APPENDIX 10
Memorandum from Eaga Partnership Limited
INTRODUCTION
1. Eaga welcome the opportunity to provide
written evidence to the Environmental Audit Committee on their
follow up inquiry into energy efficiency.
1.2 In order to put our comments into context,
it is necessary to briefly outline Eaga's role in the provision
of energy efficiency across the United Kingdom.
1.3 The Eaga Partnership is a non-profit
distributing organisation, we also support the work of the Eaga
Charitable Trust who sponsor research into the area of fuel poverty.
1.4 Eaga have been involved in the delivery
of energy efficiency and demand side management programmes nation-wide
over the last eight years, primarily in our role as managing agents
of the Home Energy Efficiency Scheme (HEES). To date over 3.5
million households have received assistance from Eaga through
HEES. In February 2000, Eaga were announced as the Scheme Manager
in three of the four designated Scheme Manager Areas for the management
of the New Home Energy Efficiency Scheme.
1.5 However, during this time we have also
worked in partnership with over 100 Local Authorities, and 10
Public Electricity Suppliers providing energy efficiency measures
to domestic households under the Energy Efficiency Standards of
Performance initiative.
1.6 Eaga have also developed Watersmart,
a demand side management programme designed to curb domestic water
consumption. Several Water Companies are currently undertaking
Watersmart trails on domestic properties within their franchise
area. Watersmart has been included as an example of best practice
in OFWAT publications on leakage and water efficiency. We are
also grateful for the recognition granted within the Social Action
Plan by Ofgem to our innovative "Power for Low Income Families'
initiative, which has now been launched as a new joint venture—NEST
Makers—to specifically assist vulnerable families in the
competitive market.
1.7 Our experience in delivering demand
side management to low income and vulnerable domestic households
across the United Kingdom has provided Eaga with a wealth of operational
experience. We therefore feel that we are able to provide worthwhile,
practical and valuable comments to the area of the fuel poor and
utility regulation.
1.8 Eaga would particularly like to applaud
the Committee on carrying out this follow up to the initial inquiry,
and hope that the inquiry brings into clear focus the benefits
which would accrue from an effective, co-ordinated energy efficiency
strategy.
1.9 Eaga would like to draw the Committee's
attention to several areas of interest, which may provide interesting
background information to the follow up inquiry.
The integration of New HEES with all programmes
of energy efficiency assistance
1.10 The New Home Energy Efficiency Scheme
will become operational across England on 1 June 2000. Comparable
schemes are already operational across Scotland (Warm Deal) and
Northern Ireland (the Domestic Energy Efficiency Scheme). The
New Home Energy Efficiency Scheme will be launched in Wales in
October 2000.
1.11 Although the Welsh HEES initiative
is currently undergoing a tendering process, Eaga currently manage
the Warm Deal on behalf of the Scottish Executive and the Domestic
Energy Efficiency Scheme on behalf of the Northern Ireland Housing
Executive. When considered alongside the fact that Eaga have been
appointed to manage New HEES in three of the four English Scheme
Manager areas, it is evident that Eaga will be the major provider
of energy efficiency assistance to domestic households—across
the whole of the United Kingdom—over the next five years.
1.12 Within our written evidence to the
Committee's original energy efficiency inquiry, Eaga drew the
distinction between the different levels of cost associated with
the delivery of the existing Home Energy Efficiency Scheme and
the measures offered by the Energy Efficiency Standards of Performance.
1.13 As the measures offered by New HEES
result in a more comprehensive package of assistance for families
in fuel poverty, it is important to ensure that all other sources
of help are also channelled through the most cost effective delivery
mechanism available. This method alone will provide the best possible
outcome for the most vulnerable households.
The benefits of energy efficiency to the UK Climate
Change programme
1.14 Eaga feel that the contribution of
domestic energy efficiency programmes to the UK Climate Change
strategy deserve stronger recognition. It has been calculated
by the Department of the Environment, Transport and the Regions
within their Climate Change Consultation Paper that each installation
carried out under the existing Home Energy Efficiency Scheme saved
around 0.25 tonnes of Carbon per annum. The combination of energy
efficiency measures provided by New HEES will ensure that the
new annual saving will be substantially higher.
1.15 The cumulative effect of energy efficiency
Carbon savings should also not be under estimated. When energy
efficiency measures are installed within a domestic household
the savings in Carbon emissions are not discrete to the year of
installation, they build up in a similar fashion to the calculation
of compound interest.
1.16 For the purposes of illustration, the
table below assumes 1,000 installations carried out each year
over a three year period.
Illustration of the cumulative effect
of Carbon savings from domestic energy efficiency programmes
| Year 1 | Year 2
| Year 3 | Savings per year*
|
| 1,000 | — | —
| 250 t/C (1,000 x 0.25 t/C) |
| 1,000 | 1,000 | —
| 500 t/C (2,000 x 0.25 t/C) |
| 1,000 | 1,000 | 1,000
| 750 t/C (3,000 x 0.25 t/C) |
| Total savings |
1,500 t/C (250+500+750) |
| * Savings calculated on 0.25 tonnes/Carbon per installation, as stated in the Climate Change Consultation Paper published by the DETR.
|
1.17 The total savings in tonnes/Carbon from these 3,000
energy efficiency installations is therefore 1,500 t/C. If the
cumulative effect of energy efficiency is not considered the savings
would be calculated as 3,000 installations multiplied by 0.25
t/C, equivalent to only 750 t/C over the same period of time.
1.18 The table above is purely for illustrative purposes
only over a three-year period. However the final lifetime savings
from 1,000 installations per year will be far higher.
1.19 Perhaps the most persuasive argument however is
not the saving in potential savings in Carbon, but the savings
in lives. The impact of a warmer, healthier home—especially
to the more elderly—cannot be under estimated.
The Utilities Bill—an opportunity for Suppliers?
1.20 Eaga feel that the Committee should consider whether
the Utilities Bill provides a sufficient impetus for Suppliers
to fully consider and address the needs of households suffering
from Fuel Poverty.
1.21 Suppliers should be made aware that the increase
in funding for the New Home Energy Efficiency Scheme does not
absolve their responsibilities to the fuel poor.
1.22 The Utilities Bill should make provision to ensure
that Suppliers move away from the traditional viewpoint of fuel
poor households— as an issue to be dealt with to keep the
Regulator happy—towards a perspective which includes disadvantaged
families as an integral part of a Utilities business.
1.23 An example of the current perception of Suppliers
can be gained from the various affinity deals which are being
offered. Several Suppliers offer supply deals which allow more
affluent domestic customers to save Air Miles or travel discounts.
It is worthwhile to note that not one Supplier has applied this
concept to the fuel poor. Affinity deals which offer more practical
rewards, such as home insulation measures, would provide an innovative
approach to the problems facing vulnerable households.
June 2000
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