Rented homes and energy efficiency: a sad tale of intention and action

Lost in the mists of time (or 2011, to be precise) yet another Energy Bill found its way onto the statute books.  Most of us have probably forgotten what was in that bill, since several, rather more meaty examples of the species have come along since.  I haven’t, since I had the pleasure of sitting through an interminable series of committee meetings debating the finer points of the Bill. One such example was legislation requiring landlords to uprate the energy efficiency of their properties to a specified level by 2018 or face being unable to let them out, providing that the cost of the improvements would not be disproportionately burdensome. Some of us at the time thought that the 2018 date was a bit far in the future, but generally, the proposal had strong all party support and passed into law.

But, and there always are buts, the proposals required some secondary legislation to come to pass. Not least a specification of what energy band those landlords would need to attain, and what limitations on landlords’ expenditure would be regarded as ‘reasonable’. Furthermore, there was a question, which the committee at the time seemed to think would not be a problem, but the wording of the legislation later demonstrated otherwise, of what properties exactly would be covered by the new requirement? Would it just be where landlords were renting out an entire property to a tenant and would therefore obtain one energy performance certificate for the whole property? Or would it include the probably more numerous instances where properties were being let to more than one tenant – divided properties or multiply occupied homes?

Well, here we are three years later, and wooo, the first of the ‘buts’ has eventually been made into an ‘and’. At the end of July, the Department has finally got round to producing a consultation paper on how the proposals in the Bill will actually be implemented. You might have missed it by going on holiday, but it does mean that secondary legislation will now be prepared before 2018 is actually upon, us, but only just. And the good news is that the Department has set out the level of attainment that will be expected.  Landlords will have to improve their properties up to band E – not great, but since private rented properties are disproportionately to be found at the very lowest of the energy efficiency bands, in itself a real advance.

The second of the ‘buts’, however, remains firmly in that box. The Department has essentially bottled it as far as making the proposal into anything like a comprehensive measure covering all rented properties, and is proposing that the legislation only covers whole house lets. This means, not to put too fine a point on it, that the majority of properties will probably now entirely escape the requirements of the legislation. And if you are a prospective tenant looking to rent just part of house, you can be assured that your dwelling will remain just as draughty and fuel inefficient as, statistically at least, it will always have been. This wasn’t the intention of the legislation and I can only think that someone, somewhere has succumbed to a lot of pressure from some significant interests to drop the idea that the new laws might actually work properly.

I’ve been trying to get this omission plugged for some time now and I recently put a mini bill into the system with the specific aim of placing words onto primary legislation that ensures that all lets have to be included in any minimum standards programme. Unfortunately it is very unlikely to make any progress, so it is really down to the Secretary of State to change his mind about the omissions in the proposals for implementation. If you see him over the next couple of weeks, perhaps you can mention it to him…

This article first appeared in Business Green

Making community energy strategies work

Two cheers go to DECC for publishing its Community Energy Strategy.  It’s been long overdue; energy production and energy saving at community level has long had enormous potential. Indeed, other parts of Europe are far ahead of us in this context. For example, in Germany almost 50% of energy generating plant is owned or run by local groups. This makes for an entirely different landscape as far as the generating market is concerned, as well as providing resources and income for local communities themselves as a result of those generation activities.  And you could of course say that we’ve been through an extended period of reduction in what might be regarded as community energy. After all, what were the original town gasworks if not a long-lost version of this very concept? Indeed up to the end of the last war, local authorities in the UK generated almost 50% of their income from trading up, mostly through the aforesaid gas works and local electricity plants.

To some extent, DECC’s Community Energy Strategy follows the increasing trend of communities beginning to take matters into their own hands as far as local energy is concerned. But it also puts the emphasis on newer technologies – running small scale onshore wind farms and securing the proceeds for local use; installing community level solar plants; developing local purchasing schemes to benefit from bulk energy  supply in off grid areas and beginning to develop local district heating schemes that also generate electricity through CHP plants.  As the Secretary of State describes in his forward to the report, with a really fair wind we could see a substantial return to a localised energy landscape, with the possibility of schemes involving local communities supplying enough electricity for 1 million homes by 2020. That level of provision would take community energy out of the niche into which many ‘exemplars’ of community action are often placed in – interesting but inherently small time – and into the realm of significant. Furthermore it would also secure contributions to the national energy balance.

The report also mentions the possible role of the community in the other side of the equation – energy efficiency and demand side reduction – and the role that communities can play in developing their own programmes of mutual benefit through saving energy.  I personally think there is more than a little mileage in the concept of local authorities looking to be the providers of retail energy supplies. Imagine perhaps that you get your dual-fuel bill from a consortium of local towns that have together secured the supply to put into the grid.  It wouldn’t be desperately difficult to do and would secure the proceeds of energy supply for local purposes. Essentially it would finally take us back, almost full circle, to the old town gas works supplying their towns.

So there’s much to praise about the new strategy if it really can get momentum into the process. And, as is apparent, this won’t come solely from the pretty modest level of funding that might come forward. Rather, it is easing the ability of local communities to take action, supporting them when they do, and placing in their path the opportunities for securing successful partnerships that will enable local projects to fly.

