eco and the green deal
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ECO and the Green DealPROGRESS TO DATE; THE IMMEDIATE OUTLOOK; AND WHAT NEEDS TO HAPPEN
WWW.UKACE.ORGWWW.ENERGYBILLREVOLUTION.ORG
Progress to dateAnd immediate outlook following proposed cuts to the Energy Company Obligation
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Major measures delivered by Green Deal Finance, Cashback and ECO
These slides focus predominantly on ‘major measures’; i.e. those that constitute most of the work carried out. These are:
◦ Efficient boilers◦ Cavity wall insulation (CWI)◦ Loft insulation (LI)◦ Solid wall insulation (SWI)
Most of the following slides show month by month delivery of the above measures, from January 2013 to March 2014.
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Major measures delivered by Green Deal Finance, Cashback and ECO
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-140
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Boilers CWI LI SWI
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Programme delivery in historical perspective – about which more later…
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2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/150
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Boilers CWI LI SWI
Green Deal and ECO: much momentum lost, and set to worsen this financial year due to cuts
Green Deal Finance and CashbackProgress to date
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Major measures delivered by Green Deal finance
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-140
100
200
300
400
500
600
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Boilers CWILI SWIHeating controls Solar PVNumber of Green Deal Webpage views on Gov.uk
Num
ber o
f Gre
en D
eal m
ajor
mea
sure
s
Num
ber o
f Gre
en D
eal w
ebpa
ge v
iew
s on
Gov.
uk
Worth noting that other measures have featured strongly in Green Deal Finance:• Heating controls• Solar photovoltaics
However, from here, we stick to the original four major measures…
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Major measures delivered by Green Deal finance
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-140
100
200
300
400
500
600
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
602,170
170,836
Boilers CWILI SWINumber of Green Deal Webpage views on Gov.uk
Num
ber o
f Gre
en D
eal m
ajor
mea
sure
s
Num
ber o
f Gre
en D
eal w
ebpa
ge v
iew
s on
Gov.
uk
It looks as if interest has been declining…End of January 2013: Government-backed marketing campaign launches
End of June: “Green Deal mired in IT and legal problems”
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Major measures delivered by Green Deal Cashback
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-140
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Boilers CWI LI SWI
Mid-February: SWI cashback increased from £650 to £4,000; back-dated to mid-December 2013
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Energy Company Obligation (ECO)Progress to date and immediate outlook
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Progress to date under ECO
Next slides examine ECO as a whole, and then its constituent parts:◦ Carbon Emissions Reduction Obligation (CERO)◦ Carbon Saving Communities Obligation (CSCO)◦ Home Heating Cost Reduction Obligation (HHCRO)
Latest official data from DECC and Ofgem are used (to March 2014). Post March 2014, we look at the impact of changes proposed in the current ECO consultation, and compare this with what would have happened were the ECO left unchanged
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Major measures delivered by ECO – without changes
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Required m
onthly rate to
March
20150
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Boilers CWI LI SWI
WWW.UKACE.ORGWWW.ENERGYBILLREVOLUTION.ORG
Major measures delivered by ECO – consultation changes
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Required m
onthly rate to
March
20150
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Boilers CWI LI SWI
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Major measures delivered by CERO – without changes
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Required m
onthly rate to
March
20150
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.07240180862764270.149350849321765
0.2667415373334960.328365142728794
Boilers CWI LI SWI % of 2015 target
CERO activity has ramped up to the level it would need, approximately, to sustain in order to meet its original March 2015 target
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Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Required m
onthly rate to
March
20150
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.172085217141647
0.354978333041431
0.633993490532863
0.78046098515084
Boilers CWI LI SWI % of 2015 target
Major measures delivered by CERO – consultation changes
The level of activity in the first quarter of 2014 increased dramatically to take advantage of the ‘levelisation uplifts’ proposed by the consultation.This compounds the reduction of CERO targets and means very little will occur until at least April 2015
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Major measures delivered by CSCO – without changes
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Required m
onthly rate to
March
20150
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.1293930710008550.185701454234388
0.2246011853843330.247099355983712
Boilers CWI LI SWI % of 2015 target
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Major measures delivered by CSCO – consultation changes
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Required m
onthly rate to
March
20150
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.1403977792892640.201495115492874
0.2437032169480560.26811482698089
Boilers CWI LI SWI % of 2015 target
CSCO is the only part of ECO that will see any significant level of activity between now and March 2015
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Major measures delivered by HHCRO
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13Jul-1
3
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Required m
onthly rate to
March
20150
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0.164795612855921
0.442628437003544
0.767794574117072
0.814045320309498
Boilers CWI LI SWI % of 2015 target
HHCRO well ahead of schedule to meet targets. This is why it starts to wind down level of activity
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Mostly boiler replacements, averaging 1.2 measures per household helped
Relative contributions to dateFrom Green Deal Finance, Cashback and Energy Company Obligation – placed into longer term context of previous programmes
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Relative contributions: Green Deal Finance…
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-140
50
100
150
200
250
300
350
400
Green Deal Finance
Tota
l num
ber o
f maj
or m
easu
res
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…plus Green Deal Cashback…
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-140
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Green Deal Finance Cashback
Tota
l num
ber o
f maj
or m
easu
res
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…plus ECO.
