Steve James
Policy Manager, Energy UK
The Committee on Climate Change’s report outlining the action needed to achieve net-zero emissions in 2050 make a compelling case that all sectors need to do their part to cut emissions if we are to avoid the worst effects of climate change on our cities, communities and way of life.
Improvements in Energy Productivity
Businesses accounted for around 17% of total UK emissions in 2017, or approximately 80MtCO2. The Government has recognised the need to reduce emissions in this sector, setting a target in the Clean Growth Strategy of improving business energy productivity by 20% by 2030. Energy efficiency will play a crucial role in meeting this target.
The opportunities for energy efficiency in the non-domestic sector are substantial. A BEIS survey in 2016 estimated there were 63,000GWh per year of potential savings, representing a 39% reduction in energy use. Energy suppliers are already active in the burgeoning energy services market, providing bespoke solutions to businesses to reduce their energy use, lower their carbon footprint and save money.
The Value of Energy Efficiency
Businesses are increasingly recognising the value of energy efficiency not only to their costs, but also to their overall approach to sustainability. A recent survey by Energy UK and PwC found that Commercial businesses, such as retailers and consumer services, now value the benefits of energy efficiency in tackling environmental and sustainability over simply lowering costs.
However, much of the policy effort to date has focused on residential dwellings. The energy sector has delivered energy efficiency obligations since 1994, and ECO2, the most recently completed scheme, saw suppliers fund 21MtCO2 of carbon reductions and over £9bn in lifetime energy bill savings.
What barriers do businesses face?
There are well-known barriers that prevent businesses taking steps towards energy efficiency. Competing priorities, high upfront costs, long payback times and building tenure can all present challenges, and these issues compound among smaller businesses with less time and resource.
Government should take clearer leadership in this space, by fostering the conditions necessary to incentivise and support change. Through a combination of strong minimum efficiency standards for non-domestic buildings, comprehensive advice and support services, financial incentives and greater access to low-cost finance, energy efficiency can be easy and attractive to business.