1. Energy Efficiency Innovation Review (2005) Summary report: Summary report: http://www.hm-treasury.gov.uk/media/FB4/AE/ pbr05_energy_675.pdf http://www.hm-treasury.gov.uk/media/FB4/AE/ pbr05_energy_675.pdf Domestic sector: Domestic sector: http://www.est.org.uk/uploads/documents/aboutest/Household%20energy% 20efficiency%20action%20for%20a%20low%20carbon%20society.pdf http://www.est.org.uk/uploads/documents/aboutest/Household%20energy% 20efficiency%20action%20for%20a%20low%20carbon%20society.pdf

2. Energy Efficiency Innovation Review (2005) Launched – pre-budget report (2004) Launched – pre-budget report (2004) Published Dec 2005 Published Dec 2005 Defra, HM Treasury, Carbon Trust & Energy Saving Trust Defra, HM Treasury, Carbon Trust & Energy Saving Trust An input to the wider review of the UK Climate Change Programme An input to the wider review of the UK Climate Change Programme Purpose Purpose Examine how a step-change in energy efficiency (domestic, business & public sector) can be delivered cost effectively Examine how a step-change in energy efficiency (domestic, business & public sector) can be delivered cost effectively How can energy efficiency improvements be embedded into decision making across the economy How can energy efficiency improvements be embedded into decision making across the economy Innovation – technical & policy innovation Innovation – technical & policy innovation

3. Focus Includes Includes How to deliver demand side efficiencies How to deliver demand side efficiencies How to increase the uptake of existing energy-efficient goods and services How to increase the uptake of existing energy-efficient goods and services How to accelerate the development of new, energy-efficient technologies How to accelerate the development of new, energy-efficient technologies Excludes: Excludes: Transport Transport Energy services Energy services The scope for local and regional delivery The scope for local and regional delivery Assessments Assessments Potential energy & carbon savings projected to 2010 and 2020 Potential energy & carbon savings projected to 2010 and 2020 Role of new technologies – up to 2050 Role of new technologies – up to 2050

4. Energy intensity of EU countries in 2003 (tonnes of oil equiv/million EUR GDP at 1995 market prices)

6. UK position – consumer products UK/EU leads energy performance standards for UK/EU leads energy performance standards for washing machines & dishwashers Good energy performance standards & best practice standards for heating demand reduction – not world leader Good energy performance standards & best practice standards for heating demand reduction – not world leader Patchy coverage Patchy coverage other white goods, heating products other white goods, heating products Limited/no coverage Limited/no coverage consumer electronics, domestic lighting, cooking, ICT consumer electronics, domestic lighting, cooking, ICT UK/EU – few performance standards for motors, drives, commercial lighting UK/EU – few performance standards for motors, drives, commercial lighting No UK/EUI minimum standards for commercial air conditioning & lighting No UK/EUI minimum standards for commercial air conditioning & lighting UK/EU few endorsement standards, little best practice coverage UK/EU few endorsement standards, little best practice coverage except domestic boilers, gas water heaters, domestic heating, demand reduction and ICT except domestic boilers, gas water heaters, domestic heating, demand reduction and ICT Where standards are in place – 40% standards lead world wide. Where standards are in place – 40% standards lead world wide.

7. UK carbon emissions UK good progress on reducing greenhouse gas emissions UK good progress on reducing greenhouse gas emissions On course for meeting Kyoto Protocol On course for meeting Kyoto Protocol 12.5% reduction in gg emissions below base year by 2008-12 12.5% reduction in gg emissions below base year by 2008-12 Significant effort needed to meet domestic 2010 goal Significant effort needed to meet domestic 2010 goal 20% reduction of CO2 below 1990 levels 20% reduction of CO2 below 1990 levels Revised emission projections – 10% below 1990 levels by 2010. Revised emission projections – 10% below 1990 levels by 2010.

8. Household Sector Responsible for 40MtC/year (30% UK total) Responsible for 40MtC/year (30% UK total) Space & water heating 75% Space & water heating 75% Lights & appliances 25% Lights & appliances 25% Scope to deliver 9MtC of cost-effective savings by 2020 Scope to deliver 9MtC of cost-effective savings by 2020 7.5MtC from measures tackling space and water heating 7.5MtC from measures tackling space and water heating 1.5MtC from appliances 1.5MtC from appliances Two types of decisions impact on energy efficiency investment Two types of decisions impact on energy efficiency investment (in addition to low or no cost behavioural measures) (in addition to low or no cost behavioural measures) One-off measures driven by energy saving One-off measures driven by energy saving Eg retrofit insulation or heating controlsEg retrofit insulation or heating controls Purchase or replacement of fittings/appliances Purchase or replacement of fittings/appliances Decision to purchase not driven by energy savingDecision to purchase not driven by energy saving But scope to purchase high efficiency optionBut scope to purchase high efficiency option Potential carbon emission similar but levers to influence decisions are very different Potential carbon emission similar but levers to influence decisions are very different

