Transcript The Green Deal and Energy Company Obligation (ECO)

The Green Deal and Energy
Company Obligation (ECO)
June 2011
Overview
• The Green Deal
• Energy company obligation
• What’s next
• Questions
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The Green Deal
A new and ambitious approach to home energy
efficiency…
Green Deal Process
Assessment
Finance
Installation
Repayment
and Follow
Up
3
The Green Deal –
Assessment
• Gateway to the Green Deal
• Accredited assessor produces – fabric and occupancy
assessment
• Impartial – uses standardised methodology
• Consumers can shop around after receiving advice
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The Green Deal –
Finance
• Householder receives measures at no up-front
cost from a ‘Green Deal provider’.
• Payment obligation attached to the energy meter
at a property.
• Obligation transfers automatically to whoever
pays the energy bill at the property.
• Not a loan, and not secured against the property.
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The Green Deal –
Installation
• Green Deal will require standards and accreditation
for products and installers
• Installer will need to:
– meet certain standards to be accredited
– carry the Green Deal kite-mark/ logo
– sign off work once complete and inform GD
provider that repayments can begin
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New Energy Company Obligation –
Underpinning the Green Deal
Twin objectives – CO2 reductions and thermal efficiency
MEASURES
Funded primarily
by GD Finance e.g.
basic insulation
Funded primarily
by ECO e.g.
central heating
Unsuitable for
finance e.g.
•Fuel poor or low income;
•Low energy user;
•Hard to treat housing
Green Deal
Finance
Energy Company
Obligation
CONSUMERS
Suitable for full
finance e.g.
•On higher incomes;
•High energy user;
•Low cost measures
Background
What is an energy company obligation?
•
Government sets a outcome and obliges suppliers to deliver
•
The outcome must be related to reducing domestic carbon
emissions (or with new powers in the Bill the cost of heating)
•
An administrator then ensures the rules are followed – changes
require legislation
•
Energy suppliers are assumed to fund their obligations through
energy price rises with poorest hit hardest by higher energy costs
•
Not a pool of money
Why use the suppliers to deliver?
•
Energy suppliers have relationship with every household
•
Liberalised market and economies of scale keep costs down
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Objectives of the ECO
• Deliver Carbon Savings - deliver a step change in
rate of improvement of homes and provide certainty
that we will realise long term carbon savings
• Support the Vulnerable – continue to support thermal
improvement, particularly heating systems, for the
poorest and most vulnerable after Warm Front
• Work alongside Green Deal – for the technologies
crucial to meeting 2050 carbon objectives (for
example solid wall insulation) encourage innovation
and investment and drive down the costs. Ensure
Green Deal works for all consumers regardless of
social circumstances by providing extra support if
required
ECO – key features
Many details still to be determined – will be consulting
But clear that it will:
• apply to major suppliers
• be ambitious
• focus on “hard to treat” and lower income/vulnerable
• have both carbon and heating objectives
• need to offer smooth transition from CERT/CESP,
• work alongside the Green Deal in many cases
ECO – key features
Likely that ECO will:
• include very restricted list of technologies
supported?
• be a long term obligation (10 years) with interim
targets and regular reviews?
• require detailed reporting of measures installed and
carbon savings, and financial reporting on the real
costs of delivering ECO?
ECO and Green Deal
Green Deal finance vs. ECO
• ECO provides reasonable certainty of outcome. But
under ECO everyone pays and only some benefit,
while under Green Deal finance the costs and
benefits stay together.
Linkages
• ECO delivery should use the same standards and
consumer protections as Green Deal
• When Green Deal finance alone cannot deliver, ECO
should combine with it seamlessly behind the scenes
• ECO should not distort the open and competitive
Green Deal market
The Supply Chain
• Green Deal will remove barriers promote take up and
stimulate the market for energy efficiency – leading to
more activity and more jobs
• The supply chain could be very broad, including
opportunities for a wide range of companies (energy
suppliers, retailers, installers, etc)
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The Green Deal –
Indicative Timetable
• Autumn 2011- Bill receives Royal Assent (depending
on length of 1st Session)
• Ahead of Autumn 2011 - officials will be developing
thinking on secondary legislation with a view to
drafting secondary legislation and formally
consulting.
• Early 2012 – secondary legislation laid in Parliament
• Spring 2012 – detailed guidance prepared
• Autumn 2012 – First Green Deals appear
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