Feed-In Tariff for Energy Efficiency could lead to huge energy savings

A British think tank has put forward a radical solution for bolstering the UK’s energy efficiency – creating a feed-in tariff for electricity saving.

The Green Alliance outlines its plan for a “negawatts feed-in tariff” which would pay energy companies for avoided electricity consumption. Participants would compete in an auction to deliver the energy savings, with companies being paid £30 per MWh for electricity avoided – a figure based on analysis of energy efficiency programmes in the US. This would be funded through the Levy Control Framework – the UK government budget for green energy and climate subsidies.

Green Alliance claims this would reduce electricity demand by 6.4GW by 2030 – the equivalent of eight new 800MW combined cycle gas turbine power stations. Meanwhile, UK consumers could save £2.4bn in energy costs by 2025.

Amy Mount, the report’s lead author, said this in a statement: “These policies would save the UK huge amounts of money, by avoiding the construction of unnecessary power stations. If the government wants to reset energy policy for the benefit of consumers this is where they should start.”

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