Energy white paper

The Institution of Electrical Engineers has issued a report reviewing progress two years on from the energy white paper.

The report expresses concern that the policies introduced in the paper may be having unintended consequences which could threaten the security of the UK's electricity supply.

Party response: Liberal Democrats

Liberal Democrat environment spokesman Norman Baker said: "The report is right to highlight how the UK needs to maintain a diversified energy portfolio and that a more ore radical vision of the future shape of the UK's electricity network is needed to promote energy efficiency.

"The Liberal Democrats' energy policy is based on two approaches, both of which reflect these concerns.

"First, we would introduce measures to reduce energy use overall. Mandatory standards and labels for buildings, machinery, vehicles and appliances, will help and encourage householders and businesses to cut energy use. Combined Heat and Power schemes can also reduce the energy wasted in power generation, and we would set a target for 30 per cent of electricity used in the public sector to be generated from Combined Heat and Power by 2015.

"We would also tackle the problem of 'fuel poverty' in which thousands of people die each year from preventable cold-related illnesses - mostly pensioners, with poor home insulation and poor quality housing.

"We would help pensioners and severely disabled people cut their bills by allowing them to take their Winter Fuel Payment as a voucher redeemable against insulation and energy saving material, and a pensioner could save more than £100 from their energy bill by investing just one year’s Winter Fuel Payment, and help the environment as well.  This way we will invest in cutting energy use in the long term and at the same time help pensioners and severely disabled people stay warm and save money.

"Second, we would ensure that 20 per cent of the UK’s electricity comes from renewable sources by the year 2020 and 50 per cent by 2050.

"We would extend the existing Renewables Obligation on electricity suppliers so that 20 per cent of electricity must be sourced from renewables by 2020. We would not replace existing nuclear power stations as they come to the end of their safe and economic operating lives.

"There should be a mix of renewable technologies. We won’t simply rely on wind farms.

"We need to exploit the waves, the tides, the sun, even perhaps the hot rocks under the ground. Diversity of supply with renewable technologies would create thousands of jobs, whilst reducing emissions."

Stakeholder Response: Institution of Electrical Engineers

A spokesman for the IEE said: "The IEE calls for a balanced strategic approach on the part of government and stakeholders, and counsels against simplistic solutions to the complex and sensitive issues facing the UK's energy policy.

"The report makes four key recommendations. Firstly that the UK must maintain a diversified energy portfolio - over-reliance on any one particular fuel source or technology now will reduce options in the future.

"Changing patterns of power generation demand intelligent infrastructure to ensure the reliable delivery of electricity to consumers.

"Enabling a more radical vision of the future shape of the UK's electricity network could help reshape the map of regional development and prosperity.

"Innovative policies and incentives are called for to promote energy efficiency. A history of failure in traditional energy-saving programmes points to the need for greater sophistication in educating and motivating domestic consumers.

"Urgent action must be taken to protect and renew the UK skills-base and promote research, through schemes such as the Power Academy, in order to give the UK energy options for the future."

Stakeholder Response: Energy Retail Association

Russell Hamblin-Boon, head of communications and policy at the Energy Retail Association, told ePolitix.com: "Two key existing measures to improve the quality of housing stock are Warm Front and the Energy Efficiency Commitment.

"Warm Front provides grants for a range of insulation and heating measures to vulnerable people in owner-occupied homes or in private rented accommodation to improve the energy efficiency of their homes. 

"Under the energy efficiency commitment, electricity and gas suppliers are required to achieve energy saving targets by promoting improvements in energy efficiency in the household by encouraging domestic consumers to make energy savings through measures such as cavity wall and loft insulation and energy efficient boilers, appliances and light bulbs.

"They must achieve at least 50 per cent of this target by the provision of help to vulnerable consumers and those in fuel poverty.

"The energy efficiency commitment will be reviewed in 2008, but the government has already confirmed that it will miss its target of improving energy efficiency 20 per cent below 1990 levels by 2010. 

"Therefore, we need to start developing a sustainable programme of delivery that brings together energy savings and support for vulnerable customers based on realistic, cost effective targets. 

"For example, we suggest that any future scheme should not rely on cavity wall and loft insulation, but allow scope for central heating measures and encourage investment in new energy efficient products.

"There is consumer apathy around energy savings despite many homes having poor insulation.  Improving household insulation is an important part of the solution to fuel poverty.

"To address this we need to incentivise homeowners through new fiscal incentives for energy efficiency, for example: stamp duty rebates in return for energy efficiency; improvements to a property; a reduced VAT rate for A and B-rated energy efficient appliances to make it easier for customers to upgrade their fridges, freezers, and cookers; and VAT reductions on energy-efficient light bulbs to replace less efficient but currently much cheaper tungsten carbon bulbs."