Two steps forward, one step back…

So how did 2011 stack up in the world of energy policy?

On Thursday this week we are running an event on Energy Policy 2012, in Bristol. So I thought I’d cast my mind back over the last 12 months to see how far we’ve come. We’ve got a long way to travel to a low carbon economy and we’re running out of time to break our carbon addiction.

• Way back in April the Chancellor announced a Carbon Budget, committing the UK to a 50% reduction in CO2 emissions by 2025. This ambition was tempered by including a review in 2014 if this is considered to be damaging economic growth.
• An even more surprising announcement within the budget was the redefining of zero carbon homes. All homes built from 2016 will still be ‘zero carbon’ but this now excludes all of the white goods and appliances that we plug in, which are an ever-greater concern.
• The Energy Bill passed into law in September, paving the way for reform of the energy market, the roll out of smart meters and the Green Deal, to be launched in 2012. Despite broad support, coordinated by the UK Green Building Council, the government decided against making Display Energy Certificates mandatory for non-domestic buildings.
• The Green Investment Bank inched closer to being born, aiming to facilitate investment in new green and low-carbon technology. The debate continues about what will count as ‘green’ and whether or not the bank will have lending powers, or a pot of cash that is big enough to make a difference?
• The Autumn saw the eventual release of the first league table for the CRCEES (Carbon Reduction Commitment Energy Efficiency Scheme), and the (delayed) launch of the Renewable Heat Incentive - which has the potential to address the huge energy demand we have for warm spaces and hot water.

But the headline grabber of the year was the treasury taking an axe to the Feed In Tariffs (FIT), not just once but twice. Few would argue that the tariff rates needed to be reduced, as they had given perverse incentives and led to a dash for installations for those with capital, but halving the rates almost overnight has led to a legal challenge and left many companies and homeowners in limbo or worse. Another impact has been the quashing of entrepreneurial activity that focused on innovating and developing new business models and services - a part of the debate that seems to have been sidelined.

The real risk is that all of the political actions and activity do not provide certainty and stability for anyone. And let’s be clear: in these austere times investor confidence and long-term thinking by homeowners and businesses will be an essential element in transforming our energy system.

This is certainly not an exhaustive review and doesn’t begin to consider the wider European and global negotiations. On balance I think we’ve seen some great work, alongside some tragic blunders and missed opportunities. It feels to me like we have taken two steps forward and one back, with the door ajar for further back-sliding.

However, policy is just the starting point. Success should be judged on delivery and how the government use the myriad of levers available over the coming months and years.

Following a year of announcements the big question remains for all of us ‘what does it actually mean?’. I look forward to the debate next week and to a positive and energised 2012.

Ben Ross works within the energy system team at Forum. Contact Ben on b.ross@forumforthefuture.org

Find out more about our work in the Energy system here.

Simon Roberts (Chief Exec of CSE), Merlin Hyman (Chief Exec of Regen SW) and Forum’s own Chief Exec, Peter Madden, will discuss the political and policy landscape and implications for business at an event for the West of England Carbon Challenge. Just this week the network has reached the 100 member mark, representing 20% of the local workforce and half a million tonnes of carbon emitted annually. The ‘Challenge’ is a collective 10% reduction in emissions over four years. For more information on the West of England Carbon Challenge contact Simon Billing on s.billing@forumforthefuture.org