The Fifth Edge Debate: 22nd April 1998

Carrot or the Stick?

Lord Ezra, Chairman, Dalkia plc

The Government have given an undertaking to reduce CO2 emissions by 20% by the year 2010 and are now examining ways of achieving this. If it is to be done in the time, urgent and widespread action is required.

I speak ass someone who has been actively involved in the energy scene since 1947.

During that half century I have only witnessed two periods when energy saving was taken seriously: the first was in the immediate aftermath of the last war and the second was in the 1970s, during the Middle East oil crisis. Apart from those two periods there has been little concerted effort to make better use of energy and reduce emissions.

We are no in a situation in which most people accept that there is a risk of climate change but the ready availability and relatively low cost of energy counteract the need to take action.

If the Government's objective is to be achieved in these unpropitious circumstances, a combination of legislation and other stimuli will be required.

In the matter of legislation, the Government have already indicated in the recently published Green Paper entitled "Modernising the Framework for Utility Regulation" that they would be prepared to legislate to bring about greater energy efficiency within the electricity and gas sectors. Further ways of doing this could be by extending what is known as the Non-Fossil Fuel Obligation which provides a financial incentive to develop ways of generating electricity from non-fossil fuels. This could usefully be complemented by stimulating new ways in which fossil fuels can be used more effectively and with reduced emissions. I recently introduced a Private Members' Bill to this effect in the House of Lords.

In addition, there is currently going through the House of Commons another Private Members' Bill, introduced by Mr John Burnett, to require mortgage lenders to carry out an energy audit of the houses on which they advance mortgages and establish energy ratings with advice to borrowers as to how they might improve their energy efficiency. Countries like Denmark and Holland have established energy ratings on properties by law and their ratings are reviewed periodically with a view to upgrading. This procedure has substantially improved the level of energy efficiency in homes.

Legislation can only set the scene. There also need to be voluntary initiatives. I am Chairman of the Energy & Technical Services Group. This is a company which promotes energy management in general and CHP/district heating schemes in particular. We often work with others in these projects. I am also Chairman of Sheffield Heat & Power which distributes heat from the City incinerator in the form of hot water through a network which provides an energy service to buildings such as hospitals, universities, public institutions, and commercial and industrial premises. A substantial amount of emissions from individual boiler plants are avoided as a result.

In Nottingham we have formed the Nottingham Energy Partnership with the City Council to achieve within the precincts of the City a comparable level of savings in the form of greater energy efficiency and reduced emissions, with the targets set by the Government for the country as a whole. The initial step has been to carry out a survey of all the energy consumed in the area sub-divided by sectors such as housing, transport, commercial and industrial. Task forced have been set up in each sector to establish the prospects for further savings and a Register of Energy Savings is being established where organisations and individuals will be encouraged to have registered savings already made and further savings proposed. The Register will be updated annually.

Professional bodies have an important role to play in all this. I have an honorary connection with both the Institution of Civil Engineers, in whose premises we are meeting, and with CIBSE, who is one of the organisers of this conference. I know that together with other professional bodies they devote a great deal of time and effort to the issue of energy saving. This potential needs to be further developed and brought together within an effective legislative framework.