Spending on energy efficiency must be boosted into the billions if we are to tackle climate change and meet the net zero target by 2050, the chief executive of Eon UK has said.
Writing in Utility Week ahead of the Energy Summit on 13 June, keynote speaker Michael Lewis said that reducing energy consumption was a key plank of the energy transition and a “no-brainer for reducing fuel bills.”
“We should start by increasing the rate of energy efficiency installations to millions of homes up and down the country. To get to that transformational scale we need to make energy efficiency a national infrastructure priority. We need to see an increase in the Energy Company Obligation (Eco) funding pot from £640 million to a number in the billions.”
Lewis said government could fund expanding the programme by “better targeting the Winter Fuel Payment to those who truly need it, freeing up funds for additional household energy efficiency programmes for the fuel poor, and ringfencing part of our health and social care budgets to proactively invest it in making homes warmer, better insulated and with efficient heating systems.”
He also called for more financial sweeteners, such as tax incentives, green mortgages and stronger regulation including minimum performance standards.
Lewis’ call comes as Dhara Vyas, head of the future energy services at Citizens Advice, told an audience at Utility Week Live in Birmingham that the reduction in funding for the Eco energy efficiency scheme meant that it had become harder to get sign off for measures to be installed, and, even if clients were technically eligible, advisers did not know with certainty whether there was Eco funding available “as no one organisation holds this data”.
Since 2010 the pot of money available to schemes around affordable warmth has reduced by £1.2 billion to £640 million. Yet the government spends £2.44 billion on financial support for energy bills, the event heard.
Vyas said that awareness and understanding of energy efficiency measures had become very low and confidence in installing them had fallen. Poor quality of workmanship and scams around the green deal was the cause, she said. “Long term, the Eco does need to be reformed.”
The Committee on Climate Change’s recent report on meeting net zero greenhouse gas emissions factored in the ambitions laid out in the government’s Clean Growth Strategy to reduce energy consumption through insulating homes. But the demise of the green deal and the reduction by the Department for Business, Industry and Industrial Strategy (BEIS) of budgets for insulating homes has created a policy vacuum.
Dr David Joffe, team leader at the UK Committee on Climate Change and one of the authors of the report told Utility Week that even if heat and power are decarbonised, it makes huge sense to reduce energy consumption as part of reaching that zero target, as a means of addressing fuel poverty. “Once you decarbonise the energy supply, it becomes about cost, and we don’t think it’s sensible to just burn loads of hydrogen in 2050.”
He acknowledged that insulating the building stock again is not straightforward and there are particular difficulties for tackling properties built with solid walls – 28 per cent of the building stock. “It is expensive to do, and it’s not going to save you that money on your energy bill. And so that is a thorny one. I think there is potential for some new innovative solutions, that are either less invasive or lower cost.”
Eon, which has installed energy efficiency measures across 1.3 million homes in the UK said one of the pilot schemes it was involved with was to create cheaper and quicker-to-install solid wall insulation.
Olivia Haslam, deputy director Warm Homes team, BEIS, said the latest phase of the programme, Eco3, which was launched in December 2018, runs to 2022, but BEIS was starting to think about the new programme already. It is currently putting in place a new standard for competency that installers must have reached before they can do work under the Eco scheme.
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