UK Low Carbon Transition Plan – will it be enough?

The UK Government published its new energy white paper on 15th July.  The UK Low Carbon Transition Plan provides the first significant insight into how the Government intends to meet the binding targets set out in the Climate Change Act 2008 (a 34% cut in emissions on 1990 levels by 2020, and 80% by 2050).

The Transition Plan states that, by 2050, emissions from homes need to be close to zero.  At present, domestic space and water heating requirements account for one eighth of the UK’s greenhouse gas emissions, which the Transition Plan aims to cut by 30%.  Around 10% of these savings will be delivered through measures such as microgeneration, smart meters and the requirement for all new homes built from 2016 onwards to be zero carbon.  The other 20% will be delivered by an energy efficiency package mostly comprising existing policies and previously announced proposals, such as the extension of CERT to the end of 2012 and the increase in the Warm Front grant maxima.  (The Government has now committed to publishing a consultation on the extension of CERT by the end of 2009.)  This combined package of measures will see whole house makeovers provided to 400,000 homes per annum by 2015, rising to 1.8 million homes per annum by 2020.

Two mechanisms are proposed to help people meet the cost of this transformation.  The first involves the introduction of a clean energy cash-back to allow people to be paid if they use low carbon sources to generate heat or electricity.  (A household with solar panels could, for example, earn around £800 a year in addition to saving £140 on fuel bills.)

The second involves piloting ‘pay as you save’ ways to help people make their whole house greener – the savings made on energy bills will be used to repay the up-front costs.  The Government plans to spend £4 million on these pilots. 

Incentivising investment in household energy efficiency measures, smart metering and 'pay as you save' schemes should help to engender a keener understanding of the economic as well as the environmental advantages of this energy use shift.  These are sensible and welcome policies.  However, there remains a disappointing lack of clarity on how the ‘pay as you save’ scheme will be rolled out fast enough to the UK’s 26 million homes.  If the Government is serious about meeting its carbon targets, PAYS will need to be rolled out very rapidly; trials and consultations risk delays and a consequential failing to meet emissions targets. Indeed, clarity on the entre package is not pervasive.

The Low Carbon Transition Plan can be accessed here.