A growing aging population means greater demand for residential care services. Is the notion of an environmentally sustainable care home realistic? What is the current environmental impact of the residential care sector? Can reducing environmental impact have cost, health and wellbeing co-benefits?

These questions are explored in a recent study, Sustainable Care Homes, carried out by NEP Energy Services in 2012, a charity-owned social enterprise funded by NHS East Midlands Regional Innovation Fund.

Key findings of the research were:

• The residential care sector accounts for at least 3.4 million tonnes of CO2e each year and £1.07 billion in natural resource costs. The social cost of carbon adds a further £76 million in costs to the economy per year.
• In 2008/9 energy use in residential homes accounted for around £468.5 million in utility costs and around 2.3 million tonnes of CO2e, representing 0.42% of the 2009 UK carbon footprint (National Statistics, 2012)
• In 2008/9 residential homes also accounted for around £505 million in food costs generating around 622,250 tonnes of CO2e.

Besides waste, the costs of energy and food are major areas for change and likely to rise significantly. With increasing competition for natural resources, there is clearly a need to prioritise these areas for reasons of both cost and carbon management.

Waste

The research investigated both pharmaceutical, offensive and commercial waste, finding significant opportunities for carbon and cost savings.

Pharmacy waste

Annual pharmacy waste from UK care homes amounts to £49 million in value and corresponds to up to 28,764 tonnes of CO2e. Opportunities to reduce this waste are identified in other reports, particularly Evaluation of the Scale, Causes and Costs of Waste Medicines by Trueman Taylor et al 2010). Care home pharmacy waste only represents a fraction of care home pharmacy consumption, but there is scope for carbon and cost saving in reducing pharmacy waste through better communication between GPs homes, residents and pharmacies. Good medicine management and capping over-prescribed drugs makes sense in terms of both cost and health.

Laxatives, Paracetamol, Aspirin and calcium supplements represent the most significant areas of waste, cost and carbon emissions, representing around 40% of all care home pharmaceutical waste and 27.5% by both value and carbon emissions.

In research visits for this report, two managers identified that a well managed 28-day prescription cycle with better communication and cross checking between home, GP and pharmacy, has been effective in reducing unnecessary over prescription from repeat prescriptions. Central treatment rooms, with fewer goods in residents’ rooms, were also identified as having been effective in aiding better management of stocks to prevent over-ordering.

A major issue identified was that pharmaceutical interventions were paid for by the GP prescription budget, while non pharmaceutical interventions, such as additional sensory stimulation as an alternative to antipsychotic drugs, had to be paid for by the home, despite NICE recommending these alternate therapies over drugs.

Another issue is that the disposal of drugs waste through pharmacy returns is paid for by the Primary Care Trust and that comprehensive records of reasons for drugs wastage are not usually available. As waste and returns are not visible to or paid for by GPs, there is less incentive at practice level to evaluate and address how and why this waste occurs.

Offensive waste

Offensive waste is mainly hygiene and continence waste. In 2008 a staggering 50% of the UK‘s 217,000 tonnes of non-hazardous healthcare and biological waste was generated by care homes (calculated from Defra data). Offensive wastes from UK care homes have an estimated cost of £29.3 million per year and give rise to more than 30,724 tonnes of CO2e, assuming disposal to landfill.

Offensive waste was analysed in some detail, as a key component of care home waste disposal costs and carbon emissions. If offensive waste were incinerated using energy from waste locally, rather than disposal through landfill, at least 66,750 tonnes of CO2 would be saved every year, equivalent to the carbon footprint from energy use of 13,350 houses in the UK.

Support and funding for continence care, to move residents off continence pads, along with better care in hospitals to ensure residents stay off pads when admitted, has benefits for resident dignity, health and wellbeing. This also offers significant potential for carbon and cost savings across the whole lifecycle of a continence product’s manufacture procurement, delivery and disposal. Procurement of continence contracts that favour more sustainable, lower weight products with user controlled delivery, to avoid over supply, also has a huge potential to cut waste and emissions.

Clinical Commissioning Groups will be taking on this responsibility from Primary Care Trusts and should consider employing sustainable procurement practices in addressing these contracts.

Commercial and Municipal Waste

Care home municipal waste disposal is likely to cost around £19.5 million across the UK and result in around 427,000 tonnes of CO2 emissions from disposal to recycling and landfill.

Up until April 2012, councils were only able to charge for collection of waste from residential homes or premises forming part of a hospital or nursing home, but not disposal, meaning that councils effectively had to offer a subsidised waste service. As of April 2012, a charge for collection can still be made for waste from such premises, but a reasonable charge for disposal of that waste may also be made (although such waste is classified as household waste, it is treated as commercial waste for the purposes of disposal charge powers in the Environmental Protection Act 1990). This change could lead to increased costs to homes using local council waste services which no longer include free waste disposal, and in some cases already has (commercial waste service providers were always able to charge for collection and disposal).

