(John Kemp is a Reuters market analyst. The views expressed are his own)
By John Kemp
LONDON, Aug 19 (Reuters) - Britain's homes are in the midst of an energy-efficiency revolution, though that may come as a surprise and not much comfort to their occupants, who are still struggling with the highest heating and power bills for over two decades.
Between 2005 and 2011, average household power and gas consumption in England and Wales fell by a quarter from 26.2 megawatt hours (MWh) per year to 19.7 MWh, according to the Office for National Statistics (ONS).
The result is a big energy saving. In 2011 Britain's homes accounted for 26 percent of its total energy use. But household consumption was still comparable to the amount used in road transport (27.1 percent) and much higher than other categories such as industry (18.5 percent) and aviation (8.7 percent).
Real gas and electricity prices rose almost 60 percent and 40 percent, respectively, between 2005 and 2011. So some of the savings have come at the cost of comfort as soaring prices forced consumers to turn the thermostat down and make less use of domestic appliances.
The percentage of households living in fuel poverty, which the government defines as needing to spend more than 10 percent of their income to maintain a satisfactory level of warmth, increased by more than 80 percent between 2005 and 2010.
Around 4.5 million of Britain's 26 million households were officially described as "fuel poor" in 2010, up from just 2.5 million in 2005, according to the ONS and the Department for Energy and Climate Change (DECC).
Nonetheless, household bills and fuel poverty would have been much worse had it not been for a massive programme of home insulation paid for the utility companies under the government's Carbon Emissions Reduction Target (CERT) and other building insulation schemes.
INSULATION AND EFFICIENCY
Between 2008 and 2013, CERT paid for 5.3 million homes to receive loft insulation and nearly 2.6 million to receive cavity wall insulation.
The number of homes that still have inadequate insulation and could benefit from remedial measures has dropped from 12.9 million to 7.4 million. For cavity wall insulation, the figures are 7.9 million and 5.3 million, respectively.
CERT targeted homes that were easy and cheap to insulate. From January 2013, it has been replaced by the Energy Company Obligation (ECO) and the government's Green Deal programme, which will target houses with more complicated and expensive insulation requirements.
Some improvements will continue to be funded by the utilities. Others will be financed by loans that will be repaid through an extra charge on the household's individual utility bill.
The true cost of ECO has become the subject of a fierce dispute between DECC and some utility companies, which accuse the department of underestimating the cost of insulating the remaining properties, which are much harder to deal with. Nonetheless, the energy industry has made significant advances in cutting waste.
Retrofitting insulation is not the only policy measure designed to cut household energy consumption. The government has also banned the sale of incandescent light bulbs. Building regulations have been tightened to require, among other things, that nearly all new and replacement gas-fired boilers use condensing technology.
The combined impact has been significant. Earlier studies concluded the average home used half as much energy in 2007 than it would have done based on 1970 insulation and energy efficiency standards. Efficiency improvements have accelerated since then, thanks to the CERT and other measures such as the shift to more efficient lighting and heating.
EMISSION CUTS START AT HOME
Much of the focus in the debate over how to slow emissions and global warming has been on heavy industries such as cement, chemicals and steel-making as well as on fuels for road transport, aircraft and shipping. The potential for residential energy savings has often received a lower priority.
But buildings are the largest energy-consuming sector in the world, accounting for a third of consumption and a similar share of carbon dioxide emissions, according to the International Energy Agency (IEA).
Better heating, lighting, ventilation and air-conditioning in homes and offices was identified as a vital source of improved energy efficiency and reduced emissions in the agency's recent report on the "Transition to Sustainable Buildings," part of its series on "Energy Technology Perspectives."
The agency wants to cut projected energy consumption through stricter building codes and tougher efficiency standards for home appliances.
Even after the remedial work so far, Britain's housing stock is still relatively old and inefficient and wastes enormous amounts of energy.
But the large reductions in energy consumption over the past eight years show how much energy use and emissions can be curbed through a combination of rising customer prices, setting standards and targeting measures to retrofit existing buildings. (editing by Jane Baird)