ENERGY EFFICIENCY TRENDS VOL. 13. Essential insight for consumers and suppliers of non-domestic energy efficiency in the UK January 2016

Transcription

1 ENERGY EFFICIENCY TRENDS VOL. 13 Essential insight for consumers and suppliers of non-domestic energy efficiency in the UK January 2016

2 SUPPORTED BY: ENDORSED BY: last page applies throughout. Page 1 of 31

3 CONTENTS SECTION 1. INTRODUCTION 5 SECTION 2. EXECUTIVE SUMMARY SUPPLIER TRENDS CONSUMER TRENDS... 7 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: BEHAVIOURAL CHANGE CONSUMER ENGAGEMENT SUPPLIER ENGAGEMENT APPENDICES 26 APPENDIX A: METHODOLOGY 26 APPENDIX B: SUPPLIER RESPONDENTS 27 APPENDIX C: CONSUMER RESPONDENTS 28 ABOUT US 29 CONTACT US last page applies throughout. Page 2 of 31

4 TABLE OF FIGURES Figure 1: Market Monitor tracking industry confidence, Q Q4 2015(e)... 6 Figure 2: Consumers commissioning efficiency projects, Q Q Figure 3: Trends in orders from national customers, Q Q4 2015(e)... 8 Figure 4: Trends in orders from overseas customers, Q Q4 2015(e)... 8 Figure 5: Trends in the number of staff employed, Q Q4 2015(e)... 9 Figure 6: Trends in sale prices achieved, Q Q4 2015(e)... 9 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 4-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: Consumer uptake of behavioural change programmes over the last three years or reasons for lack of engagement (%) Figure 21: Consumer uptake of behavioural change programmes over the last three years by consumer type (number of respondents) Figure 22: Was the project part of a wider energy saving scheme? Figure 23: Were savings guaranteed? Figure 24: Was some form of measurement undertaken? Figure 25: Use of measurement forms for attributing energy savings to schemes (%) Figure 26: Estimated financial saving as % of annual energy spend Figure 27: Actual financial savings as % of annual energy spend Figure 28: Use of engagement activities in behaviour change programmes (%) Figure 29: Use of behavioural levers in engagement programmes (%) Figure 30: Method of programme delivery Figure 31: Duration of the programme Figure 32: Financial budget invested in the programme Figure 33: Programme funding method Figure 34: Supplier uptake of behavioural change programmes split by type Figure 35: Was the engagement programme delivered as part of a wider energysaving package? Figure 36: Are energy or financial savings typically guaranteed? Figure 37: Use of measurement forms for attributing energy savings to schemes (%) Figure 38: Use of engagement activities in behaviour change programmes (%) Figure 39: Use of behavioural levers in engagement programmes (%) Figure 40: Typical estimated financial saving as % of annual energy spend last page applies throughout. Page 3 of 31

5 Figure 41: Typical client investment in engagement programme Figure 42: Who completed the survey? Q Figure 43: Breakdown of respondents by supplier type, Q Figure 44: Supplier respondents organisation size (no. of employees), Q Figure 45: Consumer respondents by sector, Q Figure 46: Consumer respondents organisation size (no. of employees), Q last page applies throughout. Page 4 of 31

