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Memorandum submitted by National Energy Action (NEA) (LCT 10)
Executive Summary
· The transition to a low-carbon economy is necessary and challenging but policy must be designed to maximise the social benefits from eradicating fuel poverty
· Delivery of energy efficiency on a greater magnitude than is the current ambition of the government is necessary and possible.
Background
National Energy Action (NEA) is the major campaigning organisation on fuel poverty issues in the United Kingdom. NEA views the causes of fuel poverty as a combination of poor energy efficiency standards, low household incomes and unaffordable energy prices.
NEA develops and promotes energy efficiency services to tackle the heating and insulation problems of low-income households. Working in partnership with central and local government; with fuel utilities, housing providers and health services; and with consumer organisations, NEA aims to eradicate fuel poverty and campaigns for greater investment in energy efficiency to help those who are poor or vulnerable.
Introduction
1. The UK faces significant challenges in meeting commitments to reduce carbon emissions to comply with the 2050 target. However, NEA believes that the target can be met whilst ensuring that associated social and economic benefits are maximised.
2. Considering the environmental aspects of the 'green economy' in isolation from the social and economic impacts and benefits may lead to policy measures that appear advantageous, but in reality result in unintended adverse consequences for the social welfare agenda. There must not be a narrow focus from the Government that excludes the potential impact on equally valid social and economic agendas.
3. A comprehensive overview of the issues will demonstrate that it is possible to devise policy to meet the 2050 target whilst simultaneously eradicating fuel poverty and creating jobs to boost local economies across the country.
4. NEA policy proposal for energy efficiency have been designed to ensure social, environmental, and economic benefits. Green New Deal What opportunities exist for the creation of a green new deal whilst pursuing a low carbon economy? Which technologies have the biggest potential? Has the Government done enough in its stimulus package? 5. The transition to a low-carbon economy requires a long-term restructuring, with early action on the easy-wins that are still available. For the low carbon energy system to be viable and to enable the decentralisation of energy generation there must be immediate action in reducing energy demand. NEA has submitted a proposal to the Government as part of the Heat & Energy Saving Strategy consultation calling for a new approach to retrofit of the existing housing stock. 6. The scheme proposed goes further than the suggested pathway outlined in the Heat & Energy Saving Strategy consultation which is intended to enable the Government to meet emission reduction targets through energy efficiency. 7. The NEA energy efficiency programme proposes that every household should receive a whole-house assessment and retrofit works thereby improving the dwelling to a minimum standard equivalent to an EPC Band C. Social housing would be brought to the higher standard of Band B in the same timeframe. 8. Individual technologies will not be identified. It is important that the means of delivery is thoroughly planned and is sufficiently well resourced to deliver on the objectives. It is NEA's view that the proposed delivery mechanism for energy efficiency would involve a considerable requirement for installation of low and zero carbon technologies to ensure the retrofit target can be met. The whole-house retrofit programme will identify the basic measures required by the household such as draughtproofing; double glazing; and cavity and loft insulation. Beyond this, more costly measures will be assessed including solid wall insulation, the requirement for renewable/low carbon generation in /on the property and the potential for connection to district heating. 9. The proposal sketches out a pathway to be followed by all local authorities to ensure a strategic approach at the local level in the delivery of energy efficiency and community-scale low carbon generation, such as district heating and combined heat and power. 10. Every local authority should be required to produce heat and energy maps of demand in their locality and identify the opportunities to improve the efficiency of the existing buildings and community-scale interventions. From this, and other data sources, they should produce a timetabled delivery plan for the retrofit of all homes in their area by 2020 and the development of community-scale schemes for the provision of heat and electricity. 11. Analysis carried out by Impetus Consulting on behalf of Greenpeace UK[i] indicated that the annual expenditure levels of at least £5 billion proposed by NEA to improve the energy efficiency of the existing housing stock will create, or sustain, 55,000 direct jobs with hundreds of thousands of indirect jobs. Public Procurement and Policy What is the potential role for public procurement and policies such as the 2016 zero carbon homes target in driving investment, development and job creation? 12. The role of the public sector is significant in the NEA proposal. The local authority acts as the driver for development of a local strategic approach to retrofit of the housing stock and assessing the energy use and generation in the area they cover. Local authorities will be able to identify the need in their community for developing skills to deliver on the NEA proposal which will create a significant number of jobs within local communities as part of the low-carbon transition. It will be possible for local authorities to take the lead on local delivery of demand reduction and local generation.
13. A policy requiring all households to be improved to a level of a Band C, with the introduction of legislation making this a mandatory minimum standard after 2020, would drive investment prior to 2020 in energy efficiency that would reduce energy demand as part of meeting the first three carbon budgets. NEA proposes that pre-2020 retrofit be incentivised to encourage early take-up of measures. The incentives then cease post-2020 when the mandatory minimum standard comes into force.
14. Appended to this memorandum is the NEA policy proposal for a National Energy Efficiency Scheme.
May 2009
[i] http://www.greenpeace.org.uk/media/reports/case-including-energy-efficiency-investment-fiscal-stimulus-package
APPENDIX
In 2008-2009, Government-mandated expenditure on domestic energy efficiency and fuel poverty programmes will total some £5.3 billion. Warm Front and the Priority Group element of CERT should result in some £850 million being spent on heating and insulation improvements with a further £2.7 billion being expended on Winter Fuel Payments.
Historically, NEA has advocated practical heating and insulation improvements as the most rational and sustainable approach to affordable warmth, whilst recognising the need for supplementary action on household incomes and energy prices.
This paper concentrates on the energy efficiency dimension and attempts to devise a means by which expenditure in this area can be both maximised and optimised.
There is a strong correlation between energy efficiency standards and fuel poverty. The average SAP[i] rating of an existing home in England is 50; the average rating for a property occupied by a fuel-poor household is 37[i]; whilst the average house built to current Building Regulations is around 80[i].
The pattern of increased domestic fuel prices began in 2003 and, with rare interruptions, continued to rise until the winter of 2008-09. As a consequence, fuel poverty in England rose from around 1.2 million households in 2004 to 4.0 million households in 2009.
The convergence of high energy prices and the dismal quality of the UK housing stock, compounded by a lack of consistency, clear direction and boldness in policy setting, has brought about an appalling crisis in fuel poverty last winter.
The current desperate circumstances will continue, and may deteriorate, without a major review of domestic energy efficiency policy.
The Government has placed considerable emphasis on income measures and low fuel prices as the means to secure fuel poverty alleviation, but has also invested significant sums on energy efficiency programmes. However, despite expending £20 billion on fuel poverty schemes there has not been a significant improvement in the energy efficiency of the housing stock and certainly not enough to ensure households are removed from the risk of fuel poverty.
The current energy efficiency programmes are failing the taxpayer, consumer, and especially the fuel poor. They have created a fragmented approach to tackling fuel poverty reinforced by inconsistency and incoherence across the many initiatives. The existing array of competing schemes makes for a slow, expensive and overcomplicated process; whilst the up-front cost of measures has dissuaded millions of non-fuel-poor households from improving the energy efficiency of their homes. This represents a major failure in policy.
In the context of rising fuel poverty and the need for urgent action to reduce carbon emissions, the UK needs a systematic roll-out of conventional energy efficiency measures to the general housing stock, supplemented by deployment of low carbon/renewable technologies targeted at those households or communities where traditional energy efficiency measures and heating improvements are not enough to ensure affordable warmth.
It is time for a radical departure from the current piecemeal approach to delivering energy efficiency, tackling fuel poverty and reducing carbon emissions. An integrated and coherent approach that will tackle fuel poverty and domestic carbon emissions is essential. The actions needed in this National Energy Efficiency Scheme are outlined below.
The Government must have a clear vision and a co-ordinated, cross-departmental approach to energy efficiency, carbon reduction and fuel poverty. The fuel poverty strategy needs to be integrated with the Energy and Climate Change Strategy as an equal priority with tackling climate change. This should enable the delivery of resources and commitment that can only emanate from Westminster.
This National Energy Efficiency Scheme should apply to England and run from 2009 until 2020. There should be clear milestones for achievement with interim targets. The Strategy should be backed up with a costed and implementable Business Plan and full Impact Assessment. There should be a thorough review in line with the timetable for the carbon budgets that will assess progress, achievement, costs and benefits of the scheme. Annual reporting on progress by the Government should also be required. The final review stage should set in place a revised Strategy and Business Plan to run from 2020 until 2050 toward an ambition of near zero carbon homes and decarbonised energy generation.
The territorial extent of this National Energy Efficiency Scheme is limited to England. The devolved administrations should be asked to consider and adopt a Scheme of similar ambition and magnitude.
