News analysis with BESA
Could the UK learn from German Net Zero approach?
The German government has pledged to spend €177.5bn of its federal budget on climate action, including a huge programme of building renovations. BESA believes this could be a template for a UK national retrofi t programme that could help to address the energy and cost of living crises and meet our net zero obligations
G
ermany’s Climate and Transformation Fund will allocate €56bn to “climate-friendly” building renovation and seek to reduce the
30% of Germany’s total energy consumption used for heating and hot water. Much of the funding will be aimed at improving buildings in the bottom 25% of energy performance, a move that could soon be replicated by the rest of the EU, which is updating its Energy Performance of Buildings Directive. This approach represents a dramatic shift in German government priorities from supporting the construction of new homes to renovating more existing ones with one offi cial saying: “One euro spent on renovation is ten times more effi cient than if it was spent on a new home.” “This looks like a comprehensive plan for
retrofi tting buildings with both net zero and reduced energy costs for consumers in mind,” said BESA’s head of technical Graeme Fox. “We have long been calling for something similar in the UK and I would urge our offi cials to look at this closely.
Impact
“The built environment is responsible for more than 40% of total carbon emissions so upgrading our building stock could have a major impact on our net zero targets while also improving health, well- being, and productivity by creating better indoor conditions,” he added. “It is also the quickest and most cost-eff ective
way to drive down gas and electricity consumption in homes, schools, offi ces and industrial buildings when we are facing an unprecedented energy crisis.” Germany is grappling with the impact the Russian
invasion of Ukraine has had on its gas supplies and has pledged to invest €35.5bn in its renewable levy to lower electricity prices with another €20bn going towards decarbonising industry and developing hydrogen. However, German consumers no longer pay the
renewables levy that helps to fi nance the expansion of wind and solar power. Instead, the government has stepped in as part of eff orts to cut electricity bills.
BESA believes the UK could also make sensible changes to its energy levy system to make it fairer, reduce bills, and drive the uptake of low and zero carbon solutions.
The Association has put its name to an open letter
from several industry bodies, including ECA, BSRIA, FETA and SELECT, to the two candidates vying to be the next Prime Minister. It explains how adjusting the way ‘green’ levies work could help tackle the cost- of-living crisis. Currently, the levy on electricity bills is 20% higher than on gas bills, which means renewable energy is – perversely – more heavily taxed than gas. The letter to Rishi Sunak and Liz Truss recommends redressing that balance and cites research from the energy supplier E.On which shows
that rebalancing the levy would drive down the cost of electricity and reduce 70% of customers’ bills by up to £100. As well as cutting bills, balanced green levies would incentivise renewables and avoid the need to import so much gas from abroad, according to BESA. “According to the Offi ce for National Statistics
(ONS), households using electricity as the main fuel for heating were the most likely to experience fuel poverty. By addressing this historic tax anomaly, the new leader will reach those who are hardest hit by rising fuel bills,” the letter says. “In 2020, 43% of UK electricity was produced by home grown renewable sources and the percentage is accelerating at pace. By further incentivising the switch to clean electricity we are reducing
BESA’s President Rab Fletcher
8
September 2022
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