A lesson in Ministerial Defence or Defiance?

During this week The Rt Hon. A. Rudd Secretary of State for Energy & Climate Change gave a strong demonstration of why she has been appointed to her post, namely her ability to defend an indefensible position. A necessary attribute for all Tory ministers in the current Cabinet, it would appear. If this demonstration is anything to go by, she has a long career ahead of her, hopefully not defending the indefensible, but promoting the new direction that the Government will take to enable the UK to meet its obligations to reduce the risk of climate change and meet the aspirations of the electorate.

You can watch the full story unfold here, I recommend having a glass of something strong by your side.

She was called to give evidence to the Energy and Climate Change Select Committee to explain why she had claimed the following two opposing views in quick succession. The first to the House of Commons, to say that the UK was going to meet its renewable energy targets by 2020, and the second where she wrote to her counterparts in the ministries for Transport,the Cabinet Office and The Treasury to ask for their help as under current policies the UK will not meet its renewable energy targets by 2020.

I can’t help wondering whether the leak was a political move to assign blame for this mess on the shoulders of colleagues in the Cabinet Office and Treasury whose decisions have left DECC with no room for manoeuvre after a series of swingeing cuts to renewable energy subsidies which have left the industry in disarray and investors running in the opposite direction. Among the suggestions for solving the problem was the suggestion that the UK could buy in renewable energy from other countries through interconnectors. When pressed on this matter, she said that this was not her preferred approach!

The explanations that were given to the Committee for the confusion were as follows:

– due to shortfalls in progress with renewable heat and transport, the result of current policies will be 11.5% of renewable energy by 2020 instead of 15%, a shortfall of 4.5% of all UK energy or a shortfall of 23.3% of the 15% target. Not a small amount of energy.

When asked whether the shortfall was a result of the recent cuts to subsidies and support for renewable energy, she responded:

– ‘we are going to meet the planned target for electricity, so we don’t think that cutting the subsidies will make any difference’

– ‘electricity is on target to provide 30% of electricity by 2020’

– ‘we don’t think that the answer is to provide more (renewable) electricity’

-‘ there is a greater role for electricity in transport’

Bizarrely the Committe didn’t ask the obvious question here, which is: if transport is to make a greater use of electricity to achieve its renewable energy targets, then wouldn’t it be sensible to make sure that there is greater capacity in the generation market to provide that renewable electricity? If we can provide more renewable electricity and (God forbid) exceed our electricity target to compensate for the lack of progress with heat and transport, wouldn’t that be a good thing? Sadly , no such question was forthcoming.

The Minister should be writing to the Dept of Transport to tell them that they are going to make use of more renewable electricity, that DECC is going to provide it, and to propose that they to work together to ensure that there are fleets of electric cars  and other vehicles ready to use this electricity by 2020.

There was also an opportunity to point out to the Minster that the cheapest way of meeting the heat targets is to reduce energy use, and some concerted action, like a replacement for the Green Deal would be a good start, but again, sadly, no such question was posed.

When asked how much of a fine the UK could face if it doesn’t meet its targets, the Minster robustly claimed not to know how much, and explained this away by saying ‘I am commited to making sure that the UK meets its targets’,  which is very reassuring, but at the same time a bit unbelieveable. The Minister was asked what policies she planned to introduce to meet the shortfall and responded with this gem:

-‘I have some ideas that I would like to take forward’ which are curently being evaluated under the Current Spending Review. I take this as Ministerial speak for , ‘I have made my point, I have given the options to the Treasury, they will say no, and I will be absolved of responsiblity’.

Expecting to produce new policies, implement them and to convert 4.5% of the UK’s energy demand to renewable sources by 2020 is simply unrealistic. It would be unlikely to happen even in a sympathetic Government, but particularly in the current fiscal environment where cuts to tax credits are off the table which will mean that cuts to absolutely everything else will be on the table, and given the recent behaviour of this Government there is zero chance that renewable energy targets are going to be a priority.

And in Other News...

There were a couple of unrelated gems in the session that will draw hollow laughter from many in the energy sector. When asked about investment plans for nuclear she stated:

-‘the  last thing the energy sector needs is surprises’

and when asked about the options available for EDF if the Chinese were to pull out of the Hinkley deal, she stated without blinking, that

-if the Chinese pull out, EDF will find another investor’

Cue hollow laughter by every economist.

