Briefing on the EU and Fuel Poverty

Here is an overview of EU legislation that impacts on fuel poverty in Scotland.

Energy Efficiency Directive

The Climate and Energy Package , introduced in 2007, was also known as the 20-20-20 targets (20% improvement in the EU’s energy efficiency, 20% reduction in EU greenhouse gas emissions from 1990 levels and raising the share of EU energy consumption produced from renewables to 20% and all by 2020). As part of this, the Energy Efficiency Directive (EED) sets rules and obligations to help the EU reach this target, such as national energy efficiency action plans, national building renovation strategies and energy efficiency obligation schemes.

The UK has its own National Energy Efficiency Action Plan, created in 2014, which details the measures taken to meet the EED. [1]

To implement the EED, the UK needed to use existing obligation programmes such as the Energy Company Obligation (ECO) as well as ‘alternative policy measures’. An example of these other policy measures is the UK’s building regulations; energy standards in Scotland’s building regulations were updated in October 2015. Also contributing towards these measures is the Home Energy Efficiency Programmes for Scotland (HEEPS) and social sector regulations, such as Energy Efficiency Standard for Social Housing (EESSH).

In order to meet the EED, the UK had to look at the ways it was producing, distributing and consuming heat. An example of legislation introduced, directly relating to the EED, is the Heat Network (Metering and Billing) Regulations 2014 as a result of Article 9 of the EED which aims to regulate heat networks.

Heat policy is devolved, and so the Scottish Government’s Heat Policy Statement was published in June 2015. The Heat Policy Statement sets out its goals for reducing the need for heat by having better insulated buildings, by having a more efficient supply of heating with more emphasis on district heating and the use of excess heat through heat recovery and increased use of renewables. An example of this in practice could be Aberdeen City Council’s Combined Heat and Power scheme where tenants of tower blocks who were suffering fuel poverty in under heated homes benefited from the excess heat produced by the generation of the energy which was then captured and used to heat homes instead of going to waste.

“It was estimated that energy ratings could be substantially improved, CO 2 emissions reduced by 40% and most importantly, the tenants could have warm homes for approximately half of the previous cost.” [2]

Energy Performance of Buildings Directive

The Energy Performance of Buildings Directive (EPBD) aims to make old and new buildings more energy efficient in order to help the EU meet its energy and climate goals.

Some examples are: Energy Performance Certificates (EPCs) included in sale adverts for buildings, nearly zero-energy buildings by 2020, and national financial measures to improve the energy efficiency of buildings.

EPCs are a key part of the EPBD. They contain information about the energy use and the typical energy costs on a scale from A to G. The EPC also contains recommendations on measures to improve the energy efficiency of the property. They must be made available whenever the property is built, rented out or sold.

There have been recent news articles about the UK Government scrapping its Zero Carbon Homes Target which was first announced by Gordon Brown in 2006, then Chancellor, as part of an ambitious scheme to tackle climate change. Last month, the House of Lords tried to overthrow the Government’s decision. However the EPBD will require all new buildings to be nZEB from 2020. This will mean a reduction in carbon emissions and having a renewable source of energy as the main energy source.

In Scotland, the previous Local Government Minister, Marco Biagi said: “We [Scottish Government] remain committed to all new buildings being nearly zero energy from 2019, in line with European Union (EU) requirements”[3].

The EU Third Internal Energy Package, also known as the Third Package, was brought out in 2009 to hasten the outcomes of the 20-20-20 targets. The Third Package is a legislative framework with the intention of opening up the gas and electricity markets in the EU. This led to a requirement on the member states to develop national plans to install smart meters. In addition, there was an amendment made to the EPBD to require all new buildings to have smart meters. The smart meter rollout is underway in GB. The UK Government’s estimate is that smart meters will save £26 on the average household energy bill in 2020, and this will rise to £43 by 2030.

Energy- related Products (ErP) Directive

The Energy-related Products (ErP) Directive is about energy savings through better design, which results in economic savings for end-users. This was brought into UK law in 2010. An energy-related product is “any good that has an impact on energy consumption during use which is placed on the market and/or put into service, and includes parts intended to be incorporated into energy-related products covered by this Directive.”

ErP is divided further into two subsets – ecodesign regulations and energy labelling regulations.

