3 November 2010: A good Green Deal for the UK

Yesterday, Chris Huhne, the UK Energy and Climate Change Secretary, unveiled some more details of the Green Deal, the scheme aiming to get many more UK homes properly insulated. Many of the UK’s existing buildings are very inefficient and, at the same time, many more people suffer from fuel poverty in the UK than in Scandinavian countries with colder climates.

The Green Deal will involve an independent energy survey of homes and business buildings, giving advice on the best energy efficiency options. Those wanting to take up the options will then be offered finance, to be provided by a range of accredited providers, which will be repaid through savings on energy bills. Measures will be installed by appropriately-qualified installers.

Good accreditation is crucial. There are many cowboys operating in energy efficiency. An Australian scheme similar to the Green Deal had to be abandoned because so much of the work carried out was poor quality. When I tried to get a list of decent double glazing companies to do work at my kids’ school, I was told by two government agencies, the Carbon Trust and the Energy Savings Trust, that they weren’t allowed to give such a list because, being publicly funded, they couldn’t recommend private companies. I wasn’t asking to be told which company to choose, just a list of companies that were trustworthy and would do decent work. So, it’s good that the government now accepts the importance of accreditation.

The Green Deal will require legislation. However, there is no great danger that it will fail to get through parliament, since all three major parties have similar policies on energy efficiency.

Huhne said that by 2015 up to 100,000 Green Deal workers could be employed. This is correct. Energy efficiency work is labour-intensive. However, the words “up to” and “could” are rather important here. Assuming that the energy bill is passed by parliament, its effectiveness will depend on how many homes and businesses then take advantage of it. It is a good carrot, but whether it will be enough to get many existing buildings upgraded without use of any stick remains to be seen.

The DECC press release says that:

“Were all 26 million households to take up the Green Deal over the next 20 years, employment in the sector would rise from its current level of 27,000 to something approaching 250,000.”

(See DECC: Huhne heralds green homes revolution.)

Sounds impressive, but all 26 million won’t. There’s quite a big hassle factor for those not threatened by fuel poverty. The press release does mention one possible way in which the Government will use a stick:

“The forthcoming Energy Bill will create powers allowing any tenant asking for reasonable energy efficiency improvements to receive them from 2015 onwards. It will also allow local authorities, to insist that landlords improve the worst performing homes.”

(See DECC: Huhne heralds green homes revolution.)

This is definite progress. Climate Answers recommended this approach in December 2009 (see 1 December 2009: Controlling fuel poverty during the transition). If a tenant asks, the landlord should be required to act. When Ed Miliband was Energy and Climate Secretary, he published a paper saying that the Labour government would consult on regulating the private rented sector. I’ve been told by several people who were involved in the preparation of this paper that he’d wanted to go further and promise regulation, but other departments – notably the Treasury – had blocked him. However, Ed Miliband had more control over the Labour manifesto, which he drafted, so this promised regulation. The most worrying aspect of yesterday’s announcement from the coalition government was a statement in the small print about the private rented sector:

“Whether or not we use these powers will be subject to a review.”

Sounds like yet more consultation. Why is a review necessary? Everyone knows that many private rented properties are very energy inefficient. And why won’t the powers be used before 2015? That means tenants have to get through five more winters. In 2009, the Swedish government passed a law requiring that a property is energy efficient before it is rented out or sold. It shouldn’t take the UK six years to catch up with Sweden.

Despite these criticisms, yesterday’s announcement was good news overall. Huhne made the announcement while visiting a British Gas site. This was a well-chosen venue. British Gas announced in September 2010 that it would invest £30 million in installing energy efficiency measures in homes at no up-front cost, with repayments made by savings in the customers’ energy bills. The head of Centrica (of which British Gas is part), Sam Laidlaw, made a strong speech at the time calling for the energy industry to have “a fundamental change of mindset”. He accepted that “we are not there yet”, but the speech suggests that personally he is there. He went on to say that the scale of the challenge:

“… means a company like British Gas must be as much about energy saving as it is about energy supply. Decarbonising our power supply will get us a long way towards cutting carbon emissions, but it is not enough. We need to look closer to home. Britain’s households are responsible for over a quarter of the UK’s CO2 emissions. Cleaner electricity can go some way towards cutting this. But it won’t make a difference to the gas we use to heat our homes and cook our meals. We are already addressing domestic emissions by improving the energy efficiency of new homes, with sharply improved building standards. But we can’t ignore our existing housing stock. Two thirds of homes today will still be lived in by 2050. For most of us, today’s home will also be the home of the future. Yet their energy efficiency is the worst in northern Europe. There are still over 4 million inefficient boilers still in the UK. Six million homes are without cavity wall insulation. Seven million without proper loft insulation. Just putting this right could cut the carbon footprint of the average British home by around 20%.”

(See Centrica: Transforming the Energy Sector.)


1 Comment

  1. jonathan boswell

    Presumably this is an initial comment. Clearly it leaves aside more radical ideas proposed by FOE, NEF, Green New Deal, Green Alliance, Tim Yeo etc which suggest the new bill appears woefully inadequate. Is this with an eye to a role in helping towards detailed strengthening amendments in the bill ? Your comments on regulation of the private rented sector seem very apt. Hopefully your future comments will cover key issues such as (1) vagueness over key aspects of funding – NOTHIN ON INTEREST RATES (!) to be charged on the loans or Green Bank roles if any e.g. in underwriting & investment projects, (2) recruitment & employment of the 100,000 Green deal workers, (3) role of local authorities, not-for-profit & social enterprises, (4) quantified targets for homes to be covered in the owner-occupied, private rented & social housing sectors.

Leave a comment

(all comments are subject to moderation)

Comments are closed.