UK Energy Efficiency Trends – January 2015

Energy Efficiency Trends is a quarterly report focused on the UK market, providing insight into non-residential energy efficiency. The latest results show a decline in activity in the second half of 2014, possibly reflecting the recent decline in energy prices.

It is always interesting to consider the impact of wider political and economic conditions on our sector – energy efficiency does not after all operate in a vacuum.  At the time of writing, for example, it has been reported that UK inflation is now at its lowest level in 14 years and Mark Carney, the governor of the Bank of England, forecasts that this will dip yet lower before returning to the 2% target rate.  Of particular concern for the energy efficiency sector is that this has been driven by materially declining oil and gas prices. With reports of oil prices dropping some 60% since their June 2014 peak and wholesale gas prices nose-diving 30% in the last 12 months, it is perhaps to be expected that pressures on business and public sector organisations to drive cost savings – through energy efficiency measures – may ease somewhat (perhaps psychologically if nothing else). And if this does hold true, it is fair to expect this ‘relaxation’ to persist into at least the first half of 2015.   Against this backdrop the sector is probably well within its rights to feel somewhat on edge and perhaps to expect some stormy months ahead.

Our findings this quarter appear to reflect this broad concern. Whilst suppliers reported being broadly supportive of the UK government’s actions in relation to managing the economy, the sector was materially dissatisfied with its record on energy efficiency.  This negative feedback is likely to have been – at least in part – fed by particularly downbeat trading feedback. Judging by the typical response, it probably felt like a tough quarter for the industry – and a bitter pill to swallow in the context of an upbeat wider economy.

Of course this may prove to be nothing more than conjecture as things settle down next quarter, but there are certainly some systemic economic and political changes taking place and it will be interesting to consider their impacts on the UK’s non-domestic energy efficiency sector.

For more information, please visit the Trends portal on the EEVS website: http://www.eevs.co.uk/trends.html

Download PDF

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
 
Sign up for our free monthly newsletter →

Want to learn how we help our clients put it all together? Contact us