Energy Bill has little to say about reducing demand

It almost seems churlish to have a go at a department that is so clearly under siege from the rest of government, but needs must, I am afraid. We are now told that the Energy Bill - the flagship of the Department of Energy and Climate Change (Decc) energy market reform fleet - is due to sail into Parliament at the end of October.

Missing from the draft Bill was anything that might promote energy efficiency measures as part of the overall drive for low-carbon electricity in the future. Decc was rather apologetic about this, and in the draft Energy Bill preamble declared: “We are currently reviewing the potential for incentivising further demand reduction in the energy sector. This work will report over the summer, in time to fit legislative timetables, should it be required.”

So work was going on, one thought, and, well, they’ve promised that whatever it is will fit in with the legislation. This is comforting, especially since most informed commentators (including this journal) agree that the Bill really does need some robust clauses in it that apply the same sort of incentive to removing energy demand as there may be for lowering the carbon content of the energy that we do use.

And Decc has, sort of, delivered, at least as far as the words “work”, “report” and “summer” are concerned.

In July, the department published a draft paper commissioned from McKinsey management consultants, entitled Capturing the Full Energy ­Efficiency Potential of the UK. We were asked to respond by 10 August, before, the department said, “We publish a final version.” Then, it added: “In the light of this, government will consult later this year on potential policy approaches.”

If ever the saying that “you pay consultants to tell you what you already know” were true, it is true here. McKinsey informs us it has found ways to save electricity: we can install and use more efficient appliances; we can retrofit buildings so that they are more energy efficient; we can make sure new homes are built to a better standard of energy efficiency – and here’s the big one – we can replace incandescent lighting with low-energy bulbs. Blimey.

To be fair, the report does set out one or two examples of how some demand reduction measures have been structured in other countries (mostly the US), but then it does not draw conclusions from any of these, so it is difficult to know how to respond.

All this is to be further consulted upon and “peer reviewed” (I’m not certain what peer review of management consultants consists of – other management consultants, maybe?).

And this is where we have to watch the timelines. Consultation “later in the year” presumably means “until the end of the year”. There might be a “final report” in the spring, which is of course the point at which the Energy Bill is scheduled to finish its passage through the house. Indeed, if the timetable is to be believed, royal assent for the Bill will be needed in late spring so that all the secondary legislation (which doesn’t exist yet) can be rushed through in time for the great switch from Renewables Obligation to contracts for difference.

So, in summary – and you heard it here first – it looks very unlikely that there will be anything in the Energy Bill, except conceivably at the very end of its passage after the shape of the legislation and its contents have been finally decided, that makes any impact on demand-side management and reduction.

Unless, of course, someone comes along with some amendments to force something on to the statute books in advance of the lazy, meandering consultation process that we seem to be inextricably locked into. I might just give it a go myself.

Alan Whitehead, Labour MP and member of the Energy and Climate Change Select Committee

This article first appeared in Utility Week’s print edition of 21st September 2012.

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