9. Energy Efficiency Commitment (EEC) Electricity and gas suppliers are required to achieve targets for the promotion of improvements in domestic energy efficiency. Electricity and gas suppliers are required to achieve targets for the promotion of improvements in domestic energy efficiency. Environmental aim Environmental aim will contribute to the Climate Change Programme by cutting greenhouse gas emissions will contribute to the Climate Change Programme by cutting greenhouse gas emissions Social aim Social aim EEC will also contribute to the alleviation of fuel poverty. EEC will also contribute to the alleviation of fuel poverty. 50% of energy savings must be focussed on a priority group of low- income consumers in receipt of certain benefits and tax credits/pension credit. 50% of energy savings must be focussed on a priority group of low- income consumers in receipt of certain benefits and tax credits/pension credit. Eleven suppliers were set a target of 62 TWH in 2002 apportioned according to number of customers Eleven suppliers were set a target of 62 TWH in 2002 apportioned according to number of customers 1 M homes loft/cavity wall insulation 1 M homes loft/cavity wall insulation 750,000 energy efficient appliances 750,000 energy efficient appliances 450,000 condensing gas boilers 450,000 condensing gas boilers 36 M low energy lamps 36 M low energy lamps All obligated suppliers met their energy saving targets or went beyond them All obligated suppliers met their energy saving targets or went beyond them

10. Several key challenges Current programmes deliver their savings through social housing Current programmes deliver their savings through social housing By end of decade the improvement of social housing insulation will be exhausted By end of decade the improvement of social housing insulation will be exhausted Need to find ways to deliver to owner-occupiers & private landlords Need to find ways to deliver to owner-occupiers & private landlords Lack of focus on behaviour/ how to incentivise behavioural change Lack of focus on behaviour/ how to incentivise behavioural change Reduce heating hours, internal temperature, lighting levels and appliance usage Reduce heating hours, internal temperature, lighting levels and appliance usage Current physical measures will reach saturation point early to mid next decade Current physical measures will reach saturation point early to mid next decade Need to draw in new physical measures Need to draw in new physical measures Solid wall insulation, low carbon technologies, high insulation productsSolid wall insulation, low carbon technologies, high insulation products

13. Options for new or expanded policies on buildings: supplier obligation (EEC) An effective route to drive energy efficiency take-up An effective route to drive energy efficiency take-up Access to consumer is a key factor in delivering carbon savings Access to consumer is a key factor in delivering carbon savings Further increase in target is feasible - 50% increase on the current phase Further increase in target is feasible - 50% increase on the current phase 2 barriers 2 barriers Cost perception gap – customers have poor knowledge of costs and benefits of measures Cost perception gap – customers have poor knowledge of costs and benefits of measures Distrust of supply chain Distrust of supply chain How can EEC and other measures facilitate an increase in the uptake of energy efficiency measures How can EEC and other measures facilitate an increase in the uptake of energy efficiency measures Move from a market which provides units of energy to one that addresses the heating, lighting and power needs of the consumer Move from a market which provides units of energy to one that addresses the heating, lighting and power needs of the consumer Cost effectiveness not a key driver for installing insulation Cost effectiveness not a key driver for installing insulation Up-front costs, reliability and reputation of installer, perceived hassle factor, personal recommendation Up-front costs, reliability and reputation of installer, perceived hassle factor, personal recommendation Supplier cap and trade scheme – after 2011 Supplier cap and trade scheme – after 2011 Move away from installation of physical measures towards direct delivery of carbon or energy targets Move away from installation of physical measures towards direct delivery of carbon or energy targets Energy Consumption feedback Energy Consumption feedback Cost effective Cost effective Accessible real time displays Accessible real time displays Smart metering Smart metering (Energy End-use Efficiency and Energy Services Directive) (Energy End-use Efficiency and Energy Services Directive)

15. Building Regulations Most consistently effective policy Most consistently effective policy Further tightening in 2010 Further tightening in 2010 Opportunities will decline after 2010 Opportunities will decline after 2010 Further improvements – low carbon technologies Further improvements – low carbon technologies Solar water heating, small-scale renewables, micro-CHP, heat pumps Solar water heating, small-scale renewables, micro-CHP, heat pumps Need to reduce costs Need to reduce costs Builders Obligation Builders Obligation Sustainable Building Code for a small proportion of houses built by volume house-builders Sustainable Building Code for a small proportion of houses built by volume house-builders Drive down costs of new technologies by increasing market penetration Drive down costs of new technologies by increasing market penetration Compliance with Building Regulations Compliance with Building Regulations Study of 99 new houses Study of 99 new houses Third failed to achieve recommended level for air tightness Third failed to achieve recommended level for air tightness

16. Consumer Goods Appliances & lighting - 20% household energy goods Appliances & lighting - 20% household energy goods Long term energy and cost saving do not drive consumers decisions electrical goods Long term energy and cost saving do not drive consumers decisions electrical goods Price is key factor Price is key factor Personal recommendation Personal recommendation Where energy label exists the energy rating an important factor Where energy label exists the energy rating an important factor But fewer A+ & A++ products sold in UKBut fewer A+ & A++ products sold in UK Domestic lighting Domestic lighting Market misalignment Market misalignment Financial benefits not regarded as important Financial benefits not regarded as important Poor quality lights & fittings Poor quality lights & fittings Lack of product information & mandatory standards Lack of product information & mandatory standards Lack of compatibility Lack of compatibility More scope for minimum energy performance standards & energy labelling schemes More scope for minimum energy performance standards & energy labelling schemes EU level EU level Up-rate labelling & standards for white goods Up-rate labelling & standards for white goods New product standards and labelling information New product standards and labelling information on consumer electronics & lighting

18. Business & public sector

20. Studies feeding into Energy Efficiency Innovation Review