EEC3 – The Way Forward Presentation to NIA Annual Conference 12 December 2006 By Iris Rooney,...
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Transcript of EEC3 – The Way Forward Presentation to NIA Annual Conference 12 December 2006 By Iris Rooney,...
EEC3 – The Way Forward
Presentation to NIA Annual Conference12 December 2006By Iris Rooney, Defra
Summary
• Context• Energy Review • Role of EEC • EEC3 Initial Consultation• Supplier Obligation• Role of Insulation Industry
Context (1)
• Demand for household energy services rising on average 1.5% (0.6MtC) per annum
• Currently offset by improvements in energy efficiency of about 1% per annum
• Energy use in household sector needs to fall by approx 1.8% to be on track for 2050 goal.
• Requires action on multiple fronts - new and existing buildings, technology and behaviour
Context (2): Household Carbon Emissions
Households were responsible for 27% of UK carbon emissions in 2004
By fuel By end use
• Addressed the 2 major long term challenges in UK energy policy:- climate change & reducing carbon emissions- secure, clean energy at affordable prices
• Commitment to competitive energy market • Aim is to set right regulatory framework to enable
the market to move in the right direction to meet long-term challenges
Energy Review (1)
Energy Review (2) – Energy Efficiency & the Household Sector
• New homes - long-term goal of carbon neutral developments
• Product Policy - transform markets • Improved information - better billing & In-House displays +
smart metering trials• Distributed Generation - consented developments• Existing Homes - EEC3 and supplier obligation post-2011
Role of EEC (1)
• EEC1 delivered 0.4MtC pa in 2010• £600m investment in energy efficiency• For every £1 spent by suppliers, householders
benefited by £9• 50% of EEC1 and EEC2 activity targeted at
Priority Group
Role of EEC (2)
• EEC2 already making significant contribution to increased carbon abatement targets – expected to deliver 0.62 in 2010
• At the half way point, suppliers have achieved 76% of the target
• Insulation activity accounted for 88% of these savings
Role of EEC (3)
• Targets will be increased by 50-100% over EEC2, delivering 0.9MtC to 1.2MtC
• Unlimited carry-over of activity from EEC2 to EEC3
• Use experience gained from EEC3 and money announced in Budget 2006 for smart meters trials to inform developments of post-2011 approach
EEC3 Initial Consultation (1)
• Successful passage of the Climate Change and Sustainable Energy Act presented new opportunities
• Consider smooth transition to the 2008-11period• Inform Statutory Consultation in spring 2007
EEC3 Initial Consultation (2) – Key Themes
A. Climate Change and Sustainable Energy Act
B. Transition to 2008-11
C. Equity Issues
D. Opportunities for trading
A. Climate Change & Sustainable Energy Act
• Move to carbon emission reductions target instead of the current energy efficiency target
• More options for delivery of carbon savings & reduced consumption of energy from grid:- Eligibility of microgeneration measures - Eligibility of other measures affecting consumer
demand
Climate Change and Sustainable Energy Act (2)
• Explore scope for greater innovation
• Possible approach of “ring-fencing” a limited proportion of each supplier’s target that could be met by unproven measures or trials
B. Transition to 2008-11
• EEC3 will be 50-100% bigger than EEC2, with unlimited carry-over
• Energy suppliers encouraged to make full use of transitional arrangements to start on EEC3 work early
• Possibility of setting the scores early for individual measures under EEC3
C. Equity issues
• Need to consider:- impact on low-income customers- cost-effectiveness in terms of carbon and fuel
poverty objectives - what is technically feasible
• Implications of directing different levels of activity to the priority group
Equity issues (2)
• Potential for new mechanism to offer suppliers flexibility in meeting their priority group target
• Need to consider any approach in the light of the need to reduce carbon emissions and the impact of priority group consumers
D. Opportunities for Trading
• Findings on work on trading reported – views invited
• Trading of retrospective measures has been suggested, but this is constrained under EEC
• Possibilities post-2011 include tradable targets defined in terms of absolute carbon or energy demand
EEC3 - Next Steps
• EEC3:- Summary of consultation responses in January
2006- Continuing discussions with stakeholders- Statutory consultation in Spring 2007
Supplier obligation (1)
• Early announcement in the Energy Review to give market long term certainty
• SO will need to incentivise all measures if we are to achieve 60% savings by 2050 – including cost-effective measures like insulation
• Formidable work programme ahead to determine the shape. Defra in the lead
Supplier Obligation (2)
• Process will include:• Liaison throughout with key stakeholders,
including the insulation industry• Short update in Energy White Paper• Call for evidence around May 2007• Formal consultation end 2007• Website coming soon …
Insulation Industry (1)
• Government needs your support to deliver its challenging carbon and fuel poverty objectives
• Insulation remains a cost-effective way of achieving large-scale carbon reductions
Insulation Industry (2)
• You have made a major contribution to the success of EEC to date and effectively met the challenge of increasing demand
• We expect insulation to play a major role in EEC3• Look forward to the industry’s continuing
constructive input to the development of EEC3
Contact Details
• EEC3 Consultation can be found at <http://defraweb/corporate/consult/eec3/index.htm>
• EEC3 - Iris Rooney at [email protected]