The Benefits
§ Compliance with Government targets to eradicate fuel
poverty § Community approaches lead to a better take-up of measures § Local authorities have the flexibility to tailor schemes
to meet need in their area and use local knowledge to introduce not only
individual house solutions but also community solutions where appropriate. § Ensures that no area, is a 'no-go' area for energy
efficiency help, no matter how remote or hard to treat § Addresses the problem of communities and household types
that are over-represented amongst the fuel poor but under-represented in
take-up of energy efficiency assistance e.g. rural areas, ethnic minorities § Uses local employees and businesses to deliver the service
where possible, meaning money is reinvested in the community and local jobs
created. In turn, this improves take-up of services through trusted local
organisations. § Develops a more consistent and stable market for
insulation installers and new technologies rather than the current stop/start
approach and funding uncertainty which have led some companies to cease
trading. § Efficiencies achieved by competition at a tendering level
for the contract, and in competition between local companies for jobs, and
ring-fenced budgets. Local authorities can link up to bulk-buy micro-generation
or other technologies to achieve economies of scale. § Ensures every home, wherever possible, meets common
minimum energy efficiency standards § Provides simplicity for consumers and uses the brand of
trusted local councils § Overcomes issues surrounding data sharing and stigma as
all homes are targeted in a systematic door-to-door approach, though sharing
data at a local level can help target the most deprived areas first. § Schemes could be reliably monitored and verified, using a
common method, ensuring consistently high standards § Does away with the notion of a maximum grant - and
satisfies equity criteria being based on ability to pay. § Overcomes current problems with eligibility. Currently around 33% of fuel-poor households are not eligible for assistance under Warm Front (e.g. households marginally over the income threshold and the 30% of older households who fail to claim their entitlement to Pension Credit).
Delivery
One of the key aspects of the Scheme is the proposed means of delivering energy efficiency retrofit. The current approach of individual applications, individual processing of applications and individual installation of remedial measures by different funders/scheme managers is sub-optimal and leads to higher costs and a lack of coherent delivery. The current system loses all the potential benefit of economy of scale and lacks a strategic approach to energy efficiency.
The model for delivery under the Scheme should be an area-based scheme led by local partnerships involving local authorities. The local authority can choose whether to deliver the scheme in-house or through a partnership with a managing agent; but it needs to be locally led, with local accountability. There should also be scope for groups of local authorities on a regional or sub-regional basis to administer and deliver a scheme.
The onus and obligation for delivery should be placed on the local authority as the key point of delivery with a local community partnership to shape the delivery of the scheme to suit the local situation. The council-led approach is key to the Scheme to improve strategic delivery and foster local partnership and community involvement.
Councils have an unequalled, in-depth knowledge of
their locality and the needs of householders enabling them to be best placed to
deliver a national housing retrofit programme.
Local authority involvement also enables the integration of other public
services such as fire safety, crime prevention, income maximisation and water
efficiency. Local authorities are also
more trusted by householders than energy suppliers. Local authority involvement provides a line of accountability currently absent from existing schemes such as Warm Front.
The involvement of local authorities will ensure a strategic approach to energy use, generation and efficiency. Local authorities currently produce Affordable Warmth Strategy, Climate Change Strategies and Action Plans and a whole raft of other documents intended in their design to deliver a degree of the ambition that underlies this Scheme. There is a need for an integrated, strategic approach from local authorities to develop an 'Energy and Climate Change Strategy' with an accompanying Delivery Plan that will form the basis for the delivery of this Scheme in their area.
Many local authorities have signed up to NI186 in their Local Area Agreements to reduce per capita carbon emissions in the local authority area. This could be utilised as the basis for developing a strategy that will address energy use and energy efficiency in the context of reducing emissions. It should be noted that NEA places equal weighting on reducing carbon emissions and tackling fuel poverty in this Scheme and this would need to be reflected in the national strategy and in each local authority plan.
The delivery would incorporate multiple phases in line with the following. Some of these may run concurrently, but are identified in a sequential manner. This list is purely representative of some of the stages involved and is not exhaustive.
1. Local authority assessment of their area using heat and energy use mapping to:
a. identify areas where there is potential for community scale low carbon/renewable generation or community heating
b. identify areas of high use for further investigation
2. Pre-survey a representative sample of the housing stock to identify the archetypes and potential suite of measures that could be required to ensure the local supply chains and industry can be prepared for the delivery phase.
