Transcript www.nia-uk.org

Energy Efficiency Commitment
2008-11: A view from energy
suppliers
Russell Hamblin-Boone
Head of Corporate Affairs
What is the ERA?
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It is the only dedicated trade association for
energy suppliers
All the main energy suppliers operating in the
domestic market in GB are members
Why was it set up?
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Responds specifically to retail issues
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Dedicated service to energy retailers
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ERA established October 2003
Characteristics of the ERA
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‘Punching above its weight’
Strong customer focus
Lobbying, engagement, research, representation
Unlike traditional trade associations, very much a
delivery organisation
Does not tell the industry what to do - but asks it
some difficult questions
Led by members, facilitates the debate on key policy
issues
Energy Efficiency Commitment
2008-11
Government’s target and needs to be realistic and
reflective of:
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the product range
industry capacity
market potential
changes in market dynamics (e.g., reduction of social
housing opportunities)
future changes to Building Regulations.
Measures, costs and values
Insulation
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Costs will increase as evidenced by insulation manufacturers’ response to
EEC2
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Insulation relies on reaching saturation
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There are two key factors that remain unproven a) installer capacity growth
potential and b) consumer demand.
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Defra has overestimated available insulation
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Industry capacity has limited opportunities for expansion
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Difficult to predict increased cost of EEC3 – min 32% more + increased cost of
materials.
Measures, costs and values
Cavity Wall Insulation
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EEC3 carbon score for CWI considerably
reduced.
Removal of pre and post 1976 categories for
cavity wall insulation.
Measures, costs and values
Loft Insulation
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ERA supports BRE research recommending an increase in
lifetime of Loft Insulation in line with CWI to 40 years
EEC score for loft top-ups must take account of disturbance etc.
Loft depth weighting should be based on the English Housing
Conditions Survey.
The number of Virgin lofts that have been installed during EEC2
as a weighted average will result, in lower overall carbon scores
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Priority Group
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A realistic % PG should be agreed at the outset and should not be set
on traditional equity basis
Balancing equity as in previous programme would come at a high price
& limit programme carbon savings for a given spend
47% scenario is not possible without resort to high cost measures such
as micro generation heating or solid wall insulation
25% scenario is at the top end of what energy suppliers and NIA
believe is potentially possible with low cost measures
High cost measures should not be included (except via the exemption
option)
Differential exemption option could play a crucial role in managing risk,
limiting cost impacts to energy bills and balancing equity
Fuel switching, feedback displays and micro generation volume
assumptions are unrealistic
Priority Group
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Maximise energy savings potential
Provide a holistic solution to fuel poverty
Pool resources from EEC, Warm Front, DWP Benefits check,
Social Services etc
Maximise the benefit to low income and fuel poor households
Restore an equity balance
Balancing that equity not just to relevant customer groups but
also to individuals
Maintaining as a far as possible continuity of programmes for
installers
All suppliers offering PG work this winter
DWP mailing = estimated 6% take up
Transition
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Most suppliers will have completed a large part of their EEC2
activity by March 2007
Without adequate transition arrangements there may be a lull in
insulation activity during 2007
Defra must confirm their scoring methodology and indicative
scores to be attributed to each measure by the end of 2006
Scores should state precisely the value of EEC2 GWh to EEC3
credits in terms of GWh or tonnes of carbon
Early confirmation will not guarantee an early start,
Costs may be double that of EEC2
Microgeneration
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All suppliers exploring expansion options for
microgen
A niche market that has not reached critical mass for
market transformation
Microgen currently not cost effective for consumers
compared to insulation
Work in progress to find solutions for cost of
administering exports.
Still not a significant part of EEC.
Need support for heat led and electicity led microgen.
A strong argument for innovation incentives.
Future challenges
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Smart meters
Local generation – CHP
Electric homes
Fuel Poverty
Energy Reduction v Energy Consumption
Thank you
Russell Hamblin-Boone
Head of Corporate Affairs
[email protected]
www.energy-retail.org.uk