That’s a wrap

The UK is well ahead of the energy efficiency demands due to be placed on it by Brussels next year, reports Robert Stokes

The UK technically has until June 2014 to transpose the Energy Efficiency Directive (EED) into law. While this will require changes to British energy laws and policies, existing programmes and regulations will go a considerable way towards delivering the “substantial energy efficiency improvements required by the EED,” according to the Department of Energy and Climate Change (Decc).

The directive lays down common policy principles for all 27 European Union member states to boost energy efficiency to help meet a target of reducing energy use by 20 per cent by 2020 compared with 2008 levels. Efficiency improvements can come through technological and organisational changes and governments are charged with laying the groundwork for later improvements.

Notably, the directive obliges member states to: boost efficiency in the entire energy chain from generation, through distribution, to final consumption; remove barriers in energy markets; tackle market failures lessening efficiency in supply and use; and establish by April 2013 indicative national energy efficiency targets for 2020, while creating energy efficiency obligations schemes or policy measures. This is intended to drive efficiency improvements in homes, industry, and transport – and the public sector is expected to be a role model.

It is early days. Decc says government departments and other relevant bodies are working together and separately “to begin the process” of ensuring compliance with the EED. This includes the devolved administrations of Scotland, Wales and Northern Ireland, which are represented on an EU EED implementation programme board led by Decc’s Energy Efficiency Deployment Office.

Existing UK schemes contributing to increased energy efficiency include: the Green Deal, the EU Emissions Trading System, the Energy Company Obligation (Eco), the smart meters scheme, the Climate Change Agreements programme, and the Carbon Reduction Commitment Energy Efficiency Scheme.

The devolved administrations have adapted UK schemes or started their own. For example, the Scottish Government published “Conserve and Save: the Energy Efficiency Plan for Scotland” in October 2010, introducing a headline target to reduce Scotland’s final energy consumption in 2020 by 12 per cent.

Energy trends data from December indicate that Scotland’s final energy consumption increased 1.2 per cent in 2010 compared with 2009 but fell 6.2 per cent against the baseline adopted for Scotland’s target. “Overall, this indicates that Scotland is on track to meet the 2020 reduction target,” a Scottish Government spokesman says.

Scotland currently operates an Energy Assistance Package and the Universal Home Insulation Scheme for the domestic sector. And its government also funds Energy Saving Scotland, a network providing advice and support to households and businesses.

For small and medium-sized enterprises, the Scottish Government has a loans scheme managed by the Energy Saving Trust, and there is a Central Energy Efficiency Fund for local authorities, the National Health Service and state-owned Scottish Water.

Resource Efficient – a new programme starting in April – will integrate non-domestic energy and material resource efficiency services currently being provided by Zero Waste Scotland, the Carbon Trust and the Energy Saving Trust.

While much is already being done, one key area requiring major new policy stems from Article 8 of the EED, requiring energy efficiency audits for large companies. Decc says it is working closely with the Scottish, Welsh and Northern Ireland governments to develop this.

A spokesman for Energy UK says: “We welcome the EED, which should ensure that energy efficiency is taken seriously throughout Europe, but without imposing excessive costs on industry or domestic customers. The UK already complies with most provisions and, indeed, the directive’s approach to supplier obligations was largely modelled on the UK experience.

“We have ample experience of getting energy efficiency measures installed and developing the market. We would expect that our obligations not only meet the EED but exceed it in terms of insulation and similar activities. One concern is that some parts of the legislation may have the right principle but are disregarding the very advanced stage that some countries might have reached already.”

He continues: “The UK has had environmental obligations since 1994, culminating in the latest ones – Green Deal and Eco. So we think the legislation in that area may not take into account the almost 20 years of work the UK industry has done.”

Mike Landy, head of on-site renewables at the Renewable Energy Association (REA), says Decc is increasingly looking to make support for renewable energy incentives for buildings conditional on meeting minimum energy efficiency standards.

The REA supports this, but only if standards are “proportionate and related to the renewable energy technology being installed”, Landy says. “We do have concerns that the standards being looked at to achieve zero carbon in future new buildings will maximise energy efficiency but could fail to drive uptake of onsite renewables.”

He adds: “An important general point for renewable energy is that achieving the UK’s mandatory target under the EED [15% of energy consumption from renewables by 2020] depends both on maximising renewable energy generation and minimising UK energy consumption, making energy efficiency a very real part of the renewables policy objective.”

Policies to encourage industrial combined heat and power (CHP) would further the ambitions for energy efficiency, says Cogen Europe, the Brussels-based European association for the promotion of CHP. The EED mandates national plans to boost CHP and wider heat networks, yet the UK is a laggard in this respect, despite government financial support and incentives. According to Cogen Europe, in 2010, Germany generated 13.2 per cent of its electricity from CHP, and Denmark had the highest proportion at 49.2 per cent. In the UK in 2011 about 7.4 per cent of electricity was generated by CHP plants.

“It will be very important that when the UK government transposes the directive into UK law it sets an ambitious goal to ensure both CHP and heat network deployment,” says Cogen Europe spokesman Stefan Craenen. “Unfortunately, starting April 2013, the UK government will effectively increase taxes on CHP schemes [through the carbon price floor which will drive up the cost of using fossil fuels for power generation], so there is a need for a significant change in direction if CHP’s environmental and economic benefits are to be fully realised in the UK.”

Robert Stokes is a freelance journalist

This article first appeared in Utility Week’s print edition of 29th March 2013.

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