Energy Efficiency (Print)

Key facts

Between 2002-2005, the energy retail industry achieved £1000 million worth of energy saving measures (61TWh per year) through the first Energy Efficiency Commitment

Ofgem estimates that this has avoided 15.5 million tones of carbon emissions

Between 2005-2008, the energy retail industry aims to achieve a further £700
million worth of energy saving measures per year (1301TWh) through the second Energy Efficiency Commitment target

ERA’s Position

The energy retail industry has achieved £1 billion worth of energy saving measures over the last three years through the first Energy Efficiency Commitment. We expect to double these savings over the next three years (2005 – 2008), which will support the Government’s targets to reduce CO2 emissions and achieve carbon savings supporting the Kyoto agreement.

However, we need flexibility to allow us the creativity to find new and innovative solutions to the serious issue of carbon emissions. We would also encourage government to offer fiscal incentives to encourage house owners and landlords to invest in home energy efficiency measures. Finally, we recommend that progress is measured by output (i.e. results achieved) rather than input (e.g. the measures undertaken) so that we can see the real impact of our joint efforts.

Background on Energy Efficiency

The Government’s 2003 Energy White Paper set energy efficiency at the heart of UK energy policy, announcing a long term goal to reduce the UK’s carbon emissions by some 60% by 2050, with significant progress by 2020, in an effort to steer the country towards a low carbon economy.

Domestic energy efficiency has been improving steadily over the past few years, but there are still further possibilities for reducing energy consumption (the government estimates that a reduction of 30% could be achieved). It can not be stressed strongly enough that government, consumers and the industry all have a part to play in the drive towards a more energy efficient society. The energy retail industry has been fulfilling its obligations by meeting the targets set by the Energy Efficiency Commitment.

What is EEC?

The Energy Efficiency Commitment (EEC1) began in April 2002 and required energy suppliers to achieve a target of domestic energy efficiency improvements by 31 March 2005. The Department for Environment, Food and Rural Affairs (DEFRA) is responsible for setting the overall target and policy framework of the EEC and OFGEM, the industry regulator, is charged with administering the scheme. DEFRA set an overall energy savings target of 62 TWh for the EEC1 (which is equal to a 1% annual reduction in domestic carbon dioxide emissions).

Suppliers are required to achieve these targets by installing energy efficiency measures in the household sector. Within the confines of the framework suppliers can fulfil their obligations by carrying out a range of approved measures (i.e. wall and loft insulation, energy efficiency boilers, energy and saving light bulbs). In addition, suppliers must achieve at least half of their energy savings in households claiming income-related benefits or/and and tax credits.

The energy savings achieved under EEC1 equate to £350m per year based on current wholesale electricity prices. In addition, Ofgem estimated that carbon emissions of 15.5mn tones were avoided, or about 1pc of their total. The targets for the second phase of EEC (EEC2), which runs from 2005-8, have doubled to 130 TWh.

Tips for Making Your House Energy Efficient

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Around 33% of the heat lost in your home is through the walls, so insulating them can be the most cost-effective way to save energy in the home. Installing cavity wall insulation can save you up to £120 per year on your heating bills.

Laying your loft with 10 inches of insulation can save you around 23% of your home's energy use. An adequate amount of insulation (250mm) can also save you around a quarter of heating costs and up to £170 every year.

Replace boilers over 15 years old with a new energy efficient one. High efficiency condensing boilers are the most energy efficient and can up to a third of your annual heating bills.

Turning your thermostat down by 1ºC could cut your heating bills by up to 10 per cent and save you around £30 per year.

Is your water too hot? Your cylinder thermostat shouldn't need to be set any higher than 60ºC/140ºF.

Close your curtains at dusk to stop heat escaping through the windows.

Always turn off the lights when you leave a room.

Don't leave appliances on standby and remember not to leave appliances on charge unnecessarily.

If you're not filling up the washing machine, tumble dryer or dishwasher, use the half-load or economy programmes.

Only boil as much water as you need (but remember to cover the elements if you're using an electric kettle).

A dripping hot water tap wastes energy and in one week wastes enough hot water to fill half a bath, so fix leaking taps and make sure they're fully turned off.

Replace your light bulbs with energy saving recommended ones: just one can reduce your lighting costs by up to £78 over the lifetime of the bulb - and they last up to 12 times longer than ordinary light bulbs.

Only boil as much water as you need (but remember to cover the elements if you're using an electric kettle).

A dripping hot water tap wastes energy and in one week wastes enough hot water to fill half a bath, so fix leaking taps and make sure they're fully turned off.

Replace your light bulbs with energy saving recommended ones: just one can reduce your lighting costs by up to £78 over the lifetime of the bulb - and they last up to 12 times longer than ordinary light bulbs.

What are others saying?

“We need both to invest on a large scale in existing technologies and to stimulate innovation into new low carbon technologies for deployment in the longer term. There is huge scope for improving energy efficiency and promoting the uptake of existing low carbon technologies like PV, fuel cells and carbon sequestration.”
Tony Blair, Prime Minister, November 2004

"Action to reduce fuel bills must be twinned with a renewed focus on greater energy efficiency improvements, and the enhanced Warm Front scheme as well as the expanded Energy Efficiency Commitment can make a real difference."
Elliot Morley MP, Minister for Climate Change and Environment, July 2005

"The UK Government has taken a global lead by setting tough carbon dioxide emissions reduction targets. However, achieving these will be almost impossible unless household energy efficiency plays its full part."
Philip Sellwood, Chief Executive, Energy Saving Trust, July 2005