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DECC responds to W

e are now just a matter of weeks away from the launch of Green Deal, the

Government’s flagship green initiative that is set to revolutionise energy efficiency in the UK. Green Deal is a finance mechanism that will allow businesses, homeowners and tenants to borrow money to make energy improvements to their properties, and pay it back through the savings they make on their energy bills.

There will be, of course, cases where the savings made are not enough to cover the cost of the energy efficiency measures. Measures such as solid wall insulation are incredibly effective at reducing carbon emissions, but are costly.

On top of this, there are the cases of fuel poverty that will always need to be tackled; something the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP) have been helping to achieve over the past five years. These streams of funding come to an end in December 2012, but unfortunately the problem of fuel poverty will not, and this cannot be tackled through Green Deal alone.

It is for these reasons that a new Energy Company Obligation (ECO) will run alongside Green Deal, ensuring that all homes in the UK can benefit from this new carbon reduction initiative.

When plans for ECO were first announced by the Government, it was with the aim of reducing domestic carbon emissions and alleviating fuel poverty by setting two targets: the Carbon Saving Obligation to reduce carbon emissions and the Affordable Warmth Obligation to reduce heating costs for low- income and vulnerable consumers. The level of funding across the obligation was proposed at around £1.3bn per year. The initial plans for ECO also stated that the Carbon Saving Obligation should focus on supporting the installation of solid wall insulation, with other measures eligible to be installed in packages only. Measures eligible under the Affordable Warmth Obligation were defined by DECC as those measures that resulted in a reduction in heating costs to the household.

However, Climate Energy, like many involved in CERT and CESP-funded programmes, were concerned that the plans for ECO did not provide enough support to the fuel poor, and were worried about the transition between the end of CERT / CESP funding and the start of this new funding stream. We contributed to the DECC consultation process with these concerns, and we were pleased to see that, when DECC’s response to this consultation process was released in June, many of our concerns had been addressed.

DECC has now introduced a third ECO element, the Carbon Saving Communities Obligation, representing around £190m of funding per year. This will fund insulation measures in the poorest areas of the country, and to ensure that rural households do not miss out, suppliers will be required to deliver 15% of their overall Carbon Saving Communities Obligation to rural, low-income households in settlements with a population size under 10,000.

The introduction of the Carbon Saving Communities obligation also means a wider range of measures will be eligible under the Carbon Saving Communities obligation, including cavity wall, loft and solid wall insulation.

We also had concerns that some non-standard cavity wall would not be eligible for Green Deal funding due to the cost, and therefore

industry and local authority concerns around ECO

Garry Worthington, head of Green Deal at Climate Energy, discusses the ECO – Energy Company Obligation – and its relationship to the wider Green Deal.

homeowners could lose out. DECC listened to this, and non-standard cavity wall insulation will now be included under the ECO Carbon Saving obligation, alongside solid wall insulation. This move will help the smooth transition from the existing CERT and CESP schemes to the Green Deal and ECO.

The DECC Green Deal consultation response also confirmed that boiler repairs are now classed as an eligible measure under the Affordable Warmth Obligation, provided that the repaired boiler is accompanied with a level of aftercare for the household.

One of the major differences between Green Deal and ECO and current CERT and CESP streams of funding is that the potential savings as a result of energy efficiency measures, and therefore eligibility for funding, will be calculated per property, on a case by case basis, rather than by area or property type as is currently the case. This will be done through an in-depth Green Deal assessment, carried out by an accredited assessor, and will allow homeowners, Green Deal providers and energy companies to see accurate estimates of savings over the lifetime of the measures installed.

ECO funding will also only be available through a Green Deal provider, something Climate Energy is working towards becoming. We believe our vast experience in managing CERT and CESP funded projects will enable us to quickly and easily pick up the ECO baton, allowing us to continue our work in reducing fuel poverty and carbon emissions across the UK. The knowledge and participation of local authorities is critical to successful delivery of this ECO funding. It is for this reason that we will be working closely with local authorities to ensuring that all those households who require access to this new funding receive it, and that we can continue to reduce carbon emissions and fuel poverty in the UK.

Garry Worthington

FOR MORE INFORMATION For more information about ECO and how you can access it, please contact Robert Marjoram at Climate Energy on 01376 531557.

public sector executive Jul/Aug 12 | 47

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