Utility Week

UTILITY WEEK | 2ND - 8TH AUGUST 2019 | 11 Utility of the Future: climate change continued overleaf "The UK's building stock remains one of the most inefficient in Europe. If the govern- ment will not back energy efficiency, one of the cheapest ways to reduce our carbon emissions, it will not bode well for the other, costlier actions required for decarbonisa- tion," it argued. The committee was told by Lord Deben, Chairman of the Committee on Climate Change (CCC), that "energy efficiency is by far the cheapest way of reducing our emis- sions" and that "low carbon heat cannot be deployed cost-effectively unless build- ings are properly insulated". The committee reported that the total system cost of heat decarbonisation could be £6.2 billion higher per year to 2050 without energy efficiency. The committee points to a lack of political will and woeful funding and sets out a series of measures that would put the government back on track – including mirroring the approach taken by Scotland setting up cen- tralised funding to sit alongside the Energy Company Obligation (ECO). The ECO scheme started operating in January 2013, and by December 2018 had delivered around 2.5 million improvements, in approximately 2 million homes. While this is impressive it is nowhere near the rates of improvement needed. The scheme operates across Great Britain and targets low-income, vulnerable and fuel-poor households. It is The Utility of the Future Utility Week is running a year-long campaign to tackle the difficult question of the future of the sector. The campaign pillars include: July/August: Climate change September/October: Customers November/December: Business models and workforce Jan/February: Regulation March/April: Technology Check utilityweek.co.uk for more campaign content. supplier led and funded via a levy on energy bills. ECO itself has had its funding halved over recent years, operating now at £640 million a year, from an original budget of £1.3 billion. At one point with other schemes thrown in, this was up at nearly £1.6 billion. Certainly, the findings and recommenda- tions of the BEIS committee chime with the opinions of energy leaders who been have urging action for some time. When asked which measures the government should pursue in order to reach emissions targets cost-effectively, Energy Institute members have put energy efficiency improve- ments in the top spot for the past three years in its annual barometer (see graph, p10). Eon UK's chief executive, Michael Lewis, has been calling for huge increases in spend- ing on energy efficiency, tax incentives and more stringent regulation. The National Infrastructure Commission has called for efficiency improvements to be treated as critical infrastructure – recommendations backed by BEIS. Critics have been hoping for a kick-start to the programme to emerge in a long-awaited white paper. The turmoil in Number 10 would appear to have put paid to this for now. Promoting energy efficiency through business services The utility of the future will increas- ingly be offering business services where reducing energy efficiency is part of the offering. Eon has partnered with Mauer UK to bring to market a unique external wall insulation that significantly simplifies the process. A surveyor carries out a laser scan survey of the property, the insulation is manufac- tured offsite and then it is installed at the customer's property. The Mauer system significantly reduces the disruption caused to the house- holder, reduces installation times and can be installed in any weather. Eon says it expects the product will help reduce the costs of solid wall insultation. Centrica has entered into a 15-year energy performance contract with St George's Hospital in south London, which it says will reduce the hospi- tal's fuel bill by as least 10 per cent a year. Delivered by Centrica Business Solutions, the project is guaranteed to save the hospital over £1 million a year with no upfront cost, while also reducing annual carbon emis- sions by 20 per cent (6,000 tonnes). SSEN has set up an energy-saving programme called the SAVE project, which engaged 8,000 customers across Solent in four distinct engagement methods across three trial windows. SAVE uses a randomised control trial methodology combined with household monitoring and detailed annual surveys to ensure results are scalable and replicable. The project's key output is a network investment tool that allows SSEN engineers to understand the applicability and cost-efficiency of SAVE interventions against traditional reinforcement. What is going wrong… • There is a profound disparity between the public money invested in residential energy efficiency schemes per capita in England compared with the devolved nations. • The government has set targets for energy efficiency without having a clear grasp of how much public investment is required to meet them. • ECO has become the government's key mechanism for alleviating fuel poverty through energy efficiency – but a lack of funding, its focus on low cost rather than need, and the requirement for top-up funds from recipients, make it unsuitable as the government's only fuel poverty scheme. • The £5 million Green Home Finance Innova- tion Fund is woefully inadequate to stimulate demand for energy efficiency within the "able- to-pay" sector. … and what it wants to see • Make improving the energy efficiency of the UK's building stock a national infrastructure priority. • Three tiers of funding consisting of ECO, centrally funded local authority schemes, and a further national funding pot – to achieve the seven-fold increase in energy efficiency installations needed for the UK to meet its new statutory net zero emissions target. • An energy efficiency action plan to meet its EPC band C 2035 target – including a wide package of incentives deployed at scale, such as a stamp duty enticement, for the able-to-pay market. The UK's building stock remains one of the most inefficient in Europe BEIS select committee's view

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