Energy Efficiency Action Plan: formal review and annual report

1. Executive Summary

The Scottish Government published Conserve and Save: the Energy Efficiency Action Plan for Scotland ( EEAP) in October 2010 setting a 12% final energy consumption target across all sectors in 2020 against a baseline averaged over the years 2005 - 2007. This established a minimum level of ambition for all sectors. This target sits alongside and supports our greenhouse gas emissions reduction target.

We are on track to meet the 12% energy efficiency target. The latest energy trends data for 2010 showed a slight increase in consumption compared to 2009 due in part to the economic recovery from the previous year and a particularly cold winter. Consumption in 2010 was 1.2% higher than in 2009 but still 6.2% lower than the 2005-2007 baseline against which the energy efficiency target is measured.

Energy efficiency as part of a wider resource efficiency agenda has environmental, social and economic benefits. It reduces greenhouse gas emissions, assists households in fuel poverty and importantly in the face of rising energy costs and tight economic circumstances supports individuals, public sector organisations and business to save money. The global economic downturn only strengthens the need for our businesses, particularly our small and mediums sized enterprises, to take advantage of the market opportunities presented by Scotland's investment in a low carbon economy, energy and wider resource efficiency being key sub-sectors within that.

Chart 1: Key subsectors of the low carbon economy

Energy efficiency is critical to satisfying our requirements for the services that energy provides (heat, light, mobility, function of appliances etc.), whilst ensuring that these remain affordable and we protect the environment for future generations. This places energy efficiency at the top of our hierarchy of energy policies as the simplest and most cost-effective way to reduce emissions whilst seeking to maximise the productivity of our energy resources. Energy efficiency complements our other energy related strengths, and works across areas such as housing, business, and transport, all of which are major consumers of fuel, to help us create a more sustainable Scotland with opportunities for all to flourish.

The EEAP set out the direction for Scotland's energy efficiency policy in the years taking us up to 2020. It identifies the need to take effective action to encourage innovation, secure finance (or funding) and develop skills to take advantage of the opportunities presented. Advice and support to consumers in homes and organisations is key to help drive demand.

Under Section 60 of the Climate Change (Scotland) Act 2009, the plan was required to set annual energy efficiency targets and describe how these targets are to be reported on. Using data published each December by the UK Department of Energy and Climate Change we have reported progress against the target. Previous progress reports on the plan were published in 2011 and 2012 and this report meets both the commitment to (a) publish an annual report and to (b) formally review the plan within 3 years of its publication.

Table one - Summary of progress on actions

Priority Area	Actions Total	Actions Complete	Partially complete	Superseded / no longer appropriate
Encouraging Behaviour Change	5	5	0	0
Domestic	8	6	2	0
Business	5	4	0	1
Public Sector	7	6	1	0
Building Standards	9	9	0	0
Built Environment	5	4.5	0	0.5
Changing our Transport systems	3	3	0	0
Developing Skills for Energy Efficiency	5	4	1	0
Financing Energy Efficiency	3	3	0	0
Taking Energy Efficiency Forward	3	3	0	0
Total	53	47.5	4	1.5

The EEAP covers 10 priority areas, and identifies a total of 53 discrete actions that support the achievement of the target. All actions have been completed or are on track to be completed. Progress against actions is detailed in Section 4 of this report. Highlights include:

• Encouraging Behaviour Change
  We launched the Greener Scotland website ^[1] providing advice on the actions individuals can take to go greener, including the significance of energy efficiency in reducing our carbon footprint and consuming less energy. The site provides top tips for reducing energy and a tour of an energy efficient virtual house. To date, there have been over 130,000 unique visits to the site, with 18% repeat traffic - a quarter of whom went on to revisit at least once more. Facebook likes have grown from zero to over 13,000 and there has been a 135% increase in subscribers to Greener Scotland emails, which facilitate on-going behaviour change over time.
• Domestic Energy Efficiency
  Over 544,000 Scottish households benefited from the Carbon Emissions Reduction Target ( CERT). We are encouraging take-up of its replacement, the Energy Company Obligation ( ECO), through effective partnership working. We established the Home Energy Efficiency Programmes for Scotland ( HEEPs) for Scotland in 2013, investing £79 million in 2013-14. Our investment is expected to attract funding from energy companies creating a total fund of around £200 million a year.
• Energy Efficiency for Business
  The £7m Resource Efficient Scotland programme, launched in 2013, offers comprehensive information, advice and support to businesses, third sector and public sector organisations to implement energy, material resource and water efficiency measures. This brought together services previously provided by three different organisations. There are three delivery routes: advice and support, sector programmes and strategic interventions. The Advice and Support service aims to provide some form of support to at least 12,500 organisations per year (including 12,000 SMEs). It is targeting savings of at least £21 m per year to organisations in Scotland, including:
  • energy efficiency savings of 45 GWh - equivalent to taking around 10,000 cars off the road
  • raw material savings of 25,800 tonnes
  • diverting 67,000 tonnes of waste from landfill.
• Energy Efficiency across the Public Sector
  Until March 2013, we funded the Carbon Trust to support our public bodies with technical and carbon management advice, including the Public Sector Carbon Management programme, (completed by over 150 organisations), providing them with a Carbon Management Plan and a baseline assessment of their energy use and carbon emissions, targets and a standardised methodology for identifying and developing energy and carbon reduction projects. This led to the implementation of measures across the public sector in 2011/12 which saved around 398 GWh of energy, generating annual cost savings of nearly £4.3 million.
• Achieving energy efficiency through Building Standards
  New energy standards were introduced in 2010. The impact of this policy is assessed in terms of emissions, with annual abatement of approximately 14-16 ktCO ₂ identified ^[2] . As abatement is cumulative from each year's build, this would give an annual abatement of 133 ktCO ₂ in 2020 and 253 ktCO ₂ in 2027.
• Infrastructure for the Built Environment
  We have pro-actively developed district heating as a discrete policy area within energy efficiency. We established a £5m District Heating Loans scheme. In October 2012 twelve projects were approved for funding worth £2.1 million ^[3] . Six others have been have been offered an in principle loan by the Scottish Investment Bank ( SIB). We convened an Expert Commission on District Heating which reported in November 2012, we have published our Heat Vision for Scotland, and will shortly published a District Heating Action Plan which will address the commission recommendations, and by the end of 2013 we will publish a draft Heat Generation Policy Statement for consultation.
• Changing How we use our Transport Systems
  Through the Scottish Green Bus Fund, launched in 2010, we have provided grant totalling £7.7 million and assisted the purchase of approximately 94 low carbon buses. Each new bus is expected to produce 30% less emissions and require 60% less fuel than a diesel bus, delivering an average emissions reduction of around 21 tCO ₂e per year or 300 tCO ₂e over its life-cycle.
• Developing the Skills for Energy Efficiency
  Our Low Carbon Skills Fund, ^[4] delivered through Skills Development Scotland, has supported Scottish Businesses to undertake over 2,100 episodes of training to increase individuals' energy and low carbon skills since 2010.
• Financing Energy Efficiency
  Analysis by the Scottish Futures Trust indicates that an investment of £350 million in low carbon measures - across the Scottish public estate - could lead to potential cost reductions in the region of £900 million. Scottish Government is working closely with the Green Investment Bank, Scottish Futures Trust and Resource Efficient Scotland, CoSLA, Scottish Enterprise and others to bring forward a nationwide programme of energy efficiency projects across the public sector estate. Engaging with the Green Investment Bank to establish where there are opportunities for large scale private investment; supplementing public sector investment and accelerating the programme.
• Taking Energy Efficiency Forward
  The Scottish Government's Economic Strategy (refreshed in 2011) identified the transition to a low carbon economy as a new strategic priority which will be central to maximising Scotland's sustainable economic growth rate - particularly in the long-term.

A focus on increasing resource efficiency - water, waste, energy and materials (including critical raw materials) - across all areas of the Scottish economy and adopting sustainable business practices will boost our long-term productivity and performance. The better we are able to adopt low carbon practices the greater our comparative and competitive advantage will be relative to our competitors. This focus on resource efficiency will also help the Scottish economy become more resilient to increasing global demand for scarce resources.

There is considerable scope to explore further the options of taking forward energy efficiency pro-actively and providing the finance that will enable us to do so.

Since the Action Plan was published the significance of energy efficiency has grown internationally. We have seen the publication of the UK Energy Efficiency Strategy to which we contributed through representation on the UK Energy Efficiency Deployment Office and a new European Directive on Energy Efficiency which came into force in November 2012.

