In this Energy Insight:
- Existing UK policies and regulations
- Energy-saving targets and plans
- UK rules and regulations concerning buildings and energy
- Energy-saving technologies and products
- Financial incentives and obligations driving energy efficiency improvements
- Domestic energy efficiency
- Fuel tax for vehicles
- The future of energy efficiency measures
From 2000 to the end of 2019, total energy consumption in the UK fell by 11 percent to 1.4 million tonnes of oil equivalent (mtoe), despite the population rising by over 13% from 58.9 million to over 66.7 million in the same period. (Over the period 2018 to 2019 total energy consumption in the UK decreased by 1% while “population growth at 0.5% was slower than any year since mid-2004”). The impacts of COVID-19 on the population are not yet available, but ONS has issued some information on its possible effects.
To meet the legally binding target, laid down in the Climate Change Act 2008, (as amended) of reducing the UK’s greenhouse gas emissions by at least 100% below the 1990 base year levels by 2050, more has to be done to reduce the use of fossil fuels. Improving energy efficiency is one of the major solutions.
Existing UK policies and regulations
EU directives and UK Statutory Instruments
While a member of the European Union, the UK agreed to comply with the Energy Efficiency Directive (EED)(2012/27/EU)
, under which. from 1 January 2014 to 31 December 2020 EU Member States are obligated to achieve energy savings. They had to do this by using Energy Efficiency Obligations Schemes and/or other targeted policy measures
to drive energy efficiency improvements in households, industry buildings and transport.
Some, however, are in the process of being amended. For example, the UK government has consulted on “Ecodesign and Energy Labelling Regulations
”, (SI 2010 No 2617), and is in the process of publishing new regulations in 2021.
A search on the official UK legislation website finds over 200 results
relevant to the Energy Efficiency Directive, including those laid before Parliament due to Brexit.
In February 2019 the Hansard Society were reporting doubts
that all the pre-Brexit legislation would be ready by 29 March 2019 when the UK was scheduled to leave the EU. On 27 January 2021, the Hansard Society published Brexit and Beyond: Delegated Legislation
criticising the lack of scrutiny of around 960 Brexit-related statutory instruments being laid before Parliament.
Energy-saving targets and plans
Article 7 of the EU Energy Efficiency Directive
“requires Member States to achieve a cumulative end-use energy savings target by 31st December 2020 equivalent to 1.5 per cent of annual energy sales to final energy users relative to the average energy sales over the period 2010-12”.
The UK’s approach for complying
with Article 7 was set out for the period 2010-2020; and the progress of the UK’s national energy efficiency action plan
was reported annually. In the 2017 report we were told that since 2007, industrial energy consumption has fallen by 23%; household energy consumption has fallen by 12%; passenger transport consumption has fallen by 8% (but passenger kilometres increased by 6% since 2014); and road freight transport has decreased by 3%.
UK rules and regulations concerning buildings and energy
UK Building regulations
The Building Regulations 2010
(SI 2010 No 2214) “are minimum standards for design, construction and alterations to virtually every building. The regulations are developed by the UK government and approved by Parliament.”
- The insertion of insulation into a cavity wall
- Work affecting the thermal elements, energy status or energy performance of a building.
Part L of the Building regulations concerns Conservation of fuel and power
. It lays down the minimum U-values
for roofs, walls, floors and windows for new buildings, and alterations to existing buildings
New public buildings
of the Building Regulations sets out that new buildings should be nearly zero energy, and in a circular letter of 14 January 2019
, the Ministry of Housing, Communities & Local Government informed building control bodies of the requirements that new public buildings should be nearly zero energy.
Who makes sure Building Regulations are complied with?
Local authorities have the duty of making sure that any building work in their area complies with the Building Regulations. Advice can be found for homeowners; professionals, such as architects and builders; and local authorities, on the Local Authority Building Control LABC website
Energy Performance certificates (EPCs)
gives a property an energy efficiency rating on how it's built, as well as showing the propery’s energy use and how it could be reduced.
It is the Building Regulations which lay down that EPCs are required for new and modified buildings. They are also required when a property is sold or let, and have to be carried out by an accredited person
Energy Savings Opportunity Scheme (ESOS)
The ESOS Regulations 2014
implemented the EU Energy Efficiency Directive Article 8 (4 to 6).
These regulations made it mandatory for UK organisations employing 250 or more people, or with an annual balance sheet total in excess of €50mn (£39mn), to carry out annual audits
including an estimate of total energy consumption covering buildings, industrial processes, and transport, and to identify energy saving opportunities. But there was no regulatory requirement for organisations to implement the energy saving opportunities identified. Changes
are in the process of being made to these regulations (July 2021).
What standards exist to help?
Energy-saving technologies and products
Energy technology list (ETL)
BEIS updates the Energy Technology List monthly, providing details of nearly 60,000 energy-saving products
from 56 technology categories, for businesses and the public sector.
[The Enhanced Capital Allowance (ECA)
scheme for energy saving technologies, from which businesses could benefit from tax breaks when investing in eligible energy saving equipment, ended in April 2020.]
