There has been no sight yet of the £9.2 billion Boris Johnson pledged to spend on energy efficiency measures. Yet, energy efficiency has emerged as the lead theme in post-lockdown green recovery stimulus packages put forward by organisations from all sides of the political spectrum to help meet climate change targets and create green jobs. Spending on energy efficiency can deliver a ‘quick payback’, says the CBI in its proposed green recovery package. It describes a national energy efficiency programme as a ‘long overdue’ and an essential element of reaching the 2050 net-zero emissions target. (1)
According to the FT the £9.2bn spending pledge is snarled up in a Whitehall turf war after Downing Street chief adviser Dominic Cummings sought to water down the policy. There is still enthusiasm for the scheme in the Treasury and the business department (BEIS), but several Whitehall figures have blamed Mr Cummings for the deadlock, saying he has described it as “boring old housing insulation”. Cummings is said to believe that new housing is a bigger priority and should take the lion’s share of the £9bn capital spending. (2)
80% of homes today will still be around in 2050 when the UK aims to reach net zero emissions. Heating our buildings accounts for over a third of emissions. There are 2.5 million UK households in fuel poverty – 25% of households in Scotland, and 11.3% in extreme fuel poverty. The Scottish Government’s Just Transition Commission calls energy efficiency “a good example of Just Transition in action”.
But Dominic Cummings thinks a Just Transition to zero carbon is boring.
The Scottish Fuel Poverty Act has a statutory target to reduce fuel poverty to no more than 5% of households by 2040, and extreme fuel poverty to no more than 1% by 2040. Though exactly why we should accept any level of fuel poverty in an advanced western country is difficult to comprehend. Energy Action Scotland has been campaigning for the elimination of fuel poverty since the 1980s, yet the level of fuel poverty today is around the same level it was 40 years ago, with families having to choose between going hungry and staying warm.
But Dominic Cummings calls tackling fuel poverty boring.
Scotland has a relatively good energy efficiency programme compared to England. But even that needs to be doubled in size if Scotland is to meet its climate change commitments. 6,000 new jobs could be created in Scotland. The Scottish Existing Homes Alliance is calling for the fuel poverty programme to upgrade 30,000 homes every year, including the installation of renewable heating systems supported by grants for the fuel poor. There should also be a statutory target for Energy Performance Certificates (EPC) of band C for the vast majority of homes by 2030, and zero carbon by 2045. Around 40,000 homes were upgraded in Scotland last year. The EPC target would mean this would have to be doubled to just over 80,000 renovations on average each year to the end of 2030 –about 200 per day. (3)
But Dominic Cummings calls meeting climate change commitments boring.
The path to better insulated and lower carbon homes is strewn with failed policies and rollouts – not least the disaster that was the Green Deal. Over the past decade progress has gone backwards. Energy efficiency needs a very practical road map. There is no point setting rules and then not providing the money to do it and training for the workforce.
After a spending boost delivered by the last Labour government, the Committee for Climate Change (CCC) calculated that the annual number of installations has crashed to an estimated 90 per cent of 2012 levels as the Green Deal programme backfired spectacularly. Since then, the main support for energy efficiency has come from the industry funded and organised Energy Companies Obligation (ECO) scheme, the level of which has plummeted in recent years. The experience has been “tremendously disillusioning” for the industry’s supply chain.
Energy efficiency investment has the potential to unlock substantial long-term economic returns – for every £1 spent on insulating the fabric of a building, £3 is generated in economic benefits. The job creation benefits would be spread over the whole of the country. The added twist in the wake of the pandemic is the health benefits that energy efficiency can deliver. And while the current phase of the pandemic has hit as the weather has been warming, next winter is likely to see a second wave. The prospect of respiratory conditions being exacerbated by poorly insulated buildings during a second wave doesn’t bear thinking about.
The energy efficiency industry is reliant on a host of small-scale contractors. These companies may have secured a respite during the lockdown through the employee furlough scheme but will nevertheless be at risk of going under unless they can secure new orders. Spending has to start now because otherwise we are in severe risk losing the skill base we already have in the industry. It’s all very well £9.2 billion being there somewhere in the kitty but it needs to be produced now or people will be at risk of losing their jobs.
But, according to Utility Week “Dominic Cummings is looking for the next big shiny things and energy efficiency is not as sexy as technological or glamorous projects”. Small Modular Reactor anybody?
(1) Utility Week 27th June 2020 https://utilityweek.co.uk/build-back-better-the-9-2-billion-energy-efficiency-question/
(2) FT 29th June 2020 https://www.ft.com/content/d4035d01-e33e-473a-81ea-93125a69942e
(3) Existing Homes Alliance Sept 2019 http://existinghomesalliancescotland.co.uk/wp-content/uploads/2019/09/Pathway-to-zero-carbon-homes_EXHA_Sept2019.pdf