Value Management - Overcoming barriers to smarter heat solutions in UK homes. Annex 1b Analysis of existing policy
Abstract:
This project studied how value can be delivered across a smart energy value chain - in the context of the UK. It built a clear understanding of how smart energy systems can deliver combined consumer value alongside commercial value for market participants - producers, suppliers, distributors. The analysis will help to make the commercial deployment of smart energy systems more likely. This £600,000 project was delivered by Frontier Economics, a leading economic consultancy.
The final report has 11 annexes. This is Annex 1b: Analysis of existing policy.
This annexe sets out the analysis of existing heat and energy efficiency policies underlying our analysis of barriers and solutions. The annexe is structured as follows.
- We first summarise our findings.
- We then review existing heat and energy efficiency policies in the UK and internationally, analysing how far policies have overcome barriers to uptake, and their wider effectiveness (e.g. in terms of cost, or impact on industry confidence).
- No ‘silver bullet.’ Our analysis has shown that there is no ‘silver bullet’ that effectively addresses all barriers at onc
- Absent mandating, overcoming or bypassing interestbarriers is a prerequisite for policy success.TheGreen Deal hashad little success in this area to date.
- Supplier obligations have been successful in driving energy efficiency take up but they may not result in the most effective delivery.
- Mandating can be an effective last resort.
- To minimise the cost of mandated standards, they should be set in as broad a way as possible.
- Setting broad mandates also helps avoid adverse outcomes.
- If financial incentives are high enough, manyother barriers can be overcome.
- Alignment with long-term decarbonisation goals has not always been achieved.
- To be effective, financial incentives must be designed with awareness and interest barriersin mind.
- Consumers’ tendency to focus on near term costs and benefitsand credit constraints could also be driving low take up of financial incentives that are not paid up front.
- Upfront grants may be a more cost effective way of driving uptake than ongoing payments.
- Green Deal loans have not been a success.
- District heat development internationally has relied on a range of enabling policy measures.
- Experience with district heat also highlights the importance of supply side and competition policy.
Publication Year:
2015
Publisher:
ETI
Author(s):
Frontier Economics
Energy Categories
Class Name:
Subclass Name:
Category Name:
Language:
English
File Type:
application/pdf
File Size:
828822 B
Rights:
Energy Technologies Institute Open Licence for Materials
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Further information:
N/A
Region:
United Kingdom
Related Dataset(s):
No related datasets
Related Project(s):
Smart Systems and Heat (SSH) Programme - Value Management and Delivery
Related Publications(s):
SSH Stagegate 1 - Review of International Smart Systems and Heat Initiatives - Final Report
Value Management - Characterisation of the Current Energy Value Chain (WA4 D1)
Value Management - Future Business Models: Options and Analysis
Value Management - Overcoming barriers to smarter heat solutions in UK homes - final report
