Tag Archives: ECO

Energy and Climate Questions to the Mayor

March 2013: This month the Mayor has been asked questions in relation to:

Collective Switching initiative by boroughs; details on decentralised energy projects being delivered by the Mayor; Mayoral response to the Government’s ECO brokerage consultation; the spend timeline for DECC funding to the GLA and boroughs; the GLA response to the Government’s consultation on the definition of fuel poverty; the impact of sun spots on London’s CO2 emissions; a London target for ECO; progress on delivering the Green Deal through the Mayor’s RE:NEW programme; recently published GLA environment reports; recent meetings of the Mayor’s Environment Adviser; the Mayor’s position on climate change; the commissioning of Weather Action; CHP capacity secured through planning in 2012; Sutton energy from waste plant; the Mayor’s support for solar power in London; emissions from the new London Bus; support from the DfT’s Green Bus Fund to TfL; changes being made to the  Congestion Change Exemption; details of the Greener Vehicle Discount; support for biomethane buses in London; Camden’s biomethane fuelling station; RE:NEW’s support to tackling fuel poverty and the list of non-GLA organisations that have utilised the RE:FIT programme.

Previous months questions to the Mayor can be found here.

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Green Deal training for Landlords

February 2013: Future Climate are undertaking training seminars for landlords on the Green Deal and ECO which “will help you understand how you can make the most of this new financing in keeping your properties up to date.”
Dates, times and venues for training
Monday 18 February 2013 – 9.30am to 12.30pm &1.30pm to 4.30pm – London Borough of Camden
Tuesday 19 February 2013 – 9.30am to 12.30pm – London Borough of Camden
Wednesday 20 February 2013 – 9.30am to 12.30pm and1.30pm to 4.30pm – London Borough of Camden
Thursday 21 February 2013 9.30am to 12.30pm – London Borough of Hackney
Monday 25 February 2013 9.30am to 12.30pm – London Borough of Camden

Full details on Future Climate’s website. The project is funded under DECC’s Green Deal Pioneer Places Fund.

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SWI gets permitted development rights

January 2013: Solid Wall Insulation’s (SWI) time has finally come and it is now the key technology to be supported in the Government’s annual £1.3 billion ECO domestic energy efficiency programme (which came into operation at the beginning of this year). However, a significant barrier to the roll out of SWI was potential planning difficulties householders could face when wishing to retrofit their homes with SWI.

So it was good to see a tweet from DECC Minister Greg Barker last week announcing that the Department for Communities and Local Government (DCLG) – which sets the policy for planning – had issued new guidance which allows SWI to be fitted without planning approval.

No DECC or DCLG news release was issued, and it was left to BusinessGreen to explain the change. “The formal clarification confirms solid wall insulation – which is commonly fitted to the exterior of a building, potentially changing the look of a property – is classified as a “permitted development”, meaning property owners can undertake the work without specific planning permission.

“Listed buildings and properties in conservation areas will remain an exception to the rule and would require specific planning permission, but Barker predicted that planning issues would “not present a problem for the vast majority of people intending to put solid wall insulation on their houses”.

The clarification is made in the following Technical Guidance issued on the government’s planning portal website ‘Permitted development for householders‘ and the wording in the document which marks such a major change for the insulation industry is remarkably succinct:

“The installation of solid wall insulation constitutes an improvement rather than an enlargement or extension to the dwellinghouse [sic] and is not caught by the provisions of d(i) and d(ii).” [p13]

where d(i) to d(ii) set out limits and conditions to permitted development rights to the enlargement, improvement or other alteration of a house.

There is now a lot of activity around rolling out SWI in London including:

“A leading SWI installer recognised that in London there was no supplier stocking the full range of SWI materials required for jobs. Consequently, firms involved in one-off SWI jobs found it virtually impossible to source products at competitive rates. As a large contractor, the firm has worked hard to bulk purchase equipment for itself. Needing a warehouse for its own operations, it decided that it could help supply the sector at the same time.”

There’s still some way to go for SWI to make its impact in London. Even with permitted development rights, planning permission will be required in conservation areas and, as the Future of London report points out – there are around 600,000 homes in conservation areas in London, roughly half the national total and around 60 per cent of all homes in the capital are solid wall.