6 SECTION 1. INTRODUCTION Welcome to the latest edition of UK Energy Efficiency Trends, the leading source of market information and insight for the energy efficiency sector. This edition takes the temperature of consumer and supplier market activity in the third quarter of 2015 (July-Sept), and it does feel something of a tale of two sectors this time. On the supplier side, despite the positive news of the COP21 agreement, the domestic policy landscape continues to be a source of uncertainty and supplier angst. And with domestic order books somewhat flat this quarter, this side of the industry reported something of a downbeat quarter; the EEVS-Bloomberg Market Monitor dipping to an historic low point. By contrast, consumer feedback has been more positive, with more than eight out of 10 consumers reporting that they commissioned new projects in Q a new high for the sector. There was also growth in larger investment projects, and we are seeing increasingly broad-based take up across the public and private sectors. There was also reported growth for the typically lower-profile technologies boiler controls seeing a welcome uptick that moved it into the top three within the technologies list. Perhaps the most significant insight from this quarter s survey research relates to 'behaviour change' initiatives. This edition includes a special feature on this low-cost and also little understood energy saving opportunity. The research was conducted in partnership with Global Action Plan (to which we need to give special thanks) and the findings and commentary start on page 18. This sheds new, much needed light on this often overlooked aspect of energy management, so we hope you find it particularly useful. Of course, if you have any questions, please do get in touch. Tom Rowlands-Rees Bloomberg NEF Ian Jeffries EEVS Insight last page applies throughout. Page 5 of 31

7 SECTION 2. EXECUTIVE SUMMARY The EEVS/Bloomberg Energy Efficiency Trends Survey (Vol.13) was conducted between 14 October and 14 December 2015 and completed by 67 UK-based respondents (38 consumer organisations and 29 suppliers). Their answers related to the situation in the third quarter of SUPPLIER TRENDS The market monitor which combines trends in supplier order books, staffing levels, sale prices and government action fell for the third consecutive quarter in Q to just 23 points, but is expected to pick up in Q4. The decline was driven by a continued downward trend in national orders, a dip in the number of staff employed, and a marginal drop in reported sale prices for Q3. Overseas orders was the only supplier category with a rising confidence indicator in Q3. Customer demand remained the dominant category of concern for suppliers of energy efficiency in Q3 (31%), followed by policy/subsidy uncertainty (21%) and regulation (14%). National competition, previously a major concern, continued to fall in relevance accounting for just 10% in Q3. Confidence with regards to the government s management of energy-efficiency policy remained flat in Q3 after hitting an all-time low in Q2. Meanwhile confidence in the management of the wider economy continued its decline as respondents reporting effective management dropped from 41% in Q2 to 10% in Q3. The special feature on behaviour change revealed that nearly half of suppliers estimate savings of between 5% and 10% for typical engagement programmes. None estimate savings below 2% or above 20%. Energy meters are the most widely used method for measuring savings of engagement programmes with 62% adoption. (See section 5.2). Figure 1: Market Monitor tracking industry confidence, Q Q4 2015(e) Positive sentiment (max = 500 points) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4(e) Negative sentiment (min = -500 points) 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 6 of 31

8 2.2. CONSUMER TRENDS In the third quarter, 82% of consumers reported commissioning energy efficiency projects, an uptick on the long term trend (around 70%) and a new high for the sector. Lighting-based technologies continued to outperform other energy saving technologies, with a material uptick in lighting controls in Q3. Interestingly, perhaps reflecting seasonal demand, boiler controls saw increased uptake, at 35% of respondents. Offices (19%), industrial and manufacturing (20%) and education (19%) represented leading property-based categories in Q3 2015, with a wide range of other public and private sector groupings also benefiting from energy-saving investments. The headline trend in capital cost retains its volatility. This quarter saw a strong volume of smaller-scale projects (up to 50k) and large projects (over 500k), but the core middle range projects ( 50 to 500k) slumped and accounted for only one in five investments. Financing arrangements remain broadly stable, with in-house capital the foundation stone for the vast majority of projects. An emergent trend during 2015 however has been the reported use of combination funding (i.e. in house and external finance together) and it will be interesting to see if this more balanced finance approach continues into Financial payback periods returned to the long-term trend of 3-4 years in the quarter, driven by growth in longer five- to 10-year payback projects. Performance measurement remains weakly established. One-third of projects used accepted procedures to determine savings and investment returns, but the large majority did not measure savings performance or were unsure if measurement was undertaken. The special feature section on behaviour change revealed that 80% of consumer respondents undertook at least one engagement programme in the last three years. Most programmes were shown to have small budgets, to be delivered by in-house teams and to include elements of measurement with energy meters being the most widely cited method. (See section 5.1). 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 Q 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 7 of 31