3. Identify the potential partners in the community who are key stakeholders in the Scheme
4. Using DWP benefits data, EPC data, identifiers of deprivation, local knowledge and the pre-sample data and mapping to develop targeting for the roll-out of delivery
These preparation stages would be followed by delivery of a full whole-house energy audit of the property and the householder energy use. The householder would receive a pre-EPC check and full SAP assessment (or equivalent depending on further development of the whole-house assessment required) that would identify a list of measures that would outline the percentage improvement measures would make, the impact on the SAP/EPC rating, the CO2 savings and the cost of the measure. This is purely indicative of the information on the retrofit that could be provided.
Alongside the audit for energy efficiency the householder will receive advice on how to use their current heating system and an assessment of their current expenditure on energy. Along with an indication of the income level of the household it will be possible to determine if there is potential for fuel poverty.
An assessment of benefit entitlement would be carried out to determine if the household is eligible for grant funding under the scheme. If the householder is eligible they will be offered the income maximisation service, which would guide their application through the DWP to ensure the householder is claiming and receiving the benefits they are entitled to.
Other community initiatives that can be delivered at this time include assessing under HHSRS for Category 1 hazards and referring to the appropriate local authority department and the local Home Improvement Agency to rectify these.
The householder would also be offered (if the local authority decides to deliver these alongside the energy efficiency scheme)
· fire safety measures such as smoke alarms and fire blankets or extinguishers;
· crime prevention measures such as better door and window locks, spy holds, door chains and other such measures;
· water efficiency measures
These measures would be installed at the same point at the energy efficiency measures are installed.
Delivery of the scheme, where appropriate, will follow the principles of area-based, zonal schemes such as Warm Zones. Systematic assessment of identified, targeted areas would take place, progressing ward-by-ward, street-by-street, door-to-door. Every household in the area would be visited. This will require return visits and timing the visits to fit with the lifestyle and work patterns of the residents.
The aim is to deliver a whole-house solution to the householder whilst taking into account the wider requirements and needs of energy at a community level rather than the current focus on individual households being treated in isolation. This is where a council-wide energy use and heat mapping study to identify the potential for local generation of heat and electricity is key. A wide suite of measures will be considered and not just the easy wins of cavity wall insulation and light-bulbs.
The delivery of energy efficiency measures will be coordinated locally so the contractors are able to benefit from the economies of scale of retrofitting multiple properties in the same street These savings come into there own when considering installing solid wall insulation on a series of terraced properties or retrofitting a block of flats.
The Scheme will aim to cluster delivery of measures to households to ensure that economies of scale can be realised. To encourage economies of scale, reduce costs, and provide certainty to the industry there can be an element of pooled purchasing of measures through the Scheme or regional/sub-regional groupings.
Social housing should adopt a stock-based approach and work with the local authority to improve the energy efficiency of the entire stock, with priority being given in the targeted areas.
The delivery of the Scheme in the local authority will be a one-stop-shop. This will become the access point to the energy audit and advice; impartial help and advice on energy tariffs, payment methods, switching supplier; income maximisation; and other community services; whilst being the means to access grant funding and the financing mechanisms proposed to fund up-front costs for landlords and owner occupiers. The one-stop-shop also provides a means to promote and ensure take up of other incentives such as Feed-in Tariffs and Renewable Heat Incentives.
There is a requirement for a central coordinating and reporting body that reports to government. This body will be responsible for:
· delivering the national communication campaign and ensuring coordinated launch, communication, and working across the regional and local partnerships that will develop under the NEA proposal.
· sharing of best practice and producing guidance for local delivery partnerships
· ensuring appropriate use of data on the housing stock in line with data protection legislation
· acting as a body local authorities report to on their progress under the national programme
Financial Measures
The current funding landscape in this area is complicated and confused. There needs to be a simplification and reassessment of the current myriad of schemes. This Scheme advocates a single funding for tackling fuel poverty, reducing carbon emissions and improving energy efficiency that can be accessed fairly by all regions and devolved nations.
There are several funding streams incorporated into this Scheme, but importantly they are all accessed through one point, the local delivery scheme which will be a one-stop-shop and will identify the eligibility for grant funding and provide access to the appropriate stream of funding for upfront costs.
This Scheme makes the current programmes under Warm Front, CERT and the future Supplier Obligation obsolete. These would be disbanded in their current form.
