Energy Efficient Scotland (EES) is a large scale energy efficiency improvement programme to be implemented in Scotland. Over a 20-year period, currently scheduled to start in 2020, an amount in excess of £10billion is planned to be directed to the improvement of the energy efficiency in domestic and non-domestic buildings.
Funding for energy efficiency projects will come not only from the Scottish Government but also private interest-free and low interest loans as well as the successor(s) to the Energy Company Obligation (ECO). Aside from directing investment funds to the Scottish economy, promotion and support of energy efficiency through programmes such as EES, is one of the few instruments at the Scottish Government’s disposal to conduct energy policy, especially on the energy demand side.
EES was officially announced in May 2018 with the publication of the EES Route Map. At that time the UK was already in the process of leaving the European Union: commonly referred to as Brexit.
Brexit, regardless of its final shape (which is currently unknown), is expected to affect policies in multiple ways including limitations to EU funds, skilled labour movement restrictions and increased import prices to name a few examples (among the potential impacts highlighted by different studies, reported in a 2018 Institute for Government report ). The magnitude and the exact nature of any impacts will be affected by the exact form that Brexit will have. In this shifting socio-economic landscape, EES will undoubtedly be affected in a range of ways.
In this working paper, we explore the funding limitations that Brexit could introduce to EES. Specifically, we identify two EES funding mechanisms that are likely to be affected; government-issued grants and privately-provided loans. For different reasons, these mechanisms are of paramount importance in order to achieve the EES goals as specified in the EES Route Map.