ENERGY EFFICIENCY TRENDS VOL. 16. Essential insight for consumers and suppliers of non-domestic energy efficiency in the UK September 2016

Transcription

1 ENERGY EFFICIENCY TRENDS VOL. 16 Essential insight for consumers and suppliers of non-domestic energy efficiency in the UK September 2016

2 SUPPORTED BY: Bellrock delivers a full range of property and facilities management services to over 40,000 retail commercial and public sector properties throughout the UK. Utilising in-house expertise and selective partners, it also provides a consolidated and integrated approach to delivering the complete range of energy services, tailored to strategic property asset and lifecycle objectives. For more information, please call Richard Singleton, Managing Director (Corporate), on +44 (0) , enquiries@bellrock.co.uk or visit Bird & Bird supports its clients to achieve energy savings, security of supply and reputational benefits from implementing energy management solutions. The firm has an international, market-leading legal team with over ten years' experience in all aspects of energy management. For more information, please call Michael Rudd, Partner, on +44 (0) , michael.rudd@twobirds.com or visit Minimise Energy provides LED lighting products and services that maximise efficiencies and ROI for clients. The company delivers a seamless, in-house service from initial site survey through to completed installation for leading private and public sector organisations, helping to improve building environments and meet energy efficiency objectives. For more information, please call Sam Stageman, Sales Director, on +44 (0) , sam.stageman@minimise.com or visit ENDORSED BY: last page applies throughout. Page 1 of 27

3 CONTENTS SECTION 1. INTRODUCTION 4 SECTION 2. EXECUTIVE SUMMARY SUPPLIER TRENDS CONSUMER TRENDS... 6 SECTION 3. SUPPLIER TRENDS THE ORDER BOOK STAFF NUMBERS SALE PRICES INDUSTRY RISK GOVERNMENT EFFECTIVENESS SECTION 4. CONSUMER TRENDS TECHNOLOGIES & MEASURES PROPERTY TYPES PROJECT COSTS PROJECT FINANCE FINANCIAL PAYBACK MEASUREMENT AND VERIFICATION CONSUMERS NOT UNDERTAKING ENERGY EFFICIENCY SECTION 5. SPECIAL FEATURE: POST-BREXIT IMPACTS ON ENERGY EFFICIENCY SUPPLIERS CONSUMERS APPENDICES 22 APPENDIX A: METHODOLOGY 22 APPENDIX B: SUPPLIER RESPONDENTS 23 APPENDIX C: CONSUMER RESPONDENTS 24 ABOUT US 25 CONTACT US last page applies throughout. Page 2 of 27

4 TABLE OF FIGURES Figure 1: Market Monitor tracking industry confidence, Q Q3 2016(e)... 5 Figure 2: Consumers commissioning efficiency projects, Q Q Figure 3: Trends in orders from national customers, Q Q3 2016(e)... 7 Figure 4: Trends in orders from overseas customers, Q Q3 2016(e)... 7 Figure 5: Trends in the number of staff employed, Q Q3 2016(e)... 8 Figure 6: Trends in sale prices achieved, Q Q3 2016(e)... 8 Figure 7: Key issues of concern to energy-efficiency suppliers, Q Figure 8: Trends in key issues of concern, Q Q Figure 9: Trends in industry views on energy efficiency policy, Q Q Figure 10: Industry views of the wider economy s management, Q Q Figure 11: Uptake of energy efficiency technologies, Q v four-quarter average Figure 12: Trends in top technologies for consumer uptake, Q Q Figure 13: Breakdown of commissioned projects by property type, Q Figure 14: Trends of commissioned projects by property type, Q Q Figure 15: Trends in capital costs, Q Q Figure 16: Trends in finance models, Q Q Figure 17: Trends in expected payback periods, Q Q Figure 18: Trends in the use of good practice M&V, Q Q Figure 19: Consumer reasons for lack of efficiency uptake, Q v four-quarter average Figure 20: Supplier business impact following the vote to leave the EU Figure 21: Expected impact on key business areas over the next 12 months Figure 22: Views on the principal driver for results in Figures 20 and 21 above Figure 23: Supplier views on what Brexit negotiations should aim for in relation to EU-derived energy efficiency legislation (such as ESOS and EPBD) Figure 24: Suggested focus areas for the UK Government in the wake of the Brexit vote Figure 25: Consumer business impact following the vote to leave the EU Figure 26: Expected impact on consumer business costs over the next 12 months Figure 27: Views on the principal driver for results in Figures 25 and 26 above Figure 28: Consumer views on what Brexit negotiations should aim for in relation to EU-derived energy efficiency legislation (such as ESOS and EPBD) Figure 29: Suggested focus areas for the UK Government in the wake of the Brexit vote Figure 30: Who completed the survey? Q Figure 31: Breakdown of respondents by supplier type, Q Figure 32: Supplier respondents organisation size (no. of employees), Q Figure 33: Consumer respondents by sector, Q Figure 34: Consumer respondents organisation size (no. of employees), Q last page applies throughout. Page 3 of 27

