Memorandum submitted by the Association
for the Conservation of Energy (CIT 24)
INTRODUCTION
1. The Association for the Conservation
of Energy is a lobbying, campaigning and policy research organisation,
and has worked in the field of energy efficiency since 1981. Our
lobbying and campaigning work represents the interests of our
membership: major manufacturers and distributors of energy saving
equipment in the United Kingdom. Our policy research is funded
independently, and is focused on four key themes: policies and
programmes to encourage increased energy efficiency; the environmental
benefits of increased energy efficiency; the social impacts of
energy use and of investment in energy efficiency measures; and
organisational roles in the process of implementing energy efficiency
policy.
2. ACE believes that individuals, households
and communities do have a crucial role in tackling climate change"
but barriers to behaviour change need to be dismantled and incentives
increased to help the citizen bring about the "fundamental
shift needed to move to a low carbon economy".
ACE RESPONSE
TO COMMITTEE
QUESTIONS
What is the real scope for individual and local
community action to contribute to tackling climate change? Increasing
energy efficiency, in particular the delivery of the Energy Efficiency
Commitment (EEC)
3. While the Energy Efficiency Commitment
has been very successful in terms of reaching the given targets,
we are some way to go before every home in the UK is treated to
make it warm and cheaper to heat.
4. EEC, as it is presently organised, will
only go so far—the concentration on cavity wall insulation
(CWI) and loft insulation does not help the 50% of the older UK
properties that have single brick walls and the considerable number
of flat-roof properties.
5. Even amongst the eligible householders,
reach has been patchy because of the proliferation of short-lived
special offers and marketing schemes from the energy suppliers.
There is also the credibility barrier—many householders
can't believe that a utility which exists to make profits out
of selling units of electricity or gas would actually subsidise
energy saving measures that cut fuel bills. So measures are largely
installed by householders in the know and with the ready cash
to pay the (albeit subsidised) price.
6. Schemes organised for a specific geographical
area—like Warm Zones—could be the answer. These schemes
can combine the credibility of the council, with the money of
the energy supplier, plus the word of mouth endorsement of the
community, and the local knowledge of the installers and community
groups. Different contact methods, including door to door visits,
can be used and needy individuals can be helped to obtain resources
from third parties (state benefits and access to programmes such
as Warm Front) which, with insulation measures, can help move
them out of fuel poverty.
7. Ultimately, if the government continues
to enforce energy savings from the utilities, the energy suppliers
should move to being ESCOs (energy services companies) providing
for each household levels of warmth and ability to power an agreed
number of appliances. Unlike today, where a customer is just a
number on a computer file, and the relationship purely transactional,
ESCOs, to provide their services adequately, will have to know
their customers, their lifestyles and the state of their property.
It will be cheaper for the ESCO, after a certain point, to avoid
expensive investment in increasing energy generation by helping
their customers reduce demand. This has happened in California
where utilities have provided low-cost solar panels for customers
at the edge of their distribution network, rather than build a
new power station.
What is the potential for, and barriers to, microgeneration?
8. There is considerable potential for microgeneration
in the UK, but the considerable barriers have to be removed first.
Firstly, we have to say that there is ultimately
no barrier in terms of public acceptance of microgeneration. Polls
show substantial general support for the idea of microgeneration.
For every resident who objected to David Cameron's wind-turbine,
there were probably substantial numbers who supported the idea.
The British public (in general) will support—and ultimately
pay for—new technology if they feel it is of use to them.
Witness the rapid rise in personal use of the internet and mobile
phones—and, in our houses, the investment in gas central
heating and double glazing.
The biggest barriers to microgeneration are
cost and the spatial planning system.
9. Microgeneration is too expensive. It
is the preserve of the Green, the early-adopter and the householder
with enough money to spare. Ask an installer and they will tell
you that a typical customer is a home-owner, educated to degree
level, middle-class, middle-aged and with money in his or her
pocket from a recent legacy.
10. The ability to afford micro-generation
must be moved to a wider circle than the people making a choice
between a world cruise and a solar panel. The costs of microgeneration
must be driven down by economies of scale. In the UK, microgeneration
is a "cottage industry". Installers are generally very
small businesses—often sole traders. The units they are
installing are made on very small production lines and largely
assembled by hand. The industry estimates that £50 million
is required to invest in mass production to bring down costs to
the householder so that pay-back looks a reasonable proposition.
This means investors must be satisfied that there will be a market,
in the near future, big enough to reward their investment.
11. One way of guaranteeing a market is
for the Government to set itself an adequate binding national
target for microgeneration. There is provision for this in the
Climate Change and Sustainable Energy Act 2006 which requires
the Government to make a decision on a target by November 2007.