NEA estimates the Treasury would need to commit at least £5 billion of central government money per year up to 2020. A full assessment of the impact of this scheme is required from the government. This funding would be directed to the following:
· grant funding whole-house installations in those households deemed eligible under the Scheme
· enforcement and compliance costs for Building Regulations and the new Code for Sustainable Existing Homes
· funding other fiscal incentives proposed such as the Landlord Energy Saving Allowance and VAT cuts
· regulatory costs associated with the Energy Performance Certificate Scheme
· the delivery of the national communications plan
· additional funding to local authorities to enable proper enforcement of HHSRS and funding to ensure the scheme can be properly resourced in the set up years before becoming self-sustaining during the delivery phase.
The government grant/subsidies should be effectively targeted at those who are the most in need due to being vulnerable or on low incomes. A proportion of this funding will need to be directed to social housing, especially local authority owned, so they are able to fund the works required. Households below an EPC Band E should be automatically assessed for government grants. Those on low incomes and certain benefits should be eligible for grant funding.
The private rented sector should be treated as a collection of businesses, large and small, by government and have a separate means of securing financing through interest free loans similar to the Energy Efficiency Loans offered by the Carbon Trust. There is a need for the private rented sector to professionalise and act as the businesses they are. They should be funded through similar financing mechanisms offered to other businesses and be incentivised through the tax system.
The owner occupier segment should have access to a 'pay as you save' type scheme to finance the up-front costs of the retrofit. This should be linked to the household and careful consideration needs to be made of which route for payment is decided by government. There are two options: repay through the DNO; or repay through a payment to the local authority. Due to the nature of the involvement of the local authority in this scheme it seems sensible that local authorities be the route of repayment, collecting alongside the council tax and using the same systems already in place in town halls across the country.
This funding should be financed through green bonds. NEA advocates the establishment of a Green Infrastructure Bank which would raise funds for the delivery of the scheme from the private sector. This financing would fund the 'pay as you save' scheme for owner occupiers, the Energy Efficiency Loans for the private rented sector, housing associations to source capital for their retrofit programme on top of money from government; whilst providing a source of financing for local authority to develop community heating and low carbon/renewable generation.
Targeting
Whilst it will be recognised that improving the energy efficiency of the housing stock is essential to meet carbon reduction targets and ease the burden of meeting national renewable targets, the Scheme should provide a focus on the poorest households and those communities who are most likely to be fuel poor.
The scheme should prioritise those communities where reducing energy bills through energy efficiency measures will alleviate fuel poverty. They should be identified using the pre-sampling, data sourcing and mapping referred to under the delivery section.
There will be clusters of housing stock that will be of poor quality and have a low SAP rating. These can be identified by the local authority carrying out pre-assessment by property archetype and enable the local authority to determine which areas to assess first.
The scheme will be open to all households from the outset in the local authority area, but will initial audit and assess the areas where those on low incomes and who would benefit more from earlier intervention. There will still be a means for the able-to-pay outside of the areas being assessed in the systematic way advocated in this scheme so those 'early adopters' who wish to have works done sooner are able.
Standards and regulation
The Scheme has an ambitious target that all homes will be near zero carbon by 2050. There is a need for interim targets that have some relation to the carbon, fuel poverty and renewable targets the government has signed up to meet in the years approaching 2020. This proposal lays out the scheme until 2020 and does not assess the requirement of the scheme from 2020 to 2050.
The Scheme requires the establishment of a Code for Sustainable Existing Homes with the standard tied to the bandings of Energy Performance Certificates. All existing homes should reach at least an equivalent to an EPC Band C by 2020.
Supplementing this standard, social housing should achieve a higher standard by 2020 - equivalent to an EPC Band B. Since social housing is both a public good and likely to house those on the lowest incomes or at the greatest disadvantage this policy would deliver major social and environmental benefits and could serve as a model for subsequent developments in the private sector.
To create other access points to work, other than sale
or void of a property, Building Regulations should be amended to demand
consequential works to improve the energy efficiency of the entire property to
reach the appropriate level in the Code for Sustainable Existing Buildings when
renovation, refurbishment or extension takes place. Local authorities should be required under planning laws to consider the energy efficiency level of the whole house and to require the owner of the dwelling to meet the specific standard as a condition of receiving planning consent to extend, refurbish or renovate a domestic property.
