The Energy Efficiency Strategy: The Energy Efficiency Opportunity in the UK

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    The Energy EfciencyStrategy:

    The Energy EfciencyOpportunity in the UK

    November 2012

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    The Energy EfciencyStrategy:The Energy EfciencyOpportunity in the UK

    November 2012

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    Department of Energy and Climate Change3 Whitehall PlaceLondon SW1A 2AW

    Telephone: 0300 060 4000Website: www.decc.gov.uk

    Crown copyright 2012

    Copyright in the typographical arrangement and design rests with the Crown.

    This publication (excluding logos) may be re-used free of charge in any format or medium provided that itis re-used accurately and not used in a misleading context. The material must be acknowledged as crown

    copyright and the title of the publication specified.For further information on this document contact:

    Energy Efficiency Deployment OfficeDepartment of Energy and Climate Change3 Whitehall PlaceLondon SW1A 2AW

    Email: eedostrategy@decc.gsi.gov.uk

    This publication can be found on DECCs website:http://www.decc.gov.uk/eedo

    Published by the Department of Energy and Climate Change

    http://www.decc.gov.uk/http://www.decc.gov.uk/
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    The Mission Improving our energy efficiency is a key strategic objective for the Coalition Government.

    It is fundamental to decarbonising the UK, maintaining secure energy supplies, andincreasing the productivity of our businesses. We have a proud history of making the verymost of our resources and energy should be no different.

    This Coalition Government has a mission to seize the energy efficiency opportunity,accelerating the deployment of twenty-first century energy saving measures through:

    connecting energy efficiency knowledge and technologies to finance seeking strongreturns;

    supporting energy efficiency innovation;

    harnessing the power of improved energy use information, driving its availability anddisclosure; and

    encouraging collective action to act on this new and better information.

    As set out in this strategy the benefits to energy efficiency can be significant, including:

    boosting growth and creating jobs in our economy;

    saving households and businesses money on fuel bills;

    creating a more sustainable and secure energy system;

    delivering cost effectively against our climate change goals; and

    reducing energy imports.

    The December 2011 Carbon Plan was clear that, if we are to cut our green house gasemissions by 80% by 2050, energy efficiency will have to increase dramatically across allsectors. It set out four possible scenarios for 2050, relative to 1990, which imply a percapita demand reduction of between 31% and 54% relative to 2007.

    This Government has already made progress through radical initiatives such as the GreenDeal, but this Strategy pinpoints the remaining energy efficiency potential within the UKeconomy and summarises the actions we will now take to realise this.

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    i

    Contents

    Ministerial Foreword 1

    Clarification of scopeThe Energy Efficiency Deployment Office (EEDO)

    Devolution

    33

    3

    The Energy Efficiency Opportunity in the UK 5

    Understanding energy efficiency 6

    The energy efficiency opportunity 7

    Energy efficiency potential in the UK economy 8

    The benefits of energy efficiency 8

    Our ambition for improving energy efficiency 15

    The barriers to deploying energy efficiency 18

    Maximising the potential of existing schemes 20

    An energy efficient future 22

    The annexes to this strategy can be found at http://www.decc.gov.uk/eedo

    http://www.decc.gov.uk/eedohttp://www.decc.gov.uk/eedo
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    ii Energy Efficiency Strategy: The Energy Efficiency Opportunity in the UK

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    1

    Ministerial Foreword

    Energy efficiency belongs at the heart of alow-carbon economy. By reducing energy useand cutting down on waste, we can reduceenergy bills, make our energy system moresustainable, and drive down greenhousegas emissions.

    Too often, governments have neglected the rolethat energy demand reduction can play in

    managing our energy system. Yet measures thatreduce demand can contribute in a morecost-effective way to meeting our energy andclimate goals than supply-side measures. Thatswhy energy efficiency as a way of reducingdemand takes pride of place at the centre of

    the Coalition Governments policy framework.

    I want Britain to get as close as possible to usingonly the energy we really need. We could besaving 196TWh in 2020, equivalent to 22 power

    stations through, socially cost-effectiveinvestment in energy efficiency. That is around11% lower than the business as usual baseline.It could also reduce carbon emissions by41 MtCO2e, contributing to achieving ourcarbon budgets.

    Britains homes have been built and developedover hundreds of years, and their energyefficiency varies from good to dreadful. Bringingas many homes as possible up to the level of

    the best is not only a worthwhile investment;

    it also presents a huge business opportunity,including a chance for British companies todevelop expertise which can be exported tooverseas markets.

    This strategy sets the direction for energyefficiency policy for the coming decades.It makes clear our ambition, the barriers that weneed to address, and the additional steps we are

    taking now to stimulate the energy efficiencymarket. It shows how we will act to connectfinance with demand, encourage innovation, andmake energy efficiency information moreaccessible to the consumer.

    Energy efficiency can reduce energy bills forhouseholds and businesses, and can boost theeconomy in a sector with great potential forfuture growth, driving innovation in the process.The prospect of achieving more with less

    energy is an exciting one, and this strategy setsout the opportunity in full.

    Edward DaveySecretary of State for Energy andClimate Change

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    2 Energy Efficiency Strategy: The Energy Efficiency Opportunity in the UK

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    3

    Clarication o scope

    The Energy EfciencyDeployment Ofce (EEDO)EEDO has developed this Strategy, drawingfrom expertise across Government andconsidering energy efficiency potential across

    the UK economy, including in businesses,buildings, products and transport. It is the first ina series of documents that EEDO will produce.

    EEDO has been set up within DECC to support

    the delivery of our existing energy efficiencypolicies, by improving our evidence base andanalysis, ensuring effective delivery against theobserved energy efficiency potential in theeconomy, and by bringing coherence to theGovernments offer to the consumer.

    Beyond DECC, EEDO forms an inclusiveinitiative with UK Government Departments,

    the Scottish and Welsh Governmentsrepresented on its quarterly Steering Board and

    Northern Ireland having observer status. As theevidence base is developed, the objective will be

    to share information, by region and sectorswhere possible, and consider solutions toachieving further energy efficiency potential as agroup.

    DevolutionAny development of policy in the area of energyefficiency needs to take into account thefollowing arrangements:

    that, in Scotland1 and Wales, theencouragement of energy efficiency isdevolved, while the regulation of energyefficiency is reserved; and

    that the promotion and regulation of energyefficiency is devolved to Northern Ireland.

    Furthermore, as policy ideas in this Strategy aredeveloped they will need to take account ofwhere they may impact on other policy areas

    that are devolved to Scotland and Wales.Northern Ireland are able to draw from EEDOswork as it considers its own future energyefficiency policy.

    This approach is reflected in this Strategy, withdifferences between the policy frameworks ofdevolved Governments clear ly referenced.

    1 Low Carbon Scotland, the Scottish Governments first report on proposals for meeting the annual climate changetargets set under the Climate Change (Scotland) Act 2009.http://www.scotland.gov.uk/Topics/Environment/climatechange/scotlands-action/lowcarbon/rpp

    http://www.scotland.gov.uk/Topics/Environment/climatechange/scotlands-action/lowcarbon/rpphttp://www.scotland.gov.uk/Topics/Environment/climatechange/scotlands-action/lowcarbon/rpp
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    5

    Te Energy EfciencyOpportunity in the UK

    1. The UK now has a huge opportunity tooptimise the energy use of both domestic andbusiness customers, reducing bills and/orwarming homes, while at the same time,delivering a more sustainable society. Individualscan do this through taking action to reduce theirdemand, such as turning off energy usingproducts that are not in use, buying pro