9 SECTION 3. SUPPLIER TRENDS This section of the report presents the survey findings for the supply-side of the industry (organisations delivering a broad range of building-related energy efficiency technologies, measures and services to the non-domestic market). The survey was completed by 29 UK-based supplier organisations THE ORDER BOOK Figure 3: Trends in orders from national customers, Q Q4 2015(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(e) 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. The confidence indicator based on trends in national orders continued its downward trend in Q Whilst the bulk of respondents saw stable volumes over the quarter, those citing rising orders dropped to an all-time low of 38%. Expectations for Q4, however, suggest a reversing of this trend. Figure 4: Trends in orders from overseas customers, Q Q4 2015(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(e) 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. The broad trend of stable overseas orders continued into Q3 with the bulk of respondents reporting constant levels. However orders picked up for 28% of respondents an increase on the last page applies throughout. Page 8 of 31

10 18% in Q2 nudging the confidence indicator upwards. As with national orders, suppliers are optimistic about overseas orders for Q STAFF NUMBERS Figure 5: Trends in the number of staff employed, Q Q4 2015(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(e) 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. Trends in the number of staff employed took a dip in Q3 as fewer respondents reported increases and more reported falls. However, the bulk of respondents continued to see stable staffing levels and expectations for Q4 remained roughly unchanged SALE PRICES Figure 6: Trends in sale prices achieved, Q Q4 2015(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(e) 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. The confidence indicator for sale prices dropped marginally in Q3 as more respondents reported slight falls in prices achieved. Most continue to report stable prices and, based on expectations for Q4, the confidence indicator should remain around zero for a third consecutive quarter. last page applies throughout. Page 9 of 31

11 3.4. INDUSTRY RISK Figure 7: Key issues of concern to energy efficiency suppliers, Q Business tax 3% Staff costs 4% Pressure to reduce costs 3% Raising finance 7% Competition - national 10% Regulation 14% 7% Customer demand 31% Subsidy/policy uncertainty 21% Customer demand Subsidy/policy uncertainty Regulation Competition - national Raising finance Staff costs Business tax Pressure to reduce costs Source: EEVS, BNEF. Note: each supplier respondent was asked to select their primary issue of concern. Therefore results sum to 100%. In Q3 2015, customer demand remained the dominant category of concern for suppliers of energy efficiency. In Q2, subsidy/policy uncertainty and regulation both surpassed national competition, which had held the second rank for the prior three quarters. In Q3, this remained the case with the former accounting for 21% and the latter 14%. National competition continued to fall in relevance, accounting for just 10% in Q3. Figure 8: Trends in key issues of concern, Q Q % 90% 80% 70% 60% 50% 40% 30% 20% Business tax Staff costs Raising finance Competition - national Regulation Subsidy/policy uncertainty Customer demand 10% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q 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 10 of 31

12 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 Q 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. Supplier confidence with regards to the government s management of energy efficiency policy remained flat in Q3 after hitting an all-time low in Q2. Whilst there was a doubling in respondents reporting effective policy management (from 5% to 10%), those reporting ineffective management reached an all-time high accounting for 64%. 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 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. Confidence in the management of the wider economy continued its decline in Q3 as respondents reporting effective management dropped from 41% to 10%. Meanwhile, the proportion of respondents with neutral views went from an all-time low in Q2 to an all-time high in Q3. last page applies throughout. Page 11 of 31

