Following confirmation of new £3bn plan, local government leaders team up with Siemens to argue that government should bring forward £5bn of promised long term energy efficiency spending
The government may have last week announced plans to spend £3bn over the next year to boost the efficiency of homes and public buildings, but Ministers are today facing fresh calls for them to deliver a more ambitious energy efficiency programme.
The UK100 network of Mayors and local government leaders has teamed up with engineering giant Siemens UK to call on the government to invest £5bn in support of the Conservative manifesto pledge to boost energy efficiency across the UK.
A new report sponsored by the Department for Business, Energy, and Industrial Strategy (BEIS), will argue that £5bn of development funding could unlock £100bn of schemes, including £40bn of energy efficiency focused investment.
It also proposes that the government should introduce a dedicated Net Zero Development Bank to finance energy efficiency schemes and bring an end to the duplication that currently sees BEIS operate 21 different grants.
The report predicts the proposed package of measures could create over 300,000 jobs, help to "level up" all parts of the country, and deliver on the government's stated goal to "build back better and greener" from the coronavirus crisis.
"If ministers are to meet their manifesto promise on energy efficiency in our homes, which are some of the leakiest in Europe, they need to kick-start a renewable revolution," said Polly Billington, director of UK100. "This would help hard-pressed consumers save on their fuel bills, support hundreds of thousands of jobs and protect the environment. £5bn now would unlock £100bn to rescue the UK economy and deliver on the Prime Minister's ambitions of levelling up and meeting Net Zero. The Chancellor's statement, while welcome, should have had far more front-loaded investment."
Chancellor Rishi Sunak last week announced plans for a new one year £3bn energy efficiency programme, including £1bn to upgrade schools and hospitals and £2bn to fund a voucher scheme to help households cover up to £5,000 of the cost of improvements, with fuel poor households eligible for grants worth up to £10,000.
The move was welcomed by green groups, but they also warned that without further clarity on how the government plans to drive longer term energy efficiency improvements the UK will remain off track to meet with its emissions goals.
The Conservative manifesto pledged to invest £9.2bn in improving domestic energy efficiency, but it remains unclear precisely how and when the full promised funding package will be delivered.
The new study from UK100 and Siemens UK argues the government needs to take a co-ordinated approach that delivers large scale building upgrades, clean heat technologies, and local renewables and electric vehicle projects.
"There is an urgent need to scale up local, sustainable, energy if the UK is to have any chance of meeting Net Zero by 2050," said Carl Ennis, UK CEO at Siemens. "This requires a collective national effort with government, business and the public all playing our part. Local energy should be at the heart of the National Infrastructure Strategy creating a more consistent policy landscape that will give investors the confidence to invest earlier."
The group argues that such programmes could be backed through the establishment of a Net Zero Development Bank, which would bring together all government financing for supporting the transition to net zero emissions and kick-start local energy schemes that are at too early a stage to be attractive to private finance. The Bank would provide a single gateway to government support and replace lost funding from the EU within a more stable regulatory regime, the report suggests.
The report is the culmination of an 18 month programme of five workshops held across England, alongside expert interviews with over 320 experts from local authorities, business, academia, NGOs, and local economic partnerships (LEPs) to discuss the barriers and opportunities associated with green financing. The report will be presented at a meeting energy and clean growth minister Kwasi Kwarteng on Monday.
"Decarbonising our energy network is the sort of grand challenge that is central to tackling the climate emergency and making sure we meet our national, regional and local net zero targets," said Tim Bowles, the Conservative Mayor of the West of England. "In the post- Covid-19 recovery and renewal of our economy, there is a real opportunity to make substantial progress towards marking this goal a reality."
The report analysed the progress of the five regional energy hubs, set up by the government in 2018, which currently have a pipeline of 183 projects valued at £850m. But it found that 90 per cent of these projects were still at an early stage of development and most of the projects are also relatively small scale, at below £5m.
Siemens and UK100 detail how the potential pipeline could be increased by more than 100 times from £850m to £100bn, through £40bn for energy saving and efficiency in homes and businesses; £10bn for renewables such as solar, wind and biomass; £30bn for low carbon heating such as district heating networks; £10bn for smart energy systems; and £10bn for low emissions transport such as electric and hydrogen vehicles.
It adds that such a decade long investment programme could create nearly 320,000 jobs in the local energy sector, including over 220,000 in energy efficiency alone.
The report comes on the same day as a separate study from a group of NGOs and business leaders in Scotland today set out an eight point plan to deliver a green recovery in the country.
The Climate Emergency Response Group, which brings together a host of leading Scottish businesses, trade bodies, and civil society groups, sets out a series of practical recommendations designed to strengthen climate action while creating new jobs and economic opportunities.
Specifically, the report identifies four priority areas for the Scottish government: a buildings retrofit programme; a rural jobs creation programme; a new wave of green enterprise support; and a city and town infrastructure transformation programme.
It adds that these initiatives should be accompanied by four "cross-cutting strategies" to deliver greater policy certainty to unlock private investment in green infrastructure; the introduction of a green scrappage scheme; a new green future skills programme; and an expanded capital investment stimulus programme.
"A decade ago, governments around the world responded to the financial crisis with business as usual with only 16 per cent of the UK stimulus going to clean measures," said Fabrice Leveque, head of policy at WWF Scotland. "We're still reaping the consequences. We need to learn the lessons of the past and build back a better, greener and fairer economy that is resilient to the climate emergency accelerating before our eyes. A wealth of evidence shows that steps to make our economy lower carbon can secure jobs and bring other benefits like cleaner air, warmer homes and better health."