Intervention needed to kick-start ECO

 Intervention needed to kick-start ECO, claims insulation industry

By Alex Marshall – Environmental Data Services
28 August 2013 – 12:58 BST

The government must urgently put in place measures to boost the Energy Company Obligation (ECO) energy efficiency scheme or it will fall far short of expectations, according to the National Insulation Association (NIA).
DECC should agree a “robust delivery plan” with the seven energy suppliers obligated under the scheme and the insulation industry, said Neil Marshall, the NIA’s chief executive.

This plan must “… include an agreed timeline for the volumes of cavity wall, solid wall and loft insulation to be installed in fuel poor and “hard to treat” homes…”, Mr Marshall said. DECC should also offer financial incentives to councils and housing associations to ensure they have properties upgraded.

Mr Marshall made the comments after DECC issued statistics showing take-up under both ECO and the Green Deal which appear to be levelling off. Under ECO, energy suppliers have to improve the homes of those in fuel poverty as well as hard to treat properties.

The scheme started in January and runs until April 2015. Mr Marshall said current take-up suggests just 100,000 cavity walls, 135,000 lofts and 9,500 solid walls will be insulated a year. This would be 65% below the amount of cavity wall and 90% below the number of solid wall installations needed according to DECC’s own impact assessment.

The Committee on Climate Change has said there should be 600,000 cavity walls, 1.2 million lofts and 80,000 solid walls insulated a year, although that includes all activity not just ECO.

“Performance is nowhere near what we need to be doing,” said Mr Marshall. “I’m concerned far too much emphasis is being put on the Green Deal and what’s happening with ECO is being missed.”

He said it was wrong for the government to hope that performance would improve towards the end of the scheme. “Even if it does, it’s not sensible to do two year’s work in six months.”

The NIA is not the first body to criticise ECO. Centrica and Npower, amongst others, have repeatedly warned of its high cost, caused by the difficulty of finding properties to upgrade.

On 11 August, Centrica’s chief executive Sam Laidlaw told The Financial Times that it was costing his firm up to £120 per tonne of CO2 saved compared to £30/t under its predecessors, the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP).

“We want to sit down with the government and see whether this is actually the most cost effective way of reducing customers’ carbon emissions [and] whether it can be changed to bring down costs,” he said.
Mr Marshall said finding homes to upgrade would not be an issue if housing associations and councils were coming forward with blocks of properties to upgrade. “If you invest in the proper amount in marketing, you’ll find them,” he said.

But housing associations are currently reluctant to come forward because they have to contribute to the costs of works unlike under past schemes. “Some are preferring to wait a year in the hope then they might not have to,” Marshall said.

DECC could overcome that by either putting a requirement on them to come forward or establishing a limited fund to cover the costs for early actors.

The NIA is calling for several other actions to boost the scheme. These include a “high profile, government-backed, communications programme” and simplifying ECO’s rules. The latter could include lowering the amount of evidence needed to prove compliance.