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Evaluation of DECC Local Authority Competitions

December 2012: DECC have issued a tender to evaluate a series of competitions they have recently launched and the Invitation to Tender (ITT) document provides some useful information on the background to how the department will measure the success of these three particular schemes – which are:

  • “Fuel Poverty Fund (£25m) The overall aim of the project is to reduce the extent of fuel poverty through the provision of resources to support improvements to the thermal efficiency of dwellings.
  • The Green Deal Pioneer Places Fund (£10m)The primary purpose of the funding is for local authorities (LAs) and/or consortia of LAs (e.g. counties) to demonstrate ambitious approaches to kick starting local Green Deal activity in both the domestic and non-domestic sectors in England.
  • ‘Cheaper Energy Together’ collective switching fund (£5m)The primary purpose of the funding is to support innovative collective switching or purchasing schemes by Local Authorities or third sector organisations which aim to achieve better deals on energy bills for consumers through collective purchasing power.

Applications for the competitions were submitted at the end of November.  We expect the majority of project activity to complete by the end of March. “

The winners have as yet not been announced by Government: Secretary of State Ed Davey did however recently say that  115 applications had been received to “Cheaper Energy Together” competition.

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London Assembly write to Government about Fuel Poverty

December 2012: Following last month’s evidence session (and see here), the London Assembly Health and Environment Committee  has written to the Mayor, Department for Energy and Climate Change and energy companies about fuel poverty and domestic energy efficiency retrofit. The Committee’s correspondence can be seen here.

Writing to Minister for Energy Greg Barker, the Committee say: “The Committee would also like to know what lessons you are taking from the experience of CERT and CESP (and other programmes such as the GLA’s RE:NEW) for the Green Deal and ECO, and in particular for achieving better take-up and delivery in London. These new programmes provide an excellent opportunity to redress the previous imbalance and to show DECC’s commitment to fair delivery in London.”

The Committee quiz the Mayor over future proposals for the RE:NEW programme, asking “the Committee would like information on whether and how the plans it has heard are compatible with any further down-scaling of the annual GLA resource allocated to the programme. Your Deputy referred the Committee to the ECO funding stream but this is, we understand, for the retrofitting work itself. Is it expected to support GLA front-end activity, promotion or pipeline assembly? He also referred to a team of 90 staff within the Housing and Land Directorate, including staff transferring from the Homes and Communities Agency. The Committee would be interested to hear what quantum of staff time, and what other resource, will be allocated to RE:NEW work in 2013/14.”

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FAQs on ECO Brokerage

December 2012: Further to the ECO Brokerage consultation document issued earlier this week, DECC have now issued an ECO Brokerage FAQ briefing.

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Local Authorities and RSLs will not be able to trade in new ECO brokerage

13 December 2012: DECC yesterday released their consultation on the ECO brokerage. Previous posts (here and here) have highlighted the potential of the brokerage to local authorities and community groups to further access the £1.3 billion annual funding directed through the Energy Company Obligation (ECO) to support the take up of energy efficiency measures. However, Government have taken the view that local authorities and RSLs will not be able to trade on the brokerage.

The ‘Guide to the ECO brokerage‘ sets out the Government’s case:

“Why can’t a Local Authority or Registered Social Landlord trade on brokerage?

The primary objective of brokerage has always been to stimulate the Green Deal market. Therefore in the very first instance we will look to restrict trading to domestic Green Deal Providers. However, over time we will look to open the platform to other sellers. We are committed to working with social landlords and local authorities to see how this can best be done.

Will energy companies be able to pick and choose which companies they buy from on brokerage? Could this disadvantage smaller Green Deal Providers?

ECO brokerage is a blind trading mechanism. Energy companies will not be able to see who they are buying from. Therefore, if a smaller Green Deal Provider can offer ECO at a competitive price they will be able to compete on the brokerage platform.

DECC will be monitoring ECO Brokerage trading activity for any evidence of uncompetitive behaviours from buyers and sellers.”

The  ECO brokerage consultation adds that:

“53. …It should be noted that all Green Deal Providers, non-Green Deal Provider delivery agents, and Local Authorities and Housing Associations/Registered Providers of Social Housing can all still access ECO directly via a direct bilateral partnership with ECO obligated energy companies, although we recognise the challenges involved in this for some providers.”

The consultation makes sets out that there was a clear majority in favour for establishing a brokerage, and hence the Government will put a brokerage mechanism in place on “a voluntary basis while it carries out this consultation asking for views, and any supporting evidence, on the need to regulate energy companies to use the brokerage service.”

