UCL Energy Institute


UCL Energy Institute’s Peter Mallaburn publishes paper on ‘Making efficiency pay’ in Nature Energy

18 March 2019

Dr Peter Mallaburn, Principal Research Associate in energy efficiency policy, has just published a paper on how governments can design better policy to increase household energy efficiency - vital if we are to meet climate change targets.

Insulation being installed on new housing

'Making efficiency pay'

In Dr Mallaburn's article, published in Nature Energy on 18 March 2019, he argues that for the UK to meet its commitments under the Paris agreement, we need to ‘step up a gear’ on household energy efficiency. He sets out how “financial mechanisms” – policies that exploit the value of energy efficiency – could be one way of achieving this.

Dr Mallaburn’s conclusions are based a paper* published in Energy Policy by Donal Brown and colleagues at the Universities of Sussex and Leeds and the Finnish Environment Institute that looks at how such financial mechanisms work and the lessons for policymakers. It finds that successful schemes have three basic design rules:

  1. Use public subsidy to keep overall cost of capital as low as possible
  2. Emphasise the “multiple benefits” of efficiency, such as comfort and health, not just cost savings
  3. Make the whole process simple, credible and easy to understand for the householder

The Green Deal, the UK’s version of a financial mechanism, managed to break all three of these rules, and, unsurprisingly, was a policy disaster, with today’s household insulation falling to 5% of their 2012 peak. As it ponders a replacement the government should take note of the author’s findings and their overall conclusion: that even the best designed schemes aren’t enough is there isn’t a coherent strategy in place.

Read the full paper on Nature.com

*Worth the risk? An evaluation of alternative finance mechanisms for residential retrofit. Brown, D., Sorrell, S. & Kivimaa, P. Energy Policy 128, 418–430 (2019)

Image by Alina Kuptsova from Pixabay