[email protected]@nea.org.uk National Energy Action Policy Update October 2012 NEA Sponsored by.

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National Energy Action

Policy Update

October 2012

NEA

Sponsored by

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Cabinet reshuffle

The DECC Ministers



We agree with Professor Hills assessment of the weaknesses of the current definition, and agree that the Low Income High Costs framework provides a better approach to understanding the issue of fuel poverty and intend to adopt it as the main measures of fuel poverty in future

The number of individuals in fuel poverty as well as the households affected will also be reported on

As well as using the Low Income High Costs indicator as the main measure of fuel poverty, we expect to continue to report on numbers under the 10% definition in our annual report of fuel poverty statistics

Defining fuel poverty - Hills

http://www.decc.gov.uk/assets/decc/11/consultation/fuel%20poverty/6406-fuel-poverty-changing-the-framework-for-measureme.pdf

Responses to the consultation, which can be accessed at the above address, should be submitted

by 30 November, 2012.







There have been some energy price rises announced and we expect more to follow.

Energy Prices

Supplier Current bill New bill Effective from

British Gas £1,260 £1,336 November 16

EDF Energy £1,202 £1,202 PendingE.ON £1,260 £1,260 No increase in 2012npower £1,244 £1,356 November 26ScottishPower £1,349 £1,368 December 3SSE £1,235 £1,354 October 15Average £1,258 £1,312 Pending

'We are calling on you to launch an urgent, expert, independent review into the rising cost of domestic energy bills and whether competition among energy suppliers can be made to work more effectively in the consumer interest.'

“I can announce, which I am sure you will welcome, that we will be legislating so that energy companies have to

give the lowest tariff to their customers”



Simpler Tariffs

British Gas has unveiled a new energy bill design – and a new pricing structure. At the last look there were 26 different tariffs for gas and 28 for electricity as well as 25 for Economy 7.

E.ON has simplified their tariff range. They now have five new, simpler tariffs. All new plans, plus E.ON's standard plan, now come with a single rate and a simple standing charge. ScottishPower will write to all its customers who pay for their energy on a quarterly basis, with a personalised quote to estimate how much they can save by making changes to their energy account.



Supplier social obligations

Ofgem, Domestic suppliers’ social obligations: 2011 annual report, October 2012

Regulator positive:• Disconnections decreasing• Repayment periods lengthening • Number of customers in debt decreasing• Number of PPM installations decreasing

But also consider:• The average level of gas debt has increased by around 10% whilst debt levels for

electricity are largely static• Prices are on the up • Decline in energy advice provision

Improved situation for PPM customers: can switch with a debt of up to £500 as against previous £200.

Ofgem say disconnections have generally fallen and repayment periods lengthened among PPM customers.



http://www.ofgem.gov.uk/Sustainability/Environment/WHDS/Documents1/WHD_AR_08_Oct_2012.pdf

• The Warm Home Discount Scheme (WHD) is now in its second year

• The Warm Home Discount is a scheme funded by energy suppliers

• It replaces social tariffs and voluntary arrangements previously offered by energy suppliers.

• The 2012-13 annual discount payment will be £130 and will be paid by March 2013.

• The Warm Home Discount scheme separates eligible households into two groups – the ‘Core’ group and the ‘Broader’ group

Warm Home Discount Scheme

‘Meanwhile we will continue to deliver policies that we know are making a difference.’

Oi! It’s coming off our bottom line, and forcing us to raise our

prices.

Ofgem has recently published a review of the first year of the Warm Home Discount scheme and reports general success across all areas of supplier obligations.

The Core Group – 702,00 rebates made – 99.9% compliance – 99.8% of payments made on time

Broader Group – 234,297 payments made costing £28 million

Legacy Spending - £86.9 million on discounted tariffs, £16 million on rebates. Assisted 1.45 million households

Industry Initiatives – £22.3 million spent on benefit entitlement checks, referrals, energy efficiency advice, fuel debt assistance






Winter Fuel Payments

The EU is insisting that households who became eligible (through meeting the age criteria) after they had relocated abroad should receive the Winter Fuel Payment.

“This will not happen and I will introduce a temperature threshold to thwart this

injustice.”

If you live abroad, you may be able to receive Winter Fuel Payments if all the following apply:

• you have reached women’s State Pension age

• you live in another European Economic Area (EEA) country or

Switzerland

• you have a genuine and sufficient link with the UK, for example, you

have lived or worked in the UK for most of your working life

The Warmer Weather Payment



What will Local Authorities be required to do under the Home Energy Conservation Act (1995) in the future?

The guidance under the Home Energy Conservation Act 1995 (HECA) to English local authorities with housing responsibilities was published on 26 July 2012.

It sets out requirements for those authorities to report on the measures they propose to take to significantly improve the energy efficiency of all the residential accommodation on their areas. The guidance links with the delivery of the Green Deal by local authorities.

Home Energy Conservation Act (HECA)

http://www.decc.gov.uk/assets/decc/11/tackling-climate-change/saving-energy-co2/5992-guidance-to-english-energy-conservation-authoritie.pdf

.





Green Deal loans to be offered at 7.5%

Green Deal and ECO

Government is assuming that the loans to home owners under the Green Deal will be charged at an interest rate of 7.5 per cent.

“..it will be a challenge to make the Green Deal a compelling proposition for consumers.