The Government must accept that it is the key player in the spread
of this technology and it is in the national interest for it to
succeed. Governments have accepted this in the past and intervened
in various ways to back high-risk technologies such as aviation,
North Sea oil and gas, and nuclear power.
12. Moving on to the problems of some micro-generation
technologies with the planning system, there is a substantial
gap between the varying high level policies of sustainability
adopted by local authorities and the everyday decisions made by
their planning departments and councillors. There is a lack of
understanding of the rapidly changing technology of renewable
energy or the increased need for energy efficiency and sustainable
energy in buildings.
13. In the recent past, around 30% of renewable
planning applications were refused. This is worse in some key
technologies: 60% of wind farms are refused and biomass projects
have particular problems obtaining permission (Cabinet Office
Policy and Innovation Unit figures for 2000). Even humble domestic
solar installations can fall foul of the system; installers have
informed our staff that some councils insist on the requirement
of planning permission, even when this is not really necessary
as the installation should be permitted development. According
to Southern Solar, a leading installer of solar thermal in the
South East, around 20% of householders give up the idea of installing
solar when faced with the effort and cost of a planning application.
This is despite one council giving applicants a grant to cover
the cost of the application.
14. The Government has declared that it
will shortly undertake a review of how microgeneration technologies
are included in permitted development, and the Minister Yvette
Cooper made a strong statement on this matter on 8 June 2006 at
the Town And Country Planning Association And Renewable Energy
Association Conference, where she said that it is "patently
absurd that you should be able to put a satellite dish up on your
house but should have to wrestle with the planning process for
small scale microgeneration which is no more obtrusive."
ACE looks forward to the promised consultation on detailed proposals
later this year.
15. The review will hopefully help the problem
somewhat. However, some micro-generation technologies will end
up in the planning system because they are planning matters that
can't be covered by permitted development rights. Some technologies
can be intrusive (such as micro-wind) while some, such as solar
panels, can change the appearance of a building. Or it may be
that the application is so large that it is disputable how "micro"
an installation really is.
16. In addition, permitted development rights
are to a certain degree in abeyance in Conservation Areas, which
cover a surprising large part of urban Britain. These areas, with
their varying and subjective standards on "visual impact"
are a particular barrier to wind and solar technologies.
17. There is a recognised problem of a widespread
lack of knowledge or experience in planning departments in handling
the new technology of renewable energy or the subject of energy
efficiency. Unfortunately, resources are often lacking (especially
in small district councils) to develop knowledge and policies
in these fields. There have been attempts by outsiders to help
the planners. The best example is the DTI's "Its Only Natural"
programme which aims to educate planners and councillors on the
technology of renewables through a website and seminars around
the country. Various other pieces of work are going on, supported
by the regional bodies and local energy agencies. This is probably
inadequate and too patchy for the task. Government Ministers have
asked why more local planning authorities have not adopted Planning
Policy Statement 22 (on-site renewables in new development) as
a local planning requirement. The answer is: the LPA's do not
know enough about renewable energy—indeed any energy—to
properly enforce the policy. Therefore they avoid it.
18. There are exceptions to the above. Several
advanced local planning authorities have adopted, or are in the
process of adopting, a Supplementary Planning Document containing
guidance on renewable energy (either as a stand alone policy or
as part of a wider sustainability SPD) to help them make planning
decisions and to advise householders and businesses on what is
accepted and why. This process should be encouraged, and the Local
Government Association should be congratulated on its pending
guide to developing a local sustainable development policy which
includes sections on renewables, CHP and energy efficiency.
What is the potential for "smart metering"?
19. It has been widely acknowledged for
some time that citizens are much more likely to reduce their energy
consumption—and thereby play their part in tackling climate
change—if they have access to accurate, timely and readily
intelligible information about their energy use. Currently, however,
UK householders are for the most part unaware of their energy
consumption, due to direct debit payments, estimated billing and
a lack of information about comparative usage and/or costs. A
recent report ("Energy Efficiency: Public attitude, private
action" conducted by Future Foundation for Logica CMG, May
2006) revealed that 36% of UK consumers have no idea how much
energy they use. However, 65% say that they would like more accessible
information on day-to-day energy usage—and 82% would like
a smart meter to help monitor consumption. It is also very encouraging
that 75% of consumers state that they would be willing to make
lifestyle changes to save energy.
