London’s Energy Efficiency Challenge

The 2008 Climate Change Act commits the UK to an 80 per cent cut in carbon emissions by 2050 on 1990 levels.[1]  As a milestone towards this target, the Government is also legally bound to a 34 per cent cut by 2020, and a forthcoming commitment to a 50 per cent cut by 2025.[2]

As Figure 1 below shows, this will necessitate a sharp reduction in carbon reduction over the next 14 years. This will require significant action, bearing in mind that a reduction of only 7 per cent was achieved between 1990 and 2009 (the most recent year for which figures are available).

FIGURE 1: Carbon Emmissions in London 1990 – 2008

Source: GLA

Of the 42 million tonnes of carbon emissions attributed to London in 2009, 15 million, or 36 per cent, resulted from domestic energy consumption.[3] This emphasises the importance of improving the energy efficiency of London’s housing stock.

Energy efficiency is also an important means of tackling fuel poverty, which the UK government is committed to eliminating by 2016. [4] Oxford University academic Brenda Boardman has stated that ‘energy inefficient properties are the main cause of fuel poverty.’[5]Around 13.1 per cent of London households currently live in fuel poverty, a better record than the national average of 18.4 per cent, but still a significant number in light of the 2016 target.[6] Better insulated homes require far less energy use to retain a sufficiently warm room temperature. Therefore households spend a lower proportion of their income on fuel.

Even for non-fuel-poor households, energy efficiency measures are likely to be a vital means of keeping fuel bills down. Future projections are difficult owing to oil price volatility but the Department for Energy and Climate Change have suggested that energy policies alone will be responsible for an 18 per cent increase in wholesale gas prices and a 33 per cent rise in electricity prices, even before likely oil price rises are taken into consideration.[7]Energy efficiency measures are vital to insulate households – both literally and metaphorically – against these increases.

The average Standard Assessment Procedure (SAP) rating for energy efficiency for homes in London currently stands at 55..[8] In order to achieve the 2050 target on carbon reduction, various experts including Brenda Boardman and Consumer Focus have estimated that the UK average will need to reach 80 or 81.[9] Given that 80 per cent of the homes we will be living in in 2050 have already been built, this will necessitate a major retrofit programme of the existing housing stock.[10]

For these reasons, improving energy efficiency and reducing domestic carbon emissions is a key priority for policymakers across London. Future of London’s ongoing research into the implementation of the Green Deal and Energy Company Obligation in the Capital will provide insights into two possible methods of practically delivering on these stretching targets.

Luke Hildyard, FoL



[1] Department for Energy and Climate Change, UK Climate Change Act 2008 via http://www.decc.gov.uk/en/content/cms/legislation/cc_act_08/cc_act_08.aspx

[2] DECC, FOURTH CARBON BUDGET: ORAL MINISTERIAL STATEMENT BY CHRIS HUHNE – 17 MAY 2011, via http://www.decc.gov.uk/en/content/cms/news/cb_oms/cb_oms.aspx

[3] DECC, Local and Regional CO2 estimates:2005-2009, via http://www.decc.gov.uk/en/content/cms/statistics/climate_stats/gg_emissions/uk_emissions/2009_laco2/2009_laco2.aspx

[4] DECC, The Fuel Poverty strategy via http://www.decc.gov.uk/en/content/cms/funding/fuel_poverty/strategy/strategy.aspx

[5] Brenda Boardman, Fixing Fuel Poverty: challenges and solutions, Earthscan, London, 2009, p34-35

[6] DECC, Fuel Poverty Statistics, via http://www.decc.gov.uk/en/content/cms/statistics/fuelpov_stats/fuelpov_stats.aspx

[7] DECC, Estimated impacts of energy and climate change policies on energy prices and bills, October 2011, p3

[8] The Standard Assessment Procedure is the Government’s methodology for rating the energy efficiency of a home. It works by assessing how much energy a dwelling will consume and how much carbon dioxide (CO2 ) will be emitted in delivering a defined level of comfort and service provision, based on standardised occupancy conditions. The higher the SAP rating, the more efficient the property.

[9] New Local Government Network, Paint the Town Green: Meeting the energy efficiency challenge at community level, NLGN, 2010, p6

[10] Audit Commission, Lofty Ambitions, 2009, p22