those included under a Climate Change Agreement (CCA, see below) or the EU ETS or consumption outside the UK. The savings are self-certified by the participating companies with audits carried out by the Environment Agency (a Government Agency) and penalties for companies failing to meet the reporting requirements. The overall target for the scheme is consistent with the aim of meeting the five-yearly carbon budgets. It is too early yet to make any conclusions on success or effectiveness but it is expected that the scheme administration will be simplified following consultation in 2011.

“Simplified” is another interesting term. There has been a tonne of dissent over the changes to CRC. I’m eagerly looking forward to the first league table (this October, I believe although with the changes to reporting I’m unclear on this one).

The third scheme is a long running scheme introduced in 2001 which focuses on energy intensive industry. Sector associations or facility operators can negotiate a voluntary CCA with government (Department of Energy and Climate Change) on a challenging energy efficiency target using a business as usual baseline and based on technical potential and individual assessment. The targets are revised every two years. Through this agreement participants can benefit from an 80% reduction in the energy tax (Levy). Energy use is converted to CO2 to form the metric for the target. Annual savings from the sectors covered by agreements ranged from 14.4 MtCO2 to 16.4 MtCO2 between 2004 and 2006. Initial targets have been criticized for being too lenient but have been tightened with experience. Current agreements are set to expire in 2013 though there is commitment to continue them until 2017, contributing additional savings.

A very useful summary as to what the current policies are with regards to energy efficiency.

  • architects hertfordshire

    good information!!!!!

  • Tokaino

    This what you’re after Mel? You can download both reports from here:

  • Anonymous

    Brilliant – Thank you.

  • Lam