Select Committee on Environmental Audit Minutes of Evidence


Memorandum from Eaga Partnership Limited


  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 1Year 2 Year 3Savings per year*
1,000250 t/C (1,000 x 0.25 t/C)
1,0001,000500 t/C (2,000 x 0.25 t/C)
1,0001,0001,000 750 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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