Welcome

Chair: Jim Strang, Chief Executive,

Parkhead Housing Association and CIH

Governing Board Member

A Homes Crisis in Scotland

A blueprint for Scotland’s future

Housing as “home”

Neighbourhood

Community

Health

Education

Employment

Income

Environmental sustainability

Wellbeing Domains

BUILDING THE HOMES WE

NEED

BUILDING THE HOMES WE

NEED Output of Scottish Government Affordable Investment

Programme 13/14

BUILDING THE HOMES WE

NEED

Commission Targets

Building the

homes we need

The building gap

Recommendation 5

Given the number and complexity of the

options available to housing associations,

the Commission calls on the Scottish

Government to establish a dedicated source

of advice to help housing associations in the

complex process of finding loan finance that

suits their particular circumstances.

WIDER ROLE & ASSET

MANAGEMENT

Evolving role of Housing Associations

Wider role activities:

• Youth services and facilities

• Employment and apprenticeships – key for asset management

• Money, debt and welfare advice

Many housing associations in Scotland are already the heart of their community. This must continue.

ENERGY EFFICIENCY

Recommendation 45

The Scottish Government should review the funding

required to meet its 2030 milestone of delivering a step

change in the provision of energy efficient homes.

Recommendation 40

There should be a review of other building standards to

make sure that they encourage sustainable design and

building and take sufficient account of design concepts

such as ‘lifetime’ and ‘barrier free’ housing intended to

make homes better adapted to the needs of an aging population.

HEALTH

Recommendation 32

The Scottish Housing Regulator should

undertake a thematic study of overcrowding

in homes supplied by all social housing

providers and offer guidance on how best to

minimise this.

Recommendation 33

As part of its work of monitoring progress with the achievement of the

Scottish Housing Quality Standard, the Scottish Housing Regulator

should be asked to produce a report on the extent of serious problems

of dampness, condensation and associated mould and fungal growth in

the social rented sector.

Recommendation 7

The Scottish Government should seek to clarify the discrepancy

between the success rates reported by social landlords to the Scottish

Housing Regulator in meeting the 2015 target for achieving the Scottish

Housing Quality Standard as compared with the success rates recorded by the Scottish House Condition Survey

Recommendation 34

The Scottish Government should provide more

resources for housing services, such as help with

handyman tasks and small repairs for older

households, which can help to reduce demands on

the NHS.

Recommendation 28

Housing should be a full and equal partner

in health and social care partnerships. The

new bodies should be accountable for a joint

budget, which would include funding for all

relevant housing services and be given

challenging targets that reflect the housing

contribution to relevant National Outcomes.

DELIVERY & IMPLEMENTATION

The Joint Housing Delivery Plan

and asset management

Tony Cain, Independent Senior Housing

and Development Professional

Refreshments and exhibition

viewing

Next session: 11:45

The future of

energy

procurement

Magnus Walker MEI

Procurement for

Housing

Head of Energy

Services

PfH Energy: Presentation

What makes up an energy bill?

Where are prices now?

What drives energy wholesale commodity

prices?

What will the energy markets look like

going forward?

How can you manage your energy costs?

What parts of your energy bill can be influenced?

Non-

commod

ity costs

Commodity

costs

Supplier

costs

Total Electricity costs to

rise…regardless

Cheapest energy is the energy

you don’t use

2011 2013 2015 2017 2019

non-commodity % 35 40 48 52 55

commodity % 65 60 52 48 45

0

10

20

30

40

50

60

70

80

90

100

ELECTRICITY INVOICE SPLIT

• Share of commodity cost as part of overall bill

diminishing

• Falling energy prices overwhelmed by costs of

government decarbonisation initiatives

• Likely to be double digit growth in non-commodity

costs for next few years

• Increases need for customers to utilise professional

buyers, monitor markets and time purchases

• Also look at overall consumption through efficiency

programmes- will become increasingly cost effective

Wholesale electricity prices

Current levels annual electricity: £43.00/MWh

(or 4.30p/KWh)

