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Confidence in government energy efficiency polices slumps to all time low

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The latest issue of the UK Energy Efficiency Trends report (Volume 12) provides evidence of the impacts resulting from a sharp fall in industry confidence with regards to the government’s management of energy efficiency policies.

Compiled from the results of a confidential, quarterly industry survey, it clearly evidences industry trends and has become one of the sector’s leading sources of market intelligence. The report covers both energy suppliers and consumers, providing differentiated results for each market sector.

Delivered by a research partnership between EEVS and Bloomberg New Energy Finance, and supported by Bird & Bird, Bellrock and Schneider Electric, the latest report shows the energy efficiency market monitor falling for the second consecutive quarter, from just below 100 points in Q1 2015 to 51 points in Q2 2015.

This represents a decline in supplier order books, sale prices and government action. Suppliers responding to the survey said that two of their top three concerns were regulation and subsidy/policy support.

When asked about the government’s management of energy efficiency policies alone, supplier confidence hit an all-time low in Q2, with more than 60% of respondents citing ineffective management. This represents the biggest quarter on quarter fall following Q1 which saw the confidence indicator break out of the negative zone for the first time – reaching zero.

Supplier confidence in the government’s management of the wider economy also fell in Q2, although the change on Q1 was less steep than that of energy efficiency policy. Respondents citing ineffective management increased by 3/4, but still accounted for just 36% compared to the 41% citing effective management.

Despite this gloomy picture, respondents are confident of a turnaround in Q3 and expect the market monitor to bounce up to 115 points, which, if achieved, will be the highest market monitor points score since the research was launched in 2012.

By contrast the energy efficiency consumer respondents reported an increase in project commissioning in Q2. Typically, around 70% of consumers report commissioning energy efficiency projects each quarter. Q2 2015 saw a jump in project commissioning following an extended downward trend in the market. At almost 80%, this quarter represents one the highest take up rates since the survey began.
Download the graph here: Projects Commissioned)

When it comes to technology choices, consumers continue to favour high-efficiency lighting over other individual technologies and this solution is included within 63% of energy efficiency projects.

When combined, controls (in the form of lighting controls, 34%, and general building controls, 31%) offer some collective competition for the top energy efficiency technology selection. Solar PV has also sustained its recent gains, with 22% reporting uptake in Q2, perhaps in response to the proposed FITs changes.

Interestingly, both public buildings (21%) and manufacturing sites (17%) overtook offices (15%) this quarter as the principle property types to benefit from energy efficiency upgrades. This is the first time that office property has not been in the top spot since the survey began.

The capital cost of respondents’ energy efficiency projects remains wide-ranging and volatile. Overall however the long-term trend is towards sustained growth in project size. Starting at around £60k in 2012, the current median project value is circa £110-120k despite material decreases in the volume of the very largest projects (£500k+) in the last two quarters.

Energy efficiency landscape

The above trends must be considered in the context of the operational landscape. Ian Jeffries at EEVS commented: “A notable theme in this quarter’s research has been the lack of support that the energy efficiency sector feels it has received from the UK government.

“Interestingly, however, the policy landscape has shifted somewhat since the survey was carried out.

“For example, in July the new Conservative government announced its much-publicised cuts to renewable energy subsidies and, shortly afterwards, a less prominent Treasury-led review of energy efficiency and carbon taxation. This perceptible swing in favour of energy efficiency could be a shot in the arm for a sector reporting a loss of confidence.

“Allied to this, there is increasing political optimism that the upcoming COP21 negotiations in Paris will yield a new global climate agreement.

“If so, these recent UK policy changes may suggest that encouraging energy efficiency through higher taxation could be UK government’s preferred approach, at the expense of incentivising renewables. If nothing else there’s certainly lots to look out for, and it will be interesting to see how the sector responds to these issues in the coming quarters.”

About the survey

The Energy Efficiency Trends Survey (Vol.12) was conducted between 12 August and 30 September 2015 and was completed by 63 UK-based energy and other senior managers (41 consumer organisations and 22 suppliers). Their answers related to the situation from the second calendar quarter of 2015.

