SC(3) CR-R16

Sustainability Committee

Inquiry into Carbon Reduction in Wales: Residential Carbon Reduction

Response from Home Energy Conservation Act (Wales HECA)

Introduction & Background

The 1995 Home Energy Conservation Act (HECA) provides a focus for council activity within the field of domestic energy efficiency. The Act requires councils as energy conservation authorities to:-

• Submit as initial report identifying those energy conservation measures the authority considers practicable, cost effective and likely to result in significant improvement in the energy efficiency of residential accommodation in its area.
• Report progress made in implementing the measures set out in the initial report
• Make significant improvements (interpreted to mean 30%) in domestic energy efficiency over 10-year period from April 1997.

Neither the Act nor accompanying guidance placed a statutory duty on councils to achieve efficiency improvements.

In 2004, as limited progress had been made towards the target, the Welsh Assembly Government entered into Policy Agreements with all 22 councils.

Policy Agreement Prescription Measure 7 (b) sets councils a specified percentage target for improving domestic energy efficiency for the period April 1997 to March 2007 i.e. between 12-14%.

Un-hypothecated fiscal incentives were associated with the achievement of these targets which stimulated increased activity and resources to be directed towards the home energy conservation agenda. However, it became clear as the deadline approached that as long as councils were working towards the target, the money would still be given to authorities regardless of their achievement. This has lead to failure to meet the initial objective.

Home Energy Conservation Officer

Local authorities across Wales handed this HECA responsibility to existing staff e.g. Energy Managers, Private Housing Officers, Public Hosing Officers etc. Very few authorities felt the agenda warranted a full time member of staff. The Policy Agreement targets with associated fiscal incentives drove some authorities to employ a full time member of staff but as you will see on page  4, few authorities have fully embraced the role.

Wales Home Energy Conservation Association

The Wales Home Energy Conservation Association is a forum of HECA Responsible Officers and key stakeholders which meets quarterly to address and share new research and best practice within the field of Home Energy Conservation.

The aims and objectives of the forum are:-

1. To develop a framework for partnership in energy efficiency, in particular for responding to the requirements of the Home Energy Conservation Act (HECA) and Local Agenda 21 in Wales.

2. To provide a forum for information dissemination and training.

3. Reduce energy consumption in the home.

4. Raise awareness of the benefits of energy saving measures.

5. Improve living conditions through energy efficiency.

6. Support and facilitate the development of renewable, low carbon and microgeneration technologies.

7. Elicit support and assistance from the community to maximise funding and resources.

The forum is in an experienced and knowledgeable position to support and provide information and guidance to the Assembly on what needs to be created and modified to deliver sustainable and increased carbon savings within the residential sector.

Response to General Questions

1.0 Is the proposed 3 percent annual reduction target by 2011 "In areas of devolved competence "sufficient to enable Wales to make its full contribution to meeting UK- wide targets? If not, what targets should be put in place.

The Wales HECA Forum strongly supports a 3% reduction in Carbon emissions from the domestic sector by 2011 and considers it sufficient to enable Wales to make its full contribution to meeting UK-wide targets. Serious consideration however must be given by the Assembly to securing resources and financially supporting such a target otherwise it will fail.

3% is extremely challenging within the current framework of time and resources allocated to this agenda. The average improvement in energy consumption and carbon emission reduction from the domestic sector during 2005-2006 was 1.5%.

This 1.5% has been calculated using dated software which does not give an accurate representation of energy consumption and carbon emissions. The baseline for comparison was estimated 10 years ago and no consideration has been given to the additional energy consumption of new build for the last 10 years or the explosion of electronic gadgets which has increased electricity consumption in the domestic sector significantly.

A key important consideration for future energy and carbon savings in the domestic sector are the 'Quick Wins’. Loft and Cavity Wall Insulation is very cheap, quick and easy to install and energy saving activity over the last decade has been focused on this. Empty lofts and cavities are now a diminishing return and what is left will not contribute significantly to the proposed 3% target. Support for other energy saving measures i.e. low carbon, renewable and microgeneration technology is the only way forward for delivering real energy and carbon savings.  

The graph below shows the amount of time each Local Authority in Wales allocates to Home Energy Conservation activity. Bearing in mind this has only delivered an average of a 1.5% improvement per annum, it is clear that the National Assembly should be encouraging local authorities, via mandatory targets and fiscal incentives, to employ a Home Energy Conservation Officer to coordinate activity, shape policy and help deliver the increasingly challenging targets.

2.0 Should the emission reduction target be based on Welsh consumption , or production ,or both (i.e. Should it take into consideration the Carbon Dioxide generated in Wales (production), or the Carbon Dioxide emissions that Wales’ residents are responsible for, regardless of their source(consumption)?

The residential emissions reduction target should be based on consumption rather than production as under current powers, Wales does not have any control over energy production.

Production is also an important area and emissions should be recorded, monitored and reduced if possible but in our capacity as a network of Home Energy Conservation Officers, it is difficult to comment on how the National Assembly should drive this.

The current method of measuring improvements in domestic energy efficiency for Home Energy Conservation Act (HECA) compliance is inconsistent, inadequate and in many cases incorrect. Carbon reductions are estimated based on the saving equivalent of measures installed deducted from a baseline figure estimated 10 years ago. The contribution from new build is not accounted for nor is the boom in the electronic equipment industry. It is also impossible for the Home Energy Officer to record all improvements in an authority over a year as many are not registered in anyway.