**Final bills will include shaping +non-

commodity costs

40.00

42.00

44.00

46.00

48.00

50.00

52.00

54.00

56.00

58.00

60.00

Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15

£/M

Wh

Electricity Baseload Annual price

Oct-13 Oct-14 Oct-15

Wholesale gas prices

Current levels annual gas: 42.80p/Th (or

1.461p/KWh)

**Final bills will include shaping +non-

commodity costs

40.00

45.00

50.00

55.00

60.00

65.00

70.00

75.00

Oct/12 Jan/13 Apr/13 Jul/13 Oct/13 Jan/14 Apr/14 Jul/14 Oct/14 Jan/15 Apr/15 Jul/15

p/T

h

Gas: Wholesale Annual prices

Oct-13 Oct-14 Oct-15

Commodity Market Drivers

Markets trading Gas: Seasons, Quarters, Months, Weeks, Days

Electricity: Seasons, Quarters, Months, Weeks,

Days, 4hr, HH

2015 2016 2017 Jan

2018 March 2018

Oil Weat

her

European Markets (Elec, Gas, Coal, Emissions)

Fundamental supply and demand

Energ

y

Deliv

ery

April

2018

Cash

out

Foreign Exchange rates (£, $,€)

Short term

changes to

supply and

demand

Global markets (Coal, LNG)

Market traders expectations

(Regulatory, political, economic, technological)

Electricity market price drivers:

Next few years Nation

al

Usage

Generat

ion 2010-15

2015+

2020+

External drivers: Regulation,

Political, Legislation Regulation (Ofgem)

• Competition in

wholesale traded

markets has fallen

• Big 6 investigation

by Competition and

Markets Authority

Legislation

• DECC: Energy bill 2014

• Trilemma: Decarbonisation,

Security of supply, Affordability

• Renewables: Contracts for

Differences: Wind, Solar

• Nuclear 35 year contracts

(£92.50/MWh)

• DECC forecast ever rising oil price

• Capacity auctions for fossil fuel

availability

• Upgraded network to support

renewables

• Cost supported through general

levy on all energy users p.a.

(2014 £3.5bn, 2020 £8bn, 2021+

£?bn)

• Vs. cheaper gas, coal for fossil

fuel legislation 202

3

Political • International

agreements on long

term Climate

Change measures

• Tough UK targets

for Carbon

reductions from

energy sector

20

15

Current electricity generation

Long term electricity generation

mix Fundamental

changes to

electricity

generation

Scenario shows

impact of

generation

switch from

fossil fuels to

intermittent

renewables

Forward prices

may not be

driven by

predictable links

to coal, gas or

oil

Increased

premiums to

cover risk

More volatile

short term

prices>

opportunities

NGC UK

forecast

TWh

All energy purchased on

a single day determined

by customer. Delivery

starts 01/10/14

Price set by

market conditions

on day of

purchase.

No variation to

pricing once

purchasing

completed.

Budget certainty

over cost from

start of energy

delivery.

Immune to short

term price spikes

during delivery

period.

1. Spot (Fixed Price Fixed

Term)

Single customer

purchasing

50.00

52.00

54.00

56.00

58.00

60.00

62.00

64.00

66.00

68.00

70.00

Oct/13 Jan/14 Apr/14 Jul/14 Oct/14

p/T

hGas: Wholesale Annual prices

Oct 14 Annual price

Gas

delivery

01/10/

14-

30/09/

15

Purchase window: 1

day

12 month

range:

High 67.60

Low 53.45

Average

61.53 21st March

62.28p/Th

Example : 12 month Locked basket

All energy must be

purchased before

delivery starts 01/10/14

Updates on

basket volumes

bought through

purchase window.

No variation to

pricing once

purchasing

completed.

Budget certainty

over cost from

start of energy

delivery.

Immune to short

term price spikes

during delivery

period.

