Climate change & energy

Action in the UK - Energy services

The Energy Services Directive will promote energy efficiency in the UK. A clear indication of how it will be implemented was given to the EU by the 17 May 2008 deadline, as summarised in this webpage.  It impacts on both providers and users of energy. The Directive’s full name is the EC Directive on Energy End Use Efficiency and Energy Services and, as announced in the Energy White Paper, new policy measures may be needed to implement it. DECC has lead responsibility for implementing the Directive and works closely with other government departments and the devolved administrations The Directive was not fully implemented by 17 May, though there is agreement in principle with most key sectors.

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Background

The Directive was introduced to enhance the cost effective improvement of energy end use efficiency in Member States. It covers all forms of energy, including electricity, natural gas, liquefied petroleum gas and other fuels such as coal and heating oil, biomass and transport fuels (except aviation and bunker fuels).

The Directive applies to providers of energy efficiency measures, energy distributors, distribution system operators and retail energy sales companies; and all energy users except those involved with the EU carbon emissions trading scheme.

Energy companies may be excluded from the requirements of Articles 6 (energy distributors, distribution system operators and retail energy sales companies) and 13 (billing and metering) of the Directive if they meet any of the following criteria:

  • annual turnover of 2m Euros (total not just energy) or less
  • energy production equivalent to 75GWh or below below (for comparison, 80GWh approximates to two fuel tankers delivering throughout the year)
  • employs fewer than ten people (in total including contractors)

The main requirements of the Directive are:

  • national indicative energy savings target of 9% by 2017
  • public sector to fulfill an exemplary role in meeting the target
  • Member States required to place obligations on energy suppliers and distributors to promote energy efficiency
  • requirements on metering and billing to allow consumers to make better informed decisions about their energy use

DECC coordinates implementation working with other Government Departments, the Devolved Administrations and Ofgem is steering implementation, through five workstreams:

  • Workstream 1  - Articles 4 and 14 on setting a UK energy target and monitoring of that target
  • Workstream 2 – Article 5 on the public sector playing an exemplary role in energy efficiency measures
  • Workstreams 3 and 4 – Articles 6-12 on placing obligations on energy suppliers and on developing the market for energy services and energy efficiency improvement measures
  • Workstream 5 – Article 13 on smart metering and better billing

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Workstream 1

The required UK Energy Efficiency Action Plan 2007, which announced that we expect to double the EU indicative energy saving target of 9% over nine years by 2017, and deliver 18% saving, was published on 29 June 2007. The European Commission will report on the UK and other Member States' plans in 2008. Two further plans will be produced before July 2011 and July 2014 and DECC will continue to work on these throughout the lifetime of the Directive.

DECC is also working with European partners on the EMEEES project to harmonise evaluation and monitoring methods.

As part of the framework for overseeing energy savings, a workshop on data requirements was held in September 2007. Papers from the workshop can be requested via email at energyservicesdirective@defra.gsi.gov.uk

In 2007 Defra commissioned the consultants Ecofys to examine the case for developing an improved energy efficiency data management framework. The report has now been published (see latest news) and the next steps are now being finalised.

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Workstream 2

Article 5 of the Directive requires all public sector organisations to lead by example and take up cost effective energy efficiency improvements that generate the largest savings in the shortest space of time. They must also show leadership by demonstrating and communicating their energy saving actions, and sharing best practice and information. Negotiations on voluntary agreements to meet the requirements of the Directive have taken place with lead bodies across the public sector. These are expected to be signed shortly.

In practice, this means that equipment and vehicles purchased in the public sector must as a minimum conform to the energy efficient product specifications detailed in the Buy Sustainable – Quick Wins list. These specifications also consider the energy efficient consumption of equipment in all modes. The specifications will be kept under review to ensure they continue to meet the requirements of the Directive.

On 13 December 2007 Defra published a consultation outlining the UK Governments preliminary views of implementing Article 5. In support of this consultation are the following two reports:

Two workshops were held to inform the consultation
  • 29 January 2008 - aim of the workshop was to discuss what a voluntary agreement for the public sector relating to the procurement of energy using equipment and vehicles might look like.
  • 11 September 2007 - aim of the workshop was to review the current level of public sector compliance and identify possible options for meeting gaps in compliance, particularly in relation to options in Annex VI of the Directive.

The consultation closed in March and the summary of responses is expected to be published shortly.

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Workstreams 3 and 4

These workstreams place obligations on energy suppliers and on developing the market for energy services and energy efficiency improvement measures. The August consultation primarily focused on these workstreams and closed on 26 October 2007.  

The summary of responses has been published. The responses generally supported the Government’s preferred approach of voluntary agreements with energy suppliers and discussions are underway with suppliers and other stakeholders on the format and contents of voluntary agreements.

In support of the consultation were the following two reports:

Following the closure of the consultation period and to help with the development of the voluntary agreements, a series of workshops were held in January and February 2008 with key stakeholders. The first of these was with the net bound- sector (gas and electricity supplied through the national grids), which produced the following reports and presentations:

Workshops with the non net-bound sector (non-grid fuels eg coal, heating oil, LPG and wood fuel) and a cross-sector workshop for Northern Ireland produced the following reports:

An earlier workshop on the wider energy services market was held in May 2007 to inform this consultation at which the following documents were tabled:

Outline agreement has been reach with energy suppliers and distributors (including trade associations) in the shape of voluntary agreements. It is expected that the final agreements will be signed by end of 2008.

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Workstream 5

Workstream 5 requirements have been considered as part of the Energy Review work on billing and metering led by DECC with involvement from Ofgem.  A number of commitments to action were published in Chapter 2 of the Energy White Paper in May 2007. These took account of responses to a public consultation on options for billing and metering. A second-round three month consultation on billing and metering was published in August. It concluded at the end of November and the Government response was published by BERR on 29 April. Further information is available at:  www.berr.gov.uk/whatwedo/energy/environment/smart-metering/

In July 2007, Defra published a desk study on heat metering to support BERR’s second-round consultation, as follows:

On 17 October 2007, Defra hosted a stakeholder event on real time display policy, to seek views on maximising the influence of real time energy data.

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Page last modified: 29 January 2009
Page published 19 March 2004

Department for Environment, Food and Rural Affairs