That’s not quite the end of the matter though.  I can’t help thinking that for any sort of community energy strategy to work, there needs to be some joined up policy between DECC, local government institutions, and the Treasury (to name but three departments) to ensure that the landscape really is propitious. One very recent example which evidences the need for such cohesion well comes to mind.  The Community Energy Strategy tells us that the department is going to have ‘a programme of engagement with communities and local authorities in the Energy Companies Obligation’. But wait, haven’t we heard that somewhere before?  A number of local authorities and local communities HAVE been very engaged in ECO, to the extent that they were doing exactly what the strategy says – getting local partnerships together, securing external funds, building local interest, and easing the path for large schemes of community energy efficiency uplift – using ECO. The local authority in Southampton (which is my constituency) has, among a number of others, enthusiastically trodden that path.  Southampton was about to sign up for a programme that would have secured the cladding of hundreds of hard to treat homes, to the immense benefit of local residents. But then the Prime Minister ‘reviewed’ ECO, as I predicted he might in the last column I wrote here. The result of that review has been that such schemes up and down the country have seen partners pull out because they are no longer obliged to bank the carbon savings they thought they were obliged to over the period originally stipulated.

The net result of this is that some very bruised local communities and local authorities may not go near such schemes again because of the mess they now find themselves in as a result of believing that such community energy projects could work. It’s all well and good to have a strategy but it will only be as good as what follows from it. More work to be done here I think.

This article was first published in The Environmentalist magazine.

RIP ECO

Obscure reference: this one’s still there…

Obscure reference: this one’s still there…

There’s a major catastrophe under way and, as far as I can see, with a very few honourable exceptions, no-one’s reporting on it, but it’s a catastrophe nevertheless. The hon. exceptions are the estimable Inside Housing and the Guardian (only they seem to have moved on).

The catastrophe I’m talking about is that the whole programme of solid wall insulation as we know it, which is supposed to be advancing via the Energy Companies Obligation, has almost completely disappeared before our eyes.  And it’s a catastrophe for the simple reason that Britain has some of the least energy efficient housing in Europe. So much so that if we do not seriously get to grips with our collective home energy efficiency now, then we severely lessen any chance we might have to reduce overall carbon emissions to anything like acceptable target levels by the 2030s. And of course it isn’t just me saying that;  the Committee on Climate Change is clear that to meet the terms of the third carbon budget (early 2020s) we need to have externally clad (or otherwise insulated) something like 2.2 million homes. By the fourth budget (assuming the government doesn’t abrogate its commitment to it) some 3.5 million homes will need to have been treated.  Last year, as DECC records, about 16000 such homes were clad, making it only a matter of …ooh…230 years or so before the 2020s target is reached.

And over the past few weeks it’s become apparent that any hopes that we might have had of some progress, any progress, being made in that fundamental task are being dashed. This is because energy companies are pulling out of what could have been the white hope of ECO; the local area-based schemes that had been developed in good faith by local housing associations and local authorities across the Country.

Because ECO placed an obligation with a challenging level of carbon reduction on energy companies up to 2015, some solid –looking partnerships had developed between social landlords, local authorities, energy companies and others. The aim of such partnerships was to discharge parts of those obligations through the treatment of thousands of solid wall and hard to treat properties using an area based approach.  In Southampton a deal to begin such a programme was at an advanced stage; deals had been struck, partners agreed, programmes designed at no little cost to the local authority, and residents had been informed that cladding and a potential considerable reduction in their bills was soon to arrive.

But now as a result of the lengthening of the ECO’s ‘commitment’ and the emptying of the CERO part of the scheme to fund easier to achieve treatments, e.g. loft and cavity foam measures (which should have been the province of the Green Deal), virtually no area based schemes, as far as I can see, are now standing. The energy companies, being no longer obliged to work at the speed or to the extent that they previously were, are simply pulling the plug on their contributions.  Technically, the ECO extension until 2017 means that companies will now be obliged to only insulate around 100,000 homes by 2017, instead of the target of about 180,000 by 2015. Because of the way the ECO obligation is calculated, energy companies can now plump for cheaper measures in order to discharge their obligation.  Bearing this in mind, I would be most surprised now if anything like that number of properties are actually insulated.

It might be worth reminding ourselves of what was put forward as a real prospectus for ECO less than two years ago. Then the government said:

One of the major challenges for the ECO and Green Deal is the changing nature of the types of measures that need to be delivered. CERT, by focusing on delivering low-cost measures, has been very successful at installing simple loft and cavity wall insulation. From 2012 Green Deal finance will offer a route to deliver the remaining low cost loft and cavity wall opportunities at no upfront cost and without need for subsidy. However to meet our carbon budgets cost effectively, we will need to go far beyond just lofts and cavity walls, and move towards the next most cost effective measures.

However, some 7 million of the most difficult to treat homes require some form of solid wall insulation. The Committee on Climate Change recommended in their 2009 Report, ‘Meeting Carbon Budgets – the need for a step change’1that 2.3million solid wall homes will need to have taken up solid wall insulation by 2022 in order for the UK to be on track to achieve carbon budgets. ECO support for these properties will help drive this market, and the supply chain to fulfil it, enabling us to unlock the resulting carbon savings more cost effectively.

Now the Green Deal is on life support and ECO is in ruins. Quite a catastrophe really.