13 SECTION 4. CONSUMER TRENDS This part of the report presents feedback from energy and environmental professionals within public and private sector organisations ( consumers ), who are purchasing energy-efficiency technologies and services in relation to the built environment. The latest quarter s survey was completed by 38 UK corporate consumers (of which 82% commissioned a project in the quarter) TECHNOLOGIES & MEASURES Figure 11: Uptake of energy efficiency technologies, Q v four-quarter average Lighting - High Efficiency Lighting - Controls Boiler - Controls Behaviour Change Solar - Photovoltaic Building Energy Management System (BEMS) Boiler - Optimisation Boiler - High Efficiency Unit M&T / Performance Management Software Smart Metering Combined Heat and Power (CHP) Optimisation - of set-points and controls Refrigeration - Optimisation Motors and Drives Compressed Air Equipment Cooling and Air Conditioning Building Fabric - Glazing, Insulation, Materials Power Management - Voltage Optimisation, PFC HVAC Energy Recovery Solar - Thermal Refrigeration - Controls Refrigeration - High Efficiency Unit Radiant and Warm Air Heaters High Speed Hand Dryers Heat Pump - Air Source Heat Exchangers Heat Pumps - Water Source Heat Pumps - Ground Source 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 11 ranks technologies in descending order based on the proportion of commissioned projects that included that technology. Lighting continued to dominate the technologies list in Q3, with lighting controls enjoying a material jump in uptake rates this quarter. Taken together, the chart shows that lighting technologies were routinely deployed on more than 50% of all energy saving projects. Perhaps reflecting the seasonal change, boiler control measures moved into third place in the table. Conversely, motors and drives, HVAC and voltage optimisation saw the biggest declines in the third quarter. last page applies throughout. Page 12 of 31

14 Figure 12: Trends in top technologies for consumer uptake, Q Q % 90% 80% 70% 60% 50% 40% 30% 20% Lighting - High Efficiency Lighting Controls Boiler Controls 10% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q 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. Figure 12 shows purchase trends for the top three technologies, based on the most recent Q research. Whilst high-efficiency lighting and lighting controls have occupied the top slots over the long term, the addition of boiler controls (in place of BEMS) shows a material uptick for that technology this quarter and a potential emergent trend within the market PROPERTY TYPES Figure 13: Breakdown of commissioned projects by property type, Q Warehousing and Distribution, 2% Restaurant and Bars, 4% Data Centre, 2% Residential 4% 2% Laboratory 8% Office 19% Office Public building School & University Hospital 8% Public building 10% Manufacturing & Industrial Leisure Centre / Sports / Leisure Centre / Sports 4% Industrial 10% Manufacturing 10% University 13% School 6% Hospital Retail - Out of Town Laboratory Source: EEVS, BNEF Figures 13 and 14 show that whilst offices (19%), industrial and manufacturing (20%) and education (19%) represent leading consumer categories and beneficiaries of energy efficiency upgrades, there has also been widespread uptake across a wide range of organisation types a last page applies throughout. Page 13 of 31

15 trend that should be cause for optimism for industry suppliers as the market appears to be increasingly broad-based. 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 Q Source: EEVS, BNEF 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 Q Source: EEVS, BNEF. Note: the line shows the cost trend for energy efficiency projects over time based on the estimated median. Figure 15 has shown relatively high levels of volatility in the capital cost of energy efficiency projects since 2012 and this trend has continued this quarter. Over the last three months the sector reported a strong volume of smaller-scale projects (up to 50k) along with a good volume of large projects (over 500k), but the core middle range band (projects from 50k to 500k) only accounted for around one in five investments. The impact of this can be seen in the median project cost line which has continued its decline, to the point that median cost per project is now back down at 2012 levels. last page applies throughout. Page 14 of 31

16 4.4. 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 Q Source: EEVS, BNEF. Note: the orange line shows the cost trend for energy efficiency projects over time based on the estimated median. Figure 16 shows that financing arrangements remained stable over the first nine months of In-house capital is still the foundation stone for the vast majority of projects, although combination funding (in-house and external finance together) emerged as an established solution for a material proportion of projects during By contrast, projects delivered using externally sourced finance alone remained few and far between 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% 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Source: EEVS, BNEF. Note: the line shows the expected payback trend for energy efficiency projects based on the estimated median. Figure 17 shows financial payback periods coming back into line with the long-term trend, namely a 3-4 year median payback expectation. This is primarily due to the growth in longer, five- to 10- last page applies throughout. Page 15 of 31