Care homes should explore the potential for alternate collaborative arrangements around waste management, possibly in partnership with GPs or local health centres. Where possible, these contracts should look to favour providers who:

• Offer good data weight of waste collected
• Additional off-site segregation and recycling of municipal waste
• Energy from Waste for offensive waste

Energy

The study showed energy use and consumption in the four case study homes could be cut by an average of 11% if recommendations were implemented. Nationally, this could save £52.8 million in energy costs and 220,000 tonnes of CO2e each year.

The easiest way to achieve savings is by empowering site staff to identify areas of waste. The simplest way to do this is to provide care home managers with access to smart meter data. Three of the four homes had smart meters, however none of the care home staff were given access to the half hourly data, or trained on how to spot trends and energy waste. Educating the home managers is key to reducing energy consumption, they are better placed and are more likely to be aware of the local causes of energy waste, given the right training.

A national programme of better metering and training alone could potentially save £12million and 50,000 tonnes CO2e per annum.

Renewables

If a care home site is suitable for a ground sourced heat pump energy system, this is an option worth considering. Two of the homes studied in detail were fully or partially heated with heat pump systems and under floor heating. Both of these homes should be able to achieve near zero carbon heating by 2050. Heat pumps also have the capacity to offer low-cost low-carbon cooling in heat wave conditions. Ground sourced heat pumps also offer long-term income in terms of the renewable heat incentive, with one home having the potential to earn £10,000 per annum from this route.

Encouraging the inclusion of ground sourced heat pumps in new build care homes, and gas combined heat and power (CHP) for retrofit, would help ensure care homes contribute to the UK’s carbon targets, offer a better environment for residents and protect homes against rising energy costs.

Community, environment and food

The links each home formed with their local community were found to have helped improve the care home grounds and their local environment, and ensured residents had regular and varied external contact, improving the capacity to carry out activities that kept residents physically and mentally active. These sorts of relationships play a critical part of a healthy sustainable care home and should be valued and encouraged.

The use of care home grounds to grow food, particularly in raised beds, animals and use of suitable tools provides both diversion and stimulation for residents, helping them to maintain an active lifestyle. Three of the homes visited were growing food on-site. This approach involved engaging residents, staff and external community groups. In one case a city farm supported the home by cultivating the grounds. The cost savings are fairly small but the health and wellbeing benefits more significant. Producing food on-site also provides an incentive to compost uncooked food wastes rather than dispose of them to landfill or incineration.

Conclusion

The study’s assessment of the national picture and the four case study care homes shows significant shortfall in support and information; this currently makes it very difficult for this sector to make an active contribution to the UK carbon reduction targets. This is increasingly critical given the need to protect the sector and vulnerable older people from rising natural resource costs.

Pockets of good practice notwithstanding care home managers do not seem to be regularly encouraged by operators, Local Authorities or health trusts to engage with environmental sustainability, even where they are keen to contribute.

The costs and carbon emissions associated with residential care are high. The benefits of addressing these issues are not just financial and environmental, but a key component of high quality care.

Care Quality Commission (CQC) inspection reports deal with quality of care, life, environment and management. While recent issues raised by the CQC around medicines management and record keeping have some cross-over, there is little that clearly addresses the issues of environmental sustainability dealt with here. Consideration could be given to broadening inspection criteria to also include resource efficiency and environmental impacts of care.

A home that manages its natural environment and its environmental impacts, through a more holistic approach, can benefit residents in terms of wellbeing and home operators in terms of running costs while reducing impacts on the local and global environment.

With an aging population and rising natural resource costs, it is essential that this sector is supported and encouraged to take an active role in resource efficiency and carbon reduction. This will be critical in both safeguarding affordable care for vulnerable elderly people, maintaining dignity and social participation in old age and in achieving carbon, waste and energy targets.

High rise housing is a familiar feature of the urban landscape, with around 390,000 flats in high rise blocks in England. Its compact nature offers great potential for residents to live greener lives, but the majority of today’s tower blocks weren’t designed for low carbon living.

So how can these blocks be transformed into homes that are resource efficient and better connected, supporting stronger communities? What is needed for residents, building managers and local authorities to make the most of opportunities around shared low carbon heating systems, solar panels for communal electricity needs, recycling and food waste collections, water efficiency, green spaces, and safe, well-designed surrounding paths and streets to encourage cycling and walking?

Green Alliance’s recent report, Towering ambitions: transforming high rise housing into sustainable homes, found that, despite the potential, most green living policies have been designed with individual, street properties in mind, leaving tower block residents disadvantaged and missing out on the opportunity to live greener, more sustainable lives.

