Onzo

Onzo welcomes the policy paper “The Low Carbon Economy” published by the Conservative Party today. Among other things it provides another indication that all the main political parties appreciate the importance of energy demand management, enabling people to reduce their household bills and to cut carbon gas emissions. This must remain a policy priority even when the economy takes centre stage. We believe that when credit is so hard to come by, it is all the more important that emerging environmental technologies and enterprises should not be starved of funds. The case for massive investment to ensure, as the Conservative paper puts it, Britain is turned into the world-leading economy for green innovation and technology is compelling.

We agree with the Conservatives’emphasis on the creation of a smart grid, to allow the most effective contribution of renewables to meeting energy demand and to exploit to the full the potential for micro-generation. This accords with arguments Onzo has been putting forward for some time, that high speed broadband provision, without which that development cannot take place, should be subject to a universal service obligation, equivalent to that for fixed-line telephony, and regarded as a vital data communications tool rather than principally an entertainment medium.

This is important in the context of the general roll-out of smart gas and electricity meters that the government announced towards the end of last year. Much has been claimed for smart meters, which are often referred to as a panacea for cutting fuel bills and reducing domestic carbon gas emissions. It is true they may improve awareness of energy consumption, and if and when they facilitate feed-in tariffs for micro generation they will indeed contribute to energy conservation. As a recent report by the Government Office for Science observed, however, they cannot deliver the full range of services of which they are capable without extensive investment in IT and data management infrastructure so that, in David Cameron’s words, “fibre right into people’s homes is the norm for everyone”.

At the present state of technology, smart meters will do little to stimulate radical behaviour change by encouraging more active forms of engagement with energy systems. In introducing them it is important that the main objective should be to produce timely, accurate and actionable information for the user. This capability, and their potential to be a home hub for the provision of a wide range of beneficial services in other areas, cannot be separated from the general availability of sophisticated ITC infrastructure.

Ministers rightly make the wholesale introduction of smart meters a priority, with the target date of 2020, but we believe the process can only make sense if equal priority is given to upgrading broadband links. There are now strong suggestions that ministers may have reached an agreement with fixed-line and mobile telephone operators to fund the universal provision of broadband by 2012, and Onzo would warmly welcome that.

As the Chief Scientist to the Government has argued, the development of smart meters and smart grid should not detract from efforts to improve the chronic energy inefficiency of homes in the UK. Research indicates that existing homes account for more than 35 per cent of this country’s carbon gas emissions. The Conservative paper advocates that energy suppliers should make grants available for energy efficiency improvements, the cost to be repaid through fuel bills over a period of up to 25 years. This differs from a model Onzo has been arguing for, based on practices that are increasingly common in the United States, whereby local authorities would fund energy efficiency improvements through loans, collecting the repayments through the Council Tax. Whatever specific funding practice is adopted, however, it is important that the reluctance of the householder to invest in such improvements because of the long pay-back time is overcome by vesting both the costs and the benefits with the property rather than the owner: a point that the Conservatives accept.

These issues, which have been neglected for too long, are now at the very top of the political agenda, and Onzo will continue to contribute to the debate about them, seeking to be supportive to all parties as their thinking evolves.