Basing targets on, and measuring, consumption would alleviate all these reporting complexities and deliver a realistic picture of consumption and emissions.

The Department of Trade and Industry currently collects energy meter readings and fuel sales across the UK and DEFRA converts this data into carbon emissions for each LA. This consumption data is likely to become more available and accurate with the growing emphasis on 'display devices’ and 'smart meters’ for domestic consumers and hence could be used as real and actual monitoring. There are very few alternative methodologies for getting an accurate picture of real consumption and associated carbon emissions.

Response to specific questions on household emissions of Carbon Dioxide.

3.0 What particular challenge does Wales face in reducing Carbon Dioxide emissions from households, and how can these challenges be overcome?

The characteristics of the welsh housing stock leads itself to be a challenge within the energy and carbon conservation arena i.e.:-

• 32% of Welsh Housing Stock have Solid Walls which are difficult and expensive to insulate.
• 37% of Welsh Housing Stock is off the gas network which means householders must use more carbon intensive and expensive heating fuels i.e. oil and electricity. Alternative low carbon technology is available but the market is not mature enough for prices to be affordable. 90% of all new build in the much colder countries of Scandinavia install heat pumps as the main heating technology. Although these technologies consume electricity, they are considerably more efficient and will halve carbon emissions in comparison to oil and electric heating systems. They are also much cheaper to run. A high capital cost is what is preventing the uptake of these technologies.

Some authorities also have a higher portion of these 'hard to heat’ properties e.g. Gwynedd has:-

• 60% solid walls
• 50.8% do not have access to mains gas
• 44% of Gwynedd households earn less than £10,000 per annum which equates to high numbers of fuel poverty.

Hence, there is also an uneven playing field amongst authorities to achieve targets i.e. a predominantly urban authority with younger housing stock e.g. Flintshire can deliver carbon savings a lot easier through cavity insulation and installing efficient gas central heating systems.

As already stated, a major challenge in delivering a 3% target is the diminishing numbers of the quick and cheap wins i.e. cavity and loft insulation. Although a considerable amount of empty lofts and cavities still exist, they are not sufficient to reach this 3% target. This insulation drive is at its peak and a new and bolder framework is needed to deliver the 2011 3% challenge.

Permitted Developments - Although TAN 8 encourages Planning Departments to facilitate the installation of renewable energy to mitigate against Climate Change, applications for the most unobtrusive of technologies e.g. solar thermal may be being rejected as Planning Departments are unsure and hesitant. The current consultation on permitted developments is a positive step and the forum would like to stress the importance of ensuring the application process for low carbon technologies is simplified. It is also important that the Assembly urges planning departments to embrace these technologies and assist in their facilitation. Large parts of Wales are National Parks and have even tighter restrictions with regard to these technologies. The Assembly should encourage National Parks to, within reason, accept and install these technologies as the responsibility to mitigate against Climate Change lies with us all.

The UK Governments Low Carbon Building Programme is a grant scheme which provides a financial incentive for householders to install renewable and low carbon technology. The scheme has been running for approximately 2 years and 4 months and the number of domestic applications received are shown below:-

A high portion of householders who install low carbon technology will go through the LCPB Scheme hence these statistics can be considered to be an accurate reflection of the numbers and rate of low carbon and renewable technology take up in Wales. It is interesting to high-light, adjacent to these figures, the Welsh Assembly Governments Microgeneration Action Plan targets for Wales:-

Clearly the Low Carbon Building Programme alone is not enough of an incentive to drive the take up of low carbon microgeneration technology to deliver the Assembly Governments ambitious targets. The Wales HECA Forum believes an additional top up grant would stimulate increased take-up either directly from the Welsh Assembly Government itself or by encouraging local authorities to do so. Bringing the cost of these technologies down so that their cost has a realistic payback period would make these low carbon heating and electricity options more attractive to the public.

A more carbon robust framework is needed for New Build in Wales. The Assembly’s Sustainable Building Projects is an encouraging step but immediate steps need to taken to ensure this aspiration becomes a reality in terms of devolving the Building Regulations and adopting and making mandatory the Code for Sustainable Homes.

A major challenge for Wales is the recognition and priority Local Authorities give to the home energy and carbon agenda. As previously noted, only 4 authorities in Wales, under 20%, have a full time Home Energy Conservation Officer to coordinate the wealth of activity and deliver these targets. With Climate Change and Energy being a national priority, it is not being reflected consistently at local government level, this must be addressed. Local Authorities are in a strong and influential position to drive and shape public opinion and activity within this field and should be encouraged, via fiscal incentive or mandatory targets, to do so.

4.0 To what extent has the Welsh Assembly Government been successful in utilising the powers available to it in order to reduce household Carbon Dioxide emissions?

Policy Agreement Targets 7b and associated Policy Incentive Grant was an excellent driver and lead to some authorities recruiting a full time home energy officer e.g. Powys Council. Activity diminished once it was understood that the targets were not mandatory and grants would still be given as long as authorities were making an effort to reduce energy consumption.

The Home Energy Efficiency Scheme has been successful in tackling both Fuel Poverty and Carbon Emissions through its contribution to insulation measures. As previously noted these quick wins are a diminishing return and focus needs to steer towards less carbon intensive heating systems. Oil central heating has recently been introduced as a measure which is a carbon intensive fuel. Low Carbