APPENDIX 4
Further memorandum from the Association
for the Conservation of Energy
RESPONSE TO
THE EVIDENCE
OF BRIAN
WILSON GIVEN
ON 2 APRIL
2003
1. Scope of this further note.
1.1 This further note is submitted on behalf
of the Association for the Conservation of Energy. Its purpose
is to comment on the evidence given by the Energy Minister, Brian
Wilson MP on 2 April, to explain why this raises very serious
concern for the energy conservation industry, and to explain what
the effects of those concerns might be.
2. Summary and effect of the concern.
2.1 Our very serious concern is that
— the evidence of Brian Wilson to this
Committee, and
— other recent and historical evidence.
all send exactly the wrong signals to the energy
efficiency industry.
2.2 Let us be very clear about the seriousness
of what we are saying: the signals to industry are so wrong, so
negative in fact, that we fear that they could well lead to an
effective "investment strike" by this sector, with quite
disastrous results for the overall objectives of energy policy
set by the Government, to which we subscribe. After all, according
to the White Paper energy efficiency is confidently expected to
deliver up to four times the carbon savings required by 2020 as
the entire renewables sector. Our point is that is it all very
well "confidently expecting" this, but without commitment
it is not likely to happen.
3. The White Paper and Brian Wilson's evidence
to the Committee.
3.1 In our earlier evidence we highlighted
the "reverse hierarchy" to that recommended by this
Committee set by the White Paper: targets for CHP, "aspirational
targets" for renewables' but neither targets, nor commitments,
nor anything similar for energy conservation. We pointed out that
while it is true that the box at para 3.5 on page 33 of the White
Paper states "where (carbon) savings might be achieved"
by 2010 from energy efficiency and that para 3.6 sets out the
further savings that "can come from households" as a
result of energy efficiency, these are simply presented as a statements
of what is possible. What is nowhere stated is that the achievements
of the possible carbon savings mentioned are targets, aims, objectives
goals, or, indeed, even government policy.
3.2 On 2 April Brian Wilson gave evidence
to the Committee. The relevant sections of the (uncorrected) transcript
show two things very clearly, namely that:
— he is quite happy to repeatedly refer
to, and indeed promote, targets—in relation to everything
except energy efficiency; and
— he could give no reassurance at all
re what the status was of the carbon savings listed in paras 3.5
and 3.6 of the White Paper.
We consider these two points in paras 3.3 and
3.4 below.
3.3 Targets targets everywhere. For instance,
Mr Wilson's opening statement refers to "setting us on course
for these targets". In reply to question 2 he refers twice
to long term carbon reduction targets; and again in reply to question
3. In reply to question 5 he twice mentions the CHP target; in
reply to questions 19, 20 and 21 he refers to the renewables target;
and in answer to questions 22-26 he gives assurances re 2020 CO2
targets. So in relation to all other parts of the sustainable
energy agenda he offers targets and commitments—but not
for energy efficiency.
3.4 The questions on energy efficiency.
3.41. At question 61 Mrs Clark comments
on the lack of energy efficiency targets. Mr Wilson tries to point
out that she is wrong by referring to the targets re CO2 savings
from certain energy efficiency measures in the box on page 33
of the White Paper (para 3.5)—only to be corrected by the
DEFRA civil servant, Jeremy Eppel, that this was a misprint. (We
had, already been informed of this by Jeremy Eppel on the day
the White Paper was published).
3.4.2 At question 62 Mr Barker returns to
the issue of energy efficiency targets and says that "it
just looks like an unwillingness to make that commitment which
everybody else wants you to make." Mr Wilson replies that
there is "definitely a resistance" re targets but asserts
that "I do not think that in any way undermines either the
sincerity or the attainability of the goals that we have set ourselves."
3.4.3 This is the reply that compounds all
our fears re the government's commitment (as distinct from fine
words a-plenty) to energy efficiency, because it is another evasion.
We agree with Mr Wilson: we do not question "the sincerity
of the attainability of the goals" the government has set
itself. Our difficulty is that neither those paras on page 33,
nor any others), actually set any goals re energy efficiency.
The CO2 savings from energy efficiency are merely stated as what
is feasible: they are not stated to be goals or anything else
that would imply a commitment to them by the government.