Lighting and other energy-using products
Energy-hungry incandescent light bulbs have been unavailable for purchase in the UK since 2009 and halogen light bulbs were gradually phased out from 2016 and completely banned for sale from October 2018.
Information about the New Energy Label
, which in the UK is taking the place of the EU label, can be found on the Label 2020 website
The new label is simpler, showing straight ratings from A to G
For example, for fridges and freezers (other examples are given on the Label 2020 website):
At present August 2021), they cover
• Household refrigerators and freezers
• Washing machines and wash-dryers
• TVs and electronic displays
Financial incentives and obligations driving energy efficiency improvements
CRC Energy Efficiency Scheme and its successor
The CRC Scheme
(formerly known as the Carbon Reduction Commitment Scheme), introduced by BEIS and the Environment Agency in July 2015, aimed to incentivise energy efficiency and cut emissions in large energy users, in the UK's public and private sectors, by requiring them to buy allowances
for every tonne of carbon they emit.
Climate Change Levy (CCL)
Domestic energy efficiency
Energy Company Obligation (ECO) Scheme and fuel poverty
The UK government has introduced various other measures to help combat fuel poverty by making impoverished households more energy efficient.
Tax incentives and grants for energy-saving products in homes
For some energy-saving products, such as loft insultation, only 5% VAT
should be charged, but just for qualifying people. For most people, VAT at 20% is still levied on home improvements such as double-glazing and energy efficient boilers.
However, the Green Homes Grant voucher
, which opened for applications in September 2020, and intended to help householders pay for home insulation and other energy saving products, was scrapped
by the government six months later in March 2021. Various reasons for its failure
were given, such as excessive red tape for builders registering for the scheme, and householders unable to find builders to even provide a quote for the required work.
The government required the energy suppliers to offer each of their customers a smart meter by the end of 2020 (although customers can refuse to have one installed). Due to the COVID19 epidemic the deadline was extended to the end of June 2021, but a new target
comes into force on 1 July 2021 with which energy suppliers have to comply. The idea is that people will be able to see how much energy they are using, and what it is costing, in real-time, thereby enabling them to better manage their energy use.
By 28 July 2021, over 13.3 million smart meters were connected to the UK's DCC network
Fuel tax for vehicles
It could be argued that the high percentage of duty and VAT on road fuel
has encouraged the design of more energy efficient vehicles; and for drivers to limit their journeys. This even though the rate of duty per litre (eg 57.95p for unleaded petrol), has remained unchanged since 2011, and the 20% rate of VAT, since 2012. While the number of vehicles on UK roads
has continued to rise steadily, fuel consumption
by road vehicles has remained much the same over several years.
Although the pandemic caused a drop in demand for energy from all sectors in 2020
, the transport sector still consumed over 40 million tonnes of oil equivalent (MTOE), the largest consumption of any sector, just topping that of the domestic sector. The total 2020 demand for energy in the UK was 127.5 MTOE.
The future of energy efficiency measures
Small and Medium size businesses
Having dealt with large organisations with ESOS, in his Spring Statement in March 2019
, the UK Chancellor of the Exchequer set out the government’s intentions including plans concerning energy efficiency for smaller businesses:
An Energy efficiency scheme for small and medium sized businesses: call for evidence
was launched by BEIS for the period 13 March 2019 – 8 May 2019, to “help smaller businesses reduce their energy bills and carbon emissions…to explore how [the Government] can support investment in energy efficiency measures”. A summary of responses was published in June 2020, from which it was clear there was no clear way forward. So BEIS commissioned research “into auction design
in order to further inform the policy-making process.”
Future Homes Standard
He also stated, “to help ensure consumer energy bills are low and homes are better for the environment, the government will introduce a Future Homes Standard
(FHS) by 2025, so that new build homes are future-proofed with low carbon heating and world-leading levels of energy efficiency”. A consultation was held between October 2019 and February 2020 The Future Homes Standard: changes to Part L and Part F of the Building Regulations for new dwellings
. The Government response (published in January 2021) states that work on a full technical specification for the FHS has been accelerated and the government will consult on it in 2023 so that “from 2025, the Future Homes Standard will deliver homes that are zero-carbon ready”
UK government’s Industrial Strategy Challenge Fund
UK government’s Industrial Strategy Challenge Fund
, being delivered on behalf of the UK government by UK Research and Innovation, aims to “strengthen UK science and business innovation and take on the biggest challenges that society and industry face today” and includes ensuring that the UK prospers from the energy revolution
including moving to a low-carbon, more resource-efficient economy. Reported in May 2018, £102.5 million will be invested in developing smart, clear energy systems.
Energy efficiency in buildings
Links to guidance, regulation, research, policy papers and consultations on the subject from BEIS, Ministry of Housing, Communities & Local Government, DEFRA, Cabinet Office, etc.
Environmental reporting guidelines:
including Streamlined Energy and Carbon Reporting requirements: Guidance to help companies comply with the Streamlined Energy and Carbon Reporting regulations, including greenhouse gas (GHG) reporting. DEFRA ; BEIS. Updated 31 January 2019.
This insight was first publlished in April 2019. Revised and updated August 2021.