London and the Carbon Saving Community Obligation

November 2012: Government introduced a new affordable warmth element share to the £1.3bn a year Energy Company Obligation (ECO) earlier this year. The Carbon Saving Company Obligation (CSCo)  is designed to target insulation measures in low-income communities defined using the bottom 15% of Lower Super Output Areas (LSOA) from the Index of Multiple Deprivation. A wider range of energy saving measures will be eligible for funding under the CSCo, including cavity wall, loft and solid wall insulation. Additionally, in contrast to the bulk of the ECO funds, the CSCo will be open to applications from social housing providers.

Government have set the level of the CSCo at 20% of the overall Carbon Saving Obligation element of the ECO, representing around £190m per year. DECC have stated that London has proportionally a higher number of these low income areas and hence should – in theory – fare better under the CSCo element of ECO than other regions.

A full list of LSOA qualifying for the CSCo is available in the a July 2012 DECC guidance document available here. The  data provided by DECC is not in the most usable format  so it’s helpful that the Centre for Sustainable Energy (CSE) has produced an Excel version of the LSOA data – download here. The CSE dataset also adds ward name, ward code and region to the original DECC dataset – to give the data extra value. The CSE dataset show that London LSOA make up 815 out of the total 5159 areas selected  – just under 16 per cent. Hence, this should mean that if energy suppliers deliver their Carbon Saving Communities Obligation to the same ratio as the number of low income areas identified through the LSOA data, £30m of insulation (ie 16% of £190m) should be directed to some of the poorest homes in London, free of charge, every year, from 2013.

Grant funding will be also directed to low income households through other elements of the ECO (the affordable warmth and carbon saving obligations) but in contrast to the CSCo this will be directed to i. the non-social housing sector and will also be predominantly directed to ii. harder to treat housing through the installation of Solid Wall Insulation (SWI).

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