Monday, February 03, 2014

The UK fails to deliver: fuel poverty is up, support for energy efficiency down

Ed Davey, UK Secretary for Energy and Climate Change The UK is letting down its population by failing to deliver on energy efficiency. As a result, fuel poverty is up at the same time as fuel prices, and support for energy efficiency has plummeted and will continue to do so at the current rate.

This is happening under the watchful eye of Ed Davey, UK Secretary for Energy and Climate Change (right).

The most expensive and exclusive homes in Britain are the least well insulated, while the majority of the UK’s local authorities (LAs) are in breach of European regulations, and needlessly wasting energy, according to new research.

Not only that, but despite a year of public outcry about the cost of energy, the number of energy efficiency installations around the country has plummeted and Government has told energy companies that they can get away with insulating far fewer homes than before.

Whereas 1.61 million lofts were fully insulated in 2012, in the year to the end of October 2013, just 110,000 had been treated - a staggering 93% drop.

The same kind of drop has happened with cavity wall insulation, from 640,000 in 2012 to 125,000 in the year to October 2013, a pro-rata fall of 77%. These figures are official, from the Department of Energy and Climate Change (DECC).

The reason is because grants for such measures were dropped when the Government launched the Green Deal, a loan system that was intended to see a swathe of energy efficiency makeovers across the country, but which has so far failed to ignite public enthusiasm.

This is all despite the country having a Climate Change Act and an Energy Efficiency Strategy, which has an aim of cutting energy use by 196TWh by 2020 (an 11% cut), and carbon emissions by 41 MtCO2.

 the case for energy efficiency

The Rich Don't Seem To Care

The rich don't seem to care about saving money, heat or climate change. In the exclusive parts of London, most occupied by millionaires, a staggering 83% of homes in Kensington and Chelsea and 79% in Westminster have uninsulated walls and a lack of loft insulation, coming at the bottom of a national league for energy efficient homes.

At the other end of the country, in colder Aberdeenshire and the Outer Hebrides, homes are insulated to the highest standard, with 65% and 66% respectively having installed wall insulation.

Utility company npower found these figures in data licensed from the Energy Saving Trust. They reveal that over half the 26 million homes in Britain allow too much heat to escape through the building fabric.

As a result, together with rising fuel prices, fuel poverty is higher than ever in the UK, with seven million people, including 2.2 million children, living in fuel poverty in England, a rise of 26% compared to a year ago. People are going without food in order to pay their energy bills. No wonder they can't afford the insulated their homes. This is exactly why they need help.

A telephone survey by npower found that just 20% of households asked have insulated their domestic hot water storage tank. When asked, the main reasons given for not installing energy efficiency improvements were:
  • 42%: not being able to afford it;
  • 36%: lack of government support;
  • 33%: I can afford to waste energy (or words to that effect).
On the positive side, one third of those asked said they had made some improvements, such as installing loft insulation (39%), a new boiler/furnace (33%) and cavity wall insulation (30%).

The Green Deal Flop

The UK Government launched the Green Deal last year as a flagship policy to enable households to invest in home energy efficiency at little cost to them. But it has been a shambles, due to the difficulty of finding assessors, lack of publicity, and the cost of getting an assessment done.

Greg Barker, Energy MinisterThis week, Greg Barker (right), an Energy Minister, claimed that: "It has been an encouraging first year for the Green Deal. It has not exactly developed in the way we anticipated [but] together with the ECO, the Green Deal has improved over 400,000 homes in their first eleven months".

He puts a nice spin on it. The ECO is the Energy Company Obligation under which utilities are forced to install energy efficiency measures in their customers' homes. The detailed figures show that 98% of those 400,000 homes' improvements were conducted through ECO, and not through the Green Deal.

The figures actually show that just 1,612 households had Green Deal Plans up to the end of 2013.

At this rate it would take 16,000 years to treat all of the nation's homes.

It Will Get Worse

The situation is going to get worse, not better. The Chancellor George Osborne announced in his Autumn Statement that the energy companies’ ECO target for insulating solid wall homes will be slashed by two thirds – meaning they are now only required to tackle 100,000 homes by 2017.