5 SECTION 1. INTRODUCTION Welcome to the latest edition of UK Energy Efficiency Trends, the leading source of market insight for the energy efficiency sector. This edition examines consumer and supplier trends in the second quarter of 2016 (March-June) and provides invaluable insight on the immediate impact of the UK s decision to exit the EU. Last quarter s survey results were clear; respondents felt strongly that the energy efficiency sector would be best served if the UK remained in the EU. As we know, the UK electorate took a contrary view. So, what next? This is the billion dollar question that we asked in this quarter s industry survey. And perhaps unsurprisingly the answer we got signalled uncertainty. More importantly, as a result of this uncertainty, both consumers and suppliers expressed concern around how this is expected to impact energy saving activities and investments whether it be a cooling off of customer demand (for suppliers), or higher technology and installation costs (for consumers). The sector-wide outlook has certainly been damped, confidence has certainly been hit on both sides (see our post Brexit supply-side results on page 16, consumer-side on page 19) and, as a sector, we are keen for political and economic certainty to be restored. In other news and re-focusing on core business for a minute this quarter s results have also shown some material shifts in consumer buying preferences. Until now, lighting has been the dominant technology of choice. It is still top of the pile, but consumer interest in BEMS and Smart Metering has shot up considerably. Lighting looks to have taken much of the hit and we saw an uncharacteristically sharp dip this quarter. If this trend were to continue, these performance management-based technologies could potentially challenge lighting for the top spot in the forthcoming quarters. Watch this space! So, it is an understatement to say that there s a lot going on in the UK market at the moment! In this context, we hope that the objective intelligence that Energy Efficiency Trends aims to deliver is more helpful and more insightful than ever. Tom Rowlands-Rees Bloomberg NEF Ian Jeffries EEVS Insight last page applies throughout. Page 4 of 27

6 SECTION 2. EXECUTIVE SUMMARY The EEVS/Bloomberg Energy Efficiency Trends Survey (Vol.16) was completed by 89 UK-based respondents (55 consumer organisations and 34 suppliers), between 11 July and 12 August, Their answers relate to the situation in the second quarter SUPPLIER TRENDS Supply-side industry confidence continued to drop off this quarter and is now firmly in negative territory. Following the all-time low of the previous quarter, the market monitor which combines trends in supplier order books, staffing levels, sale prices and government action fell further from -4 to -38 points, perhaps as post-brexit concerns took hold. This decline in industry confidence continues to be driven by a downward trend in UK orders (Figure 3) with around three-quarters of suppliers now reporting either stagnant of declining order books and a further decline in confidence in respect of the government s management of energy efficiency policy (Figure 9). Key concerns for the sector remain largely constant customer demand is still the dominant issue for 38% of suppliers, followed by national competition (26%) and raising finance (12%). Analysis of our post-brexit poll also found that: More than half of suppliers (56%) considered that the decision to leave the EU had negatively impacted their business, with only 35% reporting business as usual activity following the referendum result. Over the next 12 months, 50% of suppliers considered that the UK exit will mean reduced levels of customer demand, with 29% also expecting their overheads to rise, and 29% expecting reduced business investment. In negotiating the UK exit from the EU, six out of 10 suppliers considered that energyrelated regulations should be retained in full, with 35% preferring some revision and scaling back. Only 3% of suppliers consider that EU-derived regulation should be entirely removed from the UK statute book. Figure 1: Market Monitor tracking industry confidence, Q Q3 2016(e) Positive sentiment (max = 500 points) Negative sentiment (min = -500 points) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (e) Source: EEVS, BNEF. Note: based on weighted confidence indicators from Figures 3, 4, 5, 6, and 9. Zero represents neutrality. 500/-500 indicate the maximum degrees of positive/negative sentiment possible. last page applies throughout. Page 5 of 27