Sustainable high rise homes: a tall order

The Green Deal, for example, helps householders afford energy efficiency improvements to their property, including insulation, high performing boilers, and energy efficient lighting. However it may be more challenging for a tower block resident to benefit from certain measures, such as external insulation and double glazing, unless the whole block is being improved.

Smart meters enable householders to monitor and bring their energy use down, and they remove the hassle of taking meter readings. But when all meters are in the basement of a block, communication becomes a problem. And doorstep recycling doesn’t work as collection is costly and leaving items in hallways can be a fire risk. Beyond the home itself, we are being encouraged to walk, cycle and take public transport more, but tower block residents are often put off by dark or poorly signed cycling and walking routes around their estate, a lack of secure bike storage space or bus routes that are a long walk away.

Whilst new tower blocks are being built taking account of these issues, if we want to really transform cities into sustainable, smart, desirable places at the same time as meeting our housing needs, we need also to make the most of what’s there already.

Green Alliance’s study was based on workshops held on three London estates and a series of interviews conducted with stakeholders across the country. It examined how the positive vision can be realised, making a number of recommendations for how sustainable lifestyles and their benefits can reach more people in high rise housing. The report sets out what the various actors can do, from national and local government, energy companies, housing providers and building managers, to the residents themselves.

Opportunities for more sustainable tower blocks

There are opportunities across energy, waste, water, transport and green spaces, but the study found that the greatest potential for change is in addressing heating and energy challenges. This is a great opportunity for housing providers and energy companies to work together. The Energy Company Obligation (ECO) can be used to finance whole block retrofits, as a cost effective way for energy companies to meet their ECO targets, at the same time making retrofit more affordable for housing providers. Energy companies could also prioritise tower blocks for smart meter trials, to become exemplars in the national roll-out. The report also recommends that, to bring widespread improvements to many of the lowest performing blocks, the government sets minimum energy efficiency standards for social housing. And it suggests government should seize the opportunity to integrate tower blocks into its proposals for heat networks, explicitly encouraging city decision makers to include them in their low carbon district heating plans.

Green Alliance’s findings show that there is huge potential and enthusiasm to transform existing high rise housing into sustainable homes. Changes won’t happen overnight, but with sufficient support and better targeted policies and initiatives, older tower blocks could yet take their place alongside the new high rise housing that is increasingly seen as the cutting edge of urban living.

Alongside the Towering ambitions report, Green Alliance has also published A better place to live: a toolkit for high rise green living, to help high rise residents take actions to make their homes better, greener places to live.

For more information or to discuss this work, please contact Hannah Kyrke-Smith, policy adviser at Green Alliance.

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• Sustainable living at the local (community) shop
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Energy Bill for low-carbon growth, consumer protection, energy security

The Government’s Energy Bill, introduced to Parliament by Secretary of State for Energy and Climate Change Edward Davey in November 2012, is currently at the committee stage in the House of Commons.

The Bill sets out radical reforms to the design of the electricity market that are aimed at stimulating a renaissance in construction of low-carbon energy infrastructure and in low-carbon manufacturing supply-chains. The legislation is also intended to protect consumers and to ensure adequate supply of energy in the future.

More from Parliament and DECC…

Energy Efficiency Strategy looks to transform energy use

The Government’s Energy Efficiency Strategy, published in November 2012, aims to transform in the way energy is used across the UK economy to help boost growth and jobs. The strategy proposes that investing in energy efficiency could save up to 22 power stations-worth of energy by 2020. The strategy also includes immediate action to improve UK energy efficiency, including:

• £39 million to fund five centres examining business and household energy demand: looking at what drives energy demand and how to change future behaviour.
• An energy efficiency labelling trial with John Lewis: introducing trial labels to show the lifetime running costs of household appliances.
• A drive on financing energy efficiency for business and the public sector.

More from DECC…

Updating the Renewable Energy Roadmap

The 2012 update to the Renewable Energy Roadmap reports significant progress on the rollout of renewable energy across the United Kingdom from July 2011 to July 2012, including:

• A 27 per cent increase in overall renewable electricity generated
• A 40 per cent increase over the same period in renewable electricity capacity. Now over 10 per cent of all electricity generated is coming from renewables
• A 60 per cent increase of offshore wind capacity to 2.5 gigawatts
• A five-fold increase in solar PV capacity

The Roadmap shows that the UK is on track to meeting our first interim target on the way to the ambitious European target to source 15% of all energy from renewable sources by 2020.

