Press Release – Green Energy: AECB Demands Value for Money

The AECB, the Association for Environment Conscious Building, calls on the government to stop wasting  billions of pounds of consumer’s  and taxpayer’s money on a ‘green energy’ strategy that delivers neither value for money nor energy security. Instead it should focus on the cheap and even free green alternatives that are being ignored or sidelined.

AECB challenges the government and the energy industry to show the value for money behind the ‘electricity generation first’ vision for a low-carbon future, and to assess other options on a level playing field.

While AECB has long maintained that renewable generation should be central to providing the essential electricity a modern economy requires, electricity is expensive, and should not be squandered. The Association wants to see every green technology supported on its merits – yet says the Association, some approaches are unfairly disadvantaged.

On the government’s own admission, AECB points out, properly insulating buildings saves ten times more greenhouse gas emissions per £ spent than the current Feed-in Tariff (FiT) for renewable electricity – and will still offer five times the abatement per £, even if the tariff is cut as predicted[1].

Research by the AECB for a forthcoming report[2] also indicates that:

  • Insulating UK buildings – the worst-constructed in central or northern Europe – offers the same carbon and energy benefit as building offshore wind turbines, and at around a fifth the cost.
  • Nationwide energy efficiency drives; e.g., upgrading lighting systems, could abate climate change at a profit. Only changes to utility regulation are needed to make it happen. The technology is already there.
  • Energy consumers are being told to finance a vast increase in electricity generation and transmission, but if demand was cut few of these new power stations would be needed. An energy-efficient future could cut consumers’ electricity bills, not raise them.
  • An “all-electric future” as currently proposed risks having too little energy storage to buffer the ups and downs of renewable energy supply and demand, posing increased risks that we cannot “keep the lights on”.

As AECB’s chief executive Andrew Simmonds explains: “The AECB absolutely backs the government’s ambition to cut 80% of emissions by 2050. Indeed, we would like to see emissions cuts go further. What worries us is that the strategy options on offer from the government appear neither practical nor secure, and do not offer the cheapest way to get to where we need to be by 2050. In a time of swingeing austerity, that is extraordinary.”

Notes to Editors

Government Policy
Government strategy is to decarbonise electricity supply, and switch heating and transport from gas and oil to electricity. Total electricity consumption could double or even treble by 2050.[3] This needs a large increase in electricity generation capacity, perhaps five-fold; a massive switch to low-carbon sources and large investment in the National Grid including new, larger pylons. The investment is to be funded by energy customers and by taxpayer subsidies, for example through the Renewables Obligation, the Renewable Heat Incentive (RHI) and the Feed-in Tariff (FiT).
Government ambitions for energy efficiency improvements and demand reduction are modest. Yet on DECC’s figures, FiT (at 2011 rates) delivers carbon savings at a cost of £460 per tonne CO2, while installing solid wall insulation (SWI) on private houses delivers carbon savings for £30 to £40 per tonne [4]. AECB’s own calculations show SWI could be even better value than this, with a carbon abatement cost close to zero, especially on off-gas grid houses.
Between now and 2020 the energy companies are expected to invest £200 billion  on new generation and transmission [5], paid for through energy bills. The government plans to spend £36 billion of public funds on the RHI by 2020. Yet in the same period it may spend only £15-20 billion on the Energy Company Obligation supporting solid wall insulation[6].
Level Playing Field
AECB asks “Why is the government in effect tilting the playing field away from value-for-money by spending the most money on the least cost-effective measures?” The AECB argues that a level playing field would remove these glaring anomalies. Investing to reduce consumption by measures that cost less than new energy supply reduces consumers’ bills and puts more money in their pockets, helping the economic situation.
As Andrew Simmonds stresses: “Savings of £ billions are in effect being thrown away on our behalf in the pursuit of an expensive all-electric strategy. Not only is energy efficiency more cost-effective, it often improves comfort, and reduces the fuel poverty which is a blight on our society. The energy efficiency resource is equivalent to discovering a series of new giant oil and gas fields – in some cases, gas and oil that could extract itself for free!  Yet while oil companies struggle with the rising cost of new offshore oil, and warn privately of peak oil, the UK government fails to prioritise the need to massively improve energy efficiency.”
One of the AECB’s energy advisors, David Olivier, points out that in parts of the world, energy companies are enabled to profit from installing energy-efficient technology. “In the UK since deregulation in 1999, a reduction in energy use reduces energy company profits, even if it benefits the UK as a whole. In places like California, private energy companies are rewarded for investing in energy savings where this is cheaper than increased supply. It is a matter of re-regulating companies so that their financial interests are aligned with those of their customers, and requiring them to do integrated resource planning. Because this is cheaper to consumers, everyone benefits”.
Network Stability
AECB agrees that the energy we will continue to need after fossil fuels should come from renewable sources, but maintains that the government’s emphasis on electricity at the expense of renewable fuels and heat, poses storage, stability and economic problems. Wind and solar electricity are variable. Electricity itself is too costly to store in more than small amounts. Increasing electric heating via promotion and subsidy of heat pumps risks creating ‘spikes’ in demand at just the time – bitter winter weather – when the whole of Europe lacks sun and has little wind.
We should not just be looking at the emissions of a particular energy source, argues the AECB, we should be taking a holistic view and – crucially – be looking at energy storage and security of supply. This is where energy efficiency comes into its own. Not only is it often cheaper than alternatives, it contributes on every single day of the year. After efficiency, we should be looking to energy supply systems that are not only affordable and low-carbon, but reliable, flexible and storable.
For example, low-carbon heat could be harnessed from: industrial waste heat; fields of solar collectors; geothermal wells; CHP plant running on renewable fuels (or gas in the near term); or heat pumps running on excess wind electricity. Heat can be stored in large quantities for long periods and piped to urban homes. Piped heat is common in many developed countries. In Denmark, 60-65% of detached houses are heated this way.
All options should have equal access to investment capital, so that we can pursue the best buys first. With the challenge of climate change, and the scarcity of finance, AECB calls on the government to assess options on the basis of value for money to UK PLC, given empirical mature market costs.
Andrew Simmonds insists. “We must get value for money in terms of reducing our emissions and value for money in terms of providing a stable, secure supply of the energy services which we need. The playing field is clearly tilted, so the government should be levelling it. In such straitened times, we cannot afford anything but the best value for our money.”


[2]  Less is More: Energy Security After Oil. AECB, in press (2011).

[3] ( See ‘Dangers and unintended consequences of siloed renewable energy and energy efficiency policy making: Evidence from the UK’)


[6] Details of the proposed new Energy Company Obligation and Green Deal are expected to be published imminently by the  DECC (Department for Energy and Climate Change) for consultation.