7 2.2. CONSUMER TRENDS High efficiency lighting saw one of the biggest drops in deployment this quarter and, although it still remains the leading technology deployed, it was significantly down (59%) on its rolling four-quarter average (70%). It was a similar story for solar PV and behaviour change, which both saw material declines against their four-quarter averages. By contrast, building energy management systems (BEMS) now the second most popular technology behind high efficiency lighting and smart metering were the two main beneficiaries, both seeing a material increase in uptake. It will be interesting to see if this short-term trend away from lighting continues in the coming quarters. Volatility in capital spending continued this quarter, with a significant increase in larger projects (GBP 500,000+) being reported this quarter. This increase pushed up median project costs from the GBP 47,000 last quarter to around GBP 145,000 this quarter (and perhaps reflecting the move away from lighting and behaviour change, and towards BEMS and smart metering). Project finance saw a return to the longer-term trend line this quarter, with a broad 70/30 split reported between use of in-house capital and third-party finance, respectively. After a period of tightening payback expectations, this quarter has seen something of a correction with the median payback rising towards four years (from three years last quarter). Analysis of our post-brexit poll also found that: For 73% of consumers, it remained business as usual following the referendum. But 25% did report either a minor or major impact on their energy saving investment plans. Looking ahead to the next 12 months, only 4% of consumers considered that the UK exit would lead to lower energy prices, with 55% expecting increases. Views were similar in relation to the cost of procuring energy efficiency technologies, with only 2% expecting cost reductions, 42% expecting no material change, and 32% expecting price increases. In terms of negotiating the UK exit, only 6% of consumers felt that EU policy and regulation (as it relates to energy efficiency) should be removed entirely; 55% consider it should be revised and scaled back; 39% that it should be retained as it is. Finally, the main advice to UK policy-makers from consumer respondents was for the government to take action to reduce economic uncertainty and to focus on UK energy security and driving energy efficiency. Figure 2: Consumers commissioning efficiency projects, Q Q % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Source: EEVS, BNEF. Note: shows the proportion of respondents who have commissioned (or plan to commission) projects in a given quarter. last page applies throughout. Page 6 of 27

8 SECTION 3. SUPPLIER TRENDS 3.1. THE ORDER BOOK Figure 3: Trends in orders from national customers, Q Q3 2016(e) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Fall significantly Fall slightly Remain constant Increase slightly Increase significantly Confidence Indicator (RH axis) 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (e) -300 Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1. Zero represents neutrality. 500/-500 indicate the maximum degrees of positive/negative sentiment possible. Figure 4: Trends in orders from overseas customers, Q Q3 2016(e) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Fall significantly Fall slightly Remain constant Increase slightly Increase significantly Confidence Indicator (RH axis) 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (e) -300 Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1. Zero represents neutrality. 500/-500 indicate the maximum degrees of positive/negative sentiment possible. last page applies throughout. Page 7 of 27

9 3.2. STAFF NUMBERS Figure 5: Trends in the number of staff employed, Q Q3 2016(e) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Fall significantly Fall slightly Remain constant Increase slightly Increase significantly Confidence Indicator (RH axis) 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (e) -300 Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1. Zero represents neutrality. 500/-500 indicate the maximum degrees of positive/negative sentiment possible SALE PRICES Figure 6: Trends in sale prices achieved, Q Q3 2016(e) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Fall significantly Fall slightly Remain constant Increase slightly Increase significantly Confidence Indicator (RH axis) 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 (e) -300 Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1. Zero represents neutrality. 500/-500 indicate the maximum degrees of positive/negative sentiment possible. last page applies throughout. Page 8 of 27

