Memorandum submitted by EDF Energy plc
EDF Energy is a major vertically integrated
energy company, with 5GW of electricity generation capacity, including
renewable and decentralised generation. We supply electricity
and gas to around 5.5 million customers, and manage the electricity
distribution networks that connect more than a quarter of the
UK population.
As a leading energy supplier we are deeply involved
in the delivery of energy efficiency and carbon reduction measures
to domestic properties throughout the UK, in particular, through
the Energy Efficiency Commitment (EEC) programme. Therefore, we
are very interested in this inquiry on the potential to reduce
carbon emissions in existing housing stock.
It is our company's view that climate change
is the most pressing challenge facing the world today. We are
fully committed to reducing domestic carbon emissions, and have
recently published our Climate Commitments, including a commitment
to reduce the proportion of carbon dioxide arising from our customers'
energy consumption by 15% by 2020. However, while we can encourage
and support our customers to reduce their use of energy, as an
energy supplier our potential impact is limited and must form
part of a wider Government led approach to support consumer behaviour
change through measures such as energy efficiency grants.
Furthermore, we believe that improving energy
efficiency alone is not enough to address carbon emissions from
existing homes, and decarbonisation of electricity supply must
also play a key role. This is likely to be achievable at lower
cost than some of the higher cost energy efficiency measures that
are being proposed.
In support of this inquiry, the attachment to
this letter provides further detail on a number of key areas of
concern that we would wish to draw to the attention of the Committee.
We hope that this submission is useful and can confirm that we
would be prepared to elaborate on any of these points should the
Committee require further clarification.
EDF Energy would like to draw the Committee's
attention to a number of areas:
1. SMART METERING
The introduction of technologically advanced
domestic energy supply metering can make a significant contribution
to encouraging households to reduce consumption of energy (and
carbon emissions). By allowing households both to review their
consumption in a meaningful way in real time, and to interact
directly with their supplier through the meter, householders can
be both motivated to reduce their energy consumption, and supported
to do so.
However, the current Government proposal to
put an obligation on suppliers to provide stand alone "real
time electricity monitors" will not deliver all of the benefits
that a roll out of smart meters could do. "Real time electricity
monitors can be used in the home to provide customers with an
indication of electricity usage, but without a smart meter they
cannot offer the additional benefits associated with two-way communication
between the supplier and customer and accurate and timely billing
data.
2. THE ENERGY
EFFICIENCY COMMITMENT
(EEC)
Since 2002, the EEC obligation on energy suppliers
to deliver energy efficiency measures to UK households has made
a major contribution to improving the thermal efficiency of existing
housing stock. Now transformed from January 2008 into a carbon
emissions saving programme and renamed the Carbon Emissions Reduction
(CERT) programme, there is likely to be an ongoing obligation
on energy suppliers until at least 2020, which can make a significant
contribution to improving existing stock.
However, a significant proportion (50% in earlier
programmes and now 40%) of this carbon reduction programme has
to be targeted at households on means tested benefits (called
the Priority Group), in order to address perceived issues of social
equity. This means that a disproportionally high percentage of
the UK's largest domestic household carbon abatement programme
is being directed at households who generally use the least energy,
and create the least carbon emissions. This carbon reduction programme
is therefore being significantly undermined by trying to achieve
both social and environmental objectives. We believe that the
Committee should review the level of carbon savings that could
be achieved with the same investment under CERT if it could be
more accurately targeted, and capture more high carbon emitting
households.
3. TREATING SOLID
WALL PROPERTIES
Although the EEC/CERT programme has allowed
us to vastly improve the thermal insulation of properties through
cavity wall insulation, a significant proportion of the UK's housing
stock cannot benefit from such insulation as there is currently
no cost effective wall insulation solution for solid wall properties.
This is widely recognised as a problem, and as an energy supplier
with a large proportion of customers living in solid wall flats
in the London area, we are particularly concerned that our customers
have not been able to fully benefit from EEC investment programmes.
We believe that this inquiry should advocate and support research
into insulation solutions to address this problem in an affordable
and sustainable way, possibly through BERR's new Energy Technologies
Institute.
4. MICRO GENERATION
EDF Energy recognises the role that microgeneration
can play in the residential sector, but is keen that it is only
deployed in the most suitable locations to ensure that it delivers
a true financial and carbon benefit to the consumer. Consumer
confidence in this emerging industry going forward could be seriously
damaged if deployment is not carefully managed.
5. ENERGY PERFORMANCE
CERTIFICATES
EDF Energy has been one of the energy suppliers
to agree with Minister for Housing and Planning, Yvette Cooper,
that we will link our delivery of energy efficiency measures to
households whose homes have had an Energy Performance Certificate,
allowing them to improve the energy efficiency of their home with
subsidised insulation and measures through the EEC programme.
This joining up of Government initiatives will create synergies
and target carbon reduction measures in a much more meaningful
way for the householders.
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