17 year payback projects, and came despite the uptick in very short (less than one year) payback projects this quarter 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 Q Source: EEVS, BNEF. Note: M&V = measurement & verification Figure 18 shows a continuation of the long-term trend in relation to performance measurement, which remains only weakly established within the sector. Around one-third of projects use accepted performance measurement procedures to determine investment returns, leaving a large majority either not measuring performance at all, or unsure if any performance analysis was used CONSUMERS NOT UNDERTAKING ENERGY EFFICIENCY Figure 19 below shows respondent feedback on reasons for not investing in energy efficiency. At the top end of the chart, the third quarter saw a return of a longer-term trend for more positive reasons explaining a lack of activity i.e. future projects are planned and energy efficiency has already been undertaken. Meanwhile many of the other options were not deemed relevant and six of the possible barriers were not selected by any of our survey respondents. The chart appears therefore to show that barriers to take-up of energy efficiency are limited with lack of resource, lack of affordable finance and senior management not bought in featuring as some of the key reported reasons for non-deployment of energy-saving initiatives. last page applies throughout. Page 16 of 31

18 Figure 19: Consumer reasons for lack of efficiency uptake, Q v four-quarter average Energy efficiency has already been undertaken Future projects are planned Preference for renewable energy (e.g. solar) Senior management not bought in Lack of resource Lack of affordable finance Higher priorities elsewhere Negative impact on core operations Q (industry neutral) Q (negative impact) 4Q average Wider macro-economic uncertainty Subsidy uncertainty Buildings are landlord-owned, so little upside Lack of trust in the industry Uncertainty over the financial benefits / business case 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 17 of 31

19 SECTION 5. SPECIAL FEATURE: BEHAVIOURAL CHANGE In carrying out the Trends survey we have consistently found 'behaviour change' to be one of most popular energy efficiency interventions, yet little is known about these programmes. In this special feature we have teamed up with Global Action Plan the environmental engagement charity to help shed light on what constitutes a behaviour change programme and what the programmes are achieving. Global Action Plan Commentary The EEVS-Bloomberg analysis of the special behaviour change feature created with Global Action Plan shows that most behaviour change programmes have small budgets, are delivered by an in-house team and include an element of measurement. The length of the projects varies with similar numbers being under three months and over 12 months, and the activities undertaken include a range of different methods for reaching building occupants. Moving beyond statistics, this report helps the energy efficiency industry to maximise the energy savings than can be realised through behaviour change and offers three takeaways: Behaviour change consistently delivers tangible savings Even short, minimal cost interventions are delivering results Savings could be increased by using more behavioural levers Note: for more information on the Global Action Plan, visit CONSUMER ENGAGEMENT Of the 38 consumers that answered the survey, 35 answered the section on behavioural change. Some 80% of these respondents said that they had undertaken at least one behavioural change programme in the last three years. Figure 20: Consumer uptake of behavioural change programmes over the last three years or reasons for lack of engagement (%) Yes - at least one programme 34% Yes - multiple programmes 46% No 20% Focus is on other engagement programmes 5% Currently no budget, finance or funding available 6% Staff have little influence on energy consumption 3% Plan to start one in the next 12 months, 3% Unconvinced of the benefits, 3% Note: Respondent answers are based on the Q survey and relate to action over the prior three years. last page applies throughout. Page 18 of 31