“An interest rate of 7.5% could prove to be an major additional barrier to uptake of the scheme.”

DECC have published some consumer-facing fact sheets on GD and ECO (available for householders, owners, tenants and landlords). See: http://www.decc.gov.uk/en/content/cms/tackling/green_deal/gd_quickguides/gd_quickguides.aspx


http://www.decc.gov.uk/en/content/cms/tackling/green_deal/gd_quickguides/gd_quickguides.aspx




Renewable Heat Incentive - RHI

The Department of Energy and Climate Change has published a consultation paper on proposals for the next phase of the Renewable Heat Incentive

The main aims of the domestic RHI will be to:

• Contribute towards renewables targets under the Renewable Energy

Directive

• Develop supply chains by boosting deployment

• Promote improved renewable heating technology performance

This consultation will close on 7th December 2012, after which DECC is aiming to publish a response in early 2013. Pending Parliamentary approval,

it is hoped that the scheme will be open to applicants in summer 2013.

It is proposed that the following technologies should be eligible to receive the domestic RHI:

Ground source heat pumps (GSHPs)

Biomass boilers

Air to water heat pumps (ASHPs)

Solar Thermal



Anti-green taxation

• The European Commission has decided that the reduced rate of VAT imposed in the UK on energy saving materials is in breach of EU VAT rules

• The UK has been requested to amend legislation authorising application of the reduced rate to ‘the supply and installation of energy saving materials’

• Failure to comply within a two-month period may mean referral to the European Court of Justice.

• The Commission argues that Annex III of the VAT Directive clearly lists goods and services that are subject to a lower tax regime and that energy saving materials are not included.

• This issue highlights the inequity between energy supply and energy saving within

the EU tax system.

http://www.ukace.org/publications/VAT%20on%20%27Energy-saving%20materials%27%20in%20a%20nutshell.pdf



Use It or Loose It

• CERT Super Priority Group: Success rates vary from 62% to 12.2%

• Difficulty in identifying SPG claimed

• Warm Front: £50 million underspend in 2011-12

T: 0800 316 2805

WARM FRONT/CERT/CESP

There is work that still needs to be done, and there are still opportunities in these programmes.



Interesting surveys and reports

1. English Housing Survey: Household Report 2010-11

2. Ofgem: Vulnerable Energy Customers

3. Joseph Rowntree Foundation : How can we maximise the

benefits of renewable energy for social housing?

Links will be available on the slides which will be emailed to you.



The Department for Communities and Local Government published the English Housing Survey 2010-11 reports last week. It highlighted strong links between:

Poverty and damp

Roof

10% Windows

15% Draughts

15%

Floor

35%

Through thewalls

25%

Poverty and inefficient homes

Efficiency and securityMany missing out on

direct debit discounts

http://www.communities.gov.uk/housing/housingresearch/housingsurveys/englishhousingsurvey/

English Housing Survey: Household Report 2010-11





Vulnerable Energy Customers

Stakeholders have helped Ofgem develop five themes of:

• Developing targeted and effective regulatory obligations

• Promoting best practice among suppliers and distributors

• Taking account of vulnerability in our work and being informed by

research and insight

• Prompting innovation in the provision of advice and support

• Using expertise and working with others to inform wider policy-making to

address vulnerability

http://www.ofgem.gov.uk/Sustainability/SocAction/Documents1/Proposals

%20for%20a%20new%20Consumer%20Vulnerability%20Strategy.pdf

The consultation process closes on 3 December, 2012



How can we maximise the benefits of renewable energy for social housing?

New research for the Joseph Rowntree Foundation

• Social landlords need greater certainty to plan investments in renewable

energy and energy efficiency programmes.

• Social landlords face a huge challenge to invest in energy efficiency.

• Unless social landlords can access new sources of funding to support

more expensive retrofit projects, they may be forced to sell many of their

older properties.

You can find out more about the Joseph Rowntree Foundation’s work by visiting www.jrf.org.uk


http://www.jrf.org.uk/publications/renewable-energy-getting-benefits-right-social-housing

http://www.jrf.org.uk/


The Children’s Society, Citizens Advice and Disability Rights have published research looking at what the changes to the welfare system and introduction of Universal Credit will mean for disabled adults and families with disabled children. The impact of Universal Credit on families with disabled children, produced by The Children’s SocietyThe impact on disabled people of the abolition of the severe disability premium within Universal Credit, produced by Citizens AdviceThe impact of the Universal Credit on working disabled people, produced by Disability Rights UK Holes in the safety net: joint report

Welfare changes and Universal Credit: Impacts on disabled adults and families with disabled children


http://www.childrenssociety.org.uk/sites/default/files/tcs/disabled_children_chapter_final.pdf

http://www.childrenssociety.org.uk/sites/default/files/tcs/citizens_advice_report_2012-3.pdf

http://www.childrenssociety.org.uk/sites/default/files/tcs/citizens_advice_report_2012-3.pdf

http://www.childrenssociety.org.uk/sites/default/files/tcs/disability_rights_uk_report_full.pdf

http://www.citizensadvice.org.uk/holes_in_the_safety_net_final_copy.pdf


Thanks for listening

Questions at the end

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[email protected]@nea.org.uk National Energy Action Policy Update October 2012 NEA Sponsored by.

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