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UK unveils Clean Growth Strategy to decarbonise buildings

While Australia shamefully retreats from clean energy, the UK has put it a plan to drive down emissions and energy costs, which it says will create jobs and grow the economy.

The UK has unveiled its Clean Growth Strategy as part of a drive to cut emissions and energy costs. Ministers described it as “an important component of our modern Industrial Strategy”, demonstrating that it is not an adjunct to industry and economic policy, but a fundamental part of its approach.

Minister for climate change and industry Claire Perry said the global transition to a low carbon economy “offers huge growth opportunities which the UK is well-placed to take advantage of as a core element of our Industrial Strategy”.

The strategy sets out policies and proposals across the whole of the economy and the country including business, housing, transport, power, the natural environment and the public sector.

It emphasises the government’s commitment to the ambitious decarbonisation plans set out in both the Climate Change Act and the Paris Agreement. But there is no commitment to stay in the widely criticised EU Emissions Trading Scheme.

“Clean technology is developing at a rapid pace and costs are falling faster than many predicted – for example, the cost of offshore wind has halved in two years,” Perry said.

Welcomed by Australian industry

The plan drew applause from Australia’s Energy Efficiency Council, contrasting it to the increasingly dire state of affairs of energy policy here.

“The UK Government’s new Clean Growth Strategy is built on a simple insight: the quickest and cheapest way to bring down both energy bills and carbon emissions is energy efficiency,” EEC chief executive Luke Menzel said.

“The Australian energy debate is bogged down in a never-ending argument about the relative merits of coal and renewables. Meanwhile, the UK Government is cracking on, working with households and businesses to cut their energy bills through smarter energy use.”

But is it strong enough?

The plan was criticised for not having enough “flesh on its bone” by John Sauven, executive director of Greenpeace UK, who said: “The strategy is on the right track but we need a more ambitious destination … especially on energy efficiency and electric vehicles.

“The offshore wind industry is proof you can provide jobs and regional development at low cost without leaving a legacy of nuclear waste and exorbitant decommissioning costs.”

The Climate Coalition also thought it “lacks detail”, while Policy Exchange noted that the claimed reduction of 42 per cent in emissions since 1990 “has largely been due to the offshoring of manufacturing”.

“Using carbon consumption – in which emissions produced in making imported goods are allocated to the importing country, rather than the exporting one – instead of carbon production methodology, the UK’s emissions have barely reduced at all since 1990“.

Making homes more energy efficient

The strategy promises “around £3.6 billion [AU$6.1b] of investment to upgrade around a million homes through the Energy Company Obligation” – for which energy companies are responsible at their own cost – to upgrade homes belonging to the fuel poor to Energy Performance Certificate (EPC) Band C by 2030.

It contains an “aspiration” for “as many homes as possible to be EPC Band C by 2035 where practical, cost-effective and affordable”, which, by not being specific, is open to wide interpretation.

Despite this, it was applauded – because it was their recommendation – by the UK Green Building Council as “a very positive signal that the government understand the significant opportunities for the UK that moving to a low carbon economy can bring”, and the Climate Coalition called it “good news”.

There will also be an independent review of building regulations and fire safety, which will report in spring next year.

There is an intention to “strengthen energy performance standards for new and existing homes under building regulations, including futureproofing new homes for low carbon heating systems”. This is shorthand for eliminating the use of oil for heating, replacing it with a low carbon system such as a heat pump.

All households will have an opportunity to have a smart meter installed by the end of 2020. This is a significant rollback from plans back in 2013 to have them definitely installed in all homes.

The government also intends to work with industry to implement an industry-led Each Home Counts review (published 10 months ago) to improve quality and standards for all retrofit energy efficiency and renewable energy installations.

Public and commercial buildings

For public buildings, £255 million (AU$431m) will be made available for energy efficiency improvements in England and public bodies will be assisted to access sources of funding.