At 2020 it is proposed the EPC Band C minimum on the Code for Sustainable Existing Homes becomes a mandatory requirement to be met prior to the sale or rental of the property. In the preceding years up to 2020 the energy efficiency works should be incentivised by the government to encourage uptake at the high levels required. Beyond 2020 the incentives should be removed. With an early indication on regulation from the government and ensuring householders and landlords will be incentivized to reach the standard before 2020, this should encourage take-up. If they fail to participate pre-2020 and their property remains below the standard they will not be able to sell or rent after 2020 until the property is brought up to the required standard. This should provide one of the necessary motivations for households to take up a whole-house retrofit. Announcing this intention early on in the scheme (2010), so there is adequate notice to householders will give further encouragement.
Prior to 2020 there should be enforcement of the minimum standards in the HHSRS to ensure there are no homes with a Category 1 hazard failing on the thermal comfort element. No property that falls below an EPC Band E should be allowed to be rented and those in the owner occupier segment should be prioritised for retrofit pre- or post-sale depending on the view of the owner and prospective owner.
Incentives
There needs to be appropriate incentives for householders to take up the scheme to ensure widespread delivery and enable economies-of-scale and clusters of work in an area. Incentives are particularly important for the private rented sector where a split-incentive is currently resulting in poor uptake of energy efficiency measures.
The Landlords' Energy Saving Allowance uptake of
the £1500 tax allowance up to 2015 should be extended to 2020 and be extended
to cover low-carbon and renewable technologies. The Allowance should be
conditional on a pre-EPC check and an EPC produced post-installation. The level of the Allowance should also be
increased to a level that will make it more of an incentive for landlords to
take up whole-house measures. The Allowance should be promoted among private
landlords further by disseminating information via letting agencies and the
Landlord Tenancy Deposit Scheme. As part of delivery of the scheme the
Allowance should be included in documentation sent to private landlords after
the assessment of the property along with information on the proposed loan
scheme for private landlords. The government should considered if central government funded council tax rebates for taking up a whole-house retrofit is appropriate and not an undue burden on the Treasury. Other incentives to consider include stamp duty rebate on properties being sold that have been retrofitted under the Scheme.
Feed in Tariffs and Renewable Heat Incentives should be promoted by as part of the assessment for financing and incentives the householder/landlord can apply for. Householders should be assisted in claiming these after retrofit of appropriate measures by local authorities delivering the scheme.
All incentives for the Scheme (excluding FIT and RHI) should run until 2020 to act as an incentive for early take up prior to regulation.
Enforcement
To ensure effective delivery of the strategy there will need to be enforcement of the standards to ensure local authorities, social housing providers, private landlords and owner occupiers are delivering on their obligations and that householders are bringing their properties up to the required standard.
HHSRS - there should be amendments
to the Housing Health & Safety Rating System. A referral process from
delivery agents to the relevant local authority team needs to be put in place
in each local authority as part of the scheme to deliver the strategy on a
local basis. As part of the enforcement of a minimum standared in the scheme up
to 2020 local authorities should seek to identify Category 1 hazards and
prosecute private landlords who fail to bring their properties up to the
minimum standard of a Band E. HHSRS should be amended to take into account the
requirement for all households to have an EPC rating. Those households falling
below a Band E (SAP 38 or lower) should
be deemed to be at risk of Excess Cold and be classed as a Category 1 hazard.
There should be further reassessment of the relevance of HHSRS in the longer
term. A Home MOT should be established
where all homes should require an energy efficiency MOT which incorporates a
full audit every 10 years to ensure they continue to meet the current standard
laid down by the CfSEH and regulations.
This would act to update the EPC and provide a point to intervene with
further energy advice. If a property
fails a pre-EPC check in its Home MOT the owner should be required to bring the
property up to the required standard and issued the EPC after completion of
works. This should be applicable across all tenures. The results of the Home
MOT (and updated EPC data) should feed into the energy efficiency database. The onus should fall on local authorities to ensure compliance with the CfSEH as part of their planning, building control and environmental health functions.
Obligation and competition
The current approach of a supplier obligation is not an appropriate mechanism for delivering this National Energy Efficiency Scheme. The obligation for delivery should rest with local authorities rather than energy supply companies.
With 130 out of 150 Local Area Agreements including carbon reduction targets the majority of local authorities are taking action to reduce emissions. Local authorities are the central point of delivery through partnerships in their community with a key role in reducing carbon emissions, tackling fuel poverty, and providing a strategic approach to local energy planning. Local authorities should be the bodies obligated to deliver the scheme.