Amber Rudd Green?

If the Tories want to achieve any progress on climate emission reductions, and its not clear that they do want to, despite the Rt Hon Amber Rudd’s speech last week, then they have to set out clear market signals that they mean to do so and that they will do so in a way that supports a market which lasts beyond this Parliament. This is too serious an issue to be left to individual Governments to deal with and to be subject to political whims. If ever there was an issue that needed cross-party agreement, this is it.

Clouds over the Capital

Clouds over the Capital

Amber Rudd’s speech on climate change at Aviva sets out some important pointers for how the Government plans to deal with a low carbon economy over the next decade. Having wiped the slate clean of environmental legislation over the last month, their plans appear to be based on a fairly simple idea, that the markets can solve the problem. Given that the environmental problems that we face have arisen because of what Lord Stern called ‘the largest market failure the world has ever seen’, it seems optimistic to me to believe that this approach will work.  That the markets can actually do the work that is required without some significant action by the Government through legislation and policy seems to me to be both unproven and naïve. It is unfortunate that the regulations that the Government has recently abandoned were all sending the right signals to the market; that this Government supports concerted action on climate change mitigation and would use a series of long-term initiatives to achieve that.  In contrast to this, large numbers of the companies who should be lining up to enter this new ‘market’ have objected in the strongest terms to the recent dropping of ambitious environmental targets. It is hard to believe that Amber Rudd has the backing of the Cabinet when she said. ‘We are committed to taking action on climate change and we are clear that our long-term economic plan goes hand in hand with a long-term plan for climate action.’

However hard it may be, I feel that there is little to be gained by complaining that this Government is heading in the wrong direction, because we simply cannot see into the future. There is no getting away from the fact that progress in achieving emission reductions through policy and regulation has been achingly slow. The Committee for Climate Change reflects that much of our current emissions reductions have come about because of the recession and less than one percent of the emissions reductions have come about through environmental improvements. In order to achieve our Carbon Budgets we will need to de-carbonise at a rate of 3% per annum. In order for this Governments plan to work, the market has to be three times more effective in delivering emission reductions than regulation has already achieved.

All of this effort could have been achieved more easily if we had kept some of the previous Governments policies going and not abandoned the ones that were working. I agree that the Green Deal was flawed, but it could have been rescued with a proper finance package, instead of abandoning it entirely. Similarly the zero-carbon housing regulations were heading in the right direction and had massive support from industry, ( with the usual exception of the housebuilders who don’t support any regulation that impacts on their bottom line) and also could have been made to work with some effort. Again this has been unceremoniously binned, sending housing regulations back to 2013, there to stay for the foreseeable future.

What the Tories don’t appear to understand, or are just ignoring, is that in order to create a functioning market you need investment. In order to attract investment, you need certainty, and in order to create certainty you need good governance that doesn’t change the rules without consultation. The stated objective of this Government, to achieve emission reductions through the market, has already been made very difficult by their wilful and short-termist treatment of the companies already active in the market. There is no way that we can achieve the emission reductions we need under the Climate Change Act, without the help of companies providing solar energy, wind farms, low-carbon energy, and insulation. But in dropping planned regulations including zero-carbon housing and the Green Deal, this Government will have alienated most of the companies in all of these sectors.

When the Green Deal closure was announced Amber Rudd MP said,: “ It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works.”

Having spent a good deal of time working on the development of the Green Deal and on the zero-carbon legislation I imagine I would be one of the people that the minister means when she says ‘building industry’. But why should I spend my time working with Government? The time I spent with the last three Governments has been wasted, as they have shilly-shallied with policy and regulation for a decade, only to bin all that effort when the colour of the party changes. I am certain that many large companies who have invested in Green Deal training and certification will think long and hard before coming back to the table for more.

Angus MacNeil, chair of the Energy and Climate Change Committee said, commenting on the Green Deal announcement: “The government has once again slipped out another announcement about cuts to green policies after parliament has risen for the recess. The Green Deal wasn’t working as well as ministers had hoped, but removing government support without bringing forward an alternative strategy is likely to cause further concern among businesses investing in and delivering energy-efficiency measures.”