2. Price risk managed

basket

Multiple customers purchasing

collectively

50.00

52.00

54.00

56.00

58.00

60.00

62.00

64.00

66.00

68.00

70.00

Oct/13 Jan/14 Apr/14 Jul/14 Oct/14

p/T

h

Gas: Wholesale Annual prices

Oct 14 Annual price

Purchase window:12months

01/10/13- 30/09/14

Gas

deliver

y

01/10/

14-

30/09/

15

No

energy

purcha

sed

12 month

range:

High 67.60

Low 53.45

Average

61.53 61.12p

/Th

The Future for GB electricity

markets ?

20

23

Possibly:

Internet of things- everything

connected and controllable?

Energy consumers paying market

tracking prices, invoiced near real

time from dynamic data ?

Household battery systems storing day

time solar output and discharging at

night becoming common?

Greater use of electricity for heating

as relative costs drop?

Almost certain:

• No longer solely a fossil fuel driven

market price

• Short term price volatility- even

negative market prices on some

summer days

• Much higher non-commodity costs

(60%+?) of electricity bill

• Higher relative cost of off peak periods

because uneconomic to run fossil fuel

plants

Energy: continuous cycle of

improvement

Energy

service

Understanding changing customer

needs

Framework, contractual

improvements

Energy markets, smarter

purchasing

Data interrogation

Portfolio development,

minimised costs

Increased savings, reduced demand

PfH Energy support for the social

housing sector 1. Offer professional guidance when contracting

2. Ongoing customer engagement from procurement and throughout the

contract

3. Service desk with experienced professional energy individuals from

energy procurement and energy trading backgrounds

4. Development of offering through understanding of other buying

models and competition

5. Working with customer panel to develop next energy solution

6. Demystifying energy areas through education and transparency

7. Exploring removal of barriers to smarter buying e.g. Section 20

8. Building smarter collaborative buying options for social housing

organisations to manage risk

9. Investment in systems to aid customers manage their energy usage

through data analysis

10. Evaluating purchasing performance against independent market data

PfH: Managing suppliers, providing procurement advice, supporting customers

Energy suppliers: Market cross section providing

competitive fixed prices

What are the conclusions? Commodity

prices are low

at the moment

Non-

Commodity

costs are going

to keep going

up The market

will become

more

unpredictable

and volatile

PfH Energy

offer

professional

guidance and

help

throughout

the journey

Reducing

energy usage

through data

analysis is the

future

Contact details

Procurement Manager-Energy

adickaty@procurementforhousing.co.uk

Tel: 01925 286 379

Mob: 07834 529 792

Magnus

Walker

Head of Energy Services

mwalker@procurementforho

using.co.uk

Tel: 01925 286 368

Mob: 07943 807 415

procurementforhousi

ng.co.uk

Andrea

Dickaty

Team: energy@procurementforhousing.co.uk

Citrus Energy

A unique perspective

Who are Citrus Energy

• Wholly owned social enterprise subsidiary of Cunninghame Housing Association Ltd.

• Uniquely impartial providing home and business energy users with independent advice to source the best energy deals from ALL Uk suppliers !

• Creating employment for vulnerable groups.

• Dealing with all energy related problems on behalf of many partners, including metering and void issues.

Overview of Citrus services

• Commercial service -provide full energy consultancy and procurement service for businesses or fellow RSLs – transparently presenting prices. Always more cost effective than businesses using commercial brokers and than businesses/RSLs going directly to suppliers for prices.

• Domestic Energy Switching – Phone based independent ‘best’ advice helping any domestic energy users to source the best energy deal from the whole UK energy market- becoming their voice with their supplier on an ongoing basis.

• Lemon Aid - Alleviating fuel poverty and helping those most in need to deal with energy issues; metering issues, grant sourcing- eco – whd etc, debt reduction, self disconnections, meter changes prepay to credit, advocate on billing issues, refer to ethical partners cross referring services.

• Void service – dealing with all energy related issues within 3 hours and ensuring new tenants receive the ‘BEST’ deal available to them – on average increasing rental gain by 2 days and reducing time spent dealing with suppliers by 2 hours.

