It is great to be here with you today. I would like to thank Lord Redesdale and the Energy Managers’ Association for giving me this opportunity to address you.
Since taking up my role in May, I have been impressed with the drive, ambition and innovation shown by those working in the United Kingdom’s energy efficiency sector.
The United Kingdom has made significant progress in cutting out unnecessary energy waste and reducing demand. Many of you in the room today have been the catalyst for that progress. Whether it is promoting the benefits of energy efficiency in the organisations you work in and driving forward action, or promoting it to businesses more widely.
We know that there are many organisations which are leading by action when it comes to driving forward developments in energy efficiency.
This is something that Amber Rudd, the Secretary of State, and I, are keen to help celebrate and promote.
That is why the Department of Energy and Climate Change has partnered with the Energy Managers’ Association to sponsor one of today’s award categories. Events like this are a great opportunity for British businesses to demonstrate how they are using energy efficiency measures to drive a positive commercial impact.
I want to cover three things today:
- The overall benefits of business energy efficiency to companies and to the economy;
- Some of the things that the Government has been doing to help improve energy efficiency;
- How we will help businesses to play their part.
But before I go any further, I would like to note how pleased I was to learn that earlier this afternoon the Energy Managers’ Association launched the Empowering Women in Energy Management and Environment group. The Group aims to encourage and enable more women to take up careers in energy management and other environmental professions.
Speaking as someone who is particularly keen to see greater gender diversity at all levels in the workforce - and who has attended far too many senior meetings at which women were noticeably under-represented - initiatives such as this are very good news indeed.
I am sure that I don’t need to convince anyone in this room of the commercial benefits of efficient energy management. However, I would like to set out the reasons why we in government view it as a priority and why we believe that all sectors of the economy should too.
The benefits of energy efficiency and intelligent energy management as tools for reducing avoidable waste are often overlooked. Yet they not only make sound business sense for individual organisations; they are also central to building a thriving, low carbon economy.
By reducing energy use:
we can cut the cost of energy bills, with knock-on reductions though-out the supply chain and for consumers;
we can stimulate growth and improve productivity by reducing overheads and freeing up resources for businesses to redeploy on research and development and on job creation;
we can drive innovation to give Britain’s terrific low-energy industry a massive competitive advantage;
we can enhance the security of the energy supply by cutting waste and reducing demand;
and we can reduce greenhouse gas emissions cost-effectively.
That is why the Government has put energy efficiency and demand management at the heart of energy and climate policy.
We are in good company - some of our most energy intensive industries and well-known businesses have already grasped the opportunities energy efficiency offers as a way to reduce emissions and cut overheads:
Since 1995, the automotive sector has reported a 55% improvement in energy use per vehicle, helping to create a reduction in absolute emissions of some 40% from the sector, saving nearly one million tonnes of carbon dioxide per annum;
Energy efficiency improvements and modernisation have helped the pulp and paper industry to report reduced carbon dioxide emissions of over 50% since 1990, with no decrease in production;
Marks and Spencer has reported it has improved the energy efficiency of its stores by over a third over the past eight years;
British Telecom has also reported a 44% reduction in operating emissions and a 15% reduction in supply chain emissions, since 2011; having a clear emissions reduction plan has helped them reduce their operating costs by 14%.
And smaller organisations are benefitting too. The Chinese Contemporary Arts Centre, in Manchester, is saving £4,363 and 17.6 tonnes of carbon dioxide a year, and all they had to do was install a £100 timer to their existing heating system.
The global investment community has also been waking up to the opportunities and benefits; worldwide energy efficiency investment in buildings is projected to increase to over $125 billion by 2020. The United Kingdom is well placed to take advantage of the opportunities presented by this.
Today there are over 90,000 jobs in the United Kingdom’s multi-billion pound energy efficiency sector and we’re recognised globally as a leader on energy efficiency.
It’s not surprising that we’re regarded in this way:
Our energy consumption has fallen in nine of the last ten years, delivering real benefits for consumers, both household and business.
Alongside improving living standards, Government policies have driven a reduction of nearly 20% in household energy consumption since 2004, one of the largest in the European Union.
And overall, United Kingdom energy intensity has fallen by 24% since 2004, more than most comparable economies in the European Union.
The Government has had a lot to do to ensure that the necessary investment in low carbon generation infrastructure will be put in place.
But generation is only one aspect of the energy question. The other is demand management.
And we have a good story to tell here as well.
We project our energy efficiency policies will reduce final energy demand by 145 terawatt-hours and net imports by around 20% in 2020.
This level of demand reduction is helping secure our energy future and ensuring we only invest in the new low carbon generation infrastructure which we need.
This is something we should all be proud of.
It’s the dedication and expertise of many of you here today, and your peers, that is helping drive these impressive results.
Despite this good progress, though, there is more to do if we are going to meet the United Kingdom’s climate change targets, manage risks around security of supply and maintain our competitive advantage.
Business has a fundamental role to play in helping to achieve these goals and we intend to help it play its part.
This is why we want to put the right policies in place to support and encourage businesses to continue to improve energy efficiency and reduce emissions; policies which are practical, evidence based and developed in consultation with those they will affect.
For example, Government is working with the most energy intensive industries, such as the iron and steel, glass and chemical sectors, to put in place 2050 Action Plans by the end of next year with the aim of improving energy efficiency and reducing emissions while maintaining competitiveness.
The Government also recognises that the current tax and reporting framework for business energy efficiency is
complex; that regulation on large business can be administratively burdensome and that there is a gap in support for Small to Medium Enterprises.
We believe that we can improve this framework by streamlining processes and improving incentives to reduce energy consumption. This is why we have recently been consulting on reforms to the business energy efficiency landscape; to ensure that what we are doing - and what we are asking business to do – allows companies to switch their focus from struggling with red tape to saving money and carbon.
We will continue to consult and to work with the business community - and with organisations such as the Energy Managers Association - to ensure that the Government’s energy efficiency policy delivers effective results for businesses and for the economy as well as for the planet.
It’s been a pleasure to be here this afternoon with you all.
The energy efficiency and smart energy management agenda is one that Amber Rudd and I are both passionate about.
Together the Government, the wider public sector, businesses and householders are making significant progress as we change the way we think about and consume energy.
You, as individual energy managers in your organisations, and also collectively via your association, are playing a major part in helping to drive forward this progress.
I want to thank you for that – and urge you to keep up that vital work, because there is still much to do.
Let me just end by saying this: the benefits of greater energy efficiency are huge. They are far too huge to be ignored. I am proud that in the global race for green growth, it’s the United Kingdom’s record on energy efficiency that is ensuring we’re well placed to compete in the years ahead.