It is possible that the long-term plan to reduce emissions will be met by extracting large amounts of shale gas to replace existing coal-fired generation, and by constructing new nuclear power rather than insulating homes and building new energy efficient ones. But both of these strategies are very risky propositions, and will continue to meet opposition among voters, and neither are likely to deliver much in the way of emission reduction during the life of the current Parliament. For every Tory who supports a ban on onshore wind, there will be two Tories who would be anti-fracking. Nuclear will continue to be eye-wateringly expensive and it will be difficult to convince an electorate that you are looking after their energy bills when you spend billions on a few projects that will always cost more than budgeted, and leave an expensive radioactive mess to deal with for the next 10,000 years or so.

A long-term decarbonisation plan for the UK needs to be just that, long-term. Energy efficiency measures in the building stock will need a programme of improvements and finance that lasts from now until 2050. Regulations for new housing that meets EU targets for 2020 needs to be considered now, and once set, needs to be left alone for the industry to develop solutions to meet it. Industrial research needs time and money, time that lasts longer than the life of a parliament, and longer than the political life of most politicians.

“We are committed to climate action; committed to economic security; committed to decarbonising at the least cost.” A. Rudd Aviva speech.

The future of our planet is at stake, nothing less. If the market is to be the vehicle that we use to cut emissions, so be it, but it needs to be a market with solid foundations that is left to function for decades, and not moments. The Tories have started their term in office badly, and have lost the trust of many in industry within a few months. If they are going to deliver on their promises, they need to start acting on them and delivering real change that both those in industry and ordinary people can understand and support. In the year of COP21 Paris when the world expects the UK Government to lead on climate action and to sign up to a global deal, they could have hardly gotten off to a worse start.

Government V Industry 2-0

Every Government has to forge relationships between its officials and industry. Some Governments are more successful at it than others. Some parts of industry are better at maintaining this relationship than others. These relationships depend on the same trust that all relationships depend upon. The trust that one side won’t let the other one down, that one side is listening to the other, even if not always agreeing, etc.. There is always some give and take in every relationship.

The message I get when talking to people now, particularly in the refurbishment part of the industry is that this relationship between industry and Government has broken down and isn’t likely to be fixed any time soon. The reason for this is money. Many companies have invested heavily in preparing for the Green Deal and the ECO legislation, and in the last Autumn it looked as though their investments were going to pay off. Orders were flowing in, the energy companies were starting to sign contracts, and the future was starting to look interesting, if not rosy.

Then Ed Milliband dropped his bombshell by saying that a Labour Government would freeze energy bills, and that this Government didn’t care about consumers pain in the face of high energy bills. I doubt if he or his advisers could have expected what happened next, because if they had, I don’t think they would have done it. The energy companies wailed that green taxes were putting up energy prices and with the help of certain newspapers and some willing bean counters in the Treasury, the Coalition bought that message. The result is that we all save £50 on our annual energy bills and the ECO legislation spending is extended over a much longer period.

The results are almost all negative in the medium and long term, but the short term gain for the Coalition is that it appears to be doing something. A poorly informed electorate will probably accept this and the world moves on. What it leaves behind is a wreckage of wasted time, lost earnings, cold homes, winter deaths, and higher CO2 emissions. I don’t see any vote winners in there, do you?

This is the second time that this Government has done this, with the FiTs changes carried out almost as soon as they came into power. For a group that you would expect to understand the rules of investment and business they seem to have missed some key classes. Investors like long-term programs, and they like to have some certainty. No industry likes uncertainty.

DECC are already talking about Green Deal 2.0, and hoping to engage the industry in discussions about how to improve the legislation to increase takeup. What do you do when a lover cheats on you and then asks you out on a date?

I’ll be washing my hair.

Sustainability Rating Tools

I participated in an interesting debate during the week at Derwent’s White collar Factory, chaired by the UK Green Building Council. The topic was ‘whether we need rating tools to advance the sustainability of the built environment’. I took the opposite view, more from the need to create a debate than from conviction, but as always, taking the contrary view was helpful to crystallise my thinking about what a sustainability rating tool should be rather that what they currently are. This is all very relevant to the current situation where DCLG seem intent on abandoning the Code for Sustainable Homes without consultation, and without replacing it.