The Brokerage will operate as fortnightly anonymous auction where ECO providers will be able to sell “lots” of ECO Carbon Saving Obligation, ECO Carbon Saving Communities and ECO Affordable Warmth, to energy companies in return for ECO subsidy. The auction process will be delivered by the Government Procurement Service through an e-auction online platform that allows energy companies to bid in real-time between 9am and 5pm on each auction day. Dates of first auctions are as follows:

18 December – first full test auction
15 January – first full live auction
Auctions will then take place fortnightly after that
An ECO brokerage Impact Assessment is also available to download.

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The ECO-Brokerage part 2

December 2012: No information as yet from DECC on when further details on the ECO brokerage will be released (see earlier post – The ECO brokerage – on this). There has however been a little information on the brokerage from a couple of sources which are worth mentioning:

  • An Inside Housing story stating that “The vast majority of social landlords will be excluded from the first sustainability auction for energy company obligation funding to improve the energy efficiency of homes.”
  • And a recent consultation by Ofgem on the ECO mentions that the regulator will have “no role in administering the ECO Brokerage and this Guidance does not address the brokerage or its administrative requirements. However we recognise that, on occasion, suppliers may seek credit for measures obtained through this platform. In order for such measures to be considered eligible under ECO, their installation, reporting and notification (etc) should be demonstrably compliant with the Order and this Guidance. For further information on the ECO Brokerage Mechanism please contact ECObrokerage@decc.gsi.gov.uk.”

DECC held an ECO brokerage workshop with PWC yesterday – where the software for the ‘ebay’ style online auction platform was trialled.  Hopefully some further information will be released shortly…

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Energy and Climate Questions to the Mayor

November 2012: This month the Mayor has been asked questions in relation to: the way the supplier obligation support for energy efficiency works and its shortfalls in terms of London;  promotion of anaerobic digestion plants through the London Plan;  how the GLA’s asset strategy can promote the low carbon economy; compensating for unavoidable carbon emissions during the Olympic Games; the Mayor’s view on the EU Emissions Trading Scheme (EUETS) and the international response to aviation being included in the EUETS.

Previous questions to the Mayor can be found here.

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‘ New Energy Efficiency Scheme could add over £94 to energy bills’

27 November 2012: Energy sector trade body Energy UK has published research undertaken by NERA on what they believe are errors in the Government’s assumptions of the cost per household of the new Energy Company Obligation (ECO). The report’s findings suggest that:

  • DECC estimated that the ECO would cost energy suppliers £1,300 million per year (about £53 per customer per annum). ..Our analysis suggests that correcting unreliable assumptions in DECC’s modelling would raise the estimated cost of the programme to around £1,700 million per annum (ca. £69 per customer per annum).
  • In addition, there may be a problem with DECC’s reliance on a “stated preference” study, a form of customer research which is known to suffer from a bias in the case of environmental programmes (i.e. the “warm glow” of appearing to favour good works leads people to state that they will pay more for environmental programmes than they will pay in reality). DECC has not published the study, so it is difficult to quantify precisely the impact of any bias inherent in the answers. A simple and transparent sensitivity is to assume that respondents might have ignored the “hassle costs” that an ECO project would impose on them. Adjusting DECC’s model of customer preferences by a comparable amount raises the cost of the programme further still, to around £2,350 million per annum (ca. £94 per customer perannum), but the final cost could be much higher.

Download the report here – The Costs of the Energy Company Obligation.

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    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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    Insulation suppliers ‘concerned they will not be able to continue in business’

    23 November 2012: A number of concerns around the the delivery of energy efficiency measures in London are raised in a paper presented earlier this month to the Greater London Authority’s Housing Investment Group.  The paper sets out that:

    “3.2  Due to delays in clarifying and implementing the Energy Company Obligation (ECO) and the Green Deal, additional work is now needed to ensure a smooth transition from the end of the previous CESP /CERT funding scheme in December until the Green Deal goes live in April.

    “3.3  In particular we need to ensure there is no slow down in environmental domestic retrofit in London from January to April 2013.

    Critically for the insulation industry the paper goes on to say:

    “We have met several suppliers who are concerned they will not be able to continue in business due to the potential drop in delivery from Jan-April.”

    As a consequence, the Mayor’s RE:NEW domestic energy efficiency programme has decided to continue to contract the EST who “will help manage the transition period and maintain the supply chain framework until the implementation of Green Deal and ECO in April.”

    It’s becoming clear that the insulation industry’s concerns – arising out of the Government’s decision not to implement a transition plan from CERT, which is heavily focused on the installation of cavity wall and loft insulation, to the Green Deal and ECO, which is not – are now being realised. An estimate of job losses to the insulation industry in London was also released last week (see earlier post ‘’625 jobs under threat in the Insulation Industry in London’)

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