More from DECC…

Encouraging innovation in bioenergy production from wetland biomass

Energy and Climate Change Minister Greg Barker has announced the award of £292,000 to seven organisations, to encourage and support innovation in bioenergy. This investment is part of the Department of Energy and Climate Change (DECC’s) £2 million three phase wetlands biomass to bioenergy competition, launched in October last year. As set out in the Government’s 2012 bioenergy strategy, sustainably sourced bioenergy could contribute around 11 per cent to the UK’s total primary energy demand by 2020 but more investment is needed to drive further innovation in this sector.

More from DECC…

Supporting local energy schemes

132 projects have been awarded a share of £46 million from the Government to help reduce fuel poverty, boost energy efficiency, and encourage collective switching and purchasing in regions across Great Britain. The funding will be used by local authorities and third sector organisations to install efficient central heating systems and insulation in the homes of vulnerable local residents, improve the energy efficiency of homes across local authority area, and set up collective purchasing of energy in local areas.

More from DECC…

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• News round-up: appraisal, green partnership, green investment
• News round-up: environmental tax, low carbon heat, Rio+20 outcomes, London green wall, car emissions
• News round-up: biodiversity indicators, fish, green genius, African farming, resource scarcity, renewables…

In the previous Green game-changers report (November 2011) the WWF published a collection of case studies of small-scale sustainability innovators contributing to a greener global economy. This latest report investigates how ‘large corporates’ (those with revenues of over US $1 billion per year) are responding to the challenge of those new green businesses innovators.

“Disrupt or be disrupted”

Dax Lovegrove, head of business and industry relations at WWF-UK, in the introduction describes “disrupt or be disrupted” as the rallying cry of those who have analysed the failure of major corporations. An important theme of the report is that failure to innovate into sustainability may expose corporations to future resource shock:

“Driving this movement are the smaller, disruptive business models that are emerging – using sustainability to create new markets and alter existing ones”

The report analyses the level at which large corporates have introduced innovations, identifying three key levels of adoption; firstly core business transformation (a fundamental realignment of direction to incorporate sustainable realities), secondly innovative business units (new or transformed components within a large corporation) and lastly new scalable models which provide templates for future developments.

Keeping ahead of the sustainability curve

The report presents ten case studies and makes a series of recommendations for corporations seeking to stay ahead of the sustainability curve, across some key themes:

Dematerialisation – dramatically reducing natural resource use

The report looks at how large corporates are now exploring non-ownership models of leasing and ‘collaborative consumption’ for example, companies like B&Q are moving into the tool-lending business, a move that the report identifies as being currently at the ‘scalable solution’ level.

“The drivers for leasing are numerous. Emerging social trends mean people are less keen on owning things now. In addition, leasing can be financially attractive for B&Q. If you keep materials in the loop then in 10 years’ time they are costed on resource costs 10 years ago and we insulate against increasing prices”
Matthew Sexton, director CSR, B&Q

Open Loop – using waste from other processes as a resource.

To extract 1kg of gold from the ground requires the mining of 200 tonnes of rock, compared to processing just 3-4 tonnes of scrap to reclaim the same kilogram. This problem provided the logic for Belgium-based mining and refining conglomerate, Umicore, to undergo a core business realignment from traditional mining to ‘urban mining’ where end-of-life materials are harvested bringing substantial resource and CO2 emissions savings.

Renewable energy and low carbon

Danish pharmaceutical company Novo Nordisk have reduced their global energy consumption by 21% between 2007 and 2011 while growing sales by 59% over the same period. This impressive decoupling has been achieved as a result of a collaborative interaction with DONG Energy, an established energy utility. DONG offered energy efficiency expertise to cut Novo Nordisk’s energy use in exchange for the pharmaceutical company’s commitment to long term contracts for renewable energy which allowed DONG to invest in the – initially more expensive – renewables sector.

“we now get the energy reductions we want, we have access to more green electricity than we use, and we save approximately 40 million Danish kroner annually in operational energy costs”
Anne Gadegaard, director corporate sustainability NovoNordisk

Restorative

PepsiCo India has had ‘Positive Water Balance’ status since 2009. In 2010 its manufacturing facilities consumed 5.8 billion litres of water but replenished 10.1 billion litres, a net gain of 4.3 billion litres. This was achieved by investing in water conservation in its own agricultural processes, but also by making similar investment in neighbouring agricultural communities – a pressing need given the critical nature of water stress in India. By achieving positive water balance status, PepsiCo India is insuring future sustainability as the water stress question threatens to become a major political issue.

Key recommendations

1. Monitor emerging models – The report notes that B&Q’s board were shocked by the degree of traction that peer-to-peer tool sharing websites like Zilok had already attained in the market.

