Government sets out plans for energy efficiency incentives

Companies and homeowners could be paid for adopting energy efficient technologies under new government plans to reduce the nation’s energy demand.

Alongside today’s Energy Bill, Energy Secretary Ed Davey launched a government consultation on proposals to promote energy efficiency and reduce the need for expensive investment in new electricity generation capacity.

Among the proposals is a financial incentive scheme that would pay companies for ever kilowatt hour of electricity saved through energy saving measures. A supermarket chain, for example, could qualify for the incentive by introducing more efficient refrigerators across its stores.

The consultation also sets out proposals for a targeted incentive scheme designed to pay businesses and homeowners for installing specific energy efficient technologies such as lighting, heating or ventilation in their homes or offices.

According to analysis published alongside the proposals by consultancy McKinsey, the UK has the potential to save 92TWh of electricity by 2030, some 26% of total projected demand. A saving of 10TWh is equivalent to the electricity generated by a power station in a year.

The Department for Energy and Climate Change said a 10% reduction in electricity demand could produce savings of around £4 billion in 2030 and also cut 4.5 megatonnes of carbon.

Energy Minister Greg Barker said: “Cutting the amount of electricity we use not only saves money on bills and reduces the need for new generation capacity, it makes good business sense too.

“We have schemes already in place but there are more avenues to be explored and that’s what these ambitious proposals, a first for the UK, are designed to do.”

Tom Pakenham chairman of Green Tomato Energy said: “A focus on reducing demand can not only make an immediate impact on carbon emissions, but can also create an environment in which expertise in this area can grow.

“Measures need to be implemented quickly, but with the necessary rigour to ensure that the integrity of building stock is not sacrificed for fast results to boost statistics.”