10 3.4. INDUSTRY RISK Figure 7: Key issues of concern to energy-efficiency suppliers, Q International competition, 3% Pressure to reduce costs 6% Regulation 6% Subsidy/policy uncertainty, 6% 3% Customer demand 38% Customer demand National competition Raising finance Subsidy/policy uncertai Raising finance 12% Regulation Pressure to reduce cos International competitio National competition 26% Source: EEVS, BNEF. Note: each supplier respondent was asked to select their primary issue of concern. Therefore results sum to 100%. Figure 8: Trends in key issues of concern, Q Q % 90% 80% 70% 60% 50% 40% 30% 20% International competition Raising finance Competition - national Staff costs Regulation National competition Customer demand 10% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Source: EEVS, BNEF. Note: each supplier respondent was asked to select their primary issue of concern, therefore results sum to 100% in each period. last page applies throughout. Page 9 of 27

11 3.5. GOVERNMENT EFFECTIVENESS Figure 9: Trends in industry views on energy efficiency policy, Q Q % 90% 80% 70% 60% 50% 40% 30% 20% 10% Very ineffective Ineffective Neutral Effective Very effective Confidence Indicator (RH axis) 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2-300 Source: EEVS, BNEF. Note: the confidence indicator is an input to the market monitor in Figure 1. Zero represents neutrality. 500/-500 indicate the maximum degrees of positive/negative sentiment possible. Figure 10: Industry views of the wider economy s management, Q Q % % 80% Very ineffective 70% 120 Ineffective 60% 60 Neutral 50% 40% 30% 20% 10% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q Effective Very effective Confidence Indicator (RH axis) Energy Efficiency CI (RH axis) Source: EEVS, BNEF. Note: CI = confidence indicator. The dotted line represents the CI from Figure 9 which is overlaid here for comparison with views on the wider economy. Zero represents neutrality. 500/-500 indicate the maximum degrees of positive/negative sentiment possible. last page applies throughout. Page 10 of 27

12 SECTION 4. CONSUMER TRENDS 4.1. TECHNOLOGIES & MEASURES Figure 11: Uptake of energy efficiency technologies, Q v four-quarter average Lighting - High Efficiency Building Energy Management System (BEMS) Lighting - Controls Smart Metering Behaviour Change Cooling and Air Conditioning Boiler - Optimisation Boiler - Controls M&T / Performance Management Software Solar - Photovoltaic Building Fabric - Glazing, Insulation, Materials Boiler - High Efficiency Unit Motors and Drives Refrigeration - High Efficiency Unit Radiant and Warm Air Heaters Combined Heat and Power (CHP) Refrigeration - Optimisation Refrigeration - Controls Power Management - Voltage Optimisation, PFC HVAC Heat Exchangers Compressed Air Equipment Optimisation - of set-points and controls Solar - Thermal High Speed Hand Dryers Heat Pumps - Water Source Heat Pumps - Ground Source Heat Pump - Air Source Energy Recovery Q Q average 0% 20% 40% 60% 80% 100% Source: EEVS, BNEF. Note: ranks technologies according to the proportion of consumers who commissioned a project in each technology out of the overall number of consumers commissioning projects. PFC = power factor correction. Figure 12: Trends in top technologies for consumer uptake, Q Q % 90% 80% 70% 60% 50% 40% 30% 20% Lighting - High Efficiency Building Energy Management System Lighting - Controls Smart Metering Behaviour Change 10% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Source: EEVS, BNEF. Note: shows the proportion of respondents who commissioned a project in the respective category out of the total number of respondents who commissioned a project. Smart metering was only tracked from Q onward. last page applies throughout. Page 11 of 27

13 4.2. PROPERTY TYPES Figure 13: Breakdown of commissioned projects by property type, Q Street / Highway Lighting Infrastructure, 2% Warehousing and Distribution, 2% Residential, 2% Hotel, 2% 8% Retail - Out of Town, 2% Retail - High Street, 3% Laboratory 5% Data Centre 8% Hospital 8% Office 27% Public building 11% Office Public building School & University Manufacturing & Industrial Leisure Centre / Sports / Hospital Retail - Out of Town Data Centre School 6% Leisure Centre / Sports, 3% Industrial, 3% Manufacturing, 8% University, 5% Source: EEVS, BNEF Figure 14: Trends of commissioned projects by property type, Q Q % 80% 60% 40% 20% Retail Hospital Leisure Centre / Sports Manufacturing & Industrial School & University Public building Office 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Source: EEVS, BNEF last page applies throughout. Page 12 of 27

