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A Manifesto for Warmth
Northern Ireland Fuel Poverty Coalition Conference 2015
Tuesday 1st December 2015
Stuart WightmanHead of Energy Efficiency Branch
Energy Division
• Energy Efficiency Directive• Existing Energy Efficiency Provision• Draft EnergyWise Proposals
– The Challenge, The Aims, Finding the Balance, Providing a Continuum of Support
– Step by Step Guide– Delivery Structures– Proposed Funding– Phased Approach– Timetable
Contents
Energy Efficiency Directive
Energy Efficiency Directive (EED)• Requires Member States to set up an energy efficiency obligation
scheme to achieve end-use energy savings of 1.5% each year from 2014 to 2020. However, as an alternative, Member States may opt to take other policy measures to achieve these energy savings among final customers.
• DETI is responsible for implementing EED requirements in NI. UK response to EED set out in National Energy Efficiency Action Plan
• NI contribution is 200GWh per year from 2016 onwards - NISEP is currently NI’s only contribution to EED (approx 40GW /yr).
• GB has the Energy Company Obligation (ECO) which is funded by all electricity and gas customers. Consideration previously given to introducing NI energy obligation (like ECO) but ruled for affordability and legal reasons.
Existing Energy Efficiency Provision
Existing Energy Efficiency ProvisionCurrent Responsibilities:• Domestic Sector (Social & Private) – DSD
• Business Sector – Invest NI
• Voluntary & Community Sector – DETI
• Public Estate – DFP
• Building Standards - DFP
• Climate Change & Emissions - DOE
Current Domestic Schemes
NISEP
Affordable Warmth BRS
Both NISEP and BRS end in March 2017 leaving no support any households with incomes >£20k.
overlap
Social Housing Schemes
Work ongoing to ensure energy savings from all existing schemes are captured for EED purposes.
Current Non Domestic SchemesNISEP provides some limited grant support for business.
Invest NI’s Energy Efficiency Loan Scheme provides 0% loans of up to £400k to business.
Many businesses (particularly agricultural) cannot qualify for 0% loan schemes because of EU State Aid de minimis rules.
No current support for voluntary and community sector.
NISEP
0% Loan
SchemeWork ongoing to ensure energy savings from all existing schemes are captured for EED purposes.
Draft EnergyWise Proposals
The ChallengeNeed to find balance between efficiency scheme to replace NISEP and BRS that will:- deliver 40-50 GWh of annual energy savings and lower total
carbon emissions;
- deliver lower energy bills to help mitigate the effects of fuel poverty and make business more competitive;
- stimulate the economy by promoting investment, creating jobs and supporting formal apprenticeship opportunities; and
- efficiently deliver high quality, cost effective energy efficiency improvements at minimal cost to taxpayers and consumers.
Aims• Bring together all Government energy efficiency
support (advice/grants/loans) for all sectors (domestic/business/v&c) under the ‘EnergyWise’ banner.
• Centrally procure energy services (products & labour) to deliver economies of scale and oversee quality.
• From 2017 onwards the scheme will replace NISEP & BRS in the provision of insulation and heating system upgrades to households.
• Deliver energy efficiency improvements to 8,500 households / year.
Finding the Balance
Higher income households, V&C & Business• Less grant
support (30%)• Higher energy
savings (68%)
Lower income households • More grant
support (70%)• Lower Energy
Savings (32%)
30%
70%
Grant Support (£)
Providing a continuum of supportGrant Level
100%
Household lncome
Affordable Warmth Grant
16%
0 £20k £30k
EnergyWise Loan
3,150 lower income households• Average grant £1,450 (58%)• 0% loans• 70% of grant pot
5,350 higher income households• Average grant £400 (16%)• Low interest loans• 30% of grant pot
EnergyWise Grant
EnergyWise ProposalsStep by Step Guide
One-stop shop for all Government Energy Efficiency Advice & Support
Voluntary & CommunityEnergyWise Grants and Loans
Business & Industry0% Energy Efficiency Loans (Invest NI)
EnergyWise energy efficiency and renewable heating loans.
Renewable Heat Incentive (RHI)
Households & Landlords100% Affordable Warmth grants for lowest income households (<£20k)
EnergyWise grants (16-100%) and 0% loans for low income households (<£30k)
EnergyWise grants (16%) and low interest loans for higher income households (>£30k).
Domestic Renewable Heat Incentive (RHI)
Step 1 - Extensive Marketing
• Measures installed will be determined on a case by case basis through Technical Energy Performance Assessments (including EPC) carried out by the service provider.
• Assessment fees of £25 and £50 will be charged for lower (<£30k) and higher (>£30k) income households respectively.
• Service provider will advise households on a range of energy efficiency options and the levels of grant and loan support available.
• Range of measures including boiler replacements, heating controls, radiators, insulation, LED lighting, draft exclusion and water efficiency kits. No boiler replacements will be installed without adequate insulation being in place.
