Onzo

In February the Department of Energy and Climate Change announced proposals for changes to the Carbon Emissions Reduction Target scheme (CERT) Among other things, it proposes to encourage energy suppliers to promote Real Time Energy Displays. In responding to the consultation, Onzo welcomed the proposal, but expressed a number of reservations and put forward several suggestions for improving the scheme further.

Response from Onzo Ltd

1.    Onzo, a leading global designer of domestic energy management systems, is pleased to have the opportunity to respond to the statutory consultation on proposals to make changes to the Carbon Emissions Reduction Target 2008-11 (CERT).

2.    Onzo welcomes the thrust of the government’ proposals to continue and extend the scope of CERT.  While we would prefer a scheme that prescribes     outcomes rather than inputs, we believe CERT is an adequate tool at this stage for seeking to reduce greenhouse gas emissions and for contributing to the alleviation of climate change.  We acknowledge it has the secondary effect of reducing fuel costs and that this is of particular benefit to people on low incomes, although we would make the point that CERT should not be regarded as a primary vehicle for the alleviation of fuel poverty.

3.    Onzo agrees with the government’s proposal to raise the CERT target by 20 per cent.  As new tools are found that help to achieve CERT’s purpose, the amount of money spent should be increased.  Otherwise the sums available will be spread ever more thinly and ineffectively.

4.    Onzo agrees with the government’s proposal to increase the cap on innovative  activity from six to 10 per cent.   Innovation in all areas of the economy should be encouraged, particularly at this time.  Onzo would be happy to see the cap as high as 15 per cent, beyond which point the whole CERT structure might become unbalanced.

5.    Onzo has four main points in response to the consultation:

(i)    We believe the maximum score of 0.996tCO2, equivalent to 3.5 per cent saving in electricity usage over 15 years, is far too low.  The evidence referred to in Annex 1 suggests energy savings as a result of displays of between six and 14 per cent.  This is based on rudimentary displays supplied indiscriminately.  There is no reason for the saving figure to be set at less than six per cent and it would be quite sound to set it at the mean average of 10 per cent.  Onzo’s own analysis of published studies indicates savings in Europe of 18 per cent.  As more sophisticated displays will be involved, which will be given only to people who want them and signify a willingness actively to use them to save energy, a figure even higher than 10 per cent could be justified.

(ii)    We believe the 25 per cent reduction in the score of devices that require batteries in the transmitter to be changed or recharged, rather than taking their power from the meter cable, is too low.  Evidence suggests that systems where the user needs to return to the transmitter in the meter cupboard to change or recharge the batteries have a high likelihood of falling out of use – perhaps as many as 30 per cent do so.

The use of non-rechargeable batteries in the display is quite a different matter.  Onzo’s research shows that the mobility of the display is a key driver of its effectiveness.  Displays that are only mains powered are therefore ineffective.  Those with non-rechargeable batteries are an improvement and those with rechargeable batteries ideal.

(iii)     Research shows that information on displays, websites and printed reports can all promote the benefits CERT sets out to support.  As well as the 18 per cent saving in Europe inspired by displays, referred to in paragraph 5 (i) above, Onzo’s studies suggest savings inspired by web sites of 8.7 per cent and by printed reports of 7.2 per cent.   Onzo would therefore like to see CERT encompassing all these channels and concentrating on the provision of useful and actionable information to the user rather than specifying particular devices or channels.

(iv)    The way in which CERT works creates incentives for energy companies to satisfy requirements, i.e. to meet them at the lowest possible cost.  As CERT is input rather than result oriented, the incentive is for energy companies to supply displays at the lowest possible cost regardless of their effectiveness.  Their indiscriminate inclusion in CERT might run the risk of flooding the market with poor quality displays that could discredit the whole CERT approach.  Onzo believes the best way to address this is to stipulate a minimum accuracy threshold for displays.

6.    By and large we agree with the definition of a qualifying RTD given in 2.22.  We believe however that the indication of cost on a display is likely to be inaccurate and has the potential to be misleading, and should not be a requirement.  It is true users say that they want cost information but the value of this information in behaviour change terms is doubtful.  It can result in disincentives to reduce usage both when prices rise (“all that effort for no benefit”) and when they fall (“I don’t need to do anything – I’m already paying less”).  Indications of absolute levels of usage are much more valuable.

7.    We certainly support the objective of seeking additional information on the delivery of measures under CERT, while recognising that there are certain sensitivities.

We would be happy to enlarge on the points made in this response to consultation, and in particular on the work referred to in Paragraph 4, if DECC would find it helpful for us to do so.

3rd April 2009