Investments in energy efficiency add £1.7bn to UK productivity

Investments in energy efficiency added £1.7 billion to the UK’s productivity per unit of power over the last five years, a new report has revealed.

Although there have been improvements, Britain is lagging “far behind” its European counterparts and urgent action is needed to ensure emissions targets are met.

The 2016 UK Energy Productivity Audit found that productivity per million tonnes of oil equivalent reached £13.1 billion in 2015, up from £11.4 billion in 2010. The industrial, services and domestic sectors saved enough energy during the period to heat more than 13 million homes.

Progress in the power sector has been slow. Despite, the UK’s energy bill toping a “staggering” £140 billion in 2015 – the equivalent of 7.6 per cent of the total economy – it only saw a 2 per cent improvement in efficiency over the period.

The Association for Decentralised Energy (ADE), which led the audit, said the UK needs to catch up with its peers across the channel: “Germany, the Netherlands and France have all adopted significantly better policies than the UK since 2011.”

It said Britain will be unable to meet its carbon target in 2030 unless a “significant policy gap” is filled: “Current renewable energy and energy efficiency policies are only able to take the UK around half way towards the cost-effective path to decarbonization”.

The group behind the report – which also includes the Association for the Conservation of Energy and the Institution of Mechanical Engineers – urged the government to use its new industrial strategy to support further investment in energy efficiency by businesses.

ADE director Tim Rotheray said: “Despite limited policy focus, the industrial, services and domestic sectors have made substantial energy efficiency gains, yet over 60 per cent of energy in the power sector is lost before it reaches homes and businesses.

“With our commitment to the Paris Agreements and carbon budgets, the UK is poised to create a low-carbon, competitive economy, but we must support energy productivity to meet these goals.

“The industrial strategy provides a key opportunity to implement the right policies that will not only support business competitiveness but drive energy productivity in the UK economy and help us meet our carbon goals.”

Source: ADE, 2016 UK Energy Productivity Audit

Yesterday, the UK Energy Research Centre published a review of energy policy ahead of the chancellor’s autumn budget statement next week. It called on the government to produce a white paper addressing the absence of a clear strategy on energy efficiency and heat