14 4.3. PROJECT COSTS Figure 15: Trends in capital costs, Q Q % projects in each band Thousands 100% % 60% 40% 20% Unknown 500K K K 10-50K < 10K Zero Median (RH-axis) 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 0 Source: EEVS, BNEF. Note: the line shows the cost trend for energy efficiency projects over time based on the estimated median PROJECT FINANCE Figure 16: Trends in finance models, Q Q % 80% 60% 40% Unknown Supplier-arranged Third party finance Combination In-house 20% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Source: EEVS, BNEF last page applies throughout. Page 13 of 27

15 4.5. FINANCIAL PAYBACK Figure 17: Trends in expected payback periods, Q Q % projects in each band Number of years 100% 10 80% 60% 40% 20% Unknown 10 + years 5-10 years 3-5 Years 1-3 years <1 year Median (RH-axis) 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 0 Source: EEVS, BNEF. Note: the line shows the expected payback trend for energy efficiency projects based on the estimated median MEASUREMENT AND VERIFICATION Figure 18: Trends in the use of good practice M&V, Q Q % 80% 60% 40% No Unknown Yes 20% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Source: EEVS, BNEF. Note: M&V = measurement and verification. last page applies throughout. Page 14 of 27

16 4.7. CONSUMERS NOT UNDERTAKING ENERGY EFFICIENCY Figure 19: Consumer reasons for lack of efficiency uptake, Q v four-quarter average Future projects are planned Higher priorities elsewhere Energy efficiency has already been undertaken Buildings are landlord-owned, so little upside Lack of resource Uncertainty over the financial benefits / business case Wider macro-economic uncertainty Senior management not bought in Q (industry neutral) Q (negative impact) 4Q average Lack of affordable finance Subsidy uncertainty Preference for renewable energy (e.g. solar) Negative impact on core operations Lack of trust in the industry 0% 20% 40% 60% 80% 100% Source: EEVS, BNEF. Note: respondents not commissioning projects may have cited multiple reasons. The chart shows the proportion of respondents in each category out of overall respondents, not commissioning projects. Results therefore do not sum to 100. last page applies throughout. Page 15 of 27

17 SECTION 5. SPECIAL FEATURE: POST-BREXIT IMPACTS ON ENERGY EFFICIENCY The momentous decision for the UK to leave the EU has been made and it is expected to have far reaching consequences, not least on the UK energy efficiency sector. Looking back at Vol. 15, the decision to leave the EU is not one the majority of the UK energy efficiency industry would have made, so in this edition we have asked suppliers and consumers for their views on what next? in this brave new world; how the decision is likely to impact them over the next 12 months; and what the government should do next to support the sector. The results are set out below: 5.1. SUPPLIERS Figure 20: Supplier business impact following the vote to leave the EU Major impact 3% Don t know 9% No change 35% Minor impact 53% Source: EEVS, BNEF. Note: suppliers were asked: to what extent has it been business as usual for your organisation following the vote to leave the EU? last page applies throughout. Page 16 of 27

18 Figure 21: Expected impact on key business areas over the next 12 months 12% 50% 35% 3% Customer demand 6% 9% 9% 9% 56% 29% Cost overheads 68% 29% 15% 12% Sale prices 15% 12% 21% 44% 65% Investment in growing the business 3% New staff recruitment Don't know Decrease No impact Increase Source: EEVS, BNEF. Note: suppliers were asked: looking ahead over the next 12 months, how do you think the Brexit decision will impact your organisation in respect of the following: customer demand, cost overheads, sale prices, investment in growing the business, new staff recruitment?. Figure 22: Views on the principal driver for results in Figures 20 and 21 above General economic uncertainty 35% 29% 65% Currency volatility 29% Lack of political governance / leadership Risk of reduced access to EU markets 12% 6% 29% 29% 41% 35% Primary driver All of the above 29% None of the above / business as usual 6% Source: EEVS, BNEF last page applies throughout. Page 17 of 27

