5. ENERGY EFFICIENCY
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Sector |
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Pathway |
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Base year |
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Relative |
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Absolute |
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Technology groups |
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emissions |
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emission |
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emission |
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(MtCO2e) |
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reduction |
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reduction in |
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in 2050 |
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2050 (MtCO2e) |
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Max Tech – with |
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CCS, electrification of heat, fuel |
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and without |
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switching, material efficiency, |
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carbon capture |
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energy efficiency, other |
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Iron and |
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BAU |
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15% |
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3.4 |
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Energy efficiency, material |
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steel |
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efficiency, fuel switching |
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Max Tech |
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23.1 |
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60% |
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13.9 |
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CCS, energy efficiency, |
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clustering, material efficiency, fuel |
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switching |
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Oil |
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BAU |
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44% |
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7.2 |
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Energy efficiency, fuel switching |
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refining |
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Max Tech |
16.3 |
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60% |
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10.4 |
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Energy efficiency, CCS, fuel |
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switching
Pulp and |
BAU |
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32% |
paper |
Max Tech – |
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98% |
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clustering and |
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electrification |
3.3 |
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Max Tech - |
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98% |
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biomass |
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1.0Energy efficiency, electrification of
heat
3.2
Energy efficiency, clustering, electrification of heat
3.2
Biomass, energy efficiency, electrification of heat
Notes: CCS = carbon capture and storage. BAU = business as usual. MtCO2e = million tonnes of carbon dioxideequivalent. Max Tech – maximal technical performance.
Source: UK Government (2017e), Industrial Decarbonisation and Energy Efficiency Action Plans, Summary Document, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/651276/decarboni sation-action-plans-summary.pdf.
Assessment
Improving energy efficiency is central to meeting the carbon budgets and the long-term goal of cutting GHG emissions by at least 80% from 1990 to 2050. The 2017 UK Clean Growth Strategy outlines significant policy proposals in energy efficiency over the longer term through the lens of emissions reductions.
The wide range of UK energy efficiency policies and programmes and their spread across government highlights the value of a coordinated and well-articulated framework on energy efficiency policies and programmes to draw together the many responsible areas.
The United Kingdom should ensure a strategic approach to energy efficiency policy and delivery (funding programmes), coordinate effectively across all sectors, increase the visibility of government policies and actions, and maximise the impact of individual measures. The strategy notes that building an energy efficiency market requires much more third-party finance than seen to date.
Many UK energy efficiency regulatory policies are based on or are a part of EU requirements. In the context of Brexit, the government in its Clean Growth Strategy
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5. ENERGY EFFICIENCY
underlined that it “will therefore carefully examine each area of common interest with our EU partners and work to deliver policies and programmes that are at least as beneficial as the current arrangements.”
Appliances
Minimum environmental performance standards (MEPS) and labelling for around 30 energy-using product categories in the United Kingdom are currently covered under EU legislation. The commitment, as mentioned in the Clean Growth Strategy, to continue to meet or go beyond the current standards is important and will enable the United Kingdom to cost-effectively reduce energy bills and carbon emissions.
The development of a forward plan for the continued upgrading and expansion of these standards into the future will be an important body of work so as to provide clear signals to the market and not lose momentum in this space.
Buildings and heat
The challenge of improving the energy efficiency in existing buildings is a large one and one in which the United Kingdom has made significant strides. The building stock is growing at a rate well below 1% per year and, based on previous demolition rates, 9799% of the existing housing stock will still be standing in 2050. Encouraging energy efficiency improvements in buildings is a complicated policy challenge in most countries. The CCC noted a recent upturn in building emissions in the United Kingdom.
The ECO has funded substantial work on domestic insulation, in particular over the past decade, but slowing in recent years, and is set to continue with a commitment to upgrade a further million homes between 2015 and 2020 and with a commitment to extend support for home energy efficiency out to 2028. The renovation task is large and the announced continuation of the ECO is unlikely to deliver more than a small proportion of this.
The government has recognised this challenge and aims to upgrade all fuel-poor homes to EPC band C by 2030, as far as reasonably practicable, and declared an aspiration for as many homes as possible to be EPC band C by 2035 where practical, cost-effective, and affordable. A key new initiative that has great potential is the introduction in 2018 of a requirement for a minimum energy performance level of EPC band E for new leases of private rented sector properties in the residential and commercial properties.
Also announced is an ambition to develop a long-term trajectory to improve the energy performance standards of private rented sector homes, with the aim to upgrade as many as possible to EPC band C by 2030 where practical, cost-effective, and affordable. A long-term trajectory is also due to be consulted on in summer 2019 for private rented non-domestic buildings. These are very welcome developments, particularly after the relatively poor uptake of the programme based on the Green Deal in recent years, but will require significant investment and resources over those already been announced to ensure delivery of the desired outcomes.
Experts concluded that the Green Deal requirements were too stringent for the type of renovation and spending of the funds. The National Audit Office found that the Green Deal did not provide value for money and that the ECO leads to a rise in the final prices for consumers (NAO, 2016), as it is paid for through energy bills (although it leads to net savings over time). The National Infrastructure Commission (2017) called upon the
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government to upgrade the building stock, both residential and commercial, as the rate of efficiency improvement in the UK housing stock had slowed.