The Energy Labelling Directive (ELD) was reviewed in 2015 and the conclusion was that the ELD had been successful at increasing the energy efficiency of household appliances but that revision to the legislation was needed for the EU to continue to meet the same objectives in future.

Proposed regulation would come into effect in 2017 and would restore the original A to G energy label scale and remove the A+, A++ and the A+++ categories. New regulation on energy efficiency labelling would contribute towards the EU target of improving energy efficiency by 27% by 2030.

Ecodesign is concerned with the development of minimum energy performance standards for specified energy-related products and these standards ban the least energy efficient products from being produced or imported into the EU market.

MarketWatch estimates that the Ecodesign Directive alone could save Europe €90 billion a year by 2020 which works out at approximately €280 for every household in the UK (£216.63). They estimate that over €10 billion (£7.9 million) worth of energy savings are lost each year from manufacturers and retailers not following EU rules.

The European Commission has said that if households use only energy efficient products in their homes, they could save €465 annually by 2020 (£368). In the EU, more than 85% of consumers use the energy label when purchasing, this means savings of €55 billion a year (£43.5 million).[4]

The UK Government has estimated that by 2020, the annual net savings to the UK economy resulting from these standards and labels will be in excess of £850 million per year, with reductions in greenhouse gas emissions of more than 7 million tonnes per year.[5]

Energy efficiency requirements for televisions, domestic refrigerators, simple set-top boxes, external power supplies, office/street and domestic lighting, electric motors, washing machines and dishwashers are now in force.

At both the UK and Scotland level, work on energy efficiency was already underway when the EU Directives came out. However these Directives underpin the existing work and create new targets on energy efficiency for both the UK and Scotland to work towards.

Energy Consumer Rights and Protection

EU legislation contains general consumer rights; however there is a set of rights which EU citizens are entitled to as energy consumers, and which we might take for granted in this country.[6] For example, it states that we have a right to our homes having an electricity supply, that we should have a choice of energy supplier and that we can change that energy supplier. When entering into a contract with an energy supplier a person has a right to clear information and the right to withdraw from that contract, the right to get accurate information on energy consumed, and if they would like to learn how to be more energy efficient, then they have a right to information on how to use energy in a more effective way and benefits on renewable energy. Where someone is ‘vulnerable’ then they have the right to specific consumer protection measures. There is a right to an easy resolution of a complaint about an energy supplier. There should also be a national contact point for energy where information on these rights can be found. In the UK, the national contact point is Citizens’ Advice Consumer Service.

Going Forward - The Energy Union

The EU’s Energy Union strategy has energy efficiency as a major part. It emphasises that consumers must be at the heart of the Union for it to have an effect. The EU’s Energy Union Strategy has five dimensions: energy efficiency, security of supply, a fully-integrated energy market, reduction of carbon emissions and climate research. The idea is to consume less energy in order to curb emissions and reduce reliance on other countries.[7] Heating and cooling in buildings and industry accounts for half of the EU’s energy consumption, therefore the EU has developed a new Heating and Cooling Strategy as part of the Energy Union.

The EU Citizens Energy Forum aims to create and enhance energy efficient markets for consumers. Issues raised in the Forum around Vulnerable Consumers led to a working group being formed on that issue. A recent working paper highlighted a need for a common EU measurement for energy poverty as well as better information of the housing stock. In fact the Scottish House Condition Survey was held up as a role model for this type of fuel poverty measurement.

The European Anti-Poverty Network (EAPN) is a network of 31 national networks of voluntary organisations and grassroots anti-poverty groups and 18 European organisations and is the largest of its kind in Europe. It has been actively engaged in urging the EU institutions to tackle energy poverty as part of its work of lobbying for more effective policies against poverty and social exclusion. As a result of recent European Commission focus on energy poverty, EAPN is involved with the Vulnerable Consumers Working Group and is contributing to the review of the EED and EPBD this year.

June 2016

For further information on this briefing or on fuel poverty in Scotland, please contact Helen Melone, Research, Information and Project Officer, Energy Action Scotland at helen.melone@eas.org.uk or call 0141 226 3064.

 

 

[3] The EPBD recast Article 9 requires that “Member States shall ensure that by 31 December 2020 all new buildings are nearly zero-energy buildings; and after 31 December 2018, new buildings occupied and owned by public authorities are nearly zero-energy buildings”

[5] Estimated Impacts of Energy and Climate Change Policies on Energy Prices and Bills, DECC, 2014