Select Committee on Welsh Affairs Written Evidence

Written Evidence from Energy Saving Trust

  1.  This is the Energy Saving Trust's submission to the Welsh Affairs Committee Inquiry into Energy in Wales announced in October 2005. This submission should not be taken as representing the views of individual Energy Saving Trust members.

  2.  The Energy Saving Trust was established as part of the Government's action plan in response to the 1992 Earth Summit in Rio de Janeiro, which addressed worldwide concerns on sustainable development issues. We are the UK's leading organisation working through partnerships towards the sustainable and efficient use of energy by households, small communities and the road transport sector, and one of the key delivery agents for the UK Government's climate change objectives. We operate a number of programmes in Wales including Energy Efficiency Advice Centres, transport programmes, support for domestic energy efficiency activities to all 22 local authorities in Wales and a pilot renewable energy advice (REAS) through the West Wales Eco Centre. Our response, which considers each of the Inquiry's terms of reference (ToR) in turn, focuses on our key activities and areas of expertise.

ToR 1.  UK Government policy in relation to

    (a)  the current and future energy needs of Wales; and

    (b)  the current and future provision of energy in Wales.


  3.  The Energy Saving Trust strongly believes that, in the short term, the priority focus in meeting Wales' energy needs in a secure, efficient and environmentally friendly manner must be to reduce the level of demand in the first place. Demand side activity can be implemented far quicker than changes in the supply side and will deliver carbon reductions with lower levels of low carbon supply. Energy efficiency clearly helps improve security of supply by reducing the demand for primary energy and hence the level of dependency on energy imports. The installation of energy efficiency measures can result in substantial financial savings to consumers who could save as much as £250 on their annual fuel bills simply by installing energy efficiency measures. This also means that energy efficiency plays a key role in tackling fuel poverty. Energy efficiency also clearly provides the most favourable low carbon solution when taking into account embodied energy.

  4.  To give an idea of scale at a UK level—investment in improvements in UK households has doubled energy efficiency since 1970. These changes have reduced carbon emissions by 28 MtC per annum whilst saving consumers £10 billion every year. This is three times the saving from the whole nuclear industry and almost as much as the emissions of the UK's fleet of coal fired power stations.

  5.  The Energy Saving Trust estimates that the achievable annual potential for household carbon savings in the UK is 16 MtC through existing technologies and excluding solid wall insulation. This equates to 36%[7] of household energy use. One of the emerging conclusions of the joint Defra/HM Treasury Energy Efficiency Innovation Review is that "significant [energy efficiency] cost-effective savings remain in every sector, even when other hidden costs are taken into account".[8]

  6.  It is imperative that Wales not only continues its focus on energy efficiency as the key delivery agent for its short term carbon reductions but also raises its commitment by strengthening existing measures and introducing new policies for both now and the longer term. We would be pleased to provide details of the potential energy efficiency opportunities available in the household sector.

  7.  While the short term focus should be reducing demand in the first place, the longer term focus of energy policy must be a shift towards a low carbon economy. At a household level microgeneration will have an important part to play in delivering such a shift. This is considered in more detail in our response to question 3.


  8.  In addition to the household energy sector, rising transport emissions must be tackled as a priority in Wales. Urgent action is clearly required to negate the increasing road transport emissions that are forecast by UK Government. In our view efforts to curtail Welsh transport emissions would be helped by setting a clear target for emission reductions in the transport sector. Monitoring of progress against the target would allow the effectiveness of policy to be measured and remedial action taken if necessary.

  9.  However, there is considerable further scope to tackle transport emissions, key to which is the provision of information and advice to users. We would therefore welcome long term commitment to the Travel Plan Coordinator scheme and the Walking and Cycling Strategy. Local authorities in particular have very important roles in transport planning and public transport support in their local communities. We believe that greater priority needs to be given, both in local transport investment plans and transport planning, to low carbon modes of transport, in particular to public transport, cycling and walking in Wales. We offer free transport consultancy advice to Workplaces in England and Scotland as detailed on our website, and believe we can help reduce Welsh transport emissions by expanding this service in Wales. We would be pleased to provide further details of the potential transport opportunities that the Welsh Assembly Government could adopt.

ToR 2. The relationship between the UK Government and the National Assembly for Wales—including the division of powers—on energy policy

  10.  Energy policy in Wales is the responsibility of the UK Government, as are a number of other policy areas that are of direct relevance to the use and provision of energy, including:

    —    The promotion of renewable energy.