The insight it provides is helping to transform levels of transparency and understanding within the sector – as well as supporting better, faster, more confident decision making in relation to commercial energy saving investments.

The analysis is produced quarterly, based on survey feedback from a wide range of commercial consumers and suppliers of energy efficiency.

The survey is delivered by EEVS and Bloomberg New Energy Finance and is supported by Bird & Bird (international law firm with a specialism in the energy and utilities sector), Bellrock (providing property and facilities management services to over 40,000 retail, commercial and public sector properties throughout the UK) and Schneider Electric (a global specialist in energy management improving energy efficiency and performance in more than 100 countries).

Energy

Responsible Energy Investments Could Solve Retirement Funding Crisis

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Energy Investments
Shutterstock / By Sergey Nivens | https://www.shutterstock.com/g/nivens

Retiring baby-boomers are facing a retirement cliff, at the same time as mother nature unleashes her fury with devastating storms tied to the impact of global warming. There could be a unique solution to the challenges associated with climate change – investments in clean energy from retirement funds.

Financial savings play a very important role in everyone’s life and one must start planning for it as soon as possible. It’s shocking how quickly seniors can burn through their nest egg – leaving many wondering, “How long your retirement savings will last?

Let’s take a closer look at how seniors can take baby steps on the path to retiring with dignity, while helping to clean up our environment.

Tip #1: Focus & Determination

Like in other work, it is very important to focus and be determined. If retirement is around the corner, then make sure to start putting some money away for retirement. No one can ever achieve anything without dedication and focus – whether it’s saving the planet, or saving for retirement.

Tip #2: Minimize Spending

One of the most important things that you need to do is to minimize your expenditures. Reducing consumption is good for the planet too!

Tip #3: Visualize Your Goal

You can achieve more if you have a clearly defined goal in life. This about how your money can be used to better the planet – imagine cleaner air, water and a healthier environment to leave to your grandchildren.

Investing in Clean Energy

One of the hottest and most popular industries for investment today is the energy market – the trading of energy commodities. Clean energy commodities are traded alongside dirty energy supplies. You might be surprised to learn that clean energy is becoming much more competitive.

With green biz becoming more popular, it is quickly becoming a powerful tool for diversified retirement investing.

The Future of Green Biz

As far as the future is concerned, energy businesses are going to continue getting bigger and better. There are many leading energy companies in the market that already have very high stock prices, yet people are continuing to investing in them.

Green initiatives are impacting every industry. Go Green campaigns are a PR staple of every modern brand. For the energy-sector in the US, solar energy investments are considered to be the most accessible form of clean energy investment. Though investing in any energy business comes with some risks, the demand for energy isn’t going anywhere.

In conclusion, if you want to start saving for your retirement, then clean energy stocks and commodity trading are some of the best options for wallets and the planet. Investing in clean energy products, like solar power, is a more long-term investment. It’s quite stable and comes with a significant profit margin. And it’s amazing for the planet!

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Energy

What Should We Make of The Clean Growth Strategy?

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Clean Growth Strategy for green energy
Shutterstock Licensed Photo - By sdecoret | https://www.shutterstock.com/g/sdecoret

It was hardly surprising the Clean Growth Strategy (CGS) was much anticipated by industry and environmentalists. After all, its publication was pushed back a couple of times. But with the document now in the public domain, and the Government having run a consultation on its content, what ultimately should we make of what’s perhaps one of the most important publications to come out of the Department for Business, Energy and the Industrial Strategy (BEIS) in the past 12 months?

The starting point, inevitably, is to decide what the document is and isn’t. It is, certainly, a lengthy and considered direction-setter – not just for the Government, but for business and industry, and indeed for consumers. While much of the content was favourably received in terms of highlighting ways to ensure clean growth, critics – not unjustifiably – suggested it was long on pages but short on detailed and finite policy commitments, accompanied by clear timeframes for action.

