Cameron Plans Energy Law to Boost Britain's Efficiency, Renewable Power

U.K. Prime Minister David Cameron’s coalition government plans to pass a law to make British homes and businesses use energy more efficiently and increase reliance on renewable power.

The bill was outlined today in a speech by Queen Elizabeth II that laid out the legislative program planned for the next 18 months by the Conservative and Liberal Democrat coalition government, which took power after elections this month.

Cameron said on May 14 he wants his administration to be the “greenest ever” and pledged to cut government department emissions by 10 percent in a year. Politicians must now pass the bill into law to help the U.K. cut emissions by the targeted 80 percent by 2050 from 1990 levels, said David Symons, a director at the consultant WSP Environment and Energy.

“If we’re serious about taking 80 percent of the carbon out of the economy by 2050, we have to deal with buildings -- domestic and commercial,” Symons said in a telephone interview in London. “The clock is ticking on this. Every year we don’t make the saving is a year that carbon emissions aren’t reduced by as much as they could be.”

The U.K.’s 25 million homes account for about a quarter of Britain’s emissions, according to the Committee on Climate Change, which advises the government on global-warming policy. Non-residential buildings account for an additional 14 percent of the country’s carbon dioxide output, it says.

National Interest

The bill’s main element will be a “pay as you save” program in which energy-conservation improvements such as insulation would be made to homes and paid back over time through utility bills, the Department of Energy and Climate Change said in a statement.

“Energy security and taking real action to tackle climate change aren’t add-on extras for this new government, but are vital to our national interest,” Secretary of State for Energy and Climate ChangeChris Huhne, a Liberal Democrat, said in an e-mailed statement. The bill “is designed to help consumers put a stop to wasting energy in their homes.”

The Conservatives’ election manifesto pledged to give every home as much as 6,500 pounds ($9,300) of energy improvement credits to be paid back through their utility bills over 25 years. The Liberal Democrats promised energy-improvement packages of as much as 10,000 pounds per home.

The pay-as-you-save plans are a “good idea,” and the initial funding could come from government, utilities such as E.ON AG and Electricite de France SA, from banks, or a combination of the three, Symons at WSP said. The pay-back through bills would remain with the property rather than the owner, he said.

Green Investment Bank

The U.K. is pushing for the European Union to raise its regional emission-reduction target to 30 percent from 20 percent by 2020 compared with 1990 levels.

Other possible provisions in the bill include those to foster a “green investment bank” for channeling money to renewable-energy projects and plans to regulate emissions from coal-fired power plants. A framework to begin setting up a smart electricity grid and changes to energy markets to ensure supply security are also contemplated, according to the government.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net.

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