My thoughts on sustainability rating tools are that we need them but we could do with some better ones than the ones that we currently have. In case you are not sure what rating tools I am talking about here is a list of the ones that we at HTA currently employ on one project or another. BREEAM New Construction, Code for Sustainable Homes, EcoHomes, ActiveHouse, BREEAM Communities, and a couple that we have developed ourselves: we also use energy assessment tools that some people think are sustainability tools but aren’t, like SAP, SBEM and Passivhaus, all of which suffer from the same problems as sustainability rating tools. The main problems that I have with the current crop of tools that we use are as follows:

-I don’t think that rating tools should tell professionals how to do their job. They are paid enough to know that already, and there are many mechanisms in place to spread best practice, there is no need for rating tools to do that job.

-Rating tools generally focus too much on environmental criteria to the exclusion of financial and social, and this is a big mistake. Ignoring the financial impact of measures is what has led to the Code to be on the verge of being scrapped. Housebuilders see it as adding costs but not adding any value. Their view is that Code homes don’t sell for any more than any other home, so there is no benefit to house-builders in following it. Government pays more attention to them because they have a big impact on the economy. If the Code was seen to be making new homes more attractive to purchasers, or attracting a premium value, then there would be no argument about applying it. We need to join up the thinking between environmental, social and economic sustainability.

-Rating tools tend to be written by a narrow group of people, mainly those with a strong interest in environmental matters, which leads to a narrow focus of credits and measures. Tools need to be relevant to a wider section of society and encourage high quality design that takes into account the needs of the wider population.

-The costs of running the tools and the frequent costs of retraining all need to be lower. These costs are a barrier to entry and don’t help to get tools more widely used.

-The assessments carried out using the tools tools should not need to be verified independently. Professionals are paid to do a job, and they should do it properly. A proportion of assessments should be independently audited, and poor assessments should have the rating taken away from the client. This would improve quality and lower the costs of carrying out assessments.

-Tools must look at the building a year after occupation and assess whether measures are working or not. We don’t have the luxury of continuing to install equipment to meet the requirements of a rating tool when we know that the new tenant/owner will come in and remove them. If the measure isn’t working then the tool needs to change immediately, not years later.

-Finally, rating tools should focus on the outcomes, and not on the process. Targets should be set that are measurable, and the project team should work out how best to do the work. Targets such as Fabric energy Efficiency, CO2 emissions, sound reductions, daylight factor, space per occupant, embodied energy per occupant, air quality, occupant satisfaction, hours of overheating, and so on are all measureable and there are tools or processes available to do this. I use the ActiveHouse manual as an example. Its less than 10mm thick and contains all the elements of a good rating tool. That doesn’t make it easy to meet it, but it does make it possible to understand it.

Hmmm, maybe I should write my own…

Allowable Solutions Consultation

The Allowable Solutions consultation has finally been published, and in the middle of the holiday season (thanks DCLG). For new readers the Allowable Solutions is the third and final section of the proposed 2016 Zero-carbon Standard. The other two are Fabric Energy Efficiency and Carbon Compliance. To recap:

Fabric Energy Efficiency sets a base building efficiency target set in kwh/sqm/annum which depends on the building type and its connections to other buildings.

Carbon Compliance is also an absolute target set in kg/CO2/sqm/annum and also depends on building type.

Allowable Solutions sets out how to offset any remaining emissions over a thirty year period following the buildings construction, if the combination of FEES and CC don’t equate to the definition of zero.

I should point out that zero in this context is a number derived from the emissions produced by heating, lighting, providing hot water, ventilating and cooling the building; it does not include power for rainwater harvesting, powering the TV or computer or any other non regulated equipment. The reasoning for this is that other EU legislation is driving down the energy use of such equipment and there is no need to enshrine such measures in the Building Regulations. (I think that this is a weak argument and a missed opportunity, but lets not go into that right now)

The modelling for the proposals was done in 2011 by the Zero Carbon Hub, but this work is incomplete and doesn’t include high-rise apartments or flats over garages, both commonly used building types.

The consultation sets out to provide a clear framework for projects after 2016 so that developers and housebuilders can predict their development costs with some confidence. This will help to ensure delivery of new housing continues to rise, and that the costs of additional legislation can be managed down as much as possible.

