Energy Efficiency

Energy Efficiency in London

March 2013: Helpful new briefing paper presented to the London Councils Leaders Committee on ‘Energy Efficiency in London’, which highlights:

  • The bulk of recent funding from DECC to the GLA (see here and here)  will be spent on replacing/repairing boiler and heating systems within the participating boroughs, as well as improving the insulation properties of homes, utilising the framework contracts already in place from the RE:NEW scheme. A smaller part of the funds will be spent on both domestic and business Green Deal assessments.
  • Almost one in five London households is in fuel poverty, currently defined as householders spending more than 10 per cent of their income on energy to keep warm. This is significantly higher than the national average as a result of a greater proportion of older and hard-to-treat homes. The problem is likely to get worse too,with one in four households projected to be in fuel poverty by next year as a result of rising energy costs and the UK’s homes being some of the most energy inefficient in Europe.
  • London Councils is actively pursuing Government to include measures to simplify tariffs and provide clearer information to consumers. We are lobbying for more competition to enable suppliers to offer market-beating tariffs in cases, such as the Collective Energy Switch currently pursued by London Councils and to ensure that fuel poor households will continue to benefit from centrally funded measures for retrofitting activities.
  • Due to the higher costs of delivering retro-fitting in London, there is a danger that London will lose out on its fair share of ECO funding, as it did under the CERT scheme. London Councils, with the GLA, lobbied for regional targets, which Government did not accept and has resulted in adapting the RE:NEW work to include a larger element of working with retrofitting providers to address some of their main concerns (local planning matters, parking issues and sharing of benefits claimants data). The Energy Bill, however offers a new opportunity to reinforce this point, which London Councils is actively pursuing.
  • Due to the types of homes in London and the prevalence of fuel poverty, vulnerable households are unlikely to meet the golden rule of the Green Deal without further financial support.
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DECC signs up to RE:FIT

March 2013: DECC have just announced that the department has signed up to the Mayor’s RE:FIT public sector energy efficiency retrofit programme. Signing up to RE:FIT will allow DECC to access guidance from the RE:FIT Programme Delivery Unit (PDU). Support from the PDU is funded by the GLA and is only available as a no cost service to public sector organisations in the London region. Organisations can then use the procurement framework established under RE:FIT – and the PDU can also help facilitate access to available funding sources, such as Salix, the London Energy Efficiency Fund (LEEF), and the  Public Works Loan Board amongst others.

The GLA have recently reported that “the RE:FIT programme was considered to be a highly effective, low cost model that the Department for Energy and Climate Change were considering as a model for a national scheme.

It should be noted that the EU Energy Efficiency Directive (agreed in June 2012 and required to be fully implemented by Spring 2014) includes an obligation on the central government estate to meet annual targets for building renovation the majority of this will of course be in Whitehall (see page 16 of the recent DECC Energy Efficiency Strategy from 2012 for background).

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Supporting the Green Deal in Social Housing

March 2013: A paper presented at the most recent GLA Housing Investment Group meeting has set out of the opportunities and challenges in expanding the Mayor’s housing retrofit programme, RE:FIT under the new landscape of the Green Deal and ECO. The paper sets out a proposal for additional funding for 2013/14.

“This paper seeks approval to allocate up to £150,000 for interim support to deliver early Green Deal and Energy Company Obligation (ECO) projects through the existing RE:NEW framework.

“To avoid a slowdown in delivery during this period, we intend to procure interim support to help manage the early pipeline of projects that have been developed through our work with social housing landlords.

Response to this project has been very positive and currently there are over £10m of potential projects currently being reviewed which could be ready to tender in the next 3-6 months, with a further £77m of identified projects under review. The total pipeline includes over £950m worth of potential projects and over 100,000 dwellings.

