• On 12 November 2012 DECC published its Energy Efficiency Strategy (EES), identifying four barriers which it claims are preventing the deployment of energy efficiency measures.
  • The EES sets out existing energy efficiency policies and new initiatives that DECC will employ to reduce these barriers.
  • DECC does not, however, indicate whether (and the extent to which) energy efficiency will feature in the forthcoming Energy Bill and whether the Bill will contain powers for the introduction of an energy efficiency feed-in tariff.
  1. Barriers to deployment

The Department for Energy and Climate Change (DECC) contends that there are four barriers which are hindering the full deployment of energy efficiency in the UK, being:

  • The embryonic nature of energy efficiency markets, which means that there is a lack of expertise necessary for investment in energy efficiency.
  • A lack of access to trusted and appropriate information and a need for standardised monitoring and verification processes.
  • The misalignment of financial incentives, as economic benefits are not always realised by the person who is responsible for deciding upon energy efficiency measures.
  • Many businesses undervalue investment in energy efficiency.
  1. Initiatives to tackle barriers

In order to overcome these perceived barriers, DECC has announced a suite of new initiatives. These new initiatives supplement existing energy efficiency policy, such as the Green Deal and Energy Company Obligation, the small-scale feed-in tariff (FiT) regime and the Renewable Heat Incentive, and include:

  • The introduction of three new energy efficiency Green Business Awards.
  • The promotion of financing energy efficiency for business and the public sector, for instance by publishing public sector guidance on financing energy efficiency and funding the national rollout of RE:FIT, the Mayor of London's energy efficiency retrofit programme for public buildings.
  • Support for research into energy efficiency measures, including £39 million funding for five Energy Demand Research Centres.
  • The launch of a trial with the John Lewis Partnership on the effect of labelling household appliances with information about their energy efficiency.

DECC also seeks to create a "customer journey" which will link existing consumer policies, such as the Green Deal, small-scale FiT regime and the Renewable Heat Incentive in order to make them more accessible to consumers.

In addition, the EES notes that the Energy Efficiency Deployment Office (the DECC office charged with stimulating energy efficiency deployment) will lead the implementation of the EU Energy Efficiency Directive, including the introduction of energy audits for non-SME businesses.

  1. Forthcoming Energy Bill

On 1 November 2012, Climate Change minister Greg Barker confirmed in Commons debate that the Energy Bill would contain energy efficiency measures.  This follows the Energy and Climate Change Committee's (ECCC) pre-legislative report in July 2012, which was highly critical of the lack of demand-side measures in the draft energy Bill published in May 2012 (see our e-bulletin here for more information).  The ECCC recommended amending the Bill to enable the introduction of a feed-in tariff for energy efficiency.  However, it is unclear to what extent energy efficiency measures will be included initially in the forthcoming Energy Bill, which DECC is rumoured to be aiming to publish next week.  Barker acknowledged that some amendments may not be ready in time and that they would have to be introduced during parliamentary debate of the Bill.

Publication of the EES in advance of the Energy Bill might be viewed as an attempt to placate the ECCC by drawing together ongoing and planned energy efficiency policy initiatives, and signalling the Government's commitment to include energy efficiency in the Energy Bill.  Significantly, however, the EES does not mention the introduction of a feed-in tariff for energy efficiency.

  1. Useful links