The proposal includes four options for the Allowable Solutions mechanism.

-That housebuilders/developers build to zero carbon and therefore don’t need to use it; this is the equivalent of Code Level 5 energy targets in the Code for Sustainable Homes.

-That Local authorities or other bodies provide a carbon offset mechanism through local low energy or retrofit projects.

-That housebuilders do the low carbon works themselves by retrofitting existing homes or buildings, or, by improving the performance of other schemes before 2016 and ‘banking’ the difference.

-That housebuilders/developers pay into a fund that carries out the work or arranges projects on their behalf. A sort of English Clean Development Mechanism where multiple sources of funding could be brought together to fund low carbon projects.

This is all very complex and represents the type of thing that successive governments seem to like doing, spending years on writing position papers, developing complex mechanisms, and spending many  hours of civil servants lives struggling to understand how the housing industry works so that they can ‘improve’ it.

There is another way.

By making it financially and tax efficient to design, build and sell zero carbon homes, the government could incentivise the market to produce zero carbon homes in any way it sees fit. Consumers would ask for lower carbon homes because they would represent better long term value to them, and mortgage lenders would provide funds to purchase them. housebuilders and developers would strain every sinew to innovate in all three areas of the Zero Carbon standard and they would succeed, because that is what the housing industry is good at.

It worries me that we are planning to take a route to housing delivery where two homes are going to be pronounced as zero carbon, one that meets the FEES and CC standards and achieves Zero Carbon by paying into a fund for the remaining carbon emissions, and one where the total emissions reductions are mitigated on site. The second of these two homes will be much cheaper to occupy that the first and the difference will not be obvious to the bulk of consumers. We are in danger of setting up a complicated mechanism to make life easier for housebuilders and developers, but which will has the potential to strain their relationship with their market.

Green Deal Incentives

DECC are ramping up their offers to boost take-up of the Green Deal. Is this an act of will or desperation?

The offers are described in more detail here, and, I think, are primarily aimed at householders, but can also be claimed by landlords and tenants. The works must be compete before march 2014 to be eligible and the value is a maximum of 50% of the householder/landlord investment. There is nothing for nothing from this Government.

£40m will be available at these rates, which should create an incentive between 20,000 and 40,000 properties. After that funding has been allocated, the rates will drop for the next tranche, as costs ought to have come down for more expensive measures.

I would have liked to see something that encourages a neighbour to persuade other neighbours to get involved, a way of building a streetscale or neighbourhood scale effort. But some incentive is better than no incentive.

Here are some examples of some typical scenarios that illustrate some of the possibilities.

 Measure  Rate Cavity Wall Version

(flat roof)

Solid Wall Version (pitched roof) Solid Wall with room in roof
Loft insulation (incl. top up) £100  £  100.00  £                     100.00  £                    100.00  £                 100.00
Cavity wall insulation £250  £  250.00  £                     250.00
Solid wall insulation* £650  £  650.00  £                    650.00  £                 650.00
Flat roof insulation £390  £  390.00  £                     390.00
Room in roof insulation £220  £  220.00  £                 220.00
Floor insulation £150  £  150.00  £                    150.00
Hot water cylinder insulation (incl. top up)** £10  £    10.00  £                       10.00  £                      10.00  £                   10.00
Draught proofing £50  £    50.00  £                       50.00  £                      50.00  £                   50.00
Heating controls (roomstat and/or programmer and time/temperature zone controls)**  £    70.00
Condensing oil boiler from non-condensing oil heating or other***  £  310.00
Upgrade boiler to condensing gas boiler from non-condensing boiler or other  £  270.00  £                     270.00  £                    270.00  £                 270.00
Flue gas heat recovery (condensing combi boiler) only alongside replacement boiler  £    90.00  £                       90.00  £                      90.00  £                   90.00
New or replacement storage heaters £150  £  150.00
Replacement warm-air unit £60  £    60.00
Waste water heat recovery systems £60  £    60.00  £                       60.00  £                      60.00  £                   60.00
Double/triple glazing (old single to A) £20 per m2 up to a maximum of £320  £  320.00  £                     320.00  £                    320.00  £                 320.00
High performance replacement doors £40  £    40.00  £                       40.00  £                      40.00  £                   40.00
Secondary glazing £15 per m2 up to a maximum of £230  £  230.00
 Total Potential Package Available  £                 1,580.00  £                1,740.00  £             1,810.00

* A minimum of 50% of external walls must be insulated to qualify for a Cashback on solid wall insulation.
** Cannot be claimed at same time as boiler replacement (as this is a regulatory requirement).
*** Householders should consider their renewable heat options, as they could get a higher payment under RHPP now, for certain measures.

