Planet Treasury and Planet DECC

That's no moon

And the news is… Planet Treasury and Planet DECC continue on their parallel orbits. Maybe this jolly metaphor should have the added information that  Planet Treasury is in fact a Death Star, and when the orbits of the two align too closely as they must on occasions,  pieces of Planet DECC turn to dust.

So on the same day Planet Treasury publishes the Infrastructure Investment Plan (very brown) , whilst Planet DECC produces the Carbon Plan (very green).

It is undoubtedly true that if you put these two documents together they would probably mutually combust: Treasury  – lots of airports, gas fired power stations, roads etc;  DECC lots of wind, biomass electric vehicles etc.  But the problem down the line is that sooner or later the planets do need to be in alignment to make much of the Carbon Plan work, and then, I guess,… kaboom.

Here’s a little example. The Carbon Plan confidently sets out that by 2020, there will be 1.5 million solid wall insulations deployed (chart 11 p.37). Not bad, and approaching the 2.2 million insulations projected as necessary to meet climate change targets set out in the Climate Change Committee’s Third Carbon Budget.

But then, factor in Planet Treasury. The amount allowed for in the Energy Company Obligation  (ECO) per year is to be £1.3 billion, £365 million of which is earmarked to deal with super green deals necessary to combat fuel poverty. That’s about £935 million per year for solid wall insulations – and as things now stand ECO is the only game in town for solid wall insulation funding, unless everyone with a solid walled home decides to insulate at their own cost out of a sense of patriotic duty.

So, starting next year, £935 million  (of energy company money, not taxpayers funds) permitted by Treasury to fund solid wall insulation – that’s eight lots of annual funding up to 2020 – £7.48 billion. Now turn to p.130 of the impenetrable ‘Green Deal and Energy Company Obligation’ consultation document. There we’ll find estimates of the cost of solid wall insulation  depending on the housing type – from about  £6000 per mid-terrace house for an area uplift programme to £12500 for a single detached house.  Let’s be kind and say a programme overall, might come about at about £10,000 per house on average.  So on the basis of the funding available, that’s about half of the DECC projected numbers actually done by 2020. Not going to work guys, is it?

Unless, perhaps, a better funding mechanism or a new ruler for Planet Treasury is found. Meanwhile, another lump of Planet DECC is vaporised.

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3 thoughts on “Planet Treasury and Planet DECC

  1. At the Association for the Conservation of Energy, we have done similar sums, and come up with if anything even more depressing answers.

    The Energy Company Obligation funds are also meant to ensure that the Government meets its statutory obligation to eliminate fuel poverty by 2016. As you will observe from our letter (signed with many others) in today’s Guardian, the SAME money is also supposed to be providing all the funding to achieve that objective too. Even if this money is ringfenced entirely for the fuel poor (ignoring any carbon ambitions about 2.2 million solid walled homes being insulated) it will still leave 3 million plus households in fuel poverty.

  2. Pingback: Planet Treasury and Planet DECC | alan’s energy blog greendealloan.org.uk | Green Deal Loan

  3. Pingback: ECO Mortgages: This week’s modest proposal | alan's energy blog

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