Step 2 - Technical Assessments
• Bulk purchasing strategy will ensure value for money through lower unit costs for a wide range of energy saving measures.
• Installation costs will be reduced through geographically focused procurement of services and products.
• Providing the energy services sector with a guaranteed work stream for 7 years enables installers and suppliers to plan ahead which, in turn, can generate efficiencies in the supply chain.
• Register of ‘EnergyWise’ accredited installers and suppliers will be maintained – simple registration process.
• All work will be quality assured and poor quality could lead to installers / suppliers being struck off of the register.
Step 3 – Securing Services & Products
Once households decide to proceed, the EnergyWise Service Provider will look after everything including:
– Sourcing and securing installations services and products;
– Arranging all the household finance including grant and loans (where appropriate);
– Overseeing and quality assuring all the work;
– Payment of installers and / or suppliers;
– Securing Building Control Approval; and
– Providing customer aftercare and warranty.
Step 4 - Delivery & AfterCare
• Register of ‘EnergyWise’ accredited installers and suppliers will be maintained – simple registration process.
• All work will be quality assured and poor quality could lead to installers / suppliers being struck off of the register.
• EnergyWise Service Provider will oversee and quality assure all work and have contract with installers / suppliers.
• Separate contract between EnergyWise Service Provider and households/landlords.
• EnergyWise Service Provider will arrange / secure Building Control Approval and arrange for payment to installers / suppliers.
Step 5 – QA & Building Control
• EnergyWise Service Provider will take customer deposit (where appropriate) and secure grant support / loan finance in advance of works.
• EnergyWise Service Provider will withhold payment until completion of works.
• EnergyWise Service Provider will start collecting loan payments (where appropriate) once work has been signed off.
Step 6 – Grants/Loans & Payment
EnergyWise ProposalsProposed Funding
• Year 1 (2016/17) administration and development costs to be funded through EU ELENA funding (subject to approval). Year 1 grants will either be provided through BRS or a separate bid will be made.
• Grants from year 2 onwards to be funded through a new energy efficiency levy on electricity consumers from April 2017 after NISEP ends. Subject Business Case Approval, proposals for the new Levy will be consulted on in the New Year.
• Loans to be funded through ether Capital DEL or Financial Transactions Capital (FTC).
• Scheme income from loan interest, technical assessment fees and management fees.
Proposed Funding
EnergyWise ProposalsDelivery Structures
Project Structure / Governance
DETI SRO (C Stewart)
ProjectStructures
Ensure that Government effort in the area of energy improvements remains ‘joined-up’ under EnergyWise
Project Board(DETI/OFMDFM/DSD)
DETI PM (S Wightman)
Stakeholder AdvisoryPanel
Proposed Industry Group
EnergyWise Service
Providers
Project / Contract Management Team (DETI/SIB)
Finance Service Provider (FSP)
Managed Service Provider (MSP) & Delivery Agents
EnergyWise Customers(Households / Voluntary & Community Organisations / Businesses / ESCOs)
Marketing
Sales
Delivery
Loan/grant applications
Reporting
Energy Levy Funding
Customer Finance(EnergyWise loans/grants & RHI) grant
Funding (DEL, FTC, RHI & ELENA)Loan
Repayments
External Assurance Provider (EAP)
Reporting
Installers / Suppliers
Department for the Economy (DfE)
Delivery
Domestic RHI
Payments
Loan Repayments
EnergyWise ProposalsPhased Approach
• Phase 1 (18 months) – 2016/17 – 2017/18– Need to legislate for New Levy (including Public Consultation)– Mobilisation (IT systems and service providers)– Bed in delivery structures and funding arrangements– Test loan proposals (including bad debt)– Test grant proposals– Test Water Efficiency Measures– Test proposed levels of fees – Develop procurement arrangements with industry– Develop Quality Assurance Systems – Develop effective relationships with Building Control– Phase 1 Review / Public Consultation
• Phase 2 (5 + 2 years) – 2018/19 onwards
Phased Approach
EnergyWise ProposalsTimetable
Project Timeline – Phase 1
May 15 Oct 15 Jan 16 Feb 16 May Jun 16 July 16 Sep Oct 16
Project Initiation
Gateway Review
OBC Development
Launch Public Consultation on proposed Levy
Establish Stakeholder
Forum
OBC Clearance
Procurement
AdvertiseTenders
Gateway Review
EvaluateTenders
Gateway Review
FBC
FBC Clearance
Contract Award
Phase 1 Launch
Mobilisation
Finalise Policy for proposed Levy
Develop Levy Legislation
Project Timeline – Phase 2
Sep 17 Dec 17 Jan 18 April 18
Phase 1 Review
FBC Development
FBC Clearance
Contract Award
Phase 2 Launch
Mobilisation
Introduce new legislation
Public Consultation
Gateway Review
Thank You For Listening