CERT: Priority Group Flexibility Option

Emily FlattEnergy Efficiency Manager, Ofgem

4th September 2007

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Why do we need the PG flexibility option?

• Increases options for suppliers to reach their CERT Priority Group obligations

• Attempts to targets a portion of PG activity to the most fuel poor in this group

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What is it?

• The transfer of a capped percentage of a suppliers target from PG to non PG in return for undertaking additional fuel poverty activity (details coming later)

• Extent of fuel poverty action determined by notional cost saving of transferring activity from PG to non PG

• Translation factor applied to convert the carbon transferred into number of fuel poverty measures

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Eligible Fuel Poverty measures

Solid wall insulation

Biomass boilers (under consideration)

Ground source heat pumps

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Eligible Fuel Poverty recipients

Recipients

A subgroup of the PG attempting to identify the fuel poor

These are:

• Not in social housing ie home owners

• Off the gas grid

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Using the mechanism

• Proposed that suppliers apply as a normal scheme, on application pro forma

• Applications will include: (I will go into this in more detail later with a worked example)

• % reduction sought

• Carbon equivalent of this

• Which fuel poverty measures will be used

• Approval will be granted if all the required info is provided and is correct.

• (Any Qs at this point)

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A word about terminology…

• ‘relevant reduction’ = carbon equivalent of the % reduction in the PG target

• ‘specified reduction’ = carbon savings from fuel poverty measures (determined by translation factor)

THESE WILL HAVE THE SAME VALUE!

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Worked example of application (1)

• Supplier x has a carbon obligation of 10,000 tC

• PG obligation of 4,000 tC

• Wants to switch 5% of their obligation from the PG to the non PG

• 5% = 500 tC

• New PG obligation would be 3,500 tC

• New non PG obligation would be 6,500 tC

• Overall obligation remains 10,000 tC

• 500tC to be achieved through fuel poverty measures

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Worked example of application (2)

The application must include:

• % reduction of overall obligation = 5%

• Relevant reduction = 500tC

• Specified reduction = 500tC

• Which fuel poverty measures will be used = eg solid wall insulation

• How overall obligation will be achieved = brief written summary of supplier’s other schemes

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To determine the number of fuel poverty measures needed:

Specified reduction = number of fuel poverty measures neededtranslation factor eg 50

Specified reduction = 500tC

500 = 10 fuel poverty measures needed 50

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Supplier x obligation illustrated

0 2,000 4,000 6,000 8,000 10,000 12,000

With PG flex.

Initial obligation

tC

non- PG

PG

Plus fuel poverty activity

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