Solihull Friends of the Earth’s Views on the Energy Bill 2011

Introduction

One of the greatest challenges we are faced with is dealing with carbon emissions and the problem of being very near the point of ‘peak oil’ whilst analysing what our energy needs are. The solution to this needs to involve a switch to using carbon-free and low-carbon sources of energy, as well as improving the efficiency of our use of energy. For many years, the excuse for inaction has been the lack of strong international cooperation and agreement on these issues. However, dealing with problems starts from local councils, local communities and individuals. National governments need to assist with this process and give incentives for this to happen.

The Energy Bill

The Tory-Lib Dems coalition government have published an Energy Bill and claim that it will achieve three main objectives;

* Tackling Barriers to Investment in Energy Efficiency
* Enhancing Energy Security
* Enabling investment in low carbon energy supplies

We will deal with the most important areas in this analysis;

The Green Deal

What is it ?

This part of the Energy bill will enable owners of homes and businesses at no upfront costs, though it will have to be repaid as part of the Energy Bill Cost at a particular rate of interest. The Government claims that overall, savings are made by the owners of homes and businesses.

Analysis

At first glance, this is something to be welcomed since improving energy efficiency of buildings is an important step to reducing carbon emissions and increasing efficiency. However, there are many problems with the government’s ‘Green Deal’

The main problem is that there are not enough incentives for households to take part in this scheme, particularly ones on low incomes which are mostly found in Northern Solihull and the elderly who often live in fuel poverty. They still end up paying to get the work done and therefore it’s still an expense for them. How much are the savings exactly going to exceed the level of charge? That depends on the interest rate charged on the money that is effectively borrowed for the improvements carried out. A possible small saving in the long term provides very little incentive. As it stands, this scheme in its current form is very unlikely to deal with the problem of low income and elderly people living in fuel poverty. Only some higher income people are likely to be able to afford to take part in The Green Deal scheme, and even then, we have doubts as to whether they will think that it’s worth it.

Another problem is that there are some older homes, including listed buildings where it is very difficult to carry out improvements on them to improve their energy efficiency. Even if possible, the costs involved are too high. Therefore, it’s unlikely to be feasible and viable for those households to take part in the Green Deal.

What needs to be done instead ?

The current proposals could be improved by capping the interest rates that energy companies could charge in order to make it more financially attractive for households to take part in any sort of scheme aimed at increasing energy efficiency of homes.  Interest rates could be made minimal for those households that live in fuel poverty.

However, even then, the Green deal proposal wouldn’t necessarily guarantee a integrated strategy of wide-scale retrofit of homes. We believe that there needs to be a subsidy provided by the government as part of an integrated strategy for a nationwide refit of UK homes that would bring them up to a particular minimum standard within a reasonable timescale of a few years. There should be prioritisation of identifying the least efficient properties first, a systematic analysis done and process of improvements implemented. 

Private Rented Sector

The aim of this section of the bill is ‘to prevent landlords from refusing a tenants reasonable request for energy efficiency improvements to be undertaken in their properties, where a finance package is available. It would also require private landlords in the domestic and non-domestic sector to improve some of the least energy efficient properties where finance is available. This is to come into force in April 2015.’

Solihull Friends of the Earth believes that this section of the bill is highly flawed even in its basic detail. We are in support of improving energy efficiency of homes in a wide scale, including in the private rented sector. Unfortunately, this section of the bill as it stands doesn’t even come near to achieving these objectives.

The government claims that improvements will have to be funded where it is available through the Green Deal or the Energy Company Obligation. Since it’s not clear how much funding is available, this doesn’t look like a serious proposal to revolutionise improving energy efficiency. Why should this come into force so late in April 2015? As the government itself accepts, significant carbon emission reductions of 40% by 2020 have to be made to help combat climate change. Therefore, coherent actions have to be taken as soon as possible.

Smart Meters

We believe that Smart Meters play an important role in helping people to use energy more efficiently.

The previous Labour government’s Energy Act in 2008 gave government the power to implement and direct the roll out of Smart Meters until 2013.