Additional information is available in Appendix A- RE:NEW project pipeline and Appendix B- Pipeline projects currently under review – status update

The process to identify projects was kicked off in a workshop at City Hall in December 2012: a great paper on Financing retrofit in London social housing by Verco was presented – and post workshop Verco have also prepared a summary of proceedings. Amongst the outputs  the key points for future success in attracting funding for energy efficiency retrofit in the social housing sector included:

  • Senior leadership buy-in (e.g. to overcome barriers)
  • Economies of scale
  • Get dedicated lead
  • Accurate stock data
  • Build relationships with suppliers and contractors ASAP
  • Know your stock – to be able to negotiate
  • Data – Tower Hamlets have a database of all properties in the borough (do surveys, get EPC data from DECC, not HEED – automatic calculation of Golden Rule) and;
  • There are wide differences in the helpfulness of planners in different London boroughs – if planners are less cooperative, try a multi-prong approach via sustainability officers or ward councillors (!)
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London SME retrofit programme details

15 March 2013: Details have been released that funding has been approved by the Mayor for a energy efficiency  programme targeted at London’s  small and medium enterprises (SMEs). The approval form sets out that “up to £21,000 will be allocated to commission work to deliver energy efficiency retrofit services. The project seeks to develop SME engagement, improve knowledge of the SME retrofit landscape, and establish suitable financial and delivery models using learning gained from the RE:FIT and RE:NEW programmes, with work to be completed by end-March 2013”.

The Mayor’s 2011 energy strategy set out findings that:

  • small and medium enterprises (SMEs) are reluctant to take action on installing energy efficiency measures and low and zero-carbon microgeneration technologies without seeing that government is taking action on it first (see para 2 or research here)
  • There are currently over 830,000 SMEs in the capital and collectively SMEs emit 20 per cent of the UK’s total CO2 emissions. Due to their size, SMEs  often do not have sufficient resources and expertise to allocate to energy management, and therefore require support and advice to reduce their energy use.
  • However, it is also often hard to reach SMEs and much of the support or drivers through legislation and other programmes are geared towards large organisations (SME data can be found here and here)

And set out the following action:

  • Action 8.5 – The Mayor will support SMEs to reduce their energy use by working with partners and using his programmes to signpost SMEs to existing sources of energy efficiency support. The Mayor will also review the provision of energy efficiency support to SMEs in London, identifying areas where further action is required, and developing support in areas where the Mayor can contribute to its quality, availability and accessibility.

The approval form concludes:

“This work would directly feed into a paper submitted to the Housing Investment Group for approval of GLA funding and resources to deliver pilot projects in 2013-14, and develop a pan-London SME programme. It is currently anticipated that procurement for the full programme would be commenced from 2014, with a full roll-out from 2015 onwards.”

Hence any pan-London programme would, if approved, fully start under a new Mayor after the next London election.

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Regional Green Deal statistics available …but not quite yet

14 March 2013: DECC published their first statistical release today on activity under the Green Deal over the months of January and February 2013 (statement by Secretary of State here). This revealed that 1,803 assessments of properties have taken place over the two months. The statistics however do not set out where these assessments were undertaken – ie no regional breakdown has been provided – which is hugely disappointing. Hence – the following twitter conversation took place.

So – Green Deal (and ECO also …?) regional statistics (hopefully at the local authority rather simply the regional level) will be made available in the fuller dataset released in June of this year. DECC should also consider reporting on a regional basis in the monthly stats …a discussion that will likely continue. Interested parties do feel free to contact DECC to request this happens!

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Update on the ECO brokerage

March 2013: DECC have provided a summaries on the first four auctions undertaken under the Energy Company Obligation (ECO) brokerage (for more on the brokerage – see here and here).  Details can be viewed on DECC’s website here . They’re not the easiest thing to decipher…hence, useful that Inside Housing have produced the following analysis highlighting that:

  • Energy companies are paying as much as double last year’s high for carbon savings from energy efficiency works on homes
  • The identity of the organisations selling the savings is hidden until a deal is struck to make the process more transparent and competitive.
  • Many of the lots did not meet the reserve price set by green deal providers.
  • A spokesperson for DECC said: ‘Ultimately, the ECO brokerage market is in an early stage of development and it will take a few auctions for the price to settle.’
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Energy initiatives in the Mayor’s new budget

February 2013: Following a short consultation period, the Mayor’s final 2013/14 Budget for the GLA Group has just been agreed at City Hall.  A press release sets out that this budget comprises funding for the the “Mayor’s Office for Policing and Crime, Transport for London (TfL), the London Fire and Emergency Planning Authority (LFEPA), the London Legacy Development Corporation, and the Greater London Authority including the London Assembly. The total budget for GLA Group services is £16.5 billion.