   It also notes that it is not just sustainable product innovation but new business models – for example the DONG / Novo Nordisk initiative, where an existing expertise of one partner was leveraged to encourage its customers commit to buying renewable energy at a premium price. Thus a new business model was born that serves both companies.

2. Get buy-in from the top – The report stresses the need for a consistent vision from the top.

3. Reassess the chain value – PepsiCo India looked outside the ‘four walls’ of the company to find restorative models that would impact positively on the long term viability of the company. Although some water savings were made internally, much was made in neighbouring communities.

4. Collaborate externally – Many of the most successful projects have come about as a result of collaboration with other companies, NGOs or governments.

However the report also sounds a note of caution about the current state of play in the greening of large global corporations. It notes that most of the examples profiled demonstrate ‘geographic pockets of scalable solutions or have been ramped up to comprise a separate business unit’/ Relatively few businesses had brought sustainability innovation into their core business model.

Further reading

• Green game-changers: full report available to download

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The world’s energy, water and food systems are tightly linked. This Royal Geographical Society event will consider whether these vital resources can cope in the coming decades with a growing and more prosperous global population. An expert international panel to explore this area further and put the audience’s questions to them.

Panel members for the evening will be:

• Peter Voser, Chief Executive Officer of Royal Dutch Shell
• Tim Brown, Chief Executive Officer and President of IDEO
• Professor Kevin Noone, Stockholm Resilience Centre

The Energy Water Food Stress Nexus is one of Royal Geographical Society’s talks on 21st Century Challenges, a discussion series that aims to improve public understanding of, and engagement with, some of the big issues likely to affect our lives and society in the coming years. The series helps people make their own informed decisions and judgements on the most important challenges of the 21st century.

The talks are held at the Society’s headquarters in South Kensington, London, with all talks available to watch online along with additional information. Tickets are available at £7 for RGS-IBG members or £10 for non-members.

More information and booking…

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• Feeding a thirsty world: threats and opportunities for water and food security

In this look-ahead:

• Trends in urban transport and mobility
• Improving the CRC: Have your say
• Smart Grid impact on intelligent buildings
• The 2degrees Debate: Is voltage optimization the holy grail of energy efficiency?
• The 2degrees Debate: Is fracking the answer to the energy crisis?

For a full calendar of what’s planned for the coming weeks in 2degrees, including many more events, see the 2degrees calendar of events.

Trends in urban transport and mobility

Thursday 6th September 2012 3:00 p.m. (BST) / 10:00 a.m. (EDT): Global mega trends continue to impact on mobility and how we move people and goods around. This webinar will consider these trends and looks at examples of how the industry is responding, such as the growth of integrated mobility solutions, car sharing, smarter infrastructure and connectivity.
More from 2degrees…

Improving the CRC: Have your say

Tuesday 11th September 2012 3:00 p.m. (BST) / 10:00 a.m. (EDT): Do you want to help improve the Carbon Reduction Commitment (CRC) energy efficiency scheme? Acclaro Advisory has been reviewing the various options available for improving the scheme over the last few months. Join this webinar to hear the options and to give your feedback.
More from 2degrees…

Smart Grid impact on intelligent buildings

Tuesday 25th September 2012 4:00 p.m. (BST) / 11:00 a.m. (EDT): The Continental Automated Buildings Association has completed a collaborative landmark research study to identify, define and size the principle business opportunities presented by the growth of smart grids in relation to intelligent buildings. Join this webinar to learn more about the key findings.
More from 2degrees…

The 2degrees Debate: Is voltage optimization the holy grail of energy efficiency?

Wednesday 26th September 2012 3:00 p.m. (BST) / 10:00 a.m. (EDT): Voltage optimization is often seen as a ‘quick win’, relatively simple to install and effective in reducing carbon emissions and costs . But not everyone is a supporter of the technology. Join The Co-Operative Group and RED Engineering Design to hear two different points of view.
More from 2degrees…

The 2degrees Debate: Is fracking the answer to the energy crisis?

Thursday 27th September 2012 2:00 p.m. (BST) / 9:00 a.m. (EDT): Hydraulic fracturing, or ‘fracking’, has provoked debate around the world in recent months. While opponents have expressed concern over its potential environmental impacts, supporters claim it could be the answer to the world’s energy crisis. Join this webinar to hear both sides of the argument.
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• Online events from 2degrees in June

A new study has examined the electricity usage of a representative sample of English owner-occupier homes to provide insights into how we use the electrical products that power our lives. The report reveals that peoples’ relationship with energy, and levels of usage, is higher than previously thought and consumers are still getting to grips with minimising their energy consumption around the home and that more work is required to help homeowners make the right choices.

