The government’s admission at Ecobuild hides bigger issues with energy strategy

The government admission at Ecobuild this week of the abysmal first year for its flagship green deal programme hides bigger issues with energy strategy.

Ed Davey, energy and climate change secretary, chose the high-profile sustainable design, construction and energy event at the ExCeL exhibition centre in London to confirm that the green deal loan scheme designed to fund household green efficiencies had been “disappointing” in its first year.

That’s putting it mildly. The scheme is costly, unproductive and a tactical car crash. Whether it survives to celebrate its second birthday in 2015 is open to heated debate but Davey’s optimistic tone about the green deal’s future has been drowned in a sea of data on the scheme’s costs.

Department of Energy and Climate Change (DECC) figures show that £33.2m has been spent in operating costs alone for the scheme, around £45,500 for each of the 746 homes currently on the green deal. Money better spent saving energy, I think.

For balance, Davey advised the Ecobuild audience that a million homes in England and Wales will have been insulated under the broader green deal scheme and its sister Energy Companies Obligation (ECO) since January last year.

While every little bit helps in reducing energy consumption, both the green deal and ECO do appear to be tinkering at the edges. There are clear and present dangers in the energy field that will demand a much more coherent, long-term and far broader national strategy.

The drivers for this demand are many but with one prime mover – rising costs of energy production. The government itself admits that “the era of cheap energy is over”. Many power stations are reaching end-of-life or are being mothballed to meet carbon emissions targets and investment in new productive capacity is being hampered by the uncertainties in the sector.

Renewable energy shows promise but even there, the lack of clear government leadership is discouraging investment, the latest being the decision this week by RES to scrap plans for a £300m biomass plant in Northumberland, blaming “inconsistent” government support.

Fracking is the darling of many members of the coalition but this will take years to produce energy, even if the conditions are favourable. The same goes for the planned new nuclear power station in Somerset, which will come on-stream in around 10 years’ time, and the energy unit cost will be very high.

Meanwhile back in the real world, at least one energy chief has warned of the risks of black outs because supply will soon be unable to meet demand at peak times. Sam Laidlaw, Centrica’s chief executive, told the BBC, “No new power stations are being sanctioned at the moment because everybody is worried about the political situation.”

All of which makes it imperative that the government acts now, and decisively, to help businesses, households and organisations to cut substantially the amount of energy (and water) they consume.

This has to go much further than Davey’s Ecobuild announcement that new incentives, announced later this month, would spark fresh interest in the green deal. The deal itself is limited in the energy reductions it can facilitate. The scope has to be much broader and much more active in promoting all areas of energy reduction, particularly in low-energy lighting which is currently not covered.

There should be no confusion that quality LED lighting, for example, retrofitted to an existing home, will repay purchase costs very quickly with energy saved and go on reducing energy consumption for many years.

But this simple fact is still not widely known. At Ecobuild this week, many visitors we talked with were surprised to learn about how energy efficient LED lighting is – with energy savings of up to 90% – as well as the longevity of LED products. A quality LED should last around 50,000 hours. That’s 10 times the lifespan of a compact fluorescent and 25 times longer than an incandescent bulb.

Further associated savings should accrue from reduced strain on council recycling services, increasing the benefit for the environment.

Another area untouched, but included, in the green deal is water efficiency. While there is limited scope for support to install eco showers, eco shower heads, eco taps and tap aerators, the actual take up has been low to zero in the past year.

Reducing water consumption by more than 50 per cent through these simple, efficient products is a clear winner because it reduces energy used to heat and pump water, while providing quick payback.

A new green deal that explicitly supported and promoted these ‘quick-result’ solutions as part of the broader package of  longer-return energy-saving measures like loft insulation, double glazing, solar panels, efficient boilers and wall insulation, should achieve more for the consumer and help take the strain off the National Grid.

Mark Sait is managing director of SaveMoneyCutCarbon.com.

Further reading:

The real green deal: bringing energy, water and waste under control

Energy bills are going up – and it is mostly our lack of responsibility to blame

Green deal energy efficiency scheme continues to disappoint

Households ‘could save £600m’ through simple energy and water-saving measures

The Guide to Sustainable Spending 2013