Energy efficiency: any ideas?

What's in the Energy Bill to encourage what many people acknowledge to be the most cost-effective form of energy - energy efficiency? Pretty much nothing, except the Green Deal and a vague request for more ideas. Similarly on demand-side response - not much but a sentence on somehow wrapping it into the capacity mechanism.

Energy efficiency and demand-side response are complex and difficult because you need to get understanding and buy-in from so many people. If you think it is taking EDF Energy a long time to take its investment decision over Hinkley Point C, you won’t want to know how much longer I have taken to decide about replacing a draughty window. But thousands of similar – and equally slow – decisions would have to be taken by individuals in different situations to cut enough demand to avoid building one new plant.

We all have a bias towards capital expenditure and shiny new things. It’s not just the industry that forgets about the alternative: I have heard journalists ask a chief executive whether he would spend £3 billion on nuclear, wind or gas, but I’ve never heard energy efficiency or demand reduction added to that list. While distributed energy generation is heavily covered in the media, local energy saving doesn’t find quite the same enthusiasm, instead being regarded as a “conservatory tax”. And although you would think rising prices and generally good business sense would mean firms would follow up any option to save either energy or the extra cost of peak power, many regard it as too much trouble.

It’s difficult and needs strategic thinking – but those are just the type of issues that should be taken on by government. Instead, we have a real lack of leadership on the issue, and a somewhat plaintive request for ideas.

Here are some suggestions: vary the FIT rate to incentivise domestic and business customers to fit storage systems and export at peak times; get a collective switching organisation to offer an Economy Seven-type tariff, or one with a “no peak load” option for night workers, or one for people on benefits, with so much energy efficiency investment as part of the deal; give Eco funding to Age UK or other charities instead of utilities; publish a transparent tariff for interruptible supplies, short-term operating reserve and other finance options and send it to company finance directors; train boiler installers and heating engineers to offer surveys in energy efficiency.

These ideas, volunteered by the Utility Week team during a quick brainstorm, may or may not have merit, but Decc asked, so we answered (and will gladly throw open our pages to other suggestions).

It’s just a pity that we are still on the questions phase of the process.

Janet Wood

This article first appeared in Utility Week’s print edition of 1 June 2012.

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