The UK is watching 10 billion hours more TV than previously thought, adding £205m to electricity bills. Computers, televisions and other electrical products plugged in but not in use or left on standby cost the UK up to £1.3 billion in electricity bills every year. In addition, single-person households were found to be using as much, and sometimes more, energy on particular appliances as typical families.

Powering the Nation – household energy using habits uncovered was conducted by Defra, Department of Energy and Climate Change (DECC), and the Energy Saving Trust. It highlights the actual day-to-day use of electricity across the country and allows us to see what is actually happening in people’s homes.

The study had four main objectives:

• To identify and catalogue the range and quantity of electrically powered appliances, products and gadgets found in the typical home
• To understand their frequency, and patterns, of usage, in particular their impact on peak electricity demand
• To monitor total electricity consumption of the home as well as individually monitoring the majority of appliances in the household on a five minute basis
• To collect user habits data when using some types of electrically powered appliances

The study is the first of its kind in the UK which measures and monitors electricity in real time and in real life situations; breaking down what electrical items are being used, when, for how long and how much power they use. The report is based results from the Household Electricity Use field trial, which gathered data obtained from 251 monitoring systems in owner-occupied households. Until now, a study of this magnitude and complexity had not been considered possible due to a mix of technical challenges of monitoring usage.

Reducing household energy use

Ministers commented on how the findings of the study can help reduce household use through improved understanding and energy efficiency.

Environment Minister Lord Taylor of Holbeach said:

“As this survey shows we are using a lot more energy than previously thought. Manufacturers need to develop more energy efficient electrical products and help consumers save money and the environment. We can all do simple things like switching off our televisions, computers and other home electronics and save up to £85 on electricity bill each year.”

Energy and Climate Change Minister Greg Barker said:

“Using energy more wisely in our homes will not only cut carbon but will also help save money on bills. But first we need to really understand how we use this energy in order to become more energy wise. This report provides vital insights into what is happening on the ground, highlighting the need for more energy efficient household electrical appliances and indicating which appliances contribute most to electricity demand at peak times. This research will help us to understand and manage household energy demand.”

Improving appliance labelling

The government is working with the European Union to ensure that Green Energy Labels are displayed on all new electrical appliances displayed for sale, providing clear and easily recognisable information for consumers about the relative energy consumption and performance of domestic appliances.

Philip Sellwood, Chief Executive of the Energy Saving Trust, said:

“It’s crucial that households across the nation can make informed decisions by having the right advice to help them reduce their energy usage and fuel bills. This research shows that there’s still more work to be done with consumer advice, product innovation and take up of energy-efficiency labelling. We continue to support industry and consumers though our Energy Saving Trust Recommended labelling scheme which helps consumers spot the most energy efficient products in each category.”

Further reading

• Sustainable product policy (Defra): further information on the household energy study
• Hidden costs of powering our homes: Defra press release
• Our recent work (Energy Saving Trust): download the Powering the nation report and access recorded live-stream launch event

Keeping the lights on, consumers’ energy bills down and creating cleaner electricity to help tackle climate change, are the three goals of ambitious draft electricity market reform legislation published today.

The reforms are designed to provide investors with transparency, longevity and certainty in order to attract £110 billion of investment to bring forward new low-carbon power generation for the 21st Century.

Over the next decade, around a fifth of existing power generating capacity will come off-line. Without these reforms, we could in the future see blackouts affecting millions of homes in some years. We would also be more dependent on importing oil and gas from overseas, this could present geopolitical risks and make our energy supply unsecure.

Demand for electricity will grow by 2050 as it is increasingly used to power our transport and domestic heating, leaving the UK with an energy gap which needs to be filled.

Secretary of State Edward Davey said:

“Leaving the electricity market as it is would not be in the national interest. If we don’t secure investment in our energy infrastructure, we could see the lights going out, consumers hit by spiralling energy prices and dangerous climate change.

“These reforms will ensure we can keep the lights on, bills down and the air clean.

“The reforms will also be better for the economy, leaving us less vulnerable to rising global energy prices and supporting as many as 250,000 jobs in the energy sector.

“By reforming the market, we can ensure security of supply for the long-term, reduce the volatility of energy bills by reducing our reliance on imported gas and oil, and meet our climate change goals by largely decarbonising the power sector during the 2030s”.

The draft Energy Bill proposes radical reform to the electricity market to attract the £110 billion required to build new low-carbon capacity. It will be designed to encourage a balanced portfolio of renewables, new nuclear and Carbon Capture and Storage (CCS), and to ensure that these technologies can compete fairly in the market-place.