This change in policy comes after profits of the 'Big Six' energy companies (British Gas, Npower, Scottish & Southern Energy (SSE), Scottish Power, E.ON and EDF) rose 75% in 2012 on 2011, according to the regulator, Ofgem. The same companies complained to George Osborne before his Autumns Statement about 'green tariffs' such as the ECO adding to their costs.

The Green Deal has been slammed by many, such as the members of the Federation of Master Builders (FMB), whose chairman, Brian Berry, has politely said that the scheme "has not achieved the desired results in its first full year, with the majority of SME installers and homeowners failing to engage, and the financial package underpinning the scheme proving unattractive to most consumers."

He repeated the oft-made call that: "the single most effective measure to kick-start demand would be to reduce the rate of VAT from 20% to 5% on all domestic energy-efficiency work".

Paul King, chief executive of the UK's Green Building Council, was more forthright this week when speaking at a conference on the Green Deal. He called on the Government to "recognise energy efficiency as a national infrastructure priority and be prepared to delve into its purse to make its flagship policy more appealing through stronger incentives and more attractive finance options".

Local Authorities Flout the Law

Government and local government don't even practice what they preach themselves.

Separate research conducted by the Property and Energy Professionals Association (PEPA) has found that over half of local authorities throughout the UK are failing in their obligation to display up-to-date 'Display Energy Certificates' (DEC), as required by the European Union's Energy Performance of Buildings Directive (EPBD).

PEPA, the trade body that represents business engaged in the provision of Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs), says that as a result they are missing out on the opportunity to use them as effective tools to reduce energy costs.

PEPA conducted a freedom of information exercise with all local authorities in England and Wales and found that only 47% of authorities claimed to be compliant with the DEC requirements, meaning 53% are potentially ‘breaking the law’.

A 2011 study by the Chartered Institute of Building Service Engineers (CIBSE) showed that where DECs had been used in government buildings as a proactive means of managing energy usage, savings of nearly 14% were achieved.

If these figures were applied to the estimated £750 million per annum of energy costs incurred by local authorities then energy savings of £65 million could be possible. This is a significant sum at a time when local authorities are cutting public services.

£1.9 million of public money is given to local authorities' Training Standards officers each year to ensure compliance with the EPBD regulations. But PEPA believes it is never used for that purpose since it isn't ring-fenced.

"There seems to be no political will within DCLG (the government department responsible for local authorities) to address non-compliance with the EPBD regulations and anecdotally is believed to regard the Directive as unnecessary European bureaucracy, something which is likely to end up with a fine from Brussels," said Stephen O’Hara, Chairman of PEPA.

“The whole situation regarding DECs defies logic and common sense. The proactive use of valuable energy information has been proved to reduce costs to the taxpayer, but government, both central and local, are either ignorant of this fact or do not seem to care. It is irresponsible of DCLG to show disdain for the regulations which they themselves have laid down as the law of the land, and potentially to incur swingeing financial penalties from Europe as a result.”

“Regardless of your views on climate change and reducing carbon emissions, saving money and reducing pressure on hard pressed energy supplies must surely make sense even to those who want to cock a snook at Europe.”

Employment Down

The drop in energy efficiency measures has had a knock-on effect on employment in the industry.

There are now at least 7,000 fewer people were employed in delivering insulation in homes than in 2012, according to Andrew Warren, CEO of the Association for the Conservation of Energy. “A lot of people went out and set up new small companies," because they thought the Green Deal would mean an increase in the amount of work. "They have been completely sold down the river,” he said, by the failure of government to deliver.

Andrew has for three decades been championing the cause of energy efficiency.

It's just a shame that no one at Whitehall, or in the town halls up and down the country, is really listening.


The European Union is conducting a household energy affordability study in conjunction with the University of York. You may take the survey here:

The Energy Saving Trust says that the average (gas-heated, semi-detached) three bedroom home in the UK could save the following each year on their energy bills:
  • Cavity wall insulation - £140;
  • External Solid Wall insulation - around £490;
  • Loft insulation - up to £180;
  • New boiler (furnace) - up to £310.

Energy efficiency infographic courtesy of The Trillion Fund

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