Released today (25 September), the study calls for a new approach to encourage investment in business energy efficiency. Specifically, the report recommends that businesses rates should be linked with Energy Performance Certificates (EPCs) to incentivise landlords.

Meanwhile, a new Energy Efficiency Delivery Unit (EEDU) could help to bridge the gap between viable projects and available capital, the report claims. Policy Exchange suggests the unit should mirror the Heat Network Delivery Unit, which offers expertise, certification and finance for both public and private projects.  

“Improving energy efficiency is amongst the easiest and cheapest ways to decarbonise our energy system,” Policy Exchange research fellow and report author Joshua Burke said.

“Businesses and public sector organisations spend the equivalent of nearly 5% of GDP (£22bn) on energy every year but too many organisations still aren’t investing enough in energy efficiency. It needs to be seen as a major strategic investment which is both good for the environment and good for profitability.

“Public sector leadership on energy efficiency could save the taxpayer billions, while the private sector should focus on funding energy efficiency projects, particularly those that have longer payback periods.”

‘Golden opportunity’

The report recommends that the Government extends the Energy Saving Opportunity Scheme (ESOS) to cover public sector institutions such as the NHS, defence and education, where the energy saving potential is “large and cost effective”. It calls for mandatory reporting on progress of ESOS, a scheme which requires companies of a certain size to produce detailed reports on their energy use and efficiency every four years.

Climate Change Agreements (CCAs), which offer discounts on the Climate Change Levy (CCL) for businesses that vow to improve their energy efficiency, have proved a “weak driver”, according to Policy Exchange. The think tank suggests that discounts should be made more stringent and tied to sector deals as part of the Industrial Strategy.

The report has been welcomed by UK utility company Centrica, which supported the research.

Centrica’s head of energy policy development Nick Park said: “By gaining a better understanding of their energy use, businesses large and small can save money, improve operational performance and become more resilient. Improving energy efficiency provides a golden opportunity for businesses and the public sector to improve productivity and unlock future growth opportunities.”

George Ogleby

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