The CCC in its assessment of the Clean Growth Strategy has flagged these commitments as needing firmer implementation plans. Clear action plans are needed to improve the energy efficiency of poorly performing building stock, both residential and commercial, through necessary upgrades to the thermal shell of buildings and upgrades to major energy-using systems, such as heating, hot water, ventilation, and lighting. Given the scale of the task, it is likely this will require a full suite of financial, regulatory, and promotional policy interventions. These could include green financing, tax concessions, subsidy through ECO, regulation through minimum standards for rental properties, mandatory building energy certificates, building code requirements for major renovations, and standards for building components, such as boilers, the promotion of energy efficiency renovation, which includes support information and the demonstration of effective energy-efficient renovations to the public, business, and building professionals.
The government increased the energy efficiency requirements for new buildings significantly in recent years, but backed away from its earlier commitments to set in place zero carbon standards in 2016 for homes and for commercial buildings in 2019. The government announced the intention through the Buildings Mission (UK Government, 2018c) to reduce by half the energy use of new buildings by 2030. In the Clean Growth Strategy there is an undertaking to consult on strengthening the energy performance standards for new and existing homes under Building Regulations, which includes futureproofing new homes for low-carbon heating systems. It is important that these be carried through and that a clear trajectory be established for future changes for both residential and commercial buildings. The government aims to put forward new regulations after the buildings safety review.
The CCC flagged in their assessment of the Clean Growth Strategy the need to significantly improve energy efficiency standards for new buildings, to avoid costly retrofitting. It will be important to also consider the role of onsite renewables and battery technology, electric vehicles (EVs) charging, and the likely need to mandate these if a zero-carbon ambition is to be achieved.
The government further improved standards on 1.2 million boilers per year in England and required installations of control devices to help people save energy. This is a welcome efficiency initiative given the predominance of gas and, to a lesser extent, oil boiler heating in the United Kingdom. The improvement in the energy efficiency performance of other key energy-using systems and building products should also be considered under an approach that focuses on the entire built environment.
The opportunity to improve the ability of the EPC to reflect the actual energy performance using new sources of data, which include meter data and building information, and to improve the scope and frequency of EPC through expanded trigger points should be pursued.
Transport
A major new commitment is the phasing out of the sale of new petrol and diesel cars and vans by 2040. The Road to Zero Strategy (Government, 2018d) was presented in July 2018 and sets ambitious goals for the roll-out of ultra-low emissions vehicles, for at least
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50% – and as many as 70% – of new car sales by 2030 and a broader strategy to boost the flexibility and smartness of the power system.
Energy efficiency is mainly promoted by the need to reduce GHG emissions in the sector, although it is also promoted indirectly through transport fuel taxes, which are high by international comparison. The United Kingdom is planning further emissions reductions by enhancing the efficiency of all vehicles, reducing the carbon intensity of fuels, promoting ultra-low emission vehicles, and investing in a low-carbon infrastructure.
It will be important for the United Kingdom to continue to improve the minimum standards and labelling for vehicle fuel efficiency to at least the aspiration represented by the current EU standards, which include the imminent extension to heavy-duty road vehicles. The proposed change to EU standards in 2021 should be reflected in the United Kingdom.
There are also a range of initiatives internationally in aviation and maritime energy efficiency, to which the United Kingdom is a party, and it is expected these will be continued. For the rail system there is a commitment to reduce the reliance on diesel engines, which includes trials of new technology and hybrid engines, and to encourage the shift from road to rail transport where cost-effective. The increased use of public transport, the take up of EVs in public transport, and the greater use of cycling and walking as a means of urban commuting are announced policies. These are welcome initiatives.
Industry and business
The Clean Growth Strategy commits to improving business energy efficiency at least by 20% by 2030. Heavy industry and manufacturing is a declining proportion of the economy as the United Kingdom moves to a more services-based economy, and this is reflected in the long-term decline of industry emissions.
The Clean Growth Strategy commits to establish a new industrial energy efficiency scheme to help large companies install measures to cut their energy use and bills, with further details to come. The government is also reviewing the current ESOS for large energy users. Consideration could be given to introducing a level of requirement so the identified savings may have a greater scale of realisation. Promoting energy efficiency and emissions reduction in businesses and industry can be supported through effective incentives, tax treatment, financing, and support programmes. As the CCC observed, further clarity is needed on how this will be achieved.
The Clean Growth Strategy commits the United Kingdom to publish joint industrial decarbonisation and energy efficiency action plans with seven of the most energyintensive industrial sectors. This represents a significant opportunity if appropriately resourced. The Industrial Decarbonisation and Energy Efficiency Roadmaps to 2050 (UK Government, 2015) and action plans for heat intensive industrial sectors will need to be carried through with industry.
Public sector
The government has an established leadership role in energy efficiency, both in adopting higher standards for its own facilities and operations and in using its procurement power to influence the market and support emerging technologies, such as EVs.
In the public sector, the United Kingdom should continue to lead by example with energy efficiency and emissions targets for public sector activity and facilities, which include
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