Section Menu

Technical Note for PSA 4

URN No: 02/1613/A4

PSA Target 4. Ensure the UK ranks in the top 3 most competitive energy markets in the EU and G7 in each year, whilst on course to maintain energy security, to achieve fuel poverty objectives; and (Joint target with DEFRA) improve the environment and the sustainable use of natural resources, including through the use of energy saving technologies, to help to reduce greenhouse gas emissions by 12.5% from 1990 levels and moving towards a 20% reduction in carbon dioxide emissions by 2010.

Data
Data on competitiveness of the energy market is measured using a methodology developed by OXERA on behalf of DTI, based on indicators of energy liberalisation at each stage of the supply chain (upstream wholesale markets,network and retail) and applied to energy markets in the EU and G7. 

Indications of the level of energy security will be reported by the Joint Energy Security of Supply Working Group in a report published every 6 months . Data is collected monthly by DTI on the stock of oil and reported in the DTI publication, “Energy Trends” .Fuel poverty data is provided by the English House Condition Survey (see www.housing.odpm.gov.uk/research/ehcs/), provided annually from 2002.

The Environment Agency undertakes a study of industrial and commercial waste going to landfill which will be repeated on a bi-annual basis.  Annual data on industrial and commercial waste was sent to licensed landfill sites is also available and collected by the environment agency.

The National Environmental Technology Centre (NETCEN) publishes an annual inventory on behalf of DEFRA of the UK's historic greenhouse gas emissions (see http://www.naei.org.uk/report_link.php?report_id=317), usually within 15 months of the end of the calendar year in question.  Data is available on an annual basis back to 1990.

Provisional data on carbon dioxide emissions are estimated from energy data and published annually by DTI  in the March following the end of the calendar year in question.

Quality Controls
The methodology for developing indicators of competitiveness has been peer reviewed by energy market experts. Other data will be subject to the requirements of National Statistics.

Definitions
Competitiveness of the energy market has been defined by a range of indicators – the methodology is set out in the report "Energy Market Competition in the EU and G7 " (see above).  The indicators cover the different aspects of competition at each stage of the supply chain (upstream, wholesale markets, network and retail) such as market competition , the choice offered to consumers and degree of market opening, and non-competitive areas such as network access arrangements.

Fuel poverty objectives will be measured for England using the relevant fuel poverty indicators, as defined and set out in ‘The UK Fuel Poverty Strategy’, November 2001 

The sustainable use of natural resources refers to use which can be maintained at the current level now and for generations to come. In the absence of an agreed global measure, this will be considered in relation to progress on waste, subject to review in light of the Strategy Unit Waste Report, and greenhouse gas emissions.

The Government has adopted a waste target as part of the UK’s Waste Strategy of reducing the amount of industrial and commercial waste going to landfill by 85% of 1998 levels by 2005.

The UK's target under the Kyoto Protocol is to reduce it's greenhouse gas emissions (Carbon dioxide (C02), Methane (CH4), Nitrous Oxide (N2O), Hydrofluorocarbons (HFCs), Perfluoro-carbons (PFCs), and Sulphur Hexafluoride (SF6)) by 12.5% below 1990 levels between 2008 and 2012 (emissions will be calculated as an average over these five years). The baseline for the UK's greenhouse gas emissions is 1990 although, as allowed by the Kyoto Protocol, 1995 is used for emissions of hydrofluorocarbons, perfluorocarbons and   sulphur hexafluoride.

The Government also has a domestic goal to reduce emissions of C02 by 20% from 1990 levels by 2010.  The UK Climate Change Programme               http://www.defra.gov.uk/environment/climatechange/uk/ukccp/index.htm will be reviewed in 2004. 

Timings
Indicators of energy market competition will be monitored annually, and results will be made available shortly after each survey has been completed.  Greenhouse gas and fuel poverty data are available annually with lags of about a year while industrial and commercial waste data are available bi-annually with a lag of around two years.

Territorial Scope
The study on competitiveness of energy markets will compare the UK with the EU member states and G7. The Security of Supply indicators are for Great Britain. Annual fuel poverty indicators are available for England only (fuel poverty is a responsibility for the devolved administrations). Industrial and Commercial waste figures are for England and Wales only. Emissions data relate to the UK.

Success Criteria
Competitiveness of the UK energy markets in the top 3 of EU and G7 as measured by indicators established in the methodology study.

Security of Supply indicators as set out in the JESS reports will show the UK either maintaining or improving its position.

Fuel Poverty Strategy target – to reduce the number of vulnerable fuel poor households in private sector housing in England to below 1/2 million - met by 2005-06.

Amount of industrial and commercial waste going to landfill reduced to 85% of 1998 levels by 2005 (subject to review in light of the Strategy Unit’s Waste report).

Greenhouse gas emissions should be below the level of the Kyoto target, and thus the UK should be moving towards the goal of 20% reduction in carbon dioxide emissions, by 2006.