APPENDIX: EXPLANATORY INFORMATION
Draft Electricity and Gas (Carbon Emissions Reduction)
Order 2008
CARBON EMISSIONS REDUCTION TARGET 2008-11:
PRIORITY GROUP OBLIGATION
Under the draft Electricity and Gas (Carbon Emissions
Reduction) Order 2008, covering the period 1 April 2008 to 31
March 2011, energy suppliers are required to achieve at least
40% of their carbon emissions reduction obligation by promoting
measures to the priority group. The priority group is defined
as those in receipt of at least one of the benefits and tax credits
that are listed in Schedule 2 to the Order, or to those aged 70
or over.
The priority group aims to ensure equity for those
who spend a larger proportion of their incomes on energy. In providing
particular help to low-income consumers and the elderly, it is
expected that it will contribute to the alleviation of fuel poverty.
A priority group of 40% is challenging for suppliers,
but achievable. It reflects that maximum practical potential in
terms of the numbers of measures that may delivered to these consumers,
particularly the number of remaining unfilled cavities that could
be insulated.
Under the current Energy Efficiency Commitment (EEC),
which runs from 1 April 2005 to 31 March 2008, energy suppliers
are required to achieve at least 50% of their energy efficiency
obligation by promoting measures to a priority group of consumers
in receipt of income/disability benefits and tax/pension credit.
(The EEC 2005-08 priority group does not include those aged 70
or over).
Although the figure of 40% for the priority group
under the Carbon Emissions Reduction Target (CERT) might seem
to imply a lower level of activity than the EEC 2005-08 priority
group obligation of 50%, it represents an actual increase in the
level of activity aimed at low-income and elderly consumers. This
is because CERT requires a broad doubling of activity compared
to EEC 2005-08. As a result, the amount of activity in the priority
group will increase by about 60%.
In terms of investment by energy suppliers under
CERT, an estimated £1.5 billion will be directed to the priority
group, or about 55% of their total investment for the CERT programme.
Under EEC 2005-08, an estimated £775 million will be directed
to the same group of consumers (the EEC 2005-08 low-income priority
group, plus those aged 70 or over).
Under CERT, the draft Order allows energy suppliers
to achieve a proportion of their priority group obligation by
directing specified measures to consumers in the private housing
sector who are in receipt of income/disability benefits or tax/pension
credit. Under this option, measures more likely to remove households
from fuel poverty are directed at precisely those households who
are more likely to be in fuel poverty.
Department for Environment, Food and Rural Affairs
December 2007
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