The main elements of the Bill are:

National Grid is to be appointed as the delivery body for EMR, to provide analytical basis for Government decisions and to administer two new market mechanisms:

1. A new system of low-carbon generation revenue support – a feed-in tariff with Contracts for Difference (CfDs). These CfDs will make investment in clean energy more attractive by removing long term exposure to electricity price volatility. They will stabilise returns for generators at a fixed level known as a strike price. It will also insulate consumers by clawing back money from generators if the market price is higher than the strike price. The first strike prices will be published within the Delivery Plan in 2013.
2. A Capacity Market will be established to reduce the likelihood of future blackouts by ensuring there is sufficient reliable capacity to meet demand, ensuring that consumers continue to benefit from reliable electricity supplies at an affordable cost.

These mechanisms will be supported by:

• An Emissions Performance Standard (EPS) that will provide a regulatory backstop to prevent construction of new coal plants which emit more than 450g/kWh i.e. the most polluting form of electricity generation.
• The Carbon Price Floor – this was announced by the Chancellor in the 2011 Budget and was introduced in the Finance Bill. This provides a clear economic signal to move away from high carbon technologies by increasing the price paid for emitting carbon dioxide. It places an initial value on the price of carbon of around £16/tCO2 (2009 prices) in 2013, which will rise to £30/tCO2 (2009 prices) by 2020.

With or without reform, household electricity bills are likely to increase over time, driven primarily by rising fossil fuel prices. However, electricity market reforms will help to reduce the amount that bills will increase. As a result of these reforms, electricity bills are estimated to be, on average, 4% lower over the next two decades than they would otherwise have been. Average bills for businesses and energy intensive industries will also be lower than without reform.

Gas will continue to play an important role in the transition to a low-carbon economy, to provide flexibility and help maintain security of supply. A separate strategy on the role of gas will be published in autumn 2012.

Further reading

• Draft energy bill: draft Energy Bill and further details
• Electricity market reform: full information

In this look-ahead:

• Designing for Behavior Change
• Road Testing WRI’s New Collaboration Tool for Corporate Sustainability
• Reducing Your Forest Footprint to Improve Supply Chain Sustainability
• Closing the Loop on Water Use in the Beverage Industry
• Australia’s Clean Energy Future Legislation: Exploring the opportunity for British business
• Energy Efficiency: Identifying the hot spots in your property portfolio

For a full calendar of what’s planned for the coming weeks in 2degrees, including many more events, see the 2degrees calendar of events.

Designing for Behavior Change

Thursday 7th June 2012 3:00 p.m. (BST) / 10:00 a.m. (EDT): In our recent series on using behavior change to improve the energy efficiency of existing commercial buildings we have looked at ways that owners and property managers can engage with occupants. In this webinar we’ll take a look at the role the design team has in influencing behavior, discover why it’s crucial to reducing building energy consumption, find out what strategies can be employed by designers and hear case studies that have been successful. More from 2degrees…

Road Testing WRI’s New Collaboration Tool for Corporate Sustainability

Monday 11th June 2012 3:00 p.m. (BST) / 10:00 a.m. (EDT): The World Resources Institute (WRI) in partnership with members of the Next Practice Collaborative, have developed a new tool based on the original SWOT framework aimed at helping companies catalyze new sustainability insights, innovation, and collaboration and are inviting YOU to “road test” it. Join this webinar to: get it on the ground floor for a brand new CSR tool, proved your input to help and develop its purpose and learn about opportunities to benefit from the insights and experiences of several other companies. More from 2degrees…

Reducing Your Forest Footprint to Improve Supply Chain Sustainability

Wednesday 13th June 2012 3:00 p.m. (BST) / 10:00 a.m. (EDT): Find out how the Forest Footprint Disclosure (FFD) project engages companies involved in commodities associated with deforestation – such as timber, soy, palm oil, cattle and biofuels – on behalf of investors. Join James Hulse, Director of FFD for an update of 2011 results and themes; Grupo Maggi, an FFD sector leader will talk about their work on sustainable soy; and Trillium will present their corporate engagement policy. More from 2degrees…

Closing the Loop on Water Use in the Beverage Industry

Thursday 14th June 2012 4:00 p.m. (BST) / 11:00 a.m. (EDT): Clean, high-quality water is the essential ingredient for all beverage products. Accordingly, beverage companies continually focus on water use avoidance and conservation to ensure this resource is managed responsibly. Laura Nelson will describe how BIER (the Beverage Industry Environmental Roundtable) undertakes an annual quantitative benchmarking study to evaluate water use and efficiency in the beverage industry. Join this webinar to understand the main trends and observations encountered by the roundtable; learn best practice to drive water use avoidance and six principles of world class water stewardship. More from 2degrees…

Australia’s Clean Energy Future Legislation: Exploring the opportunity for British business

