Fiona Hall MEP

Sixth meeting of the Amsterdam Sustainable Energy Forum Energy efficiency and its role in relation to security of supply Thank you very much for inviting me to the Amsterdam Forum.I'm not going to do a power point or a strategic overview.Instead I'm going to go right down to the other end of the scale and simply share a few thoughts about what is stopping energy efficiency action on the ground. There is a paradox. On the one hand everyone agrees that energy efficiency is the best way to control CO2 emissions, improve security of supply and enhance competitiveness, not least in a world where oil is $130 a barrel rather than the $30 a barrel on which many calculations are still based. And yet on the other hand the actual extent of energy efficiency improvement on the ground is disappointingly small and slow. This implies that some significant barriers exist. Firstly, there are some institutional barriers.Last year I was the rapporteur for the European Parliament's report on the Action Plan on Energy Efficiency. In that report I was very critical of the Commission's failure to put in place sufficient personnel to implement and enforce energy efficiency legislation. The situation has improved significantly in the last 12 months but is still far from perfect. For example, the calendar for eco-design implementing measures is way behind what was announced in 2006. And I'm anxious about a certain lack of boldness and leadership from the wider Commission, a hesitancy in certain quarters about proposing measures which might be seen as radical or interventionist. It would be good to have reassurance from the very top. I'd like to hear President Barroso himself say that nothing less than a steep change in energy efficiency can deliver the Lisbon agenda let alone climate change targets and energy security. And I hope that the recast of the Energy Performance of Buildings Directive due this autumn will be as ambitious as the Parliament has requested. It would be better to delay the recast than have a half-hearted text which fails to make a step change in tackling energy efficiency in existing buildings. The Parliament's report on the Action Plan energy efficiency is also very critical of the failure of Member States to prioritise energy efficiency. Not only have three countries still not submitted a National Energy Efficiency Action Plan nearly a year past the deadline, but most of the ones that have been submitted are very unambitious, as the Commission's report in January made clear. One of the institutional barriers in Member States is the confusion about where energy efficiency belongs and who is responsible. Is it the Energy Minister? Or the environment minister? And who is responsible for implementation? Is it the central government or the regions? Or the minister in charge of local government? With this level of confusion it is no surprise that energy efficiency in many countries has not been a political priority - and therefore not given the budget either. It is easier to get approval for a billion pound nuclear power plant than for a modest budget line for energy saving. The difference of course is that you only need to convince about 10 people to get approval for a nuclear power station whereas actual on-the-ground implementation of energy efficiency is the sum total of small acts by millions of European citizens. Which brings me to some very humble practical barriers which get in the way. The first is a lack of information. Of course information campaigns exist. An EU-wide ‘savemorethanfuel’ campaign is being launched next week. My political group has just launched a climate change campaign full of energy efficiency messages, and there are many national campaigns. But such campaigns tend to be very basic - change your lightbulbs, unplug your phone charger. These campaigns have a role but they are nowhere near enough to deliver the percentage savings we are looking for - the 27% potential from households. There remains a distinct lack of genuinely clear, user-friendly information designed to make it as easy as possible for people to take some of the bigger energy-saving decisions. And the best information in the world is no good unless the process it describes is simple and reliable. An example is the Brussels Region scheme to encourage people to do things like install loft insulation or buy an A++ rated appliance. There has been plenty of information - leaflets have been sent to thousands of households with a detailed table of how much subsidy is available for each activity. But there is no helpline, when you get to the small print, there is no guarantee that you will already get a subsidy - it depends on whether there is any money left in the pot when you submit your receipts and application form. It's a Catch 22 - you can only risk applying for a subsidy if you can manage without one. Of course reducing the cost of energy efficient goods would be a help to tackle the financial barrier and I look forward to the possibility of reduced VAT rates in the review of the Energy Taxation Directive. But especially at the time of a credit crunch it is upfront funding which makes the difference, as the Parliament's report stressed. It doesn't matter how much money something is going to save you in the long run if you haven't got the money to buy it in the first place - and that is true for small businesses as well as for individuals. In my constituency of North East England, the North East Home Insulation Partnership has done some very interesting research. Some people benefit from free social schemes to help those most at risk from fuel poverty, but for people who have to pay for energy efficiency work the take-up is strongly affected by price. If a package of loft and cavity wall insulation is charged at cost, around £600, then the take-up rate is about 2%. But if people only have to pay around £100 then the take up rate rises to over 80%. The mission statement of the North East Home Insulation Partnership is to insulate every home in North East England, - about a million houses. This would by itself deliver a quarter of the UK’s CO2 savings. Unfortunately even with utility funding through the UK CERT scheme there is a budget shortfall of £54million. I confess to a certain frustration that this isn’t being met by the UK Government, who managed to find 1000 times that amount for Northern Rock – but this comes back to political will and priorities. However, we are not giving up. Proposals are being developed and I am hoping we can get in place a scheme whereby people pay an energy service company a fixed amount each month in return for an a package of energy saving measures plus payment of their energy bills. As well as the lack of information and upfront finance, there is a further factor which stops people embarking on energy efficiency measures even when such measures are clearly advantageous. I think it could best be described as the hassle factor. The hassle factor is the reason why even in the super liberalised UK one in four people have never changed their electricity supplier to save themselves money. I'm afraid it doesn’t matter how much, say, cavity wall insulation’s going to save money and save the planet, if you personally are going through birth … death … marriage … divorce … illness … unemployment … overwork – Then you don’t want to hear about cavity wall insulation anymore than you want to listen to politicians like me on your doorstep. So unless we overcome the hassle factor, energy efficiency campaigns are destined to have only limited success. There are a limited number of options- good old roll-out, in other words everyone shall get insulation like they get measles vaccinations. But that’s not popular with some governments, as I just said- Then there’s marketing. After all, the best brains in advertising have a very good track record at persuading hassled consumers that they need something - and then making it easy for them to buy it. But good marketing is very expensive.- Or there can be management of the marketplace. Just as Mr Ford said you could have a car in any colour you want as long as it was black, so you can have any appliance you want as long as it is A++ with one watt standby. Shaping the market has huge potential. It has to be a community measure and the forthcoming eco-design measures are therefore particularly welcome. I just wish we could have more of them, and more quickly. The likelihood is that to overcome behavioural and psychological barriers, we will need all three approaches: roll out, promotion, and a severe restriction of products on the market. There remains a great deal more that could be said about barriersIn particular in relation to the financial barriers that can inhibit businesses, especially small businesses. Nor have I said anything about the landlord/tenant split which bedevils attempts to improve the efficiency of private rented accommodation. But I believe that the biggest challenge of all is to change the mindset of individual citizens. If we can overcome those barriers then we will finally start to realise energy efficiency’s potential.

Energy and Security