Everything you need to know about an electricity efficiency feed-in tariff

close up uk 3 pin plugAfter calling for more government action to help people reduce electricity use for nearly two years, we’re delighted that the government is finally taking it seriously.

Our recent report with WWF  looked at three ways to reduce demand, as part of the government ‘s Electricity Market Reform, concluding that an electricity efficiency FiT is the best way forward. If it is introduced, it could stimulate a new market in negawatts or electricity saving by paying anyone who can to reduce their demand for electricity.

The government’s new consultation on Electricity Demand Reduction includes a range of options including a premium payment, or electricity efficiency FiT, that will pay projects for reducing electricity.

Top three questions
Following our report, we’ve been asked lots of questions about how an electricity efficiency FiT would work.

Here are the top three most frequently asked questions and our short answers:

1)      How can you guarantee you’re saving electricity? Robust monitoring and verification (M&V) processes have been developed and successfully used abroad to establish the alternative scenario, against which savings should be measured and to ensure that savings are genuinely being delivered. The USA has been monitoring and verifying electricity saving programmes for over a decade which has enabled lessons to be learnt which can be applied here in Britain.

2)      Won’t it penalise early adopters? Individuals or companies that have been able to invest in efficiency already are already benefitting from savings on their bills. However it might be appropriate to give a higher level of FiT for ‘deeper’ measures, such as replacing whole refrigeration systems to help those who have already exhausted their ‘low hanging fruit’, such as lighting.

3)      Why would you only have a FiT for electricity and not all energy? Ideally an efficiency FiT would apply to all common fuels as well as electricity. But we don’t have a blank sheet of paper to start with and, given that the government is introducing new subsidies for electricity supply, it is vital that equal attention is given to reducing demand for electricity.

Time’s running out to make it happen
Q&A document is now available on our website, with longer answers to these and more questions. As the consultation closes at the end of January there’s not much time.

We are now keen to hear from all types of electricity users to better understand how a FiT might work best for them and to build support for a new demand policy, to be included in the Energy Bill in the New Year.

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