House of Commons - Programmes to reduce household energy consumption

Programmes to reduce household energy consumption - Public Accounts Committee Contents

1 Progress in reducing household energy consumption

1. Household energy consumption is responsible for 27% of all UK carbon emissions. Reducing household energy consumption is central to efforts to mitigate climate change and can help decrease fuel poverty[2] by reducing household energy bills.[3] Lower energy consumption also helps the government to achieve its aim of greater energy security.[4] Household energy consumption is influenced by the behaviour of the householder and the energy efficiency of their home, heating, lighting and appliances. There are a range of government programmes which impact on the householder, their home and ultimately their energy bill (Figure 1).[5] These programmes cost the UK around £2.6 billion a year—a mixture of direct government expenditure and compliance costs borne by businesses and households.[6]

Figure 1—A wide range of government programmes impact on the householder, their home and ultimately their energy bill

Programmes not led by the Department for Energy and Climate Change are indicated: Department for Communities and Local Government (CLG), Department for Environment, Food and Rural Affairs (Defra).

Source: National Audit Office

2. Household energy consumption fell between 2004 and 2007, although it remained 8% higher in 2007 than in 1990 (Figure 2). This reduction may not continue as household energy consumption continues to be driven up by the need for more housing, together with many people's rising expectations as to how warm their homes should be, and their desire to use more electrical goods and appliances.[7] The Department of Energy and Climate Change (the Department) considered that the recent fall in energy consumption was in part due to high energy prices and the weather, but also reflected energy efficiency improvements.[8] Although oil prices will continue to influence the amount of energy that people use, the Department's aim is to improve energy efficiency to reduce the harm to the environment and costs for the householder.[9] The Department accepted that it needs to do more to encourage people to reduce their energy use. The hardest task will be to change behaviour through helping people understand what they need to do and helping them to do it.[10]

Figure 2: Until 2004 energy consumption continued to rise, as improvements in efficiency did not outweigh underlying demand pressures

Note: Energy efficiency is estimated, and a downward trend indicates improvement.

Source: National Audit Office, based on data from BERR and Defra

3. Trends in household energy consumption in the UK compare unfavourably with some other European nations. For example, the Netherlands reduced average energy consumption per dwelling by 16% between 1990 and 2004, during which period average UK consumption rose by 2%.[11] The Netherlands began driving energy efficiency improvements in the early 1990s, a decade before the UK programme began in earnest.[12]

4. The UK has recently set a target to reduce greenhouse gas emissions by 80% by 2050 against 1990 levels. The independent Climate Change Committee, which has been established in the Climate Change Act 2008, has given advice to the government on the first three 5-yearly carbon budgets that should be set to meet this target and the respective contributions that should be made by different sectors of the economy.[13]

5. The Department expects to consult on a new package of measures for reducing carbon emissions from existing homes. This package will form part of its strategy in response to the carbon budgets. It will include proposals, announced in September 2008, to increase the funding of energy efficiency by energy suppliers, partly by increasing by 20% suppliers' targets for delivering energy savings through installing energy efficiency measures.[14]

6. The Department recognises the risk that the complex range of programmes to address energy efficiency and climate change are not joined up and give confused messages to the public.[15] Bringing together the programmes in the new Department of Energy and Climate Change would enable the new Department to oversee them as a whole and make sure they are working properly.[16] The system of carbon budgets would also encourage the government to take a cross-society view and consider progress across emissions sources. The Department was confident that existing policies would enable it to meet its expectations for household energy consumption, but recognised the risk that cost savings to householders may result in them spending more on other goods or services that increase energy consumption and carbon emissions.[17]

7. Current programmes do not target directly those people who use most energy, although this might achieve more cost-effective energy savings.[18] The Department aims to balance its objective of reducing carbon emissions from household energy consumption with its objective of reducing fuel poverty. For example, under the current supplier obligation, suppliers are required to install 40% of measures in the homes of people in priority groups such as low-income and elderly households, and Warm Front grants are available to improve household energy efficiency for people in fuel poverty.[19] While we recognise that the £300 savings on a household's energy bill, which could be achieved from introducing energy efficiency measures, would be particularly welcome to poorer households, the Department needs to also target high energy users to maximise reductions in energy use.[20]

2 A household is said to be in fuel poverty if it needs to spend more than 10% of its income on fuel to maintain a satisfactory heating regime (usually 21 degrees for the main living area, and 18 degrees for other occupied rooms). Back

3 Q 30; C&AG's Report, para 1.1 Back

4 C&AG's Report, para 1.1 Back

5 Householder energy using behaviour refers to how warm householders want their home to be, how many hours they want to watch TV, how many lights they have on and so on. Energy efficiency determines the amount of energy needed as a result of this behaviour. For example, a more energy efficient house consumes less energy to heat it. Back

6 Qq 7-11; C&AG's Report, para 1.1 Back

7 Qq 4-7 Back

8 Qq 3, 48 Back

9 Qq 4-6, 15-20, 48 Back

10 Qq 3, 8-10; C&AG's Report para 2.6 Back

11 Qq 2-3; C&AG's Report, para 2.6 Back

12 Qq 2-3; C&AG's Report, para 2.6 Back

13 Qq 26, 64, 108 Back