4. Our conclusion—and the effects.
4.1 Conclusion. There can only be on inescapable
conclusion: whatever the fine words in the White Paper about energy
efficiency, there is no willingness of this government to commit
itself. There is a commitment to CO2 reductions, and to CHP and
renewables in achieving those: but there is none to energy efficiency.
And every time this issue is ducked this conclusion is strengthened,
and our worst fears (that it's all fine words) compounded.
4.2 Effects. They are very serious indeed.
Industry will not continue to invest in plant, personnel, products
and new technology on the basis of fine words, which are then
not backed up by commitment, particularly when:
— previous "commitments"
have not been adhered to, leaving many companies that responded
in good faith to these with "stranded assets";
— there are commitments made to other
products; and
— there is a decreasing commitment
to energy efficiency (as outlined in Annex).
In these circumstances company boards, shareholders
and banks will simply not be prepared to put in place the necessary
infrastructure investment, either in manufacturing or installation,
equipment and training. Unless something is done about this, what
could well ensue would be what is tantamount to "an investment
strike" by this industry. Not in any planned or co-ordinated
sense; but in the simple melting away sense of a gradual reduction
in capacity. Below we indicate three ways of trying to remedy
this that would be very helpful.
5. Remedy—three issues:
5.1 It would be very helpful if the Committee
could pursue further the following issues:
5.2 Issue No 1
We do not want to get too locked into specific
terminology. If the word "target" is unacceptable then
so be it. But we do need clarification. Thus it would be very
helpful if the Committee could seek clarification on the following
matter, namely;
"Is it government policy to achieve the
carbons savings from domestic energy efficiency by 2010 listed
in para 3.5 on page 33 and by 2020 mentioned in para 3.6 on page
33 of the White Paper?"
5.3 Issue No 2
This concerns one of our member companies that
has invested heavily in new technology, that has been described
by the PIU report (at Table 6.2) as the most efficient method
of carbon saving—micro CHP. As with the generality outlined
above, so with the specific The Government's CHP strategy contained
a target of 400MW by 2010: this is not repeated in the White Paper—leading
to all the fears described above. Thus it would be very helpful
if the Committee could seek clarification on the following matter,
namely;
"Is the target for micro CHP of 400 MW
by 2010 indicated in the draft CHP strategy still Government policy?"
5.4 Issue No 3
In answer to question 2 Mr Wilson says that
the White Paper "contains 130 commitments". In the light
of this it would be very helpful if the Committee could seek clarification
along the following lines:
"Do the 130 commitments indicated by the
Minister include;
(a) the achievement of the carbon savings
from domestic energy efficiency indicated as possible by paras
3.5 and 3.6 of the White Paper and
(b) any other commitments relating to energy
efficiency, and if so which?"
April 2003
Annex
THE DECREASING COMMITMENT TO ENERGY EFFICIENCY
1999: 13 April: John Prescott in statutory
report to Parliament under the Home Energy Conservation Act sets
a target of domestic energy efficiency improvements of 20% by
2010 based on 1996 levels, explaining that "a 30% improvement
target was deliberately set as being a demanding one."
1999: September: DETR publication "Monitoring
the implementation of the Home Energy Conservation Act" re-states
the 30% improvement target no fewer than 23 times.
2001-02 DEFRA web site re-states the 30% target.
Thus Far All is Clear: But Now Comes the Reversal
2002: 10 May: Michael Meacher consistently
refuses to confirm that that target if the policy of the current
government during the Report Stage of the Des Turner Homes Energy
Conservation Bill; Hansard 10.5.02 cols 427-429
2002: 10 May: Mr Meacher moves an amendment
to the Des Turner Home Energy Conservation Bill removing all references
to the target and then the Government withdraws support for Bill
because the House insists on putting it back in, and votes him
down.
2002: 23 May: Michael Meacher tells Trade
and Industry Committee that there has never been a target. The
minutes of evidence read: "there has never been a Government
commitment . . . to a 30% target."
2003: February: No target or similar commitment
in White Paper
2003: April: Brian Wilson declines to confirm
any target, commitment or whatever to this Committee
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