20 For those companies not engaging in behavioural change programmes, the two most cited reasons were a focus on other engagement programmes relating to issues such as waste, water, and transport, and that no budget, finance or funding was available at the time. Figure 21: Consumer uptake of behavioural change programmes over the last three years by consumer type (number of respondents) Public Sector Local or Regional Authority Public Sector NHS Trust University Manufacturing Retail Engineering Public Sector Central Government Department Chemicals Property and Real Estate Public sector School/College Transportation Charity/Not-for-profit Multiple programmes One programme None up until now The breakdown by consumer type shows that the public sector has been leading the way, through local authorities and the NHS Trust, followed by universities and then manufacturing. However, 40% of respondents in the latter category also said that they had not engaged in any behavioural change schemes to date. (Figure 21). Figure 22: Was the project part of a wider energy saving scheme? Figure 23: Were savings guaranteed? Figure 24: Was some form of measurement undertaken? No 25% Don't know 4% Don't know 7% Yes 11% No 29% Don't know 7% Yes 71% No 82% Yes 64% In 71% of the cases, the behavioural change programme formed part of a wider scheme (Figure 22). Savings were guaranteed for just 11% of these programmes, although 64% listed at least one form of measurement for attributing energy savings to their programmes. (Figures 23 and 24). Energy meters were most widely cited as a form of measuring energy savings, followed by regular site audits and surveys asking staff to report their action. (Figure 25). last page applies throughout. Page 19 of 31

21 Figure 25: Use of measurement forms for attributing energy savings to schemes (%) Energy meters to show a change in energy use Regular site audits to spot-check staff behaviour Survey asking staff to report their action An IPMVP-based M&V process Experimentation methods eg. randomised control trials methods of identifying actual behaviour 0% 20% 40% 60% 80% 100% Figures 26 and 27 show the estimated financial saving of engagement projects before commencement as a percentage of the overall energy spend and the actual measured savings on completion. In most cases where projects were complete and savings measured, respondents reported the same level of actual savings to those estimated. Only two respondents saw lower levels, shifting from anticipated savings of 5-10% to realised savings of 2-5%. Of those estimating savings greater than 10%, none said that savings were not measured, instead many of these projects are pending completion. Figure 26: Estimated financial saving as % of annual energy spend Figure 27: Actual financial savings as % of annual energy spend 14% 4% 11% 14% 21% 36% up to 2% 2% to 5% 5% to 10% 10% to 20% over 20% Don't know 21% 29% up to 2% 2% to 5% 5% to 10% 10% to 20% 18% over 20% 25% 7% Savings not measured Project not yet complete last page applies throughout. Page 20 of 31

22 Figure 28 shows the uptake of different methods for delivering behavioural change projects. Online communications and face-to-face engagement of staff by the energy team were used by more than 50% of respondents. Although a range of other methods were also cited and 75% used more than one method for delivering their engagement programmes. Figure 28: Use of engagement activities in behaviour change programmes (%) Online communications Direct engagement of staff by energy team Senior leader messaging Hard copy communications Volunteer energy / green champions Formal energy training for staff Competitions Pilot ahead of a main campaign 0% 20% 40% 60% 80% 100% The biggest behavioural lever for engagement programmes is the emphasis of financial and environmental savings, adopted by 74% of respondents. This was followed by provision of new knowledge used by 57% and then the emphasis of other benefits such as improved user comfort. (Figure 29). Figure 29: Use of behavioural levers in engagement programmes (%) Emphasising financial and environmental savings Providing new knowledge Emphasising other benefits eg. improved comfort Rewards or incentives Identifying/removing people's barriers to change Fostering social norms 0% 20% 40% 60% 80% 100% last page applies throughout. Page 21 of 31

