Funding energy effiency programmes

Government incentives, grants and programmes help authorities reduce demand for energy.

Tancred Road, Liverpool. Photo by David Millington Photography Ltd.

The costs of energy will increase in the short to medium term as traditional resources deplete, and higher costs associated with renewable energy production and progressively higher carbon taxes are experienced.

As it becomes apparent that the offshore UK fossil fuel reserves are dwindling and we must rely on an increasing percentage of imported gas, guaranteeing our energy supply is becoming a strategic imperative too.

Recent tariff increases are projected to have moved 600,000 UK households into fuel poverty and the Department for Business, Enterprise and Regulatory Reform forecasts that renewable energy incentivisation may affect several hundred thousand more homes. Action is required to protect lower income householders and one important way is through the introduction of energy saving measures into existing homes.

Central government has already enacted policies and invested in mechanisms to incentivise energy saving via the major energy supply companies:

• warm front provides grants to low income households to improve their energy efficiency.
• the carbon emissions reduction target (CERT) replaced the energy efficient commitment (EEC) as the requirement for energy suppliers to meet targets in improving home efficiency and states that 40 per cent of savings should come from priority households.

CERT represents a £1 billion investment already made through obligations on energy suppliers to carry out all the easily achievable savings in existing housing, mostly covering work such as loft insulation, cavity wall insulation, draught stripping and the introduction of efficient replacement light bulbs. The scope of the scheme has also recently been widened to include funding for community heating to existing stock

Local authorities can play a key role at the town, city and district scale in supporting the delivery of CERT. The Energy Saving Trust has prepared a useful briefing note outlining this central role. Partnership working enables energy supply companies to make delivery more cost effective and local authorities to influence where the funding is spent. Examples of partnership working include 64 councils working with British Gas to provide council tax discounts for energy efficiency measures.

Utilising the local level flexibility on priority group categories can help target the households or neighbourhoods in most need, contributing to decent homes and national indicator targets. The Commission for Rural Communities and Durham County Council have produced a guide which how local authorities can develop and use local domestic housing energy management databases to target resources more effectively to households most in need of help to improve energy efficiency.

Strategic action to encourage measures that improve energy efficiency in older homes in areas that are not covered by central government intervention should be considered at regional and city level, for example through regional energy strategies or climate change action plans. Action at the block and neighbourhood scale should be encouraged as part of this and supported through development applications nearby.

The new Community Energy Services Programme (CESP) is an additional tool to deliver benefits to neighbourhoods with poor energy efficiency.

Local authorities should start to see the financial benefits of reducing energy demand in their own estate from 2010, when the carbon reduction commitment (CRC) is introduced. Authorities with an annual electricity use over 6,000 MWh across their estate will be required to participate in this mandatory emissions trading scheme. It will promote energy efficiency measures by providing financial reward to authorities that can reduce their emissions. Local authorities should adopt a whole life costing approach to considering energy efficiency actions – that is when planning a refurbishment or a new build, calculate the costs of higher efficiency against the running cost savings.

Priority: reduce energy demand
Tags: energy, cities and towns, neighbourhoods