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-140
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
Green Deal Finance Cashback ECO
Tota
l num
ber o
f maj
or m
easu
res
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Delivery since 2000: loft insulation
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2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/150
200,000
400,000
600,000
800,000
1,000,000
1,200,000
Warm Front EESOP-3 EEC-1 EEC-2 CERT CESP ECO & GD
An 87% drop in loft insulations, even though 7.5 million lofts remain under-insulated
Delivery since 2000: cavity wall insulation
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2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/150
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Warm Front EESOP-3 EEC-1 EEC-2 CERT CESP ECO & GD
A 46% drop in cavity wall insulations, even though over 5 million homes could still benefit
Delivery since 2000: boilers
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2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/150
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Warm Front EESOP-3 EEC-1 EEC-2 CERT CESP ECO & GD
EEC-2 was an important facilitator in the transition to condensing boilers
The incentive structure under HHCRO to date has meant that boilers have been the simplest way of achieving its target
Delivery since 2000: solid wall insulation
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2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/150
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Warm Front EESOP-3 EEC-1 EEC-2 CERT CESP ECO & GD
Long project set-up time under CESP led to spike to reach target in its last year
Momentum being lost; 8 million untreated solid wall homes remain
All major measures across the programmes
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2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/150
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Boilers CWI LI SWI
Drifting further away from what is needed, and what is possible
What needs to happenMeeting Carbon Budgets and dealing with fuel poverty
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On reducing CO2 emissions
To meet carbon budgets, the Committee on Climate Change requires all remaining cavities and lofts to be insulated by 2015, and 2.2 million solid walls to be insulated by 2022*
* 2013 Progress Report to Parliament, Chapter 3, Section 3
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Monthly install rates to meet carbon budgets
Average monthly rate in 2012
Average monthly rate to March 2014
Likely average monthly rate to March 2015 (ECO only)
Rate required without cuts Monthly rate required to meet CCC trajectories
-
50,000
100,000
150,000
200,000
250,000
300,000
133,886
13,839 21,296 30,759
226,696
53,070
23,457 13,571
49,348
243,599
6,804 4,387 1,249 8,023
20,478
LI CWI SWI
Monthly rates needed to meet carbon budgets (to end 2015 for LI and CWI, and to end 2022 for SWI)
Without ECO cuts and without GD Home Improvement Fund, these monthly rates would have been expected to March 2015
Installation rates seen under ECO and Green Deal so far
Installation rates likely as a result of the cuts proposed; new GD Home Improvement Fund could drive an additional 2,000 SWIs per month. But this would only make up 15% of the carbon savings lost to the ECO cuts
Installation rates seen under CERT, CESP and Warm Front
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On tackling fuel poverty The Energy Bill Revolution is calling for all low-income homes to be upgraded to an Energy Performance Certificate rating of Band C by 2025 – that means 5.9 million homes from now
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On tackling fuel poverty Achieving Band C by 2025 means:◦ Deep retrofits◦ Wide range of energy
efficiency improvements
◦ Doing so at an ambitious, but achievable rate
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Depth of retrofit in low income households
Average number of measures per household0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
HHCRO and CSCO depth of retrofit Required depth of retrofit to meet Band C
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Depth of retrofit in low income households
ECO is very much a single measure programme, with low income households supported receiving on average 1.2 measures each Deeper retrofits are needed, averaging 3.1 measures per low income household supported, if Band C is to be met Also, the range of measures ECO delivers is too narrow…
