Summary and Conclusions
The wide range of views which have informed this study emphasise that energy supply and demand in Scotland is complex and influenced by a number of diverse factors: Some of these are more open to influence than others. However, perhaps now more than at any recent time, cutting energy use and reducing carbon emissions are on Government and increasingly on wider agendas. For example, the public is increasingly aware of the impact of their energy use, although they may not always be able to move from awareness to taking action to reduce their use of energy. The impact of higher energy costs on businesses and individuals is more significant in the current economic climate than in previous years.
To deliver change in how we use energy and to reduce CO 2 emissions requires:
- Awareness of the need to change.
- Desire to make a change in our working or personal lives.
- Solutions that support change, including technology, management systems, regulations and through wider public and social networks.
- An economic case, sufficiently attractive, to promote change.
- Practical infrastructure to support change, such as transport options, alternative sources of fuel.
- Regulatory incentives that promote and permit changes that reduce energy and carbon emissions.
With many different ways to deliver change and with different issues, barriers and opportunities in each sector, there are no "magic bullet" solutions. Action will be required in many different ways. A number of the key issues, barriers and opportunities in each sector are highlighted below:
Energy Use in Homes - As the largest energy using sector and the most rapidly growing, reducing energy use in homes is vital. Existing homes dominate energy use, with the greater part of domestic energy used on space and water heating. Hence, to achieve a sizeable reduction in domestic carbon emissions requires a reduction in the use of fossil fuels for heating. Analysis from the Committee on Climate Change shows significant potential through improved insulation and more efficient sources of heating. Hence reducing heating use should be the main focus of direct Scottish Government interventions.
Electricity use is increasing in homes, for the appliances that use electricity the main influences are international, with standards set at EU level and most manufacturing is located overseas. The Scottish Government will have opportunities for indirect influence by working with retailers to improve consumer awareness of energy labels and hence change the market towards lower energy appliances.
Higher energy costs increase awareness of, and helps create motivation to improve, energy efficiency. However in uncertain economic times there is pressure on the availability of funds for investment in the key opportunities, such as insulation or more efficient boilers. Hence finance is a key barrier.
To address these issues and opportunities in the domestic sector we conclude that the Scottish Government should:
- Present energy efficiency as a credit crunch busting opportunity to householders.
- Work with retailers and other channels to reach householders to offer advice and help on energy efficiency.
- Increase funding available for advice and financial support schemes, targeted at improving insulation and more efficient boilers.
Transport - Energy use by transport continues to grow year on year, with an increase in mileage travelled by car and air and a reduction in travel by bus and on foot. Of all transport modes, road transport accounts for 71% of fuel use and private vehicles dominate road use. When making transport choices the focus is on availability, accessibility and safety of transport - rather than energy or emissions. It is important to provide a safe, integrated and affordable public transport system to encourage a modal switch from private vehicles to public transport.
Fuel price increases have brought attention to the issue, but use of cars for business and pleasure is deeply embedded in our culture and our daily routines. Hence short term changes are likely to come from small changes in driving behaviour, or avoiding travel for short journeys. In the medium term EU vehicle standards and the turnover of the car fleet will bring in lower CO 2 emissions. This turnover in the fleet will be slowed in the short term by the current economic climate.
These cultural factors and our daily routines will mean that increased awareness of transport fuel costs will not be matched by a similar level of motivation to reduce or change car use. Thus advice and support are needed to help translate the increased levels of awareness into positive change.
While goods vehicle fuel use is a smaller component of transport fuel use, there are a smaller number of businesses to target and the profit motive is even more important in difficult economic times. In addition campaigns to reduce transport costs in business can be linked to reducing commuting and business travel.
To address the key transport issues and opportunities we conclude that the Scottish Government should:
- Target behaviour change for car drivers via a package of measures (eco-driving, travel plans, pricing of public transport, anti speeding campaigns etc.)
- Work with business to provide travel advice and incentives to their workforce.
- Provide tailored and detailed advice to large fleet operators.
- Embed public transport into key decision making processes.
Industry. In today's world market, much of industry's focus is on production and improving competitiveness. However energy has received greater prominence over several years, partly due to rising energy costs and partly due to legislative drivers such as the Climate Change Levy, EU Emissions Trading and the forthcoming Carbon Reduction Commitment.
As a result the motivation to cut energy costs has never been higher. Energy and carbon are increasingly attracting attention at board level, where commitment from the top can really drive forward change. As evidence of this supply chain issues are becoming increasingly important, in many cases driven by strong awareness of brand issues in the retail sector. Hence customers are increasingly demanding improvements in energy and environmental performance from their industry suppliers.
A result of this is that many businesses have already realised many of the low cost, quick return savings. Further energy saving opportunities may require significant investment in process changes or new technology such as CHP or biomass. Funding these types of measure is an extreme challenge in the uncertain markets in which industry operates at present.
To address the key industry sector issues and opportunities we conclude that the Scottish Government should:
- Implement a high profile campaign to target largest business and harness their supply chain in the effort to cut energy costs and CO 2 emissions.
- Initial focus on industrial buildings, longer term focus on processes & CHP.
- Provision of advice on the increasingly complex regulatory aspects of energy and climate change that industry needs to understand and work with.
Service sector - Although the service sector uses the least energy of the four sectors studied, both the size of the sector and the energy it uses (generally on building services) continues to grow. Energy is in general a minor contributor to sector costs and this in the past has led to a lack of focus on reducing consumption.
However, the public sector in recent years have made a number of high level commitments to reduce the contribution to climate change, through for example, Scotland's Climate Change Declaration and the Greener Scotland Programme. This has been complemented by the provision of funding ( CEEF) to local authorities, higher education, and water and health sectors to enable them to make the necessary investment in improved energy efficiency. The most effective improvements have been made in organisations where senior management have been engaged in the development and implementation of policy and plans to improve cut energy use and CO 2 emissions.
In the private sector growing corporate responsibility is also having a real influence, particularly for larger organisations. Much of the sector, and retail in particular, includes a large number of small organisations that individually have relatively modest energy consumption. Many have relatively little prior experience of managing their energy use. However the larger organisations buy goods and services from a much wider supply chain of smaller businesses. Examples in the retail sector show how much influence can be exerted via the supply chain.
To address the key service sector issues and opportunities we conclude that the Scottish Government should:
Run campaigns and initiatives to engage senior management in energy management in the commercial and public sectors. These should:
- Provide tools and support for energy management campaigns.
- Focus on large businesses, using their supply chains to draw in SMEs.
- Offer increased financial support for SMEs and smaller public bodies.
To conclude
As the SWOT analysis shows many of the factors that drive energy use in Scotland are difficult for the Scottish Government to influence. However, rising fuel prices result in heightened awareness of the importance of reducing energy impacts at both a corporate and personal level. This awareness means that there is scope for the Scottish Government to work in partnership with a range of organisations to develop innovative and imaginative approaches to reduce energy use. Increasingly public and private sector organisations are interested in taking action, the challenge is to encourage and enable them to translate this interest into action. There are opportunities to build on EU, UK regulatory levers and the initiatives created within each sector. Using these levers the Scottish Government will be able to exert more influence than would be possible through its own efforts. The use of this wider influence will enable the Scottish Government to deliver more cost effective energy reductions than would otherwise be the case.