Solihull Friends of the Earth welcomes the decision of the present government to direct the approach to the roll-out of Smart Meters until 2018 with additional provisions made such as requiring information with respect to energy use as part of the process of the giving out of Smart Meters.

Our position is that the government needs to present a more detailed strategy regarding the roll out of Smart Meters including targets regarding how many households they aim to provide Smart Meters with.

Energy Performance Certificates

Solihull Friends of the Earth supports the decision of the Government to legislate for making Energy Performance of Properties more widely available in promoting improved energy efficiency performance of buildings.

Measures to enable Low Carbon Technologies

The government wants to enable the implementation of an enduring offshore electricity transmission regime. The government claim that this facilitates the timely, secure and cost effective delivery of connections from offshore wind farms to the onshore grid. 

The measures are mostly about the competitive and implementation measures of connections with respect to offshore wind farms.

Though we will be monitoring this carefully, we are very disappointed that there are no concrete measures with respect to renewables in general. There appears to be no detailed strategy as to how the government is going to meet its targets of 20% of energy being provided via renewables by 2020. The government needs to make very clear with this bill exactly how many offshore wind farms they believe are needed, as well as do an investigative study of any appropriate onshore sites that could also be used. There is no mention of other renewable such as solar panels in this bill even being investigated by the government. Instead, to our dismay, they have announced a cut in support to larger-scale developments involving solar panels via the feed in tariff scheme, where more of the potential renewable power in somewhere like Solihull may be used.

Nuclear Operator’s Funded Decommissioning Program

The government claims that this part of the bill will ‘ensure that there is an appropriate balance between the Secretary of State’s powers to protect the taxpayer and the operator’s need for clarity and certainty over how those powers will be exercised.’

There are certain extensions being made where the provisions above that were already made in the Energy Act 2008 in order to, according to the Government; ‘be more certain over the investment case for new nuclear and so increase the likelihood that the very significant investments will be made. This in turn will contribute to reducing carbon and improving energy security.’

Recent sad events in Japan where there has effectively been a meltdown in the nuclear plant in Fukushima as a result of the earthquake and tsunami means that this part of the bill may be jeopardy, and they have shown the many hazards of nuclear power which means that we don’t believe it increases energy security. Even the deputy prime minister, Nick Clegg, has confirmed that the government’s nuclear policy is effectively under review. Therefore, it is unlikely that the government will want to be encouraging significant investments in nuclear energy at this current time.

Solihull Friends of the Earth urges the government to take this opportunity to change course and make renewables and carbon-capture technology a major part of this Energy Bill in creating a low-carbon economy.

Measures to Improve Energy Security

Solihull Friends of the Earth takes note of the various proposals to improve Energy Security in the bill. This is an area we will continue to monitor.

Conclusion

Solihull Friends of the Earth shares some of the aims of the Government regarding this Energy Bill. Though there are some measures that we welcome such as the roll out of Smart Meters, we believe this Energy Bill to be very inadequate in even helping the UK to partially meet its climate change commitments. The Green Deal does not encourage the elderly and those on lower incomes to access it, the proposals applicable to the Private Rented Sector are unclear, vague and wholly inadequate. The proposals on low carbon technologies are weak.

Our overall conclusion is that this Energy Bill is a big let-down from what was originally promised by the coalition government. The government appears to have no coherent and coordinated strategy and little objectivity shown in the measures and procedures required in this bill to help in the battle against climate change. The proposals have just not been thought through enough. The standard of this bill and the explanations given are of a very low standard. There is little or no vision as to how local communities such as the ones in Solihull can be helped, or get involved to help meet what is one of the biggest challenges of the 21^st Century. 

Solihull Friends of the Earth will be making their views known on a local level but we urge the Government to make significant changes to the Energy Bill, otherwise an important opportunity will have been lost to make a real difference.

Update (17.06.11):  We are aware of the bill going through Committee Stage now and take note of possible strengthening of the original proposals regarding minimum energy efficiency of properties that are let by landlords. We await further details with respect to the implementation of amendments at third reading.

We also welcome new targets to halve greenhouse gas emissions by 2025 from 1990 levels.  However, we are still not convinced that the Government has a real firm and credible strategy to deal with increasing energy efficiency and helping combat greenhouse gas emissions.