BEIS published their response to the Energy Company Obligation (ECO) “Help to Heat” consultation on 30 January 2017.
It was confirmed that the “extension period” would now run until September 2018 (i.e. for 18 months, rather than one year), and that a further consultation on the scheme through to 2022 would take place at a “later date”.
The ECO will be set at a level worth an estimated £640 million per annum, rising with inflation, and will be re-focused towards low income households. It will encourage installations which make the most impact on reducing fuel poverty, including more insulation.
Further useful information (please refer directly to the source material for context, assumptions and explanations):
- The ECO scheme was launched in January 2013. As of November 2016, it has delivered energy efficiency measures to 1.6 million households in Great Britain
- The Affordable Warmth obligation – focused on low income households – will be increased as a proportion of the overall scheme from around 36% to 70% of estimated supplier spend
- The eligible Affordable Warmth Group will be increased to around 4.7 million rather than 4 million households
- The Carbon Emissions Reduction Obligation (CERO) will decrease as a proportion of the overall estimated spend, from approximately 34% to 30%
- The Carbon Saving Community Obligation will be brought to an end
- Eligibility for certain measures under the Affordable Warmth obligation will be extended to social housing in EPC Bands E, F or G
- The requirement to deliver a minimum level of solid wall insulation will be increased from the proposed equivalent of 17,000 measures per year to 21,000 per year
- A rural sub-obligation of 15% under CERO will be introduced to maintain delivery in rural areas
- Deemed scores will replace the use of the Standard Assessment Procedure methodology
The Department for Business, Energy and Industrial Strategy (BEIS) published a consultation on The Future of Heat in domestic buildings in England on 8 December 2016. The consultation period closes on 27 January 2017.
BEIS is consulting on ways to “drive the performance of heating systems up and [fuel] bills down…” For example, they propose increasing minimum boiler efficiency requirements, and making the installation of time and temperature controls mandatory with each domestic boiler installation.
The department also stresses that they are “committed to reducing the amount of energy and carbon used in buildings” and that policies “to cut carbon from heating must be complementary with policies that encourage energy efficiency in the home. The ultimate aim should be for Government to set a clear framework that enables markets to deliver these goals.”
Useful information and statistics in the document (please refer directly to the source material for further context, assumptions and explanations):
- “Consumers now tend to heat more rooms in their homes and to higher temperatures than at any time in history.” (Source given – Mavrogianni et al, Historic Variations in Winter Indoor Domestic Temperatures, 2011)
- “Commercial sales data indicates there are 1.5m replacement boilers installed each year in the UK, 96% are gas boilers and 86% of gas connections are in England…this gives approximately 1.2m boiler replacements per year.” (Source given – Subnational statistics 2014)
- “Energy consumption by the domestic sector accounted for 29% of final energy consumption in the UK in 2015.” (Source given – ECUK 2016)
- “Gas usage accounted for 77% of energy consumption for space heating in the domestic sector (excluding lighting and appliances) in 2013.” (Source given – Table 1.04, ECUK 2016)
- “It is thought that [mandating the use of highly efficient boilers in 2005] reduced average household bills by around £95 a year, and in 2009 condensing boilers are estimated to have saved £800 million in fuel costs across the UK.” (No source given)
- “Currently [in 2016] the efficiency of a domestic gas boiler should be at least 88%, calculated using a standard model known as ‘SEDBUK 2009’. For oil boilers the minimum varies: 88% in the case of system boilers and 86% for combination boilers.”
- “…Nearly all consumers receive advice from their installers when heating controls are installed, most commonly in the form of a manual (73%) or a practical demonstration (44%).” (Source given – BEIS Impact Assessment: Domestic Heating Replacement Regulations 2016)
- Guidance on how to comply with boiler requirements is provided in Approved Document L1B and the Domestic Building Services Compliance Guide.
DECC published their response to the consultation on the Warm Homes Discount on 29 June 2016.
The response states that ”there was general support for the Government’s proposals to make minimal changes to the scheme this year, keeping the eligibility for the Core and Broader Groups and the amount of the rebate the same, maintaining stability and continuity and recognising the relatively short timeframes available.”
There was also support for giving energy suppliers the option to achieve part of their “Industry Initiatives” spend through contributing to a central pot of funding. Further changes to the scheme will be introduced in 2017/18.
See the full publication at: Warm Homes Discount Scheme 2016/17: the Government Response to the Warm Homes Discount Consultation
Ofgem published a consultation document on 27 May 2016 on the potential methodology to be used to calculate ”deemed scores” for measures installed under the new Energy Company Obligation (ECO) from 2017.
Deemed scores are pre-determined estimates of the cost or energy savings generated when measures are installed in certain types of properties.
Ofgem makes clear that DECC has not yet made the decision to go ahead with deemed scores in place of “bespoke scores” produced using RdSAP, but has published the consultation document early to give the sector enough time to consider the detail of the proposals.
The rationale for the possible change is policy is stated as: “A move to deemed scores simplifies the process by removing the need to collect the data required for a SAP assessment, and removes the layer of complexity associated with making the relevant measurements.”
The consultation sets out the proposed approach and is accompanied by a detailed report report on the methodology by the BRE and a list of scores by measure. The deadline for responses is 8 July 2016.
Source: Ofgem, ECO2 Consultation: Deemed Scores
HM Treasury published a consultation document on 28 September 2015 intended to begin a review of the business energy efficiency tax landscape.
The deadline for responses is 9 November 2015.
The review covers “the Climate Change Levy, the Carbon Reduction Commitment Energy Efficiency Scheme, taxes on other fuels – e.g. heating oils, Climate Change Agreements, mandatory greenhouse gas (GHG) reporting, the Energy Saving Opportunity Scheme, Enhanced Capital Allowances and the Electricity Demand Reduction pilot.”
The paper acknowledges that ”there is a significant amount of cost-effective energy and carbon saving potential not currently being realised in business sectors” but states “a number of stakeholders argue that the current suite of overlapping policies is complex and administratively burdensome, limiting the effectiveness of policy levers.”
The government envisages “a simplified landscape that minimises overlap so that a single business or organisation faces one tax and one reporting scheme.”
Source: HMT, Reforming the business energy efficiency tax landscape