19 Figure 23: Supplier views on what Brexit negotiations should aim for in relation to EUderived energy efficiency legislation (such as ESOS and EPBD) Remove 3% Revise and scale back 35% Retain entirely 62% Source: EEVS, BNEF Figure 24: Suggested focus areas for the UK Government in the wake of the Brexit vote Provide government support/incentives 15% Focus on stability (retention of current policy) 9% Provide clarity on status of existing regulation 6% Remove red tape Focus on long term strategy 3% 3% 3% Source: EEVS, BNEF. Note: suppliers were asked if they had any specific suggestions for the UK Government on what it could do now to address sector-related concerns or minimise negative impacts of a Brexit. Responses were grouped into six broad categories shown above. last page applies throughout. Page 18 of 27

20 5.2. CONSUMERS Figure 25: Consumer business impact following the vote to leave the EU Don t know 2% Minor impact 19% Major impact 6% No change 73% Source: EEVS, BNEF. Note: consumers were asked: to what extent has it been business as usual for your organisation (in relation to energy efficiency programmes) following the vote to leave the EU? Figure 26: Expected impact on consumer business costs over the next 12 months 6% 4% 36% 55% 25% 2% 42% 32% Don't know Decrease No impact Increase Energy costs Energy efficiency costs Source: EEVS, BNEF. Note: consumers were asked: looking ahead over the next 12 months, how do you think the Brexit decision will impact your organisation in respect of the following: energy costs, energy efficiency costs? last page applies throughout. Page 19 of 27

21 Figure 27: Views on the principal driver for results in Figures 25 and 26 above General economic uncertainty 25% 23% 47% Currency volatility 23% 23% 45% Lack of political governance / leadership 6% 23% 28% Risk of reduced access to EU markets 4% 4% 23% 26% Primary driver All of the above None of the above / business as usual 17% Source: EEVS, BNEF Figure 28: Consumer views on what Brexit negotiations should aim for in relation to EUderived energy efficiency legislation (such as ESOS and EPBD) Remove 6% Retain entirely 39% Revise and scale back 55% Source: EEVS, BNEF last page applies throughout. Page 20 of 27

22 Figure 29: Suggested focus areas for the UK Government in the wake of the Brexit vote Reduce uncertainty (negotiate well / long term plan) Focus on energy security 11% 11% Focus on energy efficiency and demand side management 9% Scientific approach to regulation (consult industry experts) Hold a second referendum 4% 4% 4% Source: EEVS, BNEF. Note: consumers were asked if they had any specific suggestions for the UK Government on what it could do now to address sector-related concerns or minimise negative impacts of Brexit. Responses were grouped into six broad categories shown above. last page applies throughout. Page 21 of 27

23 APPENDICES Appendix A: Methodology The EEVS/Bloomberg Energy Efficiency Trends Survey (Vol.16) was conducted between 11 July and 12 August, 2016, and completed by 89 UK-based respondents (55 consumer organisations and 34 suppliers). This is the 16 th in a series of reports showing industry trends in non-residential energy efficiency. As the report series evolves, we continue to make minor tweaks. Initially, the report covered a broad range of European countries, but since Volume 8, it has presented UK-based results only, as these consistently accounted for the bulk of data received. In focusing the report on a single country with better data coverage, we were able to present cleaner, more robust results. This coincided with a revamp of the analysis including among other modifications the introduction of a set of time series charts. The latest modification to the series is to produce a fully annotated annual report at the start of each year, with the three remaining quarterlies taking the form of a chart pack. This report is our second quarterly with reduced commentary. Please reach out should you wish to discuss any of the trends observed in the charts. Figure 30: Who completed the survey? Q Supplier 38% Consumer 62% Source: EEVS, BNEF last page applies throughout. Page 22 of 27

24 Appendix B: Supplier respondents Figure 31: Breakdown of respondents by supplier type, Q Lighting 3% Monitoring & targeting, 3% Finance 6% CHP, 9% HVAC, 6% BMS / controls, 12% ESCO 18% Consultancy services 44% Consultancy service ESCO BMS / controls CHP Finance HVAC Lighting Monitoring & targetin Source: EEVS, BNEF Figure 32: Supplier respondents organisation size (no. of employees), Q % 3% 21% 15% 23% 32% Less than More than 1000 Source: EEVS, BNEF last page applies throughout. Page 23 of 27