Haringey 40:20 Annual Conference and Report Launch

I participated in some of the discussion groups which led to the Haringey Carbon Commission report on how the borough is to achieve its target of 40% emission reductions by 2020. The report was launched this morning at the Haringey heartlands school in the Borough with presentations from the NEF, Haringey Cabinet and some local sustainability advocates and groups.

The Carbon Commission report suggests recommendations under five headings:

  • create new business models
  • build a low carbon economy
  • boosting innovation
  • invest in low carbon transport
  • strengthen community organisations

I don’t propose to repeat the content of the report, but simply to say that it goes before Cabinet on the 16th October and if ratified will represent one of the most ambitious and interesting approaches to sustainable development in the UK.

It was good to see friends from the Muswell Hill Sustainability Group, and EcoDomus, and meet MakeMyHomeGreen, all active in the Borough on reducing the impact of buildings.

Well done to all who contributed to the days discussions, they were wide ranging and interesting. There was a large contribution in the form of questions from the floor particularly from the London Cycling network. (Perhaps because Haringey transport studies show that only one percent of journeys in the borough are by bicycle.) The wealth of issues discussed, from finances to bees, shows the complexity of the issues to be dealt with and their interconnectedness. Making progress in sustainable development will never be straightforward, but at least with this policy document backing council activity there is a lot of hope that we can make significant progress in the borough by 2020.

Thanks to the Peoples Supermarket for the delicious lunch.

 

Renewable Heat Incentive (RHI) First Contact

The Renewable Heat Incentive (RHI) for domestic properties was supposed to be in place in time to work in tandem with the Green Deal. The consultation for it launched today, two weeks before the supposed start of the Green Deal. DECC must work harder.

This RHI is planned to be available by Summer 2013, which means that any properties treated under ECO or Green Deal or both in the interim will need to ensure that any renewable systems installed at the same time are MCS certified and are one of the qualifying systems.

The purpose of the RHI is to help the UK to meet its EU obligation on renewable energy (15% by 2020) and to do for heating systems what the Feed-in-Tariff did for the Photovoltaic industry. (No! Not s***w it up. Get it going!) This is to be achieved by giving a tariff for heating systems that are fuelled by low carbon fuels.

To make the RHI work in tandem with the Green Deal, all the measures that can be funded by the Green Deal should be carried out first. These measures are indicated by a green tick on the EPC. This opens up the possibility of Green Deal providers installing some RHI kit in return for the RHI Tariff.

The tariff will primarily aim at moving the 3 million homes off the gas grid onto lower carbon systems such as Air Source Heat Pumps, biomass boilers, ground source heat pumps and solar thermal systems.

All homes that have had MCS certified systems since 15th July 2009 will be eligible unless they were part funded by Govt, in which case they are not.

The RHI payment goes to the owner of the system, so landlords get the benefit.

Second homes are excluded from the scheme.

The biomass fuel will need to come from an approved supplier on an approved supplier list so that the sustainability of the fuel source can be guaranteed.

Only one system per property is supported, but the supported system is deemed to supply the entire hot water demand.

ASHP’s need to have a Coefficient of Performance (COP) of 2.5 or greater to qualify.

Anyone aiming to apply for the RHI will need to carry out a Green Deal Assessment, and carry out the measures that are self-financing under the Golden Rule. Then get a revised EPC and demonstrate to Ofgem that they have done the work required before they can get the subsidy. The qualifying system can be installed at the same time as the improvement measures. If the green tick measures cannot be installed for technical or other reasons then Ofgem can still provide RHI payments provided sufficient evidence is supplied to them. Green Deal finance and RHI payments can be arranged for the same installation.

Solid Wall insulation may be excluded from the ‘green tick’ measures because of other barriers to delivery, at least in the first years of the RHI.

This is what a Green Tick looks like.

