The government’s Autumn Statement promised a 15% reduction in energy consumption by 2030. But is it possible?
Let’s start at the beginning. Why do we need to reduce energy consumption?
Reducing energy consumption is a triple win. It reduces CO2 emissions, reduces people’s energy bills and makes the country more energy resilient (ie. less vulnerable to external impacts such as the Russian war in Ukraine).
How do we reduce the amount of energy we use? Do we all need to sit in the dark and cold?
There are many ways to reduce energy consumption that don’t involve any behavioural change (although providing helpful information to the general public about energy usage is really important too):
- Insulation and draught proofing help buildings avoid leaking heat.
- Air source or ground source heat pumps offer much more efficient ways of heating homes.
- Smart technologies allow us to have better control over building heating systems, or to automatically turn devices on or off so we avoid wasting energy.
- Energy storage allows us to use solar energy in the night time, or wind energy on a still day. Harnessing renewable technologies in this smart way means we reduce demand specifically on fossil fuels.
The developments in energy storage over the last few years have been remarkable. Compare the old diesel backup generators with today’s nimble battery storage schemes, and they feel centuries apart. The government is backing innovation in long term storage projects too, including thermal storage, pumped hydro, hydrogen storage and single liquid flow batteries.
Equally promising is the way that the National Grid Electricity System Operator (ESO) is trialling money back schemes for people using less energy at peak times. It feels that UK politicians have been reluctant to impose behaviour change in light of the Ukraine war. Financial incentives and nudges can provide a good starting point for altering the way we manage energy at home. Inevitably, we will all need to think differently about how we use energy so these schemes are moving us in the right direction.
So how are we getting on with energy efficiency?
The UK has got some of the least energy-efficient homes in Europe. You’d think that over the years the government would have made it a big priority to address this, but it hasn’t. Over the past decade it has introduced a number of poorly-devised schemes like the Green Deal which just didn’t work.
This has led to the situation where, at a regional level, energy efficiency support is often provided via a confusing patchwork of providers, with the funding for it cobbled together from national and local government funding and involuntary contributions from energy companies. The community sector helps out too with a mixture of voluntary and financial support.
The upshot of this approach is that there is no obvious go-to place for an individual or an organisation who is keen to do a retrofit but doesn’t know where to start. Equally importantly, there has been no long-term national strategy for achieving the massive expansion in funding and supply-chain capability for the huge number of retrofits required.
The 2022 Autumn Statement announcement of £12billion for energy efficiency sounded good, but as ever, the devil’s in the detail. Half of that £12billion is not new money – it had already been allocated for this parliamentary cycle. And the other half is only to be made available in 2025 – after the next general election. This is simply too little too late, and millions of people will continue to suffer cold homes and huge energy bills as a result.
In the weeks following the Autumn Statement, a further £1billion has been put forward by government, perhaps in part due to public pressure. But given the scale of the challenge, this money is a drop in the ocean. One Bristol councillor reported that £1 billion was unlkely to even cover the costs for Bristol Council owned homes to be brought from EPC E to C.
The government is under huge economic strain. Can it afford this?
The UK can’t afford not to do this. It’s fundamental to both increasing energy security and reducing energy bills. The government also has a choice about where it puts its money. Look at the windfall tax on the oil and gas producers, who are making a fortune out of the current energy crisis. Incredibly, there’s a loophole where these producers can claim tax relief on over 90% of their windfall tax if they spend that money on more oil and gas development. But we already know we can’t burn our existing fossil fuel reserves if we’re to reach our emissions reduction targets. The last thing the planet needs is more fossil fuel development. This tax relief is illogical, it’s lunacy. This is exactly the money that should be going towards energy efficiency right now.
It’s also important to flag up that government shouldn’t be the only one funding energy efficiency. The majority of it should come from commercial investors and institutional investors such as pension funds. Other countries such as the Netherlands have been able to roll out whole-house, street-by-street energy efficiency upgrades by working at scale and adopting a whole-systems approach. This is known as the Energiesprong model. Residents end up with a cosy home and the funders get a return through receiving income from part of the residents’ future energy bills.
What would you like to see happen?
We need a joined-up strategy that enables local authorities, combined authorities, commercial funders, institutional investors, impact investors and community investors to collectively establish regional one-stop shops for energy efficiency. These would support all the phases required for a successful energy retrofit – advice, assessments, funding support, help with finding a contractor, and project managing the actual works.
If government actually collects the windfall tax on those oil and gas profits, it can seed-fund these one-stop shops. It’s a no-brainer.
In the meantime, the good news is that Energiesprong have been working in the UK for a number of years now, and run a number of successful pilot schemes, mainly with social housing providers. Just as importantly, they are also addressing the whole-system issues in the UK retrofit supply chain.
In parallel to Energiesprong’s work there are also a number organisations working on the large-scale financing aspects of the retrofit jigsaw, such as Bankers Without Boundaries,, 3Ci (the Cities Commission for Climate Investment), and the UK Infrastructure Bank. Meanwhile, ESCO-in-a-box and First Thermal (the newly-launched national franchise from the magnificent Bristol-based CHEESE project) are enabling community groups across the UK to turbo charge their local retrofit activity by providing fully developed business models, white-label systems and support.
BEC, through Zero West, has developed relationships with all the above organisations, and is working with others to set up a one-stop shop for the West of England.
If you have ideas or networks that might contribute towards this goal, please do get in touch with us on firstname.lastname@example.org