The need to ensure the majority of the housing stock is retrofitted to a higher energy efficiency standard warrants an expanded programme. This is best delivered through local led partnerships where the local authority should have the responsibility for reducing the carbon emissions in their locality. This would also provide independence from energy suppliers which may enable other means of generation such as CHP and community heating to gain more traction. Local and community renewable and low carbon generation, such as CHP, are currently mostly local authority owned and could be considered a threat to the centralised provision of gas for heat. This is essentially undermining the business model of the energy companies so they may not necessarily be enamoured with delivering these options.
The new obligation on all local authorities to reduce carbon emissions in their locality through working in partnership under the banner of a national programme for a conversion to a low carbon economy should include
· energy and heat mapping to identify areas where provision of community heat or electricity generation is preferable;
· the systematic retrofit of the entire housing stock in all sectors within their locality; and
· the delivery of energy advice, income maximisation by ensuring maximum take-up of benefits entitlement, and delivery of other community measures
· access to retrofit grants for those eligible and to financing mechanisms for landlords and owner occupiers
The current obligation and other schemes delivering have limited competition and in some case it is arguably a monopoly position enjoyed by the contracted managing agent also owning the contractors that are delivering the measures.
This proposal seeks to enhance competition by altering the point in the market where competition occurs. Under present schemes competition is limited with the only access being for large businesses tendering for the contract to deliver the energy suppliers obligations and the government national scheme. This scheme would move competition to the local level and enable smaller, accredited local businesses and installers to tender for contracts for, amongst others
· managing agents
· provision of energy audits and advice
· installation of measures
· data management and infrastructure to enable delivery
· heat and energy mapping
· provision of energy infrastructure
· billing and management services of district heating
This approach will enable new entrants into the market to deliver on energy efficiency and low carbon/renewable generation.
This local authority obligation would not separate the social and environmental objectives. The delivery mechanism through a one-stop-shop approach of whole-house retrofit available to all under the one scheme with access to the appropriate financing mechanism for their segment of the market will address both objectives. The onus for delivery of the government social and environmental objectives is taken off the energy supply companies and private sector and the reliance on a flawed principle that the market can deliver, and it is placed firmly in the public sector through local authorities.
Reporting
Progress against delivery should be monitored at a local level and collated nationally to enable proper assessment of progress to inform the need for any amendments to the scheme in future years to ensure all homes are retrofitted by 2020. The Government should require local authorities to report on progress in delivering energy efficiency improvements in their area in terms of raised standards in the housing stock and reduction of carbon emissions.
Government
should be required to report to Parliament on progress towards improving the
housing stock and feed into the reporting process for the carbon budgets and
the reduced carbon emissions achieved from the housing stock. A housing
stock energy efficiency database should be established that will enable local
authorities to report back to central government on progress towards meeting
the target. The database should include the SAP/EPC rating pre-measures and
details of improvements installed and a post-measure SAP/EPC rating with
expected reductions in carbon emission and energy use. It should be a
requirement that householders should have a full EPC assessment and
post-measures update (see delivery) and be obliged to report the improvements
to their local authority. Local authorities should be required to report back (through a housing stock database) on the improvements within their area based on the number of households where measures have been installed, the numbers removed from fuel poverty and the average EPC band (and SAP rating) by tenure, ward etc.
The local authority will be required to report on the number of homes with Category 1 hazards under HHSRS and failures of the Home MOT.
Communications
The scheme requires a comprehensive national communications strategy to create a recognisable brand that will be used by local authorities to co-brand their scheme. This will tie in the national offering with the local delivery and will ensure that householders are aware that every household will be receiving the same offering and measures up to 2020.
The national coordination body will be responsible for rolling out the communications strategy and ensuring that the local delivery across the country is communicating the same messages and offerings in a coordinated fashion. Combining a national launch and programme with local strands that are timetabled to ensure households are receiving messaging and motivation from numerous sources that will encourage them to participate in the scheme.
Each local delivery scheme will require its own communications plan for marketing the offering locally and ensuring uptake.
The central national body could provide templates of materials and advice to local authorities to ensure there is no duplication of effort and a coherent brand is maintain across the country.
The communication strategy should aim to engender trust in the scheme and drive take up of installations.
(c) NEA May 2009
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