    —    Building regulations.

  11.  However, other policies of relevance to the use and provision of energy are the direct responsibility of the Welsh Assembly Government including:

    —    The promotion of energy efficiency/CHP.

    —    Environment policy.

    —    Housing.

    —    Planning.

    —    Transport.

    —    Local government.

    —    Fuel poverty.

  12.  This provides substantial opportunity for the Welsh Assembly Government to provide tailor-made Wales-specific solutions, which have to date included, for example, the inclusion of domestic and non-domestic energy efficiency targets for Welsh local authorities under their policy agreement with the Welsh Assembly Government. It is worthwhile noting that where such polices are particularly innovative and successful they can provide a lead for the rest of the UK to follow. For the non-devolved policy areas the Welsh Assembly Government has a key role in influencing policy outcomes at UK Government level. However, it is inevitable the result is policies that are less Wales-specific.

ToR 3 The current and future portfolio of energy provision in Wales

  13.  Of particular relevance to this part of the Inquiry is the Energy Saving Trust's work on microgeneration and biofuels for transport.


  14.  We believe that microgeneration offers considerable potential and must be allowed to play a major role in Welsh energy policy objectives. An appropriate policy framework should be developed accordingly.

  15.  Microgeneration offers a number of benefits over larger scale technologies including reduced transmission and distribution network losses, enhanced security of supply through fuel diversity and reduced dependence on a small number of generators. Renewable microgeneration technologies can also help mitigate fuel poverty in hard to treat homes, such as solid wall properties, and in off-gas network areas. Microgeneration, in common with energy efficiency, will also address heat as well as power unlike nuclear and most large scale renewable technologies.

  16.  Combined heat and power in general is clearly more efficient than the production of heat and power from separate sources, which is particularly relevant in relation to gas supply. We note that DTI[9] now considers microgeneration as "the production of heat and/or electricity on a small-scale[10] from a low carbon[11] source".

  17.  Indications are that the development of microgeneration technologies will also help improve the level of engagement with consumers on climate change issues in general. In the case of renewables, microgeneration this could help increase acceptance of larger renewable generation projects. The implementation of microgeneration solutions will also help facilitate a holistic approach to carbon reduction in the household sector by allowing the implementation of energy efficiency measures at the same time. This is clearly not possible with large scale generation solution which will not help improve engagement with consumers.

  18.  It is for these reasons that we advocate microgeneration must be allowed to play a major role in Welsh energy and climate change policy objectives and an appropriate policy framework should be developed accordingly.

  19.  The Inquiry may also be interested in the recent Energy Saving Trust discussion document "Delivering the Government's 2020 vision for local energy generation". This outlines our views on the major cost, information and technical constraints preventing the early deployment of a market for microgeneration (renewable and non-renewable) and the mass market transformation actions required if the UK is to meet its climate change targets. We would be pleased to provide further details of the policy framework that we believe is required to stimulate the development and mainstreaming of microgeneration solutions.


  20.  The Energy Saving Trust in partnership with Element Energy Ltd, Econnect Ltd and the Faculty of Economics (University of Cambridge) has recently undertaken a study and analysis of the potential for microgeneration in the UK for the DTI. We believe that the final report, which DTI is planning to release shortly will be of particular interest to the Inquiry. The report will provide the most informative and relevant information in relation to the relative costs and operating efficiencies of microgeneration technologies. We suggest that in this instance this report will be more helpful than the evidence that we could currently submit. The Committee may therefore like to request a copy of the report from DTI.

  21.  The analysis contained in the report is at UK level. However, the data to undertake a Wales-specific analysis does exist and providing funding was forthcoming, the analysis could readily be developed to be Wales-specific.


  22.  DfT recently announced new measures to make transport fuels greener by requiring 5% of all UK fuel sold on UK forecourts to come from a renewable source by 2010. Prior to this a study for DfT and DTI attempted to establish the UK biofuels resource potential. The analysis did not consider Wales separately. However, we believe that it would be helpful if detailed Wales-specific analysis was undertaken. The report is available at:

29 November 2005

7   Based on domestic energy consumption reported in the Digest of UK Energy Statistics 2005. Back

8   Background paper for the Sustainable Energy Policy Advisory Board-7 June 2005. Back

9   Micro-generation strategy consultation June 2005. Back

10   Small-scale in this instance refers to homes and small commercial developments/public sector buildings. Back

11   Low carbon refers to either renewable energy generators or technologies with better fuel efficiency than conventional technologies. Back

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