25 Appendix C: Consumer respondents Figure 33: Consumer respondents by sector, Q Transportation, 4% 4% 11% Health 16% Construction & Engineering 7% Manufacturing 11% Local or Regional Authority 16% University 5% Public / Institutional Commercial Industrial Food and Drink, 2% Property and Real Estate, 2% Retail & Wholesale, 4% Services & Storage, 4% Leisure and Recreation, 5% 5% Central Government Agency, 2% School/College, 2% Source: EEVS, BNEF Figure 34: Consumer respondents organisation size (no. of employees), Q % 9% 65% 6% 9% Less than More than 1000 Source: EEVS, BNEF last page applies throughout. Page 24 of 27

26 ABOUT US About EEVS EEVS is the UK s leading provider of performance assurance, analysis and information services in relation to energy efficiency. Our performance assurance services include working with clients to devise and develop performance management systems and strategies; procurement policies and tender evaluations; due diligence on performance contracts and guarantees; performance and financial risk analysis. Alongside this, our established team of energy analysts provide high quality, independent Measurement and Verification (M&V) services for all sizes and types of energy saving projects. Since 2011 we have evaluated the savings performance of hundreds of energy efficiency projects to the global good practice standard, IPMVP. Our trusted analysis helps suppliers to credibly prove their project s or technology s saving performance, whilst providing customers with much-needed certainty around their investment s return and value for money. EEVS wider market information and research services in particular the Energy Efficiency Trends publications aim to improve the attractiveness, transparency and investability of the energy efficiency market through the provision of reliable market-level performance and trend information. For further details about EEVS and our services, please visit About Bloomberg New Energy Finance Bloomberg New Energy Finance (BNEF) is the definitive source of insight, data and news on the transformation of the energy sector. BNEF has staff of more than 200, based in London, New York, Beijing, Cape Town, Hong Kong, Singapore, Munich, New Delhi, San Francisco, São Paulo, Sydney, Tokyo, Washington D.C., and Zurich. BNEF Insight Services provide financial, economic and policy analysis in the following industries and markets: wind, solar, bioenergy, geothermal, hydro & marine, gas, nuclear, carbon capture and storage, energy efficiency, digital energy, energy storage, advanced transportation, carbon markets, REC markets, power markets and water. BNEF s Industry Intelligence Service provides access to the world s most comprehensive database of assets, investments, companies and equipment in the same sectors. The BNEF News Service is the leading global news service focusing on finance, policy and economics for the same sectors. The group also undertakes custom research on behalf of clients and runs senior-level networking events, including the annual BNEF Summit, the premier event on the future of the energy industry. For more information please visit about.bnef.com last page applies throughout. Page 25 of 27

27 CONTACT US EEVS: BNEF: Ian Jeffries +44 (0) Tom Rowlands-Rees +44 (0) Nicole Aspinall +44 (0) EEVS Insight Ltd 29 Long Lane London SE1 4PL Bloomberg New Energy Finance City Gate House, Finsbury Square London EC2A 1PQ Copyright: EEVS insight Ltd Developed in partnership with Bloomberg New Energy Finance (Bloomberg Finance L.P. 2016). No portion of this document may be reproduced, scanned into an electronic system, distributed, publicly displayed or used as the basis of derivative works without the prior written consent of the joint partners. For more information on terms of use, please contact Join the Energy Efficiency Trends Community Register at to join the Energy Efficiency Trends Community and receive free quarterly Energy Efficiency Trends reports direct to your inbox. By registering you will also be invited to complete the quarterly surveys upon which the research is based. If you are a consumer, financer or supplier of energy efficiency consultancy, products or services, your input would be greatly appreciated. Your responses will be treated anonymously and aggregated to form the published Energy Efficiency Trends report. To find out more about Energy Efficiency Trends, or to download previous editions please visit our website: last page applies throughout. Page 26 of 27

28 Energy Efficiency Trends Vol. 16 September 2016 last page applies throughout. Page 27 of 27