Compared to what has seemed to be a bit of a wasteland for new ideas in energy and buildings policy, today’s launch of the Clean Growth Strategy contains some exciting and ambitious plans for ‘cleaning up’ our energy system, transport and buildings in the coming decades.
Of the headlines, BEAMA welcomes:
- A drive towards progressive building regulations and minimum performance standards
- New impetus to attract and channel finance to fund a new low carbon future
- Recognition of the role of networks and flexibility for a smart energy system
- The positive statement to phase out fossil fuels such as oil off gas grid areas
- Investment in R&D for innovation and storage technology
BEAMA particularly welcomes the high level of ambition to maintain a trajectory towards a low carbon energy system connected to high efficiency buildings. In 2016 around 47% of our electricity came from low carbon sources and we know that the overall carbon content of electricity has reduced from over 500g CO2/kWh in 2010 to around 300g today, projected to reduce to 100g in the next 10-15 years. That opens the door for low carbon electric heating as oil is phased out in the coming decade, while progressive building regulations and minimum Energy Performance Certificate performance standards are back on the agenda to improve the efficiency of new and existing buildings. The improvement in boiler standards is long overdue as is the intention to upgrade the minimum standards for controls, although we will be pushing Government to support the Energy Performance of Buildings Directive’s lead to include independent room control via TRVs in the next round of building regulation changes. Finally, the intention to establish an industrial sector energy efficiency scheme is also very strongly welcomed.
Plans to set up a Green Finance Taskforce and work with Green Mortgage Providers really do start to establish a potential framework for driving the uptake of low carbon technologies in the shift to a new smart and flexible energy system, particularly where the market transformation required may involve relatively high up-front costs to consumers in the early years of adoption. There are a few interesting dimensions to this initiative, not least the possibility of bundled finance for high value product leasing through energy service providers, but also a potential driver for the new Quality Mark scheme, soon to be announced by the Each Home Counts framework. We hope the potential flow of money will sharpen the focus of organisations that have not got on the Each Home Counts bus as fast as they should have done. BEAMA has taken a lead role to help steer Each Home Counts towards being acceptable for industry and to enable Government and private sector confidence to grow in energy efficiency markets.
A 2032 target of over 80% of electricity from low carbon sources will be a tremendous challenge to the electrical system but there is confidence that this can be delivered by exploiting innovation, much of which has already been developed. The government is looking to network flexibility to contribute to meeting this challenge and suggest a capacity of 4.9 GW from Demand Side Response, this is well within our capability if the government creates the right commercial frameworks.
As an association supporting manufacturer endeavour with innovation, we are of course delighted to see the £841m injection into low carbon transport and technology research & development, but we expect the greatest drive in innovation for the energy sector to be in the business models used to deliver the Government’s smart systems plan. BEAMA publishes its market design report in November 2017 entitled ‘Electrification by design’, and much of the content of the Clean Growth Strategy will ring true with its recommendations, particularly for energy networks, electric vehicles and domestic buildings. For example, clustered deployment of smart grid/connected home solutions; the creation of agile service providers managing Demand Side Response value and related customer propositions; and the changing nature of finance provision either direct to the customer or indirectly through technology vendors or energy service providers.
Not everything in the Strategy is new, and we are pleased to see that the Government remains committed to existing policies and has presented these in the context of their contribution to reducing carbon emissions.
Alongside the Clean Growth Strategy, a number of long awaited documents were published including the ‘Heat in Buildings Strategy’ and a consultation on ‘Building a Market for Energy Efficiency’. These and other policy activities will dominate industry groups for months and years ahead, but in the meantime, we should be applauding Government for filling the vacuum with some concrete trajectories that we can focus on and build our businesses alongside. We look forward to working with our members, Government and other stakeholders to develop the necessary details to implement the proposals.