20. Giving citizens better information about
their energy consumption is therefore vital if they are to be
enabled to play their full part in combating climate change. This
is where "smart metering" could have a key role to play—as
long as such meters also feature visible consumer displays providing
accurate and timely consumption data. Most of the evidence on
the effectiveness of smart metering comes from abroad—but
a review of all the available literature (not only on metering,
but also on billing and direct displays) was carried out for DEFRA
in April this year by Sarah Darby of the Environmental Change
Institute at Oxford University. She concluded that "direct
feedback" to the consumer (ie obtained either from a meter
or an associated display monitor) is capable of yielding energy
savings of between 5% and 15%.
21. Against this backdrop, we welcome the
announcement in Budget 2006 of £5 million to co-finance with
energy suppliers a pilot study in the use of smart meters and
associated feedback devices. We also await with interest the results
of the UK's first major interactive smart metering trial, which
was launched in April by EDF Energy in conjunction with National
Energy Action. Furthermore, we would encourage the Government
to interpret as widely as possible the provisions of Article 13
of the Energy End-Use Efficiency and Energy Services Directive,
which requires Member States to ensure that customers "are
provided with competitively priced individual meters that accurately
reflect [their] actual energy consumption and that provide information
on actual time of use". The Directive must be interpreted
in such a way as to ensure that customers are provided with instant
feedback as to the effect of behavioural or technical improvements
on their energy consumption.
22. While on the subject of smart meters,
we must not lose sight of the important role that intelligible,
frequent and accurate fuel bills can play in encouraging citizens
to reduce their energy use. In this context we welcome the Government's
announcement in the recent Energy Review that it intends to consult
later this year with Ofgem, the energy suppliers and other interested
parties on the cost-effective provision of more frequent and accurate
bills that also contain comparative energy consumption data. We
also believe that, if properly implemented, the billing provisions
in Article 13 of the Energy Services Directive will bring about
a significant improvement in the frequency, accuracy and usefulness
of fuel bills.
Smart metering is a prerequisite for the expected
provision of energy services from ESCOs.
What are the barriers to uptake of climate change
mitigation strategies at the level of the individual, and how
can they be overcome? Are current incentives such as the energy
efficiency commitment or graduated vehicle excise duty sufficiently
strong to affect behaviour?
23. The closest that ACE has come to examining
the availability of information for people to tackle climate change
relates to a piece of research on how social housing tenants make
use of energy saving advice and equipment installed in their homes—broadly,
most do not follow best practice. User Behaviour in Energy Efficient
Homes (2004) was a survey carried out to examine how people used
their homes when they had received energy efficiency improvements.
The survey covered over 150 households in 10 locations. All were
tenants of housing associations. The project was funded by the
Energy Saving Trust and the Housing Corporation.
24. The most valuable finding from the project
is probably one that is the most simple. When central heating
systems are installed in configurations that conform to best practice
guidance, the users are generally able to use them to get a warm,
comfortable home. The corollary is also true: when best practice
is not carried through, users find it difficult to heat their
homes in a satisfactory manner.
25. One of the most important findings was
the range of ability of residents to achieve the desired results
from this system. The professionals are familiar with all these
items and can make them work together. We should remember that
most householders are not engineers and may not really understand
the principle of the thermostat. If we remember that programming
the video to record from the television is one of the most notoriously
difficult things for the average person to achieve successfully,
then it might guide us to deliver and set up systems that the
user can learn to drive effectively—without needing a driving
test.
26. The importance of this understanding
should not be underestimated. Many solutions are now being developed
to meet the sustainable development and sustainable energy agendas
that mean new technologies (such as micro-generation) are introduced
to the home. If many householders still have difficulty understanding
"old" technology like a central heating system, how
will they cope with new concepts such as ground source heat-pumps?
How can Government and other agencies—at
national, regional and local levels—encourage the uptake
of domestic emission reduction measures? What is the role of community
projects in schools and other public institutions?
27. The rating and bold public display of
energy certificates on public buildings, when combined with engaging
communication strategies and events, is an excellent means to
raise awareness and demonstrate how residential energy users can
make a difference. This is particularly true in schools, where
students can see improvements to their own building, make changes
in their own behaviour, and take these lessons home to influence
energy used in the household. The European Display™ Campaign
is a voluntary scheme designed by energy experts from 20 European
towns and cities. It is aimed at encouraging local authorities
to publicly display the energy and environmental performances
of their public buildings using the same energy label that is
used for household appliances.
28. Following on from the success of the
Display Campaign, we would urge the Government to implement as
soon as possible Article 7 of the Energy Performance of Buildings
Directive, which requires all public buildings over 1,000 square
metres to display an energy performance certificate. Furthermore,
we would wish to see an early extension of the Directive to cover
not just publicly owned buildings, but all buildings visited
by the public, eg theatres, supermarkets, banks, sports facilities,
etc.
Association for the Conservation of Energy
September 2006
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