23 Figure 30 shows that the vast majority of programmes were delivered internally, with just 21% of respondents using external support and 4% using full external management. The duration of projects varied among respondents with 29% delivering projects in less than three months. The same proportion of respondents delivered projects that lasted more than a year, whilst a quarter were delivered intermittently over a period of months (Figure 31). Figure 30: Method of programme delivery Figure 31: Duration of the programme 4% 21% Delivered internally With external support 25% 29% Less than 3 months 3 to 6 months 6 to 12 months Full external management Beyond 12 months 75% 29% 3% 14% Intermittent activity (over months) Over a quarter of respondents (29%) were able to deliver engagement projects at no extra cost to the company. Of those that allocated budgets to their programmes, 32% invested up to 10,000 accounting for the largest proportion of respondents. The bulk of engagement programmes were delivered using in-house capital (64%). Only 7% made use of supplier or third-party finance and none received third-party grants making programmes free-of-charge. Figure 32: Financial budget invested in the programme Figure 33: Programme funding method 14% 11% 4% 29% Zero Up to 10,000 18% In-house capital Supplier/third-party finance 14% 7% 32% 10,000 to 50,000 50,000 to 100, ,000 + Don't know 7% 64% Free-of-charge third-party grant Not applicable e.g. no funds required Don't know last page applies throughout. Page 22 of 31

24 5.2. SUPPLIER ENGAGEMENT Of the 29 supplier organisations that completed the survey, 28 satisfactorily answered the behavioural change section. Just under half of these said that they had undertaken a behavioural change project in the last three years. These included consultancy service companies, lighting suppliers, ESCOs, and HVAC suppliers. Figure 34: Supplier uptake of behavioural change programmes split by type Breakdown of supplier types for those undertaking projects Consultancy 29% No 54% Yes 46% Lighting, 7% ESCO, 7% HVAC, 4% The vast majority of suppliers that undertook engagement programmes delivered them as part of wider energy-saving packages (84%). Only 8% typically deliver standalone behaviour change initiatives and roughly one third typically guarantee energy or financial savings. Figure 35: Was the engagement programme delivered as part of a wider energy-saving package? Figure 36: Are energy or financial savings typically guaranteed? No 8% Don't know 8% Yes 31% Yes 84% No 69% last page applies throughout. Page 23 of 31

25 As in the case of consumer respondents, suppliers also found energy meters the most common measurement form for attributing savings to engagement schemes with 62% adoption. measurement forms typically included are varying methods of identifying how staff actually behave (38%), regular site audits to spot-check behaviour (31%), surveys asking staff to report their action (31%) and IPMVP-based measurement and verification processes (15%). Figure 37: Use of measurement forms for attributing energy savings to schemes (%) Energy meters to show a change in energy use methods of identifying actual behaviour Regular site audits to spot-check staff behaviour Survey asking staff to report their action An IPMVP-based M&V process Experimentation methods eg. randomised control trials Savings not typically measured Don't know 0% 20% 40% 60% 80% 100% Figure 38 shows a broad use of engagement activities by suppliers. As in the case of consumers, online communications topped the list with an 85% adoption rate. Volunteer energy or green champions, formal energy training for staff, face-to-face engagement of staff by energy teams, and senior leader messaging are used in 69% of programmes. Competitions are included 62% of the time, pilot programmes and hard copy communications 38% of the time and other out of the norm activities for the work place are included in 23% of programmes. Figure 38: Use of engagement activities in behaviour change programmes (%) Online communications Volunteer energy / green champions Formal energy training for staff Direct engagement of staff by energy team Senior leader messaging Competitions Pilot ahead of a main campaign Hard copy communications 0% 20% 40% 60% 80% 100% last page applies throughout. Page 24 of 31

