Energy Efficiency – Issue Summary Technical * The term energy efficiency is used to cover both energy savings and technological improvements, which the result in the same amount of useful work being achieved with less energy input. Energy can simply be wasted (lights left on in unattended rooms); used for questionable purposes (TVs on standby so that they come on more quickly); or used inefficiently (use of incandescent light bulbs instead of compact fluorescent lamps or CFLs). * A wide range of established technologies are available to reduce energy use across all sectors – these include more efficient lighting (CFLs), more efficient appliances (‘A’ rated refrigeration), higher standards of home insulation (the SAP rating – on average in the mid 80s in the UK for all housing, in the 90s for new housing – but around 140 for the best new houses in Sweden) and improved industrial processes (dynamic motor speed control). * There have been steady gains in energy efficiency both in terms of useful output (better electrical appliance efficiency) and in terms of decoupling economic growth from increased energy use in commerce and industry (interestingly the US, in spite of roughly double the energy use per capita of the UK, have performed better than most of the rest of the world in that regard). However the development of new products and services has led to increased demand for energy (more widespread use of computers and higher consumption flat screen TVs in the home; ‘always on’ INTERNET server farms in offices and commerce). The overall trend in electricity and gas use in UK therefore continues upwards at 1-2% per annum. * A range of studies suggests that the widespread adoption of energy efficiency could result in up to 40% reduction in current energy use (covering both domestic and industrial/commercial sectors). Indeed the background work by the Cabinet Office Performance and Innovation Unit for the 2002 White Paper suggested a 20% target by 2010 and a 40% target by 2020 should be adopted. * Future technology developments offer the prospect of much more intelligent control of appliances, which linked with small-scale renewable generation in the home could greatly reduce the load on the electricity network. As an example, refrigerators currently cycle electricity use via a thermostat, but can hold their temperature within safe limits for much longer – intelligent control (possibly via ‘smart’ metering and Bluetooth technology) could be used to reduce peak demand in a city so as to avoid central despatch of large and inefficient coal fired generation. Economic * A very wide range of studies point to the adoption of energy efficiency and energy savings as the economic ‘no-brainer’ solutions – with savings at least to 20% being available at no cost or with often substantial cost savings. Energy savings (some coin the phrase ‘negawatts’) are by far the most economically rational solution and would make the rest of energy policy much easier to implement (for example the 2002 White Paper recognised that renewables would be more expensive and prices would therefore rise, but bills would be held constant or drop if energy efficiency measures were adopted). * Many studies have focused on the failure of the economics to drive energy efficiency gains. The conclusions are that some of these barriers relate to lack of knowledge, some due to lack of management time, some due to lack of capital to make the up-front investment and some simply on apathy. For example, some firms may be focused more on short term survival than making a saving based on a payback period as low as three or four years. In the domestic sector, the motivation to improve house insulation may be low as the owners may intend to move in four or five years (less than the payback period) and such improvements do not add as much resale value as a ‘dream kitchen’ with the latest (inefficient) 12V ‘spot’ lighting and the ‘walk in’ US style fridge/freezer/ice maker. * The greatest energy efficiency gains could probably be made in the areas of worst housing, where fuel poverty is commonplace. These areas are however the ones most affected by lack of knowledge, lack of capital and distrust of companies/government. Additionally, most of the savings, which are made in this sector, are taken as ‘comfort gains’ – energy use does not reduce, comfort levels are simply raised to acceptable standards via similar energy use (the ‘re-bound effect’). * Since the beginnings of the focus on energy efficiency in the 1970s, Government have consistently driven for savings and more efficient use, via a wide range of campaigns and interventions in the form of obligations on suppliers, capital grants, free consultancy, improvements in building regulations, appliance labelling, the Climate Change Levy etc. Currently the Energy Savings Trust (in the domestic sector) and the Carbon Trust (in the industrial/commercial sector) operate grant schemes, awareness programmes etc. Suppliers are obliged to secure certain levels energy savings across the domestic sector (with particular focus on the fuel poor) - these additional costs are passed to the customer base as a whole. These obligations, together with other grant measures (Warm Front) and action by Local Authorities etc. are aimed at the elimination of fuel poverty by 2015. Ethical questions * Energy efficiency appears to be the ‘magic bullet’ in any energy policy. It makes any energy policy route easier to deliver, avoids waste, improves the lot of the fuel poor and adds to economic prosperity – yet it continually fails to be accepted by the public (not only in the UK but across the industrialised world). Government has tended to shy short of ‘forcing the issue’ because of lack of public uptake. Should the initiative in this area come from Government (‘strong leadership against the will of the people but for their own good’) or through bringing some kind of moral pressure to bear through awareness (as for ‘drink driving’ or the wearing of seatbelts) – and if so can the churches via such measures as Eco-Congregation make the difference? * Much of the problem appears to relate to increased energy use rather than better appliance standards per se. As an example, many households buy a new fridge, deliberately seeking out an ‘A’ rated appliance because they are environmentally conscious – but then put the old one in the garage to keep the beer cool; patio heaters have made our gardens available and enjoyable over a larger part of the year; outdoor Christmas lights cheer the dark season; security lights (500W each) make us feel safer; we like the convenience and better access to information given by broadband and ‘always on’ INTERNET access. Some of this use is profligate and a product of the ‘conspicuous consumption society’ but some genuinely does add to our sense of well-being. How far might we be able to go in persuading the public to ‘use less’ as well as ‘use wisely’ without adoption of the ‘hair shirt’ or ‘nanny state’ approach? * Some argue that price increases are the way forward (‘energy is too cheap’) – but increased taxation will drive more into fuel poverty and the better off are unlikely to change their behaviour (c.f. fuel price increases and the continued growth in 4x4 use) – and what would Government do with the increased revenues. We also need to recognise that Government have had a bad experience with taxation as a driver to behaviour change in the light of the fuel protests by truck drivers and farmers against the Fuel Duty Escalator. Just how much should we advocate or rely on price as an appropriate signal to ‘do the right thing’? * How comfortable are we that energy policy is being used as the vehicle to tackle fuel poverty via obligations on suppliers? On the surface this seems fair, but it is a wealth transfer from those who use more energy to those who use less – and sometimes those who use more might not be better off (they may be older people still in the larger family home after the children have left, they may live in a listed building which cannot readily be made more efficient etc.). And in any event, how comfortable should we be that energy suppliers are used as the instrument of social policy (acting through large and faceless multinational energy companies) rather than tackling the problem directly via low pay legislation, the social security system, housing standards etc. Church of Scotland, Church and Society Council - May 2006