 

Tariffs are aimed at funding the difference in costs between a normal boiler replacement and one that is low carbon, not the entire cost of the replacement.

The tariff is designed to pay for twenty years of heat generation over the first seven years.

The tariff is based on the cost of funding offshore wind. Therefore this subsidy costs no more that offshore wind turbines. This results in a subsidy of

  • 17.3p/kwh for solar thermal
  • 12.5-17.3 for GSHP
  • 6.9-11.5 for ASHP
  • 5.2-8.7 for biomass

Social landlords will not be eligible for the full tariff, the consultation asks for responses as to what level it should be set at for landlords.

The amount of heat used will be deemed rather than metered. The deemed figure will be set by the installer.

Summing Up

Lots to consider here. But the basic scheme looks workable, reasonably well engaged with other policies and affordable. This should mean that it is possible to start and remain without the constant reviewing of the tariff that has plagued the FiT and damaged the departments reputation so badly.

Green Deal: Plan A or Plan B?

Plan A isn’t looking too hot at the moment. I don’t think that DECC thinks that there should be a Plan B, nor do I get the impression that they are worried about takeup. They should be. The history of energy efficiency improvement programmes shows that it is very difficult to get widespread uptake and I don’t expect the Green Deal to be any different. People don’t like to have their lives disrupted and the small savings coming from the Green Deal (if there are any), aren’t going to be a sufficient incentive for many people. The Coalition thinks that the private sector will take on the Green Deal and run with it, but where are they? I am told that DECC are going to spend £2M on an advertising programme for the Green Deal. What will that buy? A few bus shelter posters up and down the country.
The early signs that the Green Deal will be up and running to replace CERT and CESP are not auspicious, the energy companies have ECO obligations to fulfill, but the Green Deal system is not fully in operation yet, and doesn’t look like being in operation for another six months or so. Among other problems this may result in some ECO funded projects starting soon which won’t be able to include Green Deal measures.

The underlying principle of building renovation is that you should do all the works you can when you go to the trouble of scaffolding the building and getting the builders in, but instead by making each set of improvements dependant on different pots of funding each with their own rules, the Coalition are splitting the work packages up and adding to the costs. Solid wall insulation to be delivered by one fund (ECO), and boilers by another(Green Deal or RHI) and two other funds available (FiT and CSCO) for microgeneration and community schemes.

Plan B should be to hold off the introduction of the Green Deal/ECO/RHI by six months until they are both ready to go, the funds are in place, and a decent sized advertising campaign has been done by government to build enthusiasm for the programme. CERT should be extended by the same period to prevent wholesale employment losses in the insulation industry.

To deliver som enthusiasm on the part of the public, there needs to be some additional incentive greater than the tiny amounts of money currently being mentioned including cashbacks and actual savings.

One option could be a revamp of council tax, the Local authorities HECA legislation is being recharged to give them a duty to get the Green Deal moving, but they will have the same problem motivating people. In order to make this fiscally neutral you have to raise council tax for everyone else by a tiny amount at the same time as reducing it for those who take up the Green Deal. This type of incentive is already being used to tax heavily polluting vehicles, so why not extend the principle to heavily polluting houses. We would need to use EPCs to highlight the CO2 emission of the properties/square meter.

The same goes for people selling properties. The point of sale/purchase/rental is a brilliant opportunity and we should legislate that a Green Deal assessment is carried out on every property when they are about to go on sale. This is only a tiny additional cost on top of producing an up to date EPC. This would give the seller information on work they could carry out to improve the value of their property and the purchaser the same information so that any changes they propose to carry out before moving in can incorporate the Green Deal measures. Stamp duty could play a part by being linked to the Green Deal and anyone who carried out the Green Deal would qualify for a lower band of taxation, this would be fiscally neutral so even George Osborne couldn’t argue with it. Simples!

Green Deal Assessment – How it will work

Having been through the Green Deal Assessor training, there are a few issues that I wanted highlight about the assessment process. There were some problems during the training mainly centred around the fact that the Green Deal/ECO is not completely finalised, so there are some gaps in the structure and process that will need to be filled as soon as possible if we are to have even a ‘soft’ launch in October. For full details of the scheme see the DECC website or the Energy Savings Trust. This is a summary of the process, not a complete description.

