Some sensible thinking on energy efficiency

Listening to politicians talking about energy and construction policy is normally one of the less inspiring aspects of my job. Like many people in our sector, if I didn’t lose faith in the political process completely after the way in which the UK solar market has been managed over the past decade, recent experiences with the Green Deal and Energy Companies Obligation (ECO) have provided a timely reminder to keep any vestiges of naïve optimism and hope firmly in check.

The problem is never ambition, vision or ideals; it is more usually conflict between technical and market realities (especially new ones) and vested interests (usually built on obsolete technologies and business models, but rich).

At a practical level, limited exposure to the non-political world amongst civil servants and politicians leads to attention to completely the wrong details (or to no details at all) and a sense that policy is made with very little feel for how our industries actually work.

I was, therefore, both pleasantly surprised and cautiously encouraged when I went to listen to Caroline Flint and Jonathan Reynolds set out Labour’s proposals for energy efficiency policy in Westminster last month.

There are some good ideas in Labour’s Green Paper; also quite a few details which need sorting out

There are some good ideas in their Green Paper; also quite a few details which need sorting out and which could potentially kill or distort policies beyond recognition; but what made the strongest impression on me was the clear evidence that they have actually got out and into the sector, done their research, listened, and remain willing to listen – not just to policy lobbyists and professional interest groups, but also to practitioners and customers across the industry. Independent of political colour or leaning (and I’m not sure that really makes much difference in this sector anyway) that has to be a better way to make policy and to govern, and I’m all for more of it. Maybe it’s even the value of being out of office for a while.

There were three excellent and genuinely transformative ideas in their proposals for me.

First, the transferring control of ECO from utilities to local authorities, social landlords and community groups. I have been arguing for this for years, it’s long overdue, and it will transform this market fundamentally for the better (as well as making it more efficient). Energy efficiency and energy markets are different beasts with different structures – policy should reflect this, not try to force one into the same shape as the other.

Second, targeting ECO solely on fuel poverty. This eliminates at a stroke the conflicts that arise from a policy framework which is never sure whether it’s about tackling climate change, saving money, creating jobs or reducing fuel poverty.

It gives the industry and delivery agencies a clear brief, allowing efficient prioritisation setting and programme development. I think we’ll find this greater clarity results in wider economic and environmental benefits anyway.

Third – and I welcome this a little more cautiously because the implications are less clear – the designation of energy efficiency as a National Infrastructure Priority. This sounds good, and I agree entirely that the energy performance of our built environment is as significant a determinant of economic outcomes as the rest of our energy and transport infrastructure, but what does this really mean in a practical and financial sense? In particular, designating the energy efficiency of 30 million varied buildings as infrastructure is one thing; handling policy and regulation for this kind of infrastructure in the same organisations and with the same mindset as a few expensive high speed rail lines is entirely another. So ‘how’ matters quite a lot here.

My list of weaknesses and ideas for further development is rather longer and too detailed for this blog.

It includes a concern about how we make sure local authorities and community groups can be the ‘intelligent clients’ any healthy industry needs, and also issues about how these proposals can be developed in a way that ensures they support (rather than accidentally undermine) some of the excellent developments currently underway with the growth of community-led ESCOs and supply companies. There are also opportunities to energise and motivate the property market in better ways.

Overall, though, this green paper has injected some much needed energy, ideas and coherence into a sector which badly needs a new start, independent of the outcome of the next election. I look forward to the debate continuing between now and next Spring.

Matthew Rhodes is managing director of Encraft