The Green Deal

Paul McCloghrieDECC

14 June 2011

Household emissions – the challenge

* Based on analysis the most practical and cost-effective route to achieving economy wide reductions

Carbon budgets are equivalent to a 34% cut in greenhouse gas emissions by 2020.

Household emissions have been relatively static recently (c.25% of the UK total).

The household sector will need to reduce direct emissions by 29% on 2008 by 2020.*

What change is needed by 2020?

24 Mt cut

(29%)

MtCO2e

How do we fill the gap?

1. Reduce the energy required to heat our homes

i. Insulationii. More efficient heating systemsiii. Better heating controls

2. Produce low carbon heati. Solar thermalii. Heat pumps

3. Change behaviouri. Attitudesii. Enabling technologies

How do we fill the gap?

Note: The technical potential indentified in the MACC reflects judgements made on feasibility which are subject to uncertainty.

£/tCO2e

5 6

250

7 8

300

90

50

100

150

850

-100

-150

-200

-250

-300

-50 0 1 10

200

11 1312 14 15 16 17 18 192 3 4

Reduce demand Renewables

Biomass boilers (non-net bound)Ground Source Heat

Pumps (non-net bound)

Solar Thermal (non-net bound)

Smart Meters

Cavity Wall Insulation

MtCO2e Air Source Heat Pumps

(replacing gas)

Air Source Heat Pumps (non-net bound)

Loft Insulation

Loft Insulation

Local Authority Solid WallInsulation

Internal Solid Wall Insulation

External Solid Wall Insulation

Solar Thermal (replacing gas)

Solid Wall Insulation

The origin of the Green Deal

Through our ‘Green Deal’, we will encourage home energy efficiency improvements paid for by savings from energy bills. We will also take

measures to improve energy efficiency in businesses and public

sector buildings.

The Coalition: our programme for government (May 2010)

The Green Deal Process

• All Green Deals start with an assessment of the property

• Accredited assessor produces – fabric and behavioural assessment

7

Assessment Finance InstallationRepayments and Follow

Up

The Principle: Golden Rule

• Repayments will be made through energy bills

• The cost of installation will stay with the property rather than the original bill-payer

• Are the savings guaranteed?

• No – but they will be based on typical savings. We cannot account for changing energy prices or behaviour change.

• A Code of Practice will ensure the benefits of measures cannot be overstated.

• The assessment will cover how the energy bill payer can benefit most from the measures installed.

Green Deal repayment – illustrative only

Green Deal Measures

Step One - Is the measure eligible?

•Green Deal Measures must meets high-level eligibility criteria in secondary legislation.

Step Two – Is measure suitable for the property?

• A physical assessment of the particular property including what measures have been installed.

• Recommendation on which measures should be installed.

• Indication of which measures are potentially “suitable” for finance.

Step Three – Does the measure meet the Golden Rule in the property?

• The Green Deal Provider weighs up the estimated energy savings for the measures and their likely costs for the installation work FOR THAT PROPERTY.

• The products installed must meet health and safety and performance standards to be set out in a Code of Practice.

Call for Evidence

• The Call for Evidence received over 300 submissions

• It is due to report at the beginning in June

• The report will cover the cost and benefits – financial and energy savings – of the measures most likely to meet the Golden Rule at the launch of the Green Deal

• Strength of testing is key

Call for Evidence – Measures covered

Category Measures

Heating, ventilation and air conditioning

Condensing boilers, heating controls, under-floor heating, heat recovery systems, mechanical ventilation (non-domestic), flue gas recovery devices

Building Fabric Cavity wall insulation, flat roof insulation, internal solid wall, external solid wall, draught proofing, heating system insulation, energy efficiency glazing

Lighting: Lighting fittings, lighting controls

Water heating Innovative hot water systems, water efficient taps and showers

Microgeneration Ground and air source heat pumps, solar thermal, solar PV, biomass boilers, micro-CHP

Customer Protection and the Golden Rule

There are a number of ways the consumer is protected:

• The Golden Rule: Providers cannot attach more finance to the energy bill than the measures are predicted to save

• For domestic customers, the Consumer Credit Act applies

• Accreditation of Green Deal participants – installers, assessors, ‘providers’

• Robust redress systems

Oversight and Accreditation Model

Installer companies / GD Providers

PAS standard managed by BSI

Accreditation Body

(UKAS)Accredit and

monitor Cert bodies to PAS

Installer oversight contractorReports to DECC SoS

Umbrella / Certification bodiesSpecialist trades & General trades

SoS (Primary Powers)

Code of Practice

Boilers and Green Deal

• More efficient boilers are a important part of reducing energy use in buildings.

• In cases where the energy savings could not pay for the measure over its lifetime, customers could part finance measures upfront.

• Robust product and installation standards already exist for the boiler industry, putting it in a good place to take advantage of the opportunities.

Energy Company Obligation: Delivering Affordable Warmth

• One of ECO objectives to help low income vulnerable people heat their homes more affordably

• Taking powers in the Energy Bill to set suppliers an ‘affordable warmth’ target

• Could offer new/repaired central heating systems to help meet this target

• Looking into case for allowing heat pumps to be delivered to off-grid homes

Energy Company Obligation: Supporting Hard to Treat homes

• One of ECO objectives is to support the improvement of harder to treat properties

• Expect energy suppliers to deliver through partners and combine subsidy with Green Deal finance

• Looking at ways to ensure the market is open and competitive

• Consultation in the autumn

Questions?

Paul McCloghrie

paul.mccloghrie@decc.gsi.gov.uk