EEF Comments on Government Energy Efficiency Strategy

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The publication today of the Energy Efficiency Strategy by the Government Energy Efficiency Deployment Office (EEDO) of course is welcome. However, after taking a look at it, the word ‘Strategy' doesn't spring to mind.

The EEDO publication reads more like, an office within DECC, in listening mode, following its call for evidence earlier in the year.

Energy efficiency is of course extremely important for many part of the economy. Indeed, we in the manufacturing sector know this all too well. An EEF member told me last week that the first energy efficiency workshop he attended was in Q2 in 1979. For manufacturing, particularly energy intensive manufacturing, energy efficiency has been on the agenda since the first fuel shock, way back then.

We must be careful here though in an assessment of the opportunities and barriers to greater efficiencies in energy usage. Firstly, let us not forget that industry, business and commercial sectors are not the same, interchangeable or comparable. All three sectors have their own challenges to face, whether that is global competition, the availability of abatement opportunities or the fierce competition for finance within the company.

If government really wants to make a difference in this area, it needs to think more broadly about the business environment in which businesses operate. Arguably, issues like access to finance and tax incentives for investment in state-of-the-art machinery are just as important as energy efficiency schemes that have had mixed success over the years. There is arguably both a big economic and environmental dividend in encouraging manufacturers to invest in the latest industrial machinery. And tax incentives are a well-established and well-understood measure compared to bespoke, complex, new energy efficiency schemes.

Having said that there is a difference within ‘business' sectors, this is nothing compared to the non-comparability between residential and business sectors. The former being a sector where the significant gains from energy efficiency have not yet even begun to be realised. Here, there is a massive opportunity just waiting to be seized and delivered. EEDO has a significant, exciting and rewarding task ahead to crack this age old nut.

We also must remember that energy efficiency improvements are not the same as demand side reductions in absolute terms. A company that becomes more efficient in its use of energy becomes more competitive and is therefore able to invest and grow. Therefore making more with less, but perhaps even using more total energy. This is something that we here in the UK should embrace, that if we can make something more efficient here in the UK, than elsewhere in the World, then we should.

Author

Director of UK Steel

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