5. ENERGY EFFICIENCY

Energy efficiency is devolved to Scotland, Wales, and Northern Ireland where the national governments set their own additional energy efficiency policies.1 The implementation of energy efficiency policies relies also on local authorities. Local authorities are responsible for housing, transport, waste, and planning, which all have a significant impact on energy. BEIS supports and funds local programmes and partnerships. For example, BEIS has supported the Local Enterprise Partnerships in England to develop local energy strategies and is funding five regional energy hubs across England to increase local capacity.

Energy efficiency data and monitoring

The United Kingdom leads internationally in the collection and monitoring of end-use data, based on the National Energy Efficiency Data-Framework and includes gas and electricity consumption data, based on BEIS subnational energy consumption statistics, information on energy efficiency measures installed in homes, from the Homes Energy Efficiency Database, the Green Deal, the Energy Company Obligation (ECO) and the feed-in tariff schemes. It also includes data about property attributes and household characteristics, obtained from a range of sources. With the greater rollout of smart meters, distribution companies will share the data through a data company, which collects all the smart meter data.

Regulatory framework

The United Kingdom has a long history of energy efficiency policies, and many of them are also linked to the EU regulatory framework. With Brexit, the United Kingdom would no longer apply the EU directives on energy efficiency, minimum performance standards and vehicle fuel economy/emission standards. The overall 20% improvement target for 2020 under the EU Energy Efficiency Directive and the 32.5% efficiency goal for 2030 and the mechanisms to increase energy efficiency in products through EU minimum standards are key examples of EU-driven policies that have led to significant reductions in electricity demand in UK.

Energy Efficiency Directive

The 2012 Energy Efficiency Directive (EED) (2012/27/EU) established a set of measures to help the European Union reach its 2020 targets. For 2020, the European Union targets an overall 20% reduction of energy consumption from 2007 levels (in primary and final energy) compared to business-as-usual projections. Individual EU countries have set their own indicative national energy efficiency targets in an effort to contribute to the EU wide target. Under the EED, United Kingdom set itself a target of reducing final energy consumption by 18% to a level of 129.2 Mtoe in 2020, equivalent to a 20% reduction in primary energy consumption or 177.6 Mtoe.

Among other things, the 2012 EED required EU member countries to:

Set energy efficiency targets, based on primary or final energy consumption, primary or final energy savings, or energy intensity.

1 Energy efficiency is not fully devolved as set out in Table 2.1, related policies, for example, taxation remains a reserved policy.

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5. ENERGY EFFICIENCY

Require energy companies to save at least 1.5% of the annual energy sales to final consumers, or implement other measures that achieve the same savings, such as improving the efficiency of heating systems and thermal performance of buildings.

Require large companies to regularly audit their energy consumption to identify ways to reduce it. National incentives should also support energy audits for small and mediumsized enterprises.

Present national building renovation strategies and measures to improve the energy efficiency in public buildings.

Ensure that central governments purchase only products, services, and buildings with a high energy efficiency performance.

The EED also asks EU member countries to report annually to the European Commission on its progress towards the EED. The United Kingdom’s 2017 National Energy Efficiency Action Plan (NEEAP) and Annual Report provide an overview of energy consumption trends and savings achieved across the UK economy through the United Kingdom’s main energy efficiency policies.

For the horizon to 2030, the European Union targets 32.5% energy savings compared to a reference case, with a clause for an upwards revision by 2023. The target is set under the EU Directive 2018/2002 on energy efficiency which was published in the Official Journal of the European Union on 21 December 2018. EU member countries will also be obliged to establish specific energy efficiency measures to the benefit of those affected by energy poverty.

Other EU directives

The Energy Performance of Buildings Directive (EPBD) (2010/31/EU) requires all new buildings to be nearly zero-energy from the end of 2020. New public buildings must be nearly zero energy from the end of 2018. In accordance with the directive, EU countries must draw up national plans to increase the number of nearly zero-energy buildings. A new version of the 2010 EPBD came into force in 2018 (2018/844/EU). It aims to accelerate the cost-effective renovation of buildings and decarbonise the national building stocks by 2050. For this, EU member countries will have to adopt stronger longterm renovation strategies.

Other important EU legislation comprises the Ecodesign Directive (2009/125/EC) and the Energy Labelling Regulation (EU 2017/1369). The Ecodesign Directive aims to improve the energy efficiency of energy-related products, which includes products and appliances in both the household and commercial sectors, by removing the least-efficient and worstperforming products from the market. This is achieved through product-specific EU Ecodesign regulations, which set minimum energy performance requirements for products and energy labels for products set under the Energy Labelling Regulation, which provides information through an A+++ (most efficient) to G (least efficient) scale that enables consumers to choose the most efficient products. New labels have also been agreed for some domestic products which will see A+++ - G categories replaced by A – G categories to allow consumers to distinguish more easily between energy efficiency classes. The EU minimum performance and labelling standards are agreed for some 30 product categories in addition to the cross-cutting EU labelling rules and measures on wasteful “standby and off mode”, covering household products, televisions, washing machines, fridges, and lighting, as well as space heaters, boilers, professional refrigeration, and ventilation units. These EU standards have a direct effect in the United Kingdom.

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Under Article 4 of the EU End-use Efficiency and Energy Services Directive, the United Kingdom was required to meet an indicative national energy savings target for 2020 of 136.5 terawatt hours (TWh) or 9% of the 2001/05 average final energy consumption excluding energy consumption within the EU Emissions Trading System. BEIS concluded that the household sector accounted for 50% of the total expected savings by 2016, with private and public sector savings contributing 26% of the total savings and transport 25% (see Table 5.1 for total savings made).

Table 5.1 Overview of energy efficiency measures in the United Kingdom [TWh]

Notes: SAFED = Safe and Fuel Efficient Driving. gCO2/km = grammes of carbon dioxide per kilometre

Source: UK Government (2017a), UK National Energy Efficiency Action Plan, https://ec.europa.eu/energy/sites/ener/files/documents/uk_neeap_2017.pdf.

2 This includes only quantified policies. Notable exceptions include savings from tax policy, such as the CCL, and enhanced capital allowances.

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