Tuesday 19th June 2012 10:30 a.m. (BST) / 5:30 a.m. (EDT): The Clean Energy Future legislation in Australia will provide exciting opportunities for British business. This webinar will give an overview of the Australian market for companies with environmental technologies and renewable energy products, as well as insight into legislative developments. Speakers include a representative from DRET (Department of Resources, Energy & Tourism Australia), Ernst & Young Australia, MHA Lighting Ltd and Austrade. More from 2degrees…

Energy Efficiency: Identifying the hot spots in your property portfolio

Wednesday 27th June 2012 3:00 p.m. (BST) / 10:00 a.m. (EDT): There is huge potential for making savings, both in cash and carbon, by improving the energy performance of existing buildings. The challenge is knowing which properties and measures to implement. Join this webinar to find out about Rapid Energy Modeling techniques and how they can be used to provide an insight into a building’s energy use; see how it can be used to identify ‘quick wins’ in energy efficiency as well as long-term interventions, and hear a practical example of how it’s being used to deliver cost savings on energy consumption. More from 2degrees…

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As many of those reading this blog are probably aware, Rio +20 marks the twentieth anniversary of the 1992 Earth Summit held in Rio, which gave rise to many outcomes – the Rio Declaration, Agenda 21, the Forests Principles, Convention on Biological Diversity – and importantly in the DECC context, the UN Framework Convention on Climate Change (UNFCCC).   The Earth Summit in ’92 is the reason why the Conference of the Parties (COP) to the UNFCCC is convened annually to review progress in implementation of the Convention and its Kyoto Protocol; as well as make plans for future commitments relating to energy and climate change.

So what’s in store for Rio +20 and how does energy and climate change feature? 

The agenda of Rio +20 was proposed when, in 2008, the G77 tabled the UN General Assembly Resolution that called for the Summit, and subsequently finalised the following year.  Overall, the Summit has three objectives and two themes:

Objectives

• Securing Political Commitment to Sustainable Development
• Assessing Progress Towards Internationally Agreed Commitments
• New and Emerging Challenges

Themes

• Green Economy in the context of Poverty Eradication and Sustainable Development
• Institutional Framework for Sustainable Development

Since last December the preparatory process for the Summit has been in full swing with monthly meetings to first discuss, and now negotiate, the outcome document. The process leading up to this invited and welcomed all stakeholders to input submissions to the Summit secretariat which were then considered and compiled into the Zero Draft of the outcome document. Currently, Member States are discussing a co-chair’s suggested text based on the amendments proposed and responses made to subsequent iterations of the Zero Draft, and at the end of this week it is expected that the Rio+20 secretariat will work with the co-chairs once again to produce a streamlined version of the text that will be under discussion at the final preparatory meeting in June; followed by the Summit itself on 20 – 22 June.

Following on from COP 17 in Durban the bridge between the COP and the Summit was highlighted by many stakeholders who were keen to build on the outcomes and momentum of Durban, and to bring the energy and climate issues into the process in the final six months lead up to Rio+20.  Whilst it is important to recognise that the agenda of Rio+20 is broader than the UNFCCC, being focussed on sustainable development – which necessarily integrates environment, economics, and social well-being as the foundations for development that will meet the needs of the present generation without compromising the needs of future generations – climate and energy issues play an important role in achieving this.

As it stands, the negotiating text focusses on the importance of access to sustainable energy for all, and the need to phase-out or eliminate fossil fuel subsidies, for instance.  The water-energy-food nexus is also a talking point especially since the German Government hosted a high level conference on this nexus in November 2011.  The is much language around ‘addressing climate change’ through green economy policies; and the links between health and climate change are strongly made with a recognition also of the impact air pollution and other pollution has on health.  In relation to oceans (or the ‘Blue Economy’ as it is being dubbed), the issue of ocean acidification – as a result of rising CO2 emissions – is addressed; as well as the impacts that sea level rise will have on coastal and protected areas.

The concept of Planetary Boundaries, highlighted by many stakeholder groups, coupled with an appreciation of the safe and just operating space for humanity, also brings climate change and energy into the Rio +20 agenda: climate change is one of the nine recognised planetary boundaries that keep us within the carrying capacity of the planet; and universal energy access for all is one of the cornerstones of the safe and just operating space.

Whilst Defra is leading preparations for Rio+20, it is a cross-Whitehall effort, with DfID, DECC, FCO and the Cabinet Office particularly involved. There is still much to play for in terms of the final outcome document and the language of the text.  But more than that, Rio +20 will also be a momentous occasion that will bring together thousands of people who will be leading the sustainable development agenda from now and for the next twenty years and beyond. It will mark the beginning of a multi-stakeholder effort to truly entrench sustainability into our development paradigm, to ensure that the worst impacts of climate change are mitigated against and that universal access to renewable and sustainable energy becomes a reality.

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