Energy policy: complex but not complicated

Last week, I was fortunate enough to be a speaker at an event hosted by Arup.

The event saw the launch of Towards the Delivery of a National Residential Retrofit Programme (link opens PDF), a report drawn together by the lovely Chris Jofeh of Arup in consultation with a wide range of stakeholders. It sets out the steps that would need to be take to create a national coordinating programme for household retrofit. It aligns research, policy, delivery and governance in a very interesting way, buying UK PLC some time to get itself organised before embarking on an ambitious 25 year programme to halve energy use from our homes.

Chris asked me to speak about energy efficiency policy: in just five minutes! Now some might say that's quite straightforward given the absence of policy at the moment, but I wouldn't dream of suggesting such a thing...

Instead I talked philosophically for a while about the types of policy levers typically used in energy efficiency and renewables (subsidies, regulation), different types of markets and the role of energy standards within them and how the policy landscape might evolve in a business-as-usual way.

I also wanted to get people thinking about the challenges of being a policy maker in this space. There are some tensions at play here which steer the policy choices that are available. For example:

• Are you aiming to reduce carbon emissions or to tackle fuel poverty? (Because it's unlikely that one policy is going to achieve both.)
• Do you want policy that is universally available (a la CERT) or something that is more targeted (a la ECO)? What are the implications of that for how many househlds you can reach and the types of measures that are supported?
• Do you want something mandatory (like the smoking ban) or voluntary (like "quit smoking" courses)? If it's mandatory, how do you enforce it? If it's voluntary, how do you achieve scale?
• How about national vs local? What's the right level for trusted delivery? Probably local. But how do you unlock real economies of scale and build a brand for retrofit? Well, that's probably national...
• And are you thinking about individual measures or about a whole house approach? Green Deal got us thinking much more about whole house retrofit (which is a good thing) and yet so much of our policy is geared to individual measures...

I'd be interested to know what you think about these tensions. Which are the trade offs that we might have to make? How do we generate public acceptability for different policy options in the face of a snarling media? How do we take policy past every front door and into every home in the land?

Last but not least, I thought I'd share with you the surprise hit of the day: my back of an envelope policy landscape! I thought I'd try and sum up what I'd like to see in place in Government policy for retrofit:

The direction of travel is essential. If there is commitment to the Fuel Poverty Strategy and the Climate Change Act, then someone within DECC should be standing up and saying so, and helping people to imagine how the future low carbon, low-cost-energy world will look and feel.

The clear trajectory - well, I'm on the "regulate it" side of the fence. And I believe that the Code for Sustainable Homes, with its ten year view of tightening standards for new homes, actually worked. So why not? It's already mooted in the Private Rented Sector Regulations (which are toothless, but at least set precedent!). So why not set the expectation that homes will have to achieve certain energy ratings before they can be bought or sold as well?

Subsidy: yep. I know. There's no money... That said, the last Autumn Statement did find £300m for district heating and about the same for public sector energy efficiency through Salix. There is money. Perhaps energy efficiency is not competitive - or just not fashionable - at the moment. Let's deploy subsidy sensibly - district heating is a strategically important technology that is hard to get going without subsidy. So is solid wall insulation. So is renewable heat. Let's give them a decent subsidy window, let it run for a while, and have a planned phase out period. And bear in mind that solar PV has had various subsidies for about 15 years and is about to be cost competitive...

Product standards: they just work. Behavioural folk call it "choice editing". Take the worst products out of the equation and encourage competition and innovation at the top of the chain. Who would have thought, a few years back, that we would have an A+++ rating on appliances? Let's keep pushing standards up...

Last but not least: we need to talk about energy efficiency. It needs to be everyday. It needs to be normal. Remember when you'd go into a town and spot the one PV installation? And now, you'll see dozens. Let's do the same for SWI and renewable heat.

Let's give people a clear vision of what their home of the future will look like. It's exciting! It has low running costs and is kind to the environment. It features helpful technologies along with clever passive design. Maybe it starts this year with a boiler upgrade, but next time, you'll replace that boiler with a heat pump. And when you re-render or re-plaster, you'll be using an insulating material. And when the triple glazing salesman comes knocking, that'll be another step on the road.

We as industry have to make more noise about what our homes will be like in the future. And, yes, we need Government to help us out here too. Tell us, Secretary of State and Ministers, that energy efficiency is important. Tell us that it's as important as Hinkley Point or fracking the South Downs. Give us the energy demand story as well as the energy supply one. Give us an integrated energy policy. Now that would be something....

Thoughts and insights welcome as ever, by email to liz.warren@se-2.co.uk or on Twitter to @se2limited. Thanks for reading!