Following the above review of building regulations, attention will turn to changing regulations for fire safety in new and existing commercial buildings, and, for new commercial buildings alone, to promote low carbon and higher energy efficiency heating, plus ventilation and airconditioning systems.

Forty-two per cent of business buildings’ energy use is in the private rented sector, and tackling this is particularly difficult, so a simultaneous consultation will cover how best to improve the energy performance of these buildings through tighter minimum energy standards.

However, the strategy expects these only to be voluntary, likely resulting in a low take-up, since a building’s owners have little incentive to invest in changes to energy performance if they do not have to pay the energy bills.

The government has also published energy efficiency action plans with seven of the most energy intensive industrial sectors, using carbon pricing as a tool to incentivise industrial emissions reduction.

£9.2 million (AU$15.5m) is offered for an Industrial Energy Efficiency Accelerator, to help reduce the emissions from industry by increasing the amount and range of commercially viable options available.

The value of the energy efficiency industry to the economy of the UK by supporting 144,000 jobs is recognised in the report.

Financing energy efficiency

To make it as easy as possible for people to pay for and make home energy efficiency improvements, the government is appealing for evidence on additional measures to encourage this, in particular highlighting the opportunities for mortgage lenders to incorporate energy efficiency into their lending decisions, and offer “green mortgage” products.

The solutions envisage focus on the demand and supply sides. On the former, developing new methods for financing energy efficiency such as equity loans, second charge mortgage extensions and low-interest loans; price signals tied to the energy efficiency of properties; and improving awareness of energy efficiency products and technologies.

The strategy says London is emerging as a leader in low carbon finance, the centre of global carbon trading, and with 50 green bonds listed on the London Stock Exchange, raising a combined $14.8 billion across seven currencies.

Building on this, a Green Finance Taskforce will be set up, comprising senior representatives from the finance industry and government, to develop proposals to accelerate private sector investments in clean growth.

The government is currently tendering a £1.4 million (AU$2.4m) three-year research project to address the drivers, barriers and challenges of new low-carbon homes.

The British Standards Institution is developing a set of voluntary green and sustainable finance management standards to promote responsible investment practices globally.

On the supply side, ideas include training more people in energy efficient technologies and practices, improving data from smart meters to open up the market for investment, and helping those who derive value from energy efficiency to become key players in the market. These would include distribution network operators, clinical commissioning groups and mortgage lenders.

The government has also launched a £10 million (AU$16.9m) thermal efficiency innovation challenge fund but is also looking for other ways to encourage innovation in energy efficiency products, services and business models and to reform and streamline a “Pay as You Save” system for businesses.

An Industrial Energy Efficiency scheme will help large companies install measures to cut their energy use and their bills. Measures will be taken to support businesses to improve energy efficiency by at least 20 per cent by 2030. This figure is half that of the 40 per cent draft goal for EU-wide energy efficiency by that year, which is to be decided on 28 November.

A “Green Great Britain” week will be celebrated to promote clean growth and a Clean Growth Inter-Ministerial Group will be reinstated that is responsible for monitoring the implementation of this strategy and report annually on performance in delivering GDP growth while simultaneously reducing emissions.

Adapting to climate change

At the same time, the UK Government published an assessment of its progress in adapting to climate change.

The UK’s first National Adaptation Programme (NAP) was published in 2013 and the report says that most of its recommendations are completed or on track. The second NAP, due in 2018, will set out further progress to manage risks.

Funding has been severely cut for flood defences and other adaptation means because of the poor state of the economy. Building the UK’s resilience to climate change continues to be an economic, social and environmental challenge.

The government’s response is to develop an ambitious 25 Year Environment Plan to chart improvements to the environment for future generations.

Amongst these is a “recognition” that procurement criteria for supply chains are an opportunity to “bear in mind the implications for climate change” in purchasing decisions. This is hardly a mandatory stance when seen in contrast to the devolved administration of Wales’ much more committed approach of its Well Being of Future Generations Act.

David Thorpe is the author of  Energy Management in Building and Sustainable Home Refurbishment.

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