Utility Week

UTILITY WEEK | JULY 2022 | 31 Heat Event Show us the money Why is the government so reluctant to commit funds to increase the energy efficiency of the housing stock? That was the question put before a recent meeting of the Utility Week Heat Council. S takeholders in the heat sector are in vir- tually universal agreement that energy efficiency is an essential first step in decarbonising heating in UK homes. Despite this broad consensus, the government has yet to make serious commitments to a coor- dinated rollout or commit to meaningful new funding. It was the glaring omission from the recent Energy Security Strategy – a docu- ment that focused squarely on securing sources of generation into the future rather on the third of all homes that are still without cavity wall insulation and the remaining half of homes without adequate lo• insulation. As Utility Week went to press, there were reports that government was planning a raid on existing decarbonisation schemes to fund a home insulation scheme. However, there has so far been no official confirmation or official indication that new funding will be brought forward. This lack of action on an obvious lever to bring down energy bills was discussed at a Utility Week Heat Council meeting convened at Utility Week Live in May. Participants put forward a range of ideas and measures that could be implemented in the short term, potentially even in time to help households this winter. Retain and expand Eco with Eco+ All attendees agreed that as the only meas- ure that has consistently delivered, the Energy Company Obligation (Eco) should be a key delivery mechanism for energy effi- ciency measures and welcomed the increase in funding for Eco4. However, of critical importance is the need to stimulate the "able to pay" market, which could be done through the creation of an Eco+ scheme that would see household- ers make a contribution to measures. Such a scheme could be created through or alongside the regulations that are still to be laid out for Eco4 and could be scaled up in time for this winter. It would need to last until 2030 or beyond to avoid the boom-and-bust effect that has been seen with other schemes, and there could be a role for the UK Infrastructure Bank. Bring EPCs up to date While an enhanced funding scheme would act as the "carrot", stimulating the market would also require an element of "stick", which could come in the form of minimum Energy Performance Certificates (EPCs). Around 40% of households do not have up-to-date EPCs, but a way to rectify this while also engaging customers would be for government and the industry to run a national home census. Attendees also recognised that the cur- rent methodology behind EPCs is fundamen- tally flawed and urgently needs updating. Allow energy suppliers to market energy efficiency measures Trust was highlighted as one of the major barriers to stimulating the energy efficiency market, but also one of the most difficult ele- ments to overcome. While local tradespeople were considered among the most trusted parties in the mar- ket, smaller companies do not currently ben- efit from the funding schemes because the burden to join is high, and so are unlikely to impart advice. Fundamentally, attendees believed that market reform was necessary to allow energy suppliers to offer bundles of products and services to lower customers' energy bills. An obligation on suppliers to reduce customer demand year on year would also be helpful. In the meantime a temporary suspension of the rules preventing marketing of energy efficiency products when energy suppliers install smart meters could be worthwhile. Changing the emphasis from installing as many smart meters as possible in a given period to ensuring time for tailored advice was also considered a good idea. Energy suppliers could also provide more tailored energy efficiency advice to those in fuel poverty, but this would require funding from government. Other sources of information could come from the Energy Savings Trust if its role was expanded in England to match what it already does in Scotland, with there also being a role for both councils and local action groups to share advice and best practice. Ahead of this winter, a national campaign for energy efficiency fronted by a high-pro- file, respected figure such as Martin Lewis would boost public interest. Engaging with householders will require all these approaches as customers trust and seek advice from different players in the market. Other ideas put forward by the council include: • Ensure any energy efficiency schemes cover a wide range of technology types, including double glazing and thermal storage. • Speed up the smart meter rollout as the first step to helping people understand their energy consumption. • Work with landlords to ensure tenants do not miss out on improvements to their building's energy efficiency. • A Green Stamp Duty would incentivise people to improve energy efficiency, with lower stamp duty paid in response to energy efficiency improvements. • In designing further interventions on heating and energy efficiency, learn the lessons from the smart meter rollout. • Local authorities should set minimum standards for housebuilders to ensure installations such as microbore piping are not barriers to heat pumps in the future. A focus on energy efficiency is one of the key recommendations from Utility Week's Energy Reset series. See pages 14-17 for a summary of a report as part of the campaign. Lucinda Dann, features editor The Heat Council is a technol- ogy-agnostic initiative formed by Utility Week that brings together actors across the heat sector to work towards the decarbonisation of heat.

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