In a recent study the Committee on Climate Change (CCC) has highlighted the importance of increasing energy efficiency as a way to reduce the UK’s carbon emissions and save billions of pounds at the same time.
Their analysis found that more efficient use of energy in the UK could save around 140 terawatt hours (TWh) of energy, which would save the UK £7.5bn a year on energy.
According to their report, the government could achieve these savings by investing in various energy efficiency measures such as heat networks and pumps in cost-effective locations for households. Building fabric improvements, such as better loft insulation, would constitute almost half of the total savings. Energy efficient appliances and lighting would provide a further tenth of the savings and the rest would be achieved through boiler replacements and upgrades within existing homes.
The report suggests that the potential savings from “cost-effective” energy efficiency measures could even reach £47bn. However, this is going beyond the government’s own energy efficiency guidance and including the value of the improvements to people’s health, and the value of electricity system upgrades brought about through added network investment.
All of this investment in these “cost-effective” energy saving measures could see households save about a quarter on their energy bills every year. The UK Energy Research Council (UKERC) report says that this is worth an average of £270 per household per year at current energy prices, not to mention benefitting from less obvious improvements such as warmer homes and better air quality.
The regulator Ofgem pointed out last month that profits at the six largest energy suppliers have risen to record levels. British Gas announced a price hike of more than 12% on some tariffs over the summer.
According to the study, energy bills in general have continued to rise in real terms to about £1,110 a year, however, this could go down to as low as £560 a year, if all of the recommended changes are implemented.
Achieving these savings on energy would require substantial changes to government policy. Currently there are few incentives for households to install the necessary energy saving measures, such as insulation, because they can take up to 20 years before households recoup the cost of installation via bill savings.
The government recently cut its Green Deal policy which provided loans for such improvements, and experts such as Jan Rosenow, senior research fellow at the University of Sussex, say many of the potential future improvements are “unlikely to happen” without policy changes. The government has yet to announce any sort of replacement scheme, without which the UK is unlikely to see the full benefits of the report. The report calls for the government to set a long term target for energy efficiency – similar to the recent pledge to ban petrol cars by 2040.