The Department for Business, Energy and Industrial Strategy (BEIS) has published an evaluation of its Electricity Demand Reduction (EDR) pilot and a new call for evidence on facilitating energy efficiency in the electricity system. The 2014-2018 EDR pilot was a mechanism designed to test the viability of energy efficiency programmes in the UK Capacity Market (CM). The CM ensures sufficient reliable capacity is available by providing payments to encourage investment in new capacity or for existing capacity to remain open. BEIS’s ambition was for EDR strategies to be incorporated into the capacity market so that emissions reductions are achieved through both supply and demand-side approaches. However, the main challenge EDR strategies have faced is that there is not yet a way to effectively value them for markets or network operators. Appropriate valuation is key to their integration with market-based mechanisms like the CM. The pilot also placed an excessive administrative burden on its participants. BEIS concluded in July that it was unsuitable for scaling up and launched its new call for evidence on market-based energy efficiency measures.
Reducing energy demand is central to the UK’s emissions targets. It could save up to 40 TWh/year in industrial and commercial buildings and 10 TWh/year in industrial processes. Savings are not only found in technological solutions like those funded by the EDR. Behaviour change is a key aspect of increasing energy efficiency and reducing demand. It could contribute half of the UK’s progress towards its 2030 energy targets. However, in Phase 1 of the Energy Savings Opportunity Scheme (ESOS), a programme to increase energy efficiency in businesses, the indication is that few reports identified behaviour change as an opportunity. Behaviour change tends to cost less to implement, leading to faster payback periods. Success is assessed on avoided cost basis, requiring baseline assessments of energy use. The International Performance Measurement and Verification Protocol (IPMVP) framework is designed to measure the success of energy demand reduction programmes. Organisations like the Energy Services and Technology Association (ESTA) provide guidance for implementing behaviour change and lobby for its introduction into national energy policymaking.