Social Enterprise with Charitable Parent

• Sustainable solution – social enterprise rather than charity – less restraint on attaining income. Profits re-distributed within the communities we work within, including partnerships with fellow RSL’s.

• Citrus has its own board which requires the service to be transparent and accountable, and to operate with the right social values.

• Subsidiary of RSL – governance demands are the same, we adhere to same principals and ethics.

• Unique approach to the commercial marketplace, the right ethics saving businesses money.

How is Citrus funded

• We have separate funding streams for our domestic services and our commercial services.

• Domestic ‘Lemon Aid’ funded by The Big Lottery and other local funders.

• Commercial service attains income to sustain domestic services for the future.

• 2016/17 – cash surplus – self sustainable

How has Citrus expanded and grown

• Unique service – service led, rather than profit generation, no sales team in domestic services – Reputation is everything, trust is key.

• Partnership working – trusted partnerships, sharing specialisms.

• We don’t hide the answers, we share them ! • Recruitment policy – 6 months unemployed staff have

felt poverty and can empathise • Commercial acumen - staff experience • Adaptable to change • Stability within Cunninghame HA

Benefits to users

• We will always find an individual tenant the best energy deal for their needs, based on; cost, heating system, metering, benefit entitlement, available initiatives – we will only switch if it benefits them, but will deal with any issues first and foremost.

• Our impartiality and transparent approach will provide a unique comprehensive service at all times.

• Our staff know what it is like to struggle and can sincerely empathise with service users of our domestic energy services.

• Energy Efficiency funding sourced 2014/15 - £267498 • Arrears Reduction grants sourced 2014/15 - £171801 • SROI – £1 : £5.71 for every £1 invested in Citrus from an

independent social return on investment carried out we create £5.71 of impact – Last year we won the Social Enterprise Scotland – Prove It Social Impact award

Benefits to users –con’d

• Our void service is quicker than preferred supplier/default supplier agreements and we ensure the new tenant has the choice of the full domestic market ensuring they get the best deal for them and their circumstances – this saves the new tenant on average £170 per annum.

• During our void service there are no meter changes therefore no issues with Gas safety checks etc, the new tenant chooses whether or not they would like a new supplier and the meter type they would ideally like to have.

• Credit meters are far cheaper than prepayment meters and we help people to move from prepayment to credit, helping them set up budgeting schemes such as fuel direct.

Benefits to users –con’d

• Transparent approach to commercial energy procurement and consultancy – we are paid a fee direct from suppliers which averages 20% of common commercial brokers fees.

• Our fees are shared with fellow RSLs and any profit attained re-distributed within our domestic services, providing sustainability.

• We work within the fixed market providing certainty of prices and strength of energy suppliers.

• Our validation, energy management and contract and bill management services are free to use.

The Future of Energy

Smart Meters “ we are apprehensive” • Will only make a difference if individuals act on the

data? they require behavioural change? • Will energy suppliers pass on supposed savings

generated from certainty of consumption and wholesale procurement?

• Signal issues could create further problems in rural areas

• Credit meter to prepay on the switch of a button – this will increase consumer costs?

• Will those who don’t have digital availability or the skills appropriate be dis-advantaged?

The Future of Energy

Renewables

• Growth in local energy companies -the principal is great but will they be able to counteract the energy suppliers margin and trade effectively on wholesale markets or will size matter?

• District Heating and Community led heating initiatives will help as long as there is investment?

• We are an energy rich country we should be able to utilise ALL the energy produced, there should be less restraint imposed by government

Citrus the next 5 years

• Sustainable 2016/17 less reliance on funding

• Grow the team

• Establish more partnerships/relationships with like minded organisations

• Add to our current services

• Champion fuel poverty issues and inequality within the energy market, both domestic and commercial.

Thanks for listening

‘More than just Energy Advice’

Mission:

To provide ethical and trustworthy

energy advice to both domestic

and commercial energy users,

whilst helping create sustainable

employment.

Colin Reid, Wheatley Group

Lunch and exhibition viewing

Workshops commence at 13:45

Andy Milne

Neil Clapperton

Chair’s closing remarks