Home energy efficiency must be a “national infrastructure priority”, major coalition urges

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Energy efficiency in UK homes must become a “national infrastructure priority” – with Government committing to a target of retrofitting 1 million homes a year by 2020 – a major new coalition of 20 organisations from the construction, housing and environment sectors is urging today. 

In an open letter to Lord Deighton, Commercial Secretary to the Treasury, the heads of environmental groups, charities, membership organisations and trade associations warn that the UK’s homes are among the “coldest and draughtiest in Europe” resulting in high energy bills and “one of the worst records on fuel poverty and preventable winter deaths”. 

They argue that Government should direct £3-4 billion a year in capital investment to fund a significant programme of energy efficiency to transform the UK’s aging housing stock. This investment would address market failures and leverage substantial additional private investment. Treasury estimates annual capital investment in infrastructure at £45billion per year (see notes to editors).

The leaders write: “Domestic energy efficiency is one of the most cost effective ways to achieve the Government’s three strategic priorities for energy infrastructure: controlling energy bills, tackling climate change and unlocking investment to support economic growth.”

“No other investment can achieve so much for individual householders and for UK Plc.”

The letter comes as the group of organisations publishes a short report, titled A housing stock fit for the future, setting out the strong economic benefits for improving home energy efficiency. These include:

Generating significant economic growth and doubling the number of jobs in the energy efficiency sector to 260,000.

  • Improving energy security and reducing the UK’s reliance on imported gas.
  • Reducing carbon emissions to meet carbon targets and combat climate change.
  • Permanently reducing energy bills by £300 a year and lifting nine out of 10 homes out of fuel poverty.
  • Improving health and wellbeing, reducing excess winter deaths and lowering NHS and social care costs.

Speaking on behalf of the coalition, Paul King, Chief Executive of the UK Green Building Council, said: “There’s a gaping hole at the heart of the Government’s plan for infrastructure, and that gaping hole is the energy efficiency of our aging housing stock. Government has so far failed to recognise the huge opportunities it presents.

“But it’s not too late. Making home energy efficiency a national infrastructure priority – and offering it significant support alongside transport, energy generation or communications projects - would not only cut households’ rocketing energy bills and help tackle climate change, but would create thousands of new jobs and strengthen the UK’s energy security. Government spends £45billion a year on capital infrastructure investment - our bricks and mortar deserve to be included.”

The cost estimate of £3-4bn per year is based upon fully funded installations for 500,000 low income households and the provision of low cost loans to 500,000 able-to-pay households. (Consumer Futures, Raising Standards, cutting bills, June 14)

The Government’s National Infrastructure Plan 2013 indicates annual infrastructure investment at £45billion per year.

As a national infrastructure priority, energy efficiency would be eligible for Government capital spending that could be used to overcome barriers to delivery. Capital investment could be used to subsidise low cost loans for householders and a programme of targeted installations for the fuel poor. Government could also provide an overarching strategy to give confidence to investors in the infrastructure pipeline and help facilitate a clear delivery plan.

The energy efficiency sector has enormous potential to attract investment and provide a major source of additional income for Government. For every €1 of public funds spent on the KfW Energy-efficient Construction and Refurbishment programme in Germany in 2010, over €15 were invested in construction and retrofit, and more than €4 went back to the public finances in taxes and reduced welfare spending.

Read the report.

Signatories to the letter and supporters of the report

Aldersgate Group

Association for the Conservation of Energy

BioRegional

Cavity Insulation Guarantee Agency

Centre of Refurbishment Excellence

Energy Bill Revolution

Energy Saving Trust

Federation of Master Builders

Forum for the Future

Friends of the Earth

Green Alliance

Greenpeace

National Energy Action

National Energy Foundation

National Housing Federation

National Insulation Association

SHIFT - Sustainable Homes Index For Tomorrow

Sustainable Energy Association

UK Green Building Council

WWF-UK

 

Text of letter

Dear Lord Deighton

The UK’s 26 million homes should be fit for the future. Our homes are among the coldest and draughtiest in Europe. As a result we have high energy bills and one of the worst records on fuel poverty and preventable winter deaths. We are also wasting vast amounts of energy and increasing our reliance on expensive fossil fuels.

Rising energy bills and safeguarding energy security will be key issues for the General Election in 2015 but they will not be solved overnight. We need a long term plan to transform the energy efficiency of our homes, within a generation.

We are calling on all the Government to:

1.             Make home energy efficiency a top infrastructure priority

2.             Support investment with a long term revenue stream

3.             Achieve 1 million deep retrofits each year by 2020

Overhauling the energy efficiency of our existing homes will be a challenge, but one that offers huge opportunities. Improving our existing homes will stimulate economic growth and create thousands of jobs spread across the country. It is the most cost-effective way to slash our carbon emissions and aid the transition to cleaner sources of energy. No other investment can achieve so much for individual householders and for UK Plc:

  • Generate significant economic growth in all regions of the UK and double the number of jobs in the sector to 260,000 jobs.
  • Improve the UK’s energy security and reduce our reliance on imported gas.
  • Reduce carbon emissions to meet carbon targets and combat climate change.
  • Permanently reduce energy bills by £300 and lift 9 out of 10 homes out of fuel poverty.
  • Improve health and wellbeing, reduce excess winter deaths and lower NHS and social care costs

An issue of such significance must be regarded as a national infrastructure priority. The National Infrastructure Plan recognises that markets need support to deliver projects of national importance, and this is clearly true for home energy efficiency.

There is a key role that Government can play in creating the right conditions for a flourishing market. Firstly, Government can provide an overarching strategy, to give confidence to investors in the infrastructure pipeline and help facilitate a clear delivery plan. Secondly, there are projects where it is essential Government capital spending is used to overcome barriers to delivery. A significant programme of energy efficiency would need public investment of £3-4 billion a year to address areas of market failures and leverage substantial additional private investment.

Domestic energy efficiency is one of the most cost effective ways to achieve the Government’s three strategic priorities for energy infrastructure: controlling energy bills, tackling climate change and unlocking investment to support economic growth. It is the only way to permanently reduce energy bills, it reduces the cost of decarbonising generation and it creates jobs in every constituency in the UK.

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