26 Almost all suppliers of engagement programmes considered emphasising financial and environmental savings to be the top lever for behavioural change programmes with 92% saying that this is typically included. This is consistent with consumer responses, as is the second most widely used lever providing knowledge typically included by 77% of suppliers. Figure 39: Use of behavioural levers in engagement programmes (%) Emphasising financial and environmental savings Providing new knowledge Fostering social norms Rewards or incentives Emphasising other benefits eg. improved comfort Identifying/removing people's barriers to change 0% 20% 40% 60% 80% 100% Of suppliers that engage in behaviour change programmes, nearly half estimate typical savings of between 5% and 10%. None estimate savings below 2% or above 20%. The vast majority of suppliers see typical client investment in engagement programmes of up to 50,000 (77%), with just 15% saying that engagement programmes are typically delivered free of charge. Figure 40: Typical estimated financial saving as % of annual energy spend Figure 41: Typical client investment in engagement programme 16% 15% 23% up to 2% 2% to 5% 5% to 10% 10% to 20% over 20% Don't know 38% 8% 15% 39% Zero - free of charge Up to 10,000 10,000 to 50,000 50,000 to 100, ,000 + Don't know 46% last page applies throughout. Page 25 of 31

27 APPENDICES Appendix A: Methodology The EEVS/Bloomberg Energy Efficiency Trends Survey (Vol.13) was conducted between 14 October and 14 December 2015 and completed by 67 UK-based respondents (38 consumer organisations and 29 suppliers). This is the 13 th in a series of reports showing industry trends in non-residential energy efficiency. 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. This is the sixth iteration of the revamped report. Additional modifications in this iteration include the one-time special feature section on behavioural change as well as the removal of the forward-looking expectations for the consumer section. Figure 42: Who completed the survey? Q Supplier 43% Consumer 57% Source: EEVS, BNEF Figure 42 shows the breakdown of respondents according to type. Prior surveys have typically seen between 60% and 80% of responses coming from consumer organisations. In Q3, the split was slightly more balanced as the proportion of consumer respondents slipped just below the lower band previously observed. last page applies throughout. Page 26 of 31

28 Appendix B: Supplier respondents Figure 43: Breakdown of respondents by supplier type, Q Monitoring and targeting 3% HVAC 7% BMS / controls 7% ICT 3% Consultancy services 35% Consultancy services Lighting ESCO Finance 10% Finance HVAC BMS / controls ESCO 14% Lighting 21% Monitoring and targeting ICT Source: EEVS, BNEF Q3 saw broad representation from suppliers across eight different business types. However, consultancy services continued to represent the largest share of respondents accounting for 35% in Q This was followed by lighting (21%), ESCOs (14%), and finance (10%). Figure 44: Supplier respondents organisation size (no. of employees), Q % 28% 34% Less than More than % Source: EEVS, BNEF Small and medium-sized organisations employing fewer than 250 staff continued to dominate supplier responses accounting for 93% in Q The remaining 7% reflected large suppliers with more than 1000 employees. last page applies throughout. Page 27 of 31

29 Appendix C: Consumer respondents Figure 45: Consumer respondents by sector, Q Transportation 3% Construction & Engineering 5% 8% University 16% Chemicals 5% Manufacturing 18% Local or Regional Authority 16% Public Sector & Institutional Commercial Industrial Health 13% Source: EEVS, BNEF Property and Real Estate 5% Retail & Wholesale 5% 3% School/College 3% Q saw an equal split between public sector and private sector consumer respondents. Those falling in the manufacturing category continued to account for the largest share (18%), followed by local authorities and universities (both at 16%). Figure 46: Consumer respondents organisation size (no. of employees), Q % 66% 3% 5% 13% Less than More than 1000 Source: EEVS, BNEF Figure 46 shows that the dominant response category continued to be large organisations of more than 1,000 employees. In Q3, consumer organisations of this size accounted for 66%. On the other end of the scale, 13% of responses came from small organisations with fewer than 50 employees. last page applies throughout. Page 28 of 31

30 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 over 400 schemes 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 29 of 31

31 CONTACT US EEVS: BNEF: Ian Jeffries +44 (0) Tom Rowlands-Rees +44 (0) Nicole Aspinall +44 (0) EEVS Insight Ltd Bedford Square London WC1B 3HP 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 last page applies throughout. Page 30 of 31

32 Energy Efficiency Trends Vol. 13 January 2016 last page applies throughout. Page 31 of 31