Policy & regulation

Think tank calls for government to implement series of energy efficiency measures

Ministers must adopt new energy efficiency measures to help unlock savings of £1.3 billion a year for UK businesses, according to a new report from think tank Policy Exchange.

The study says a new approach to policy is needed to drive up investment in energy efficiency.

Specifically, the report recommends that businesses rates be linked with Energy Performance Certificates to incentivise landlords.

Climate Change Agreements, which offer discounts on the Climate Change Levy for businesses that vow to improve their energy efficiency, have proved a “weak driver”, Policy Exchange argues.

The think tank therefore suggests that the discounts should be made more stringent and tied to sector deals as part of the industrial strategy.

Meanwhile, a new Energy Efficiency Delivery Unit could help to bridge the gap between viable projects and available capital. The unit should mirror the Heat Network Delivery Unit, which offers expertise, certification and finance for both public and private district heating projects.  

“Improving energy efficiency is amongst the easiest and cheapest ways to decarbonise our energy system,” said Policy Exchange research fellow and report author Joshua Burke.

“Businesses and public sector organisations spend the equivalent of nearly 5 per cent of GDP (£22bn) on energy every year but too many organisations still aren’t investing enough in energy efficiency. It needs to be seen as a major strategic investment which is both good for the environment and good for profitability.

“Public sector leadership on energy efficiency could save the taxpayer billions, while the private sector should focus on funding energy efficiency projects, particularly those that have longer payback periods.”

The report also recommends the government extends the Energy Saving Opportunity Scheme (ESOS) to cover public sector institutions such as the NHS, defence and education, where the energy saving potential is “large and cost effective”.

It calls for mandatory reporting on progress under ESOS, a scheme which requires companies of a certain size produce detailed reports on their energy use and efficiency every four years.

The report has been welcomed by British Gas owner Centrica, which supported the research.

Centrica’s head of energy policy development, Nick Park said: “By gaining a better understanding of their energy use, businesses large and small can save money, improve operational performance and become more resilient.

“Improving energy efficiency provides a golden opportunity for businesses and the public sector to improve productivity and unlock future growth opportunities.”

This article is adapted from a story which first appeared on Utility Week’s sister title Edie

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