A Strategy, Instead of a Plan

But should we really be surprised? The answer, in all honesty, is probably not really. BEIS ministers had made no secret of the fact they would be publishing a ‘strategy’ as opposed to a ‘plan,’ and that gave every indication the CGS would set a direction of travel and be largely aspirational. The Government had consulted on its content, and will likely respond to the consultation during the course of 2018. And that’s when we might see more defined policy commitments and timeframes from action.

The second criticism one might level at the CGS is that indicated the use of ‘flexibilities’ to achieve targets set in the carbon budgets – essentially using past results to offset more recent failings to keep pace with emissions targets. Claire Perry has since appeared in front of the BEIS Select Committee and insisted she would be personally disappointed if the UK used flexibilities to fill the shortfall in meeting the fourth and fifth carbon budgets, but this is difficult ground for the Government. The Committee on Climate Change was critical of the proposed use of efficiencies, which would somewhat undermine ministers’ good intentions and commitment to clean growth – particularly set against November’s Budget, in which the Chancellor maintained the current carbon price floor (potentially giving a reprieve to coal) and introduced tax changes favourable to North Sea oil producers.

A 12 Month Green Energy Initiative with Real Teeth

But, there is much to appreciate and commend about the CGS. It fits into a 12-month narrative for BEIS ministers, in which they have clearly shown a commitment to clean growth, improving energy efficiency and cutting carbon emissions. Those 12 months have seen the launch of the Industrial Strategy – firstly in Green Paper form, which led to the launch of the Faraday Challenge, and then a White Paper in which clean growth was considered a ‘grand challenge’ for government. Throughout these publications – and indeed again with the CGS – the Government has shown itself to be an advocate of smart systems and demand response, including the development of battery technology.

Electrical Storage Development at Center of Broader Green Energy Push

While the Faraday Challenge is primarily focused on the development of batteries to support the proliferation of electric vehicles (which will support cuts to carbon emissions), it will also drive down technology costs, supporting the deployment of small and utility-scale storage that will fully harness the capability of renewables. Solar and wind made record contributions to UK electricity generation in 2017, and the development of storage capacity will help both reduce consumer costs and support decarbonisation.

The other thing the CGS showed us it that the Government is happy to be a disrupter in the energy market. The headline from the publication was the plans for legislation to empower Ofgem to cap the costs of Standard Variable Tariffs. This had been an aspiration of ministers for months, and there’s little doubt that driving down costs for consumers will be a trend within BEIS policy throughout 2018.

But the Government also seems happy to support disruption in the renewables market, as evidenced by the commitment (in the CGS) to more than half a billion pounds of investment in Pot 2 of Contracts for Difference (CfDs) – where the focus will be on emerging rather than established technologies.

This inevitably prompted ire from some within the industry, particularly proponents of solar, which is making an increasing contribution to the UK’s energy mix. But, again, we shouldn’t really be surprised. Since the subsidy cuts of 2015, ministers have given no indication or cause to think there will be public money afforded to solar development. Including solar within the CfD auction would have been a seismic shift in policy. And while ministers’ insistence in subsidy-free solar as the way forward has been shown to be based on a single project, we should expect that as costs continue to be driven down and solar makes record contributions to electricity generation, investment will follow – and there will ultimately be more subsidy-free solar farms, albeit perhaps not in 2018.

Meanwhile, by promoting emerging technologies like remote island wind, the Government appears to be favouring diversification and that it has a range of resources available to meet consumer demand. Perhaps more prescient than the decision to exclude established renewables from the CfD auction is the subsequent confirmation in the budget that Pot 2 of CfDs will be the last commitment of public money to renewable energy before 2025.

In short, we should view the CGS as a step in the right direction, albeit one the Government should be elaborating on in its consultation response. Its publication, coupled with the advancement this year of the Industrial Strategy indicates ministers are committed to the clean growth agenda. The question is now how the aspirations set out in the CGS – including the development of demand response capacity for the grid, and improving the energy efficiency of commercial and residential premises – will be realised.

It’s a step in the right direction. But, inevitably, there’s much more work to do.

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