As an Ashden Award winner MEA have co-signed a letter to the Secretary of State for Energy & Climate Change Chris Huhne:

Dear Secretary of State

26 July 2010

UK energy and climate policy: a letter from Ashden Award winners

First, let us congratulate on you new post as Secretary of State for Energy and Climate Change.

We were sorry that you were not available to attend the Ashden Awards for Sustainable Energy Conference on 30^th June at the Royal Geographical Society.  However, it was fitting perhaps that you were not able to make it because of the debate in the House on Energy Efficiency.

As Ashden Award winners, our unique selling point is our practical knowledge and proven ability to make significant carbon reductions at the local and area-wide level.  We represent a wide constituency that draws on the frontline expertise of the social enterprise, small business, community-led, school-based, and local authority sectors.

We held a series of discussions in and around the conference and we wanted to share with you some key points and recommendations about the direction of government energy and climate policy at this critical time.

We would like to follow this letter up with a meeting with yourself and key advisers to clarify or flesh out our collective thoughts.

Some of these points are also covered in the recent Ashden Awards report - Power to our neighbourhoods, the summary of which we include with this letter.  The full report is available at www.ashdenawards.org/reports

Key points and recommendations:

Improving energy efficiency and reducing energy demand

Recommendation: We welcome the proposal for a new Energy Bill, which would "deliver a national programme of energy efficiency measures to homes and businesses". While there is a significant level of funding available from previous government programmes, we think that the levels of investment need to be significantly increased to properly support the full range of cost-effective efficiency options that we have proved to work.

We have already shown that intensive area-based approaches pay for themselves in a few years through job creation and fuel cost savings for the simpler measures, and over a longer period for the more complex insulation measures and renewable energy options.

Recommendation: As part of your administration's review of government spending we would urge you to simplify existing funding criteria for programmes such as CESP and ERDF, to enable spending to take place more quickly and efficiently.  A key problem, particularly with current fiscal belt tightening, is the ability to find match funding.  Also, the large numbers of agencies requiring detailed evidence for programmes and the level of red tape via OFGEM, RDAs, EST and other agencies stifles progress.

Recommendation: We have proved - and the evidence is clear - that local area energy efficiency schemes based around households pay for themselves.  They are a worthwhile investment on any terms.  Placing a requirement to "match fund" at the local level places an unnecessary limitation on scheme development, as if the money is found by the local authority it comes from the same source - effectively a "soft" Treasury loan via the Public Works Board.  For example, existing ERDF funding held by every region could be used quickly and simply to provide this match funding. 

Recommendation: Another proposal which we think deserves real consideration is the utilisation of the Winter Fuel Payment.  The Audit Commission "Lofty Ambitions" report highlighted that this subsidy costing £2.7 billion could dramatically reduce fuel poverty by being used for insulation measures in suitable housing rather than by paying for heating poorly insulated homes.  We suggest that there should still be an offer for hard to treat homes but to phase out this offer for cavity build after those improvements have been made.

Recommendation: The implementation of the PAYS programme should be accelerated - and this was hinted at in the Debate in the House. However, we are sure that a level of public sector financing will still be required to keep pay back terms reasonable, especially as part of the real payback is in the creation of local employment and business growth - important factors that cannot be made part of the payback calculation.

Such investment has the potential to generate many tens of thousands of new jobs - more per unit of investment than any other set of policies within the energy and climate change arena.

Recommendation: It is not enough just to increase energy efficiency. We also believe a key priority for your Department should be enact policies to reduce energy demand overall - by, for example, targeting profligate energy consumption. Controlling energy demand is the surest way to reducing environmental impacts and improving energy security in a resource-constrained world. Such an approach would also help reduce the potential for international conflict over, for example, diminishing supplies of oil and gas.  Reducing energy demand is also pound for  pound far the most cost effective way of reducing carbon emissions.

Delivery agencies

Recommendation: We are clear that there is no, one "right" model.  Each area will require different approaches, some led by social enterprise, some by community groups, some by local government. We think it vital that government policy continues to enable, fund and facilitate involvement of a wide diversity of groups, agencies and individuals.

We do have some concerns about proposals for the New Green Deal that might give a very large organising, leadership or coordinating role to large commercial organisations such as Tesco or Marks and Spencer.  The same is true of large energy utilities. Whilst we would welcome the support and involvement of such businesses and utilities, their primary motivation is not to reduce carbon, it has to be to meet shareholder objectives and make profit.  Of course, regulations and carbon pricing can and have affected this dynamic.  Many of us already work with large business successfully. In our experience, local people trust local social enterprises, local authorities working with other agencies and especially as a guarantor and cooperatives.  This is because these organisations are seen as not being driven by commercial interests.

New funding mechanisms

Proposals for the Green Investment Bank are still at an early stage.  We note and welcome with interest the proposal to invest £55bn per annum into the energy economy, amounting to £550bn over ten years.  This is the scale of investment that is required to transform the energy infrastructure.

We believe that investments of this kind will pay for themselves in the long run.  We note that the green bank proposals highlights the need for different mechanisms and funds to support short, medium and long term investment.  Such investment create local job at the same time as a more resilient energy infrastructure.  We think there are potentially significant synergies with other project that reduce carbon and support local jobs, such as the development of local food supply chains - e.g. local farmers for local schools as has been successfully implemented in Nottingham.  This is extremely popular. 

Expanding renewable energy

Recommendation: We welcome the commitment of your government to support a major expansion of renewable energy. We urge you to increase the 2020 target for the proportion of energy from renewable resources, and the potential for reducing energy demand.

Recommendation: Related to this and given the urgent imperative of reducing carbon emissions, regarding the proposed Renewable Heat Incentive for small-scale technologies and the Feed-In Tariff for small-scale electricity,  these can in some cases encourage building based micro-technologies for building, which are generally less efficient than larger scale renewables. We would urge you to consider a) creating tariff bands that would benefit more efficient larger scale (community, regional or national) renewable projects, and b) the setting of energy reduction targets in buildings to reduce energy consumption at source. We also urge you to confirm the commitment to these initiatives as early as possible to ensure that momentum is maintained and future projects can be planned.

Recommendation: The proposals for a ‘smart grid' will be important in integrating variable renewable energy sources into the system. The ability to utilise a large proportion of renewables would be further strengthened by strong grid connections to mainland Europe and the development of a European super-grid, as shown in the Offshore Valuation report to which you referred in a recent speech. The commitment to a national recharging network for plug-in electric and hybrid vehicles will also complement the expansion of variable renewable energy technologies, and reduce oil dependence.

Recommendation: We also urge you to enact a major increase - at least tenfold - in the proposed government funding of R&D on renewable energy, especially marine technologies where the UK is a world leader. Not only would this help provide longer-term environmental and energy security benefits, it would yield major employment benefits due to the high labour intensity of this sector.

In summary, we strongly support efforts to ensure energy and climate change issues are a central component of this government's agenda. There are major social and economic benefits, as well as the more obvious environmental ones, which will be forthcoming if these efforts are successful.

We would welcome the opportunity to discuss these issues with you further.  Please do contact Simon Brammer should you wish to arrange a meeting or require any further information or help from us.

Yours sincerely