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Last week’s publication of the Conservatives’ energy strategy paper Rebuilding security: Conservative energy policy for an uncertain world shows a new kind of rhetoric from them on this issue. In a departure from last year’s climate-centric papers The decentralised energy revolution and The low carbon economy, the focus of this latest paper is very much on improving energy security. Although the language is mainly about security, a closer look at the proposals reveals that many of them also featured in last year’s climate-change-focused green papers. These include: - Reforming the Climate Change Levy so that it is a tax on carbon rather than energy (a reform that ippr argued for back in 2005). This would help provide a ‘floor price’ for the price of carbon.
- Supporting the development of a new fleet of nuclear power stations
- Accelerating Carbon Capture and Storage (CCS) demonstration (partly through the introduction of an Emissions Performance Standard)
- Developing a smart grid (or ‘energy internet’ as they call it)
- Introducing a ‘Green Deal’ programme, which would offer loans to homeowners to improve the energy efficiency of their properties.
Many of these proposals do not actually differ significantly from the Government’s own – particularly the support for new nuclear, a smart grid and a loan programme for domestic energy efficiency measures (the Government’s version is called ‘Pay-As-You-Save’ and is currently being trialled across the country).
There are some new ideas. The most radical is a proposal to allow feed-in tariffs to be used for large-scale renewables investments (as opposed to the current Renewables Obligation). Some people in the renewables industry fear that this would introduce unnecessary uncertainty around the future of support mechanisms for renewable energy.
A glaring omission is how the Conservatives would tackle fuel poverty. Apart from an objective to make energy affordable and speculation that the Green Deal ‘could provide new and effective options for the deployment of public funds to combat fuel poverty’, there are no further mentions of the issue and certainly no concrete policy proposals for dealing with it.
The number of people unable to afford to heat their homes properly continues to rise, so energy policy must get to grips with this problem as well as meeting security of supply and climate change objectives. ippr recommends establishing an independent commission to create a new UK fuel poverty strategy. It is a shame that the Conservatives have missed this opportunity to develop new thinking on addressing this growing social problem.
So will energy policy represent a new dividing line as the election campaign hots up? Perhaps on style – Conservative energy security versus Labour decarbonisation. But on substance, with the exception of the issue of fuel poverty, the approaches don’t look all that different.
Jenny Bird, research fellow, ippr
Yesterday (17 March) saw the launch of the interim findings from Peter Mandelson’s Low Carbon Construction Innovation and Growth Team, who have been tasked with conducting a review of the construction industry to ensure it is fit for purpose for delivering a low carbon economy.
The report identifies big opportunities for the industry in building the low carbon homes of the future, upgrading the existing housing stock and providing new infrastructure for low-carbon energy and transport systems. It also identifies a host of barriers that need to be overcome before the industry can fully benefit from these low-carbon options.
The LCCIGT have a clear message for government, which is that in order for the industry to transform its products to low-carbon models, it must be confident that the market is also transforming. They go on to suggest that ‘the evidence is that the clearest signal of this will be taken from well-designed regulatory standards, underpinned by the presumption of a stable and realistic price of carbon.’
The three main political parties have all shied away from the use of regulatory standards to drive improvements to the existing housing stock (in the privately-owned sector at least), preferring instead to focus on the use of financial incentives to entice homeowners into ‘greening’ their homes. All three parties have announced plans to introduce loan schemes to pay for energy efficiency improvements as they vie to win green votes, but none have suggested that our homes ought to be required to meet minimum energy efficiency standards.
The Government’s recently published Strategy for Household Energy Management announced a consultation on regulations to make cavity wall and loft insulation compulsory in all privately-rented properties, but since there would be no compulsion to improve boiler efficiency, draughty windows and other causes of inefficiency, this falls a long way short of providing the kind of powerful signal the industry is seeking.
Similarly, while Europe has an emissions trading scheme, the price at which permits are trading has so far been too low to send a significant signal. Moreover, the uncertain conclusion to the global climate summit in Copenhagen last year and the likelihood that US climate laws will not be based on carbon trading make ‘…a stable and realistic price of carbon’ any time soon highly presumptive indeed.
Thus regulation is all the more important. ippr’s new report on fuel poverty calls for the introduction of minimum energy performance standards for all homes, including rental properties, in order to deliver on both poverty and climate change goals. Politicians have traditionally seen regulation as a last resort and in the run up to the election will fear frightening the business lobby with anything that might be perceived to be an unnecessary burden on industry. But today’s report shows that business may suffer without tougher regulation. Why not give them what they want?
Jenny Bird, research fellow, ippr