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Composition of retrofit in low income households
Air Source Heat PumpsBiomass Boilers
Ground Source Heat PumpsMicro CHP
PhotovoltaicsSolar Water Heating
Door InsulationElectric Storage Heaters
Flat Roof InsulationWindow Glazing
Hot Water Cylinder InsulationDraught Proofing
Solid Wall InsulationStandard CWI
Heating ControlsHTTC CWI
Loft InsulationBoiler
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
Required each month to reach EPC Band C by 2025 for low income households in EnglandSeen to date per month under ECO (estimate for low income households in England only)
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Composition of retrofit in low income households
As could be seen, low income households not only need deeper retrofits, but also require a much wider mix of measures to meet Band C
See our ‘Ending Cold Homes’ report* for Consumer Futures (now Citizens Advice)
*Click cover to open the report on the ACE website
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Reaching low income households
Average monthly helped to March 2014
Likely average monthly rate to March 2015 (ECO only)
Rate it would have been to March 2015…
Monthly rate required to meet EPC Band C trajectory
-
10,000
20,000
30,000
40,000
50,000
60,000
Low income households… …of which fuel poor
We estimate 460,000 low income households helped in Britain in first 15 months of ECO, of which 98,000 in fuel poverty
ECO set to continue at a similar rate to March 2015. Lower number of low income households that will be helped by HHCRO and CERO likely to be offset by catch-up necessary for CSCO
Without cuts, CERO would have helped considerably more low income households in the next 12 months. Were the ECO to continue until 2022, 640,000 fuel poor households would receive help.
Helping all low income households to reach an EPC rating of C by 2025 doesn’t require that many more low income homes to be reached. But it would help many more fuel poor households (3.1m to 2025), and provide more lasting support through deeper retrofits
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Reaching low income households
So, the ECO supply chain is almost going into enough low income homes, compared to the number that need to be reached to reach Band C by 2025; this is encouraging, however:
It is currently an opportunity missed, because low income households are not receiving the depth or the range of support necessary to fuel poverty proof their homes
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Conclusions Green Deal Finance and Cashback have contributed little to retrofits, compared to ECO. ECO is delivering much less than previous programmes
To cut carbon emissions at scale and speed required and to end fuel poverty more capital investment is needed to achieve deep retrofits.
The Energy Bill Revolution is calling for:
◦ Home energy efficiency to be made a UK infrastructure priority
◦ 2 million low income homes given free measures to bring them up to EPC Band C by 2020 and all low income homes brought up to EPC C by 2025
◦ Low interest loans for the able to pay◦ Use carbon revenue to provide long term funding
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About the Energy Bill Revolution
The Energy Bill Revolution is an alliance of 180 charities and businesses campaigning to end fuel poverty by making home energy efficiency the UK’s priority infrastructure investment. They are calling for all low income homes to be made highly energy efficient and for carbon tax revenue to be used to provide long term funding.
For queries, contact Ed Matthew, Director at ed.matthew@e3g.org
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About the Association for the Conservation of Energy
The Association for the Conservation of Energy was formed in 1981 by a number of major companies active within the energy conservation industry. Our aim is to encourage a positive national awareness of the need for and benefits of energy conservation, to help establish a sensible and consistent national policy and programme, and to increase investment in all appropriate energy saving measures.
ACE Research is an independently funded and internationally respected research unit which has consistently delivered ground-breaking policy research. Its work ensures that ACE’s campaigns and advocacy are always founded on, and guided by, the best available evidence and insight.
For queries, contact Pedro Guertler, Head of Research at pedro@ukace.org
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