What was interesting to me about the course was that most of it was spent on how to communicate the Green Deal to householders, not on the technical impact of the Green Deal works themselves. Most current Domestic Energy Assessors don’t really have to communicate with residents of the homes they are assessing, other than to ask them for confirmation of works carried out, so the Green Deal is a massive change in direction for them. It is important that good communication gets across to householders how the Green Deal works and whose job is what in the process. I am unconvinced that most DEA’s are in a position to understand and advice householders on the type of works that are appropriate to their dwelling. The list of potential works is a long one and each one has its own technical challenges. I still feel that a background in surveying/construction/architecture is essential for a full understanding of the technical implications of refurbishment.

The process will work something like this:

A householder contacts a Green Deal Assessor either directly, or through a Green Deal Provider,

OR

a Green Deal provider contacts a householder and proposes an assessment and the householder agrees

OR

a landlord/local authority/3rd party contacts a householder and proposes an assessment

AND

arranges a Green Deal Assessment Visit.

A document is then sent to the householder setting out the purpose of the visit, with an explanation of the Green Deal and how it works, and setting out the information required from the householder during the visit, fuel bills, evidence of any changes since the last EPC was carried out, and a description of their occupancy and lifestyle

Then the Green Deal Assessor(GDA) turns up to do the assessment. The bill payer must be present during the assessment and have agreed to the visit. If there is a landlord, then the landlord must have agreed to the visit, (in writing).

If there is no Energy Performance Certificate (EPC) then the Assessor must produce one using the latest RDSAP to baseline the property. The Green Deal measures are then assessed as improvements on the up-to-date EPC. The first hour of the visit may be taken up with producing the EPC.

Then the Occupancy Assessment is carried out, which is an analysis of how the current householders are living in the home. This assesses the number of people living there, how many baths/showers per week, how they wash/dry clothes, number of fridge/freezers and type of cooking facilities. The recent fuel bills are assessed and this information helps to guide the assessor and householder towards Green Deal measures that will save the occupant money and energy. What is going to be interesting here is how householders react to being asked a number of fairly personal questions by a stranger. How often do you wash! This section may take up to another hour.

Finally the Green Deal measures are evaluated using the Green Deal SAP (GDSAP) software and some scenarios are discussed between the assessor and the householder. These can include fabric measures, such as insulation, replacement windows and draughtproofing, or services changes such as a new boiler. There is a list of measures on the DECC website which has changed many times so far, and will almost certainly change during the life of the Green Deal. A full discussion of any one measure, such as solid wall insulation could take a half-hour easily, and there are 37 measures!

Unhelpfully, the ECO measures are not yet included in this evaluation, not was ther any information about how this will work. It is likely that the ECO measures will be discussed with the householder during the assessment but it is not clear yet how this element will be built into the final report. Clearly it is important that this is finalised soon.

Once the assessor and householder are in agreement on the scenario or scenarios to be evaluated a Green Deal Advice report is produced. This contains the EPC, the Occupancy Assessment, and the Green Deal scenarios discussed, and this can then be passed on to the Green Deal Provider for costing. If the approximate value of the works is over £10,000 then three different quotations must be provided.

It is the Green Deal Providers job to advise on costs and consents for implementation, not the Green Deal Assessors. So if planning permission is required, or if specialist investigations need to be made then those are for the Green Deal Provider to do.

Given the amount of potential discussion and the difficulty of reaching agreement with the householder, there was some discussion whether a second visit would be needed, and in many cases I think that it will. There are simply too many things to discuss. Consider how long it will take the average household to decide what kitchen to buy to replace their current one. Now consider that what the Green Deal may propose is to change the boiler, windows, and to change the external appearance of the property. These are not decisions that any householder will take quickly or lightly, and there is no reason why they should.

The big question that was on everyones minds after the course, is how much should this cost? The answer was mainly between £200-300. If a DEA can carry out four EPC’s at approximately £70 each within the time it takes to do  single Green Deal Assessment, then the market should value them accordingly. But will it?

If we get the pricing wrong, and assessors don’t spend the right amount of time with householders, then we won’t get agreement from them and there will be no work for Green Deal providers. A well-paid and competent assessment workforce will be necessary to get the Green Deal working.