Utility Week

UTILITY Week 15th January 2015

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10 | 15Th - 21sT JanUarY 2016 | UTILITY WEEK Policy & Regulation Analysis E nergy efficiency schemes have been with us for 22 years now, but instead of a clear, long-term and stable policy developing over this period, uncertainty reigns as the sun begins to set on the current tranche of initiatives. The Energy Company Obligation (Eco) rolled over into its second and much reduced form last year, and will be extinguished in 2017. Rising from its ashes will be a stream- lined and lower cost programme – with lower ambitions to match. There are fears that scaling back the energy efficiency programme even further (Eco was trimmed back as it was extended from Eco1 to Eco2) and a lack of clarity over what will replace it in 2017 will not only harm the rate at which energy efficiency measures are installed, but the industry as well. The chancellor's autumn statement con- firmed that there would be a new approach between 2017 and 2022 – heralding the fih incarnation of energy efficiency policy since 1994 (see timeline below). As part of this package, a target was set for this parliament (five years) that one mil- lion homes benefit from retrofit measures. This compares to a target of one million homes set by the coalition government for the period June 2013 to March 2015. In reality, 1.2 million homes had measures installed. The new domestic energy efficiency sup- plier obligation will run for five years from April 2017, and the Treasury said it would have a value of £640 million a year, rising with inflation. At face value, it looks as though the scheme has been shrunk because the obliga- tion on suppliers to install energy efficiency measures will fall on fewer homes over a longer period of time than previously, con- demning customers in draughty properties to suffer in cold silence. UK Green Building Council chief execu- tive Julie Hirigoyen slammed the move, saying it will mean jobs lost in the sector and vulnerable households "continue to be trapped by unaffordable energy bills". She adds: "The chancellor repeatedly talks about productivity, but here he is dis- couraging investment and destroying a market." Despite the announcement of a new scheme that the government says will lop £30 off annual energy bills because it is cheaper than its predecessor, critics say the lack of clarity surrounding it is hamstringing the energy efficiency sector. National Insulation Association chief executive Neil Marshall says energy suppli- ers urgently need clarification to give them the confidence to continue with installing measures, while Eon's strategy and regula- tion director, Sara Vaughan, adds that clarity would allow the sector to invest and deliver on government aims. "If government gives us what we need, then we will give government what it needs," she says. However, there is more to the govern- Energy efficiency frozen out Too much of the UK's housing stock is old and wastes energy, but the latest government initiatives to tackle the problem lack ambition – and detail. Mathew Beech reports. Energy Efficiency Standards of Performance (EESoP) 1994 to 2002 Timeline 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Government energy efficiency programmes Cesp: 1 October 2009 to 31 Dec 2012 Cert: 1 April 2008 to 31 Dec 2012 EEC2: 2005 to 2008 EEC1: 2002 to 2005 Energy Efficiency Commitment: 2002 to 2008 EESoP1: 1994 to 1998 EESoP2: 1998 to 2000 EESoP3: 2000 to 2002 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep ProviSional numbEr of ECo mEaSurE inSTallEd, by obligaTion Source: Decc Number of measures installed 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 2013 2014 2015 Affordable Warmth (HHCRO) Carbon Saving Community (CSCO) Carbon saving Target (CERO)

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