The final documents are posted here. In terms of funding directed to energy programmes, the background statement to the budget sets out that:

“The Mayor is continuing to work towards improving London’s environment. Energy supply and master-planning is key to delivering sustainable development for London’s economy. Investment will continue through a Decentralised Energy programme (with £1.3 million over the next two years) which provides technical, commercial and financial advisory support to partners to help them bring their decentralised energy projects to the market. This work builds on the mapping of opportunities identified through the London Heat Map. Work will also progress with partners towards a district heating demonstration project, supported by European funds.” [para 5.8]

Also mentioned is that finance will be directed to homes in London through “a fund of up to £300 million with the European Investment Bank to deliver carbon-efficient affordable homes” [para 5.4]. This relates to a loan organised by The Housing Finance Corporation (THFC) and the EIB which should be available to be utilised shortly by London housing associations – see here, here and here for further information. The funding will be managed by THFC.

Though a few other environment-related projects are mentioned in the background statement document, and reference is made to energy efficiency work to be undertaken by LFEPA and also TfL, no mention is made of the Mayor’s RE:NEW home energy efficiency retrofit scheme, or RE:FIT or RE:CONNECT – however, with the budget only just finalised, it may be the case that further information is yet to be released.

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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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How will the £100m London Green fund benefit the capital?

9 January 2013: London Assembly news release “The London Assembly will tomorrow question representatives of the Greater London Authority, Green Fund Investment Board and fund managers about the £100m London Green Fund (LGF), which was set up to invest in waste and energy efficiency programmes.”

Tomorrow’s meeting will take place on Thursday, 10 January 2013 from 10am in the Chamber at City Hall.   Members of the public are invited to attend.   The meeting can also be viewed via webcast.

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“Capital’s public buildings get energy efficient makeover”

January 2013: Mayoral announcement made last month stating that “Energy conservation measures are already complete or near completion in 111 public buildings in London. The pipeline shows that 400 buildings could benefit from the Mayor’s award-winning RE:FIT programme, saving the public purse in the region of £7 million each year”. Read the full news release here. Further information on the new framework adopted for the programme at www.refit.org.uk .

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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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Mayor to encourage energy efficiency in the private rented sector

13 December 2012: The Mayor has today published a new ‘London Rental Standard’ where- the press release states – he “has called for the establishment of a new deal with landlords, letting agents and tenants based around a voluntary and transparent ‘London Rental Standard’ (LRS), which will be consulted on with the industry and launched next year by the GLA.”

Today’s publication, ‘The Mayor’s Housing Covenant: Making the private rented sector work for Londoners’, sets out the Mayor’s proposals for improving private renting for Londoners. Included in there are commitments that:

  • The Mayor has three principal objectives for improving the private rented sector (PRS) in London which includes promoting standards through improving the energy efficiency of the stock.
  • To do this the Mayor will work with government and energy providers to ensure that the Green Deal works for London’s PRS
  • The Mayor has also committed (para 2.3) to address fuel poverty and encourage more landlords to take advantage of energy efficiency programmes.

The report goes on to say (page 33) that:
Improving energy efficiency
In terms of energy efficiency the PRS tends to perform well compared with other tenures but there is still significant room for improvement. In 2010/11, the average SAP rating for private rented homes in London was 57.3, worse than in social housing but better than in owner occupied properties and better than the national average for the PRS. The latter is probably explained by the larger share of flats in London’s PRS compared with elsewhere (flats are generally more efficient than houses).

From 2016, landlords will not be able to unreasonably refuse requests from their tenants for consent to undertake energy efficiency improvements where they can be funded by the Green Deal, and from 2018 all private rented properties must be brought up a minimum efficiency standard.” The latter requires all private rented properties (domestic and non-domestic) should be brought up to a minimum energy efficiency standard rating, likely to be set at EPC rating “E”. Further information on DECC’s website here.

Appendix 1 of the document contains the draft London Rental Standard and the energy commitment goes no further than the rather disappointing standards set by Government in the Energy Act 2011 stating that “landlords must work towards compliance with duties imposed upon them by the Energy Act 2011, especially related to requests for energy efficiency improvements by tenants and in relation to low ratings in energy performance.” The Mayor should instead look to bringing in the recommendations on PRS energy efficiency made by a coalition of organisations during the passage of the 2011 Energy Bill.
Any  feedback on the contents of the Housing Covenant paper need to be sent to the GLA by 15 February 2013.

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