Energy Efficiency Priorities Moving forward to 2020 and 2030

Scottish Government remains committed to achieving our 2020 energy efficiency targets, and maximising the significant contribution energy efficiency will make to achieving our emissions reduction targets to 2027 and beyond; and will continue to work closely with key stakeholders.

We are currently working to finalise the second climate change Report on Proposals and Policies ( RPP2) after publishing the draft earlier this year and we will publish it soon. RPP2 details actions across the Scottish economy for meeting the greenhouse gas emission targets to 2027.

We recognise that some of the progress against the current energy efficiency target can be attributed to economic recession. However the energy efficiency target was defined to allow for fluctuations within the longer-term trend. The 6.2% fall by 2010 from the baseline is well within the annual maximum. We remain confident that we can meet the energy reduction targets as the economy recovers and grows, in particular with a focus on the transition to and investment in low carbon infrastructure projects and behaviour change programmes and incentives, a strategic priority within the Scottish Government's Economic Strategy.

Energy efficiency has a significant role to play, not only to reduce energy demand, and related carbon emission but also to mitigate rising energy bills for domestic and non-domestic consumers; support the eradication of fuel poverty, and contribute significantly to the Scottish economy. Energy efficiency is integrated within mainstream policies. Over the next period the Scottish Government has set out its strategic direction and planned actions for these, including:

A draft Sustainable Housing Strategy published as a consultation in 2012 ;and the final publication of which will be in summer 2013, set out a route map and vision to 2030 for high-quality, warm, low-carbon homes including the launch of our £79 million Home Energy Efficiency Programmes for Scotland ( HEEPS) in April 2013 which is expected to attract additional funding from energy companies to create a total fund of around £200 million a year.

Having launched Resource Efficient Scotland in April 2013 for energy efficiency, waste, water and material resource efficiency we will support businesses and, public sector and third sector organisations to target savings of at least £21 million per year for these organisations in Scotland.

Working with the Scottish Futures Trust, Resource Efficient Scotland, CoSLA,and NHS Health Facilities Scotland we will bring forward a nationwide programme of energy efficiency projects across the public sector estate including; converting to greener street lighting and non-domestic building retrofit; attracting investment from the private sector such as the Green Investment Bank. Projects like this are important as analysis by the Scottish Futures Trust indicates that an investment of £350 million in low carbon measures - across the Scottish public estate - could lead to potential cost reductions in the region of £900 million.

We published our Outline Heat Vision on 29 January 2013 and set out our ambition to have a largely decarbonised heat sector by 2050, with significant progress made by 2030 taking into consideration environmental, economic and social aims; and our intention to publish later this year a Draft Heat Generation Policy Statement for consultation. We held an Expert Commission on District Heating which reported in November 2012 and we will shortly publish the District Heating Action Plan, setting out its detailed response to the recommendations of the Expert Commission and the roadmap for these recommendations are being taken forward by Government, industry and other stakeholders.

The Scottish Government is committed to driving energy efficiency improvements through building standards, with a further improvement on the current 2010 standards proposed for 2014. The Sullivan Report, 'A Low Carbon Building Standards Strategy for Scotland' published in 2007 made a wide range of recommendations. These included step changes to energy standards within building regulations in sup-port of the ambition for Scotland to achieve net zero carbon buildings by 2016/17, if practical. In view of the economic downturn, the Sullivan Panel reconvened in May 2013 to review some of the recommendations made. It is expected that the Panel will report back in late summer/early autumn.

We are also developing regulations under Section 63 of the Climate Change (Scotland) Act 2009 requiring the energy performance of existing non-domestic buildings to be assessed. Owners will either carry out physical improvement work to the building or make arrangements to measure, report and display operational ratings after such an assessment.

For existing housing, in Summer 2013, we are introducing new energy efficiency standards for social housing, setting initial targets to be met by 2020. We will have also committed to consulting by Spring 2015 on draft regulations for a minimum standard for private sector housing to be introduced in 2018 .

Transport Scotland have worked with a range of stakeholders to provide greater choice to our citizens about decisions on modes of transport. We are investing over a billion pounds in 2013-14 in public transport and other sustainable travel options to encourage people to leave the car at home.

Future updates on progress against the 2020 target, as required under section 62 of the Climate Change (Scotland) Act 2009, will be provided in Energy in Scotland: A Compendium of Scottish Energy Statistics and Information ^[5] published annually.