Onzo

29th April 2009

Dear Sirs

Response to DECC Consultations

Onzo wishes to take the opportunity to contribute in this letter to the consultations announced in February by the Department of Energy and Climate Change on the government’s Heat and Energy Saving Strategy (HESS) and the Community Energy Saving Programme (CESP).

Onzo, the leading global designer of domestic energy management systems, welcomes the objectives behind both HESS and CESP, of enabling households to economise on their energy expenditure, reducing energy consumption in the face of an impending imbalance of supply over demand, and reducing carbon gas emissions.

However, we believe the consultation documents, and in particular that on HESS, lack strategic thrust or a properly organised framework.  There is far too much emphasis on actions previously taken, and the analysis of how effective these have been, based largely on an assessment of their impact that has not been subject to independent validation, seems somewhat unconvincing.   The most significant question regarding previous action is whether and to what extent domestic and business energy use has been reduced, and the consultation documents fail to answer that question in any meaningful sense.

The government has set a target for all new homes to be “zero carbon” by 2016, but has been less than clear how this will be achieved.  Despite the aspirations contained in the HESS paper, it is even less clear how the aim of increasing the energy efficiency of existing homes can be met.  As the recent joint report by the Economic and Social Research Council and the Technology Strategy Board makes clear, this is absolutely vital if national and international carbon gas emission targets are to be met; homes account for around a third of the UK’s carbon gas emissions.

In order to make a real difference to domestic energy efficiency, Onzo recommends four areas of action.

1.    Schemes to improve home insulation.  In this regard we welcome government acceptance of our contention that energy saving improvements will only be generally adopted if the cost and the benefits attaches to the building, not the householder.

2.    Requirements on manufacturers to increase the efficiency of electrical appliances.

3.    Greater use of tools that manage energy use, such as voltage controls at a whole-house level, circuit level switching and individual appliance controls.  Appliance controls can be most effective and flexible when integrated into the appliance itself and we believe there should be some incentive for manufacturers to incorporate such controls in the design of their products.

4.    Encouragement of behaviour change.   While much work has been done on what induces behaviour change in other areas, especially those relating to heath issues such as obesity and smoking, comparatively little has been carried out in the field of energy.  As the ESRC/TSB report points out, “the effectiveness of energy-saving technologies …ultimately depends on human behaviour”. “Smart meters” are often referred to as powerful tools for effecting behaviour change, but their purpose is widely misunderstood.  While they will serve a useful purpose in allowing more accurate billing, any other benefits they will provide to the consumer are limited.

In encouraging behaviour change research shows that there are four main tools which produce results, and give even higher results in combination:

- Differential pricing tariffs that encourage energy use at non-peak times;

- Printed analysis of energy that could accompany the utility bill;

- Information and recommendations provided through electronic media (internet, mobile phone); and

- Real-time in-house energy displays.

In its response to a previous consultation Onzo welcomed the government’s acknowledgement of the role displays have to play in effecting energy reduction by including them in the Carbon Emissions Reduction Target (CERT) scheme.  We pointed out, however, that a weakness of CERT is that it is input rather than output based.  The effect of this is that suppliers have no incentive to do more than the bare minimum to meet the requirements of the scheme.  In fact the mechanism of CERT should be designed in such a way as to provide powerful incentives for real reductions in usage, including all the four tools listed above.

We hope these observations are helpful and would be happy to enlarge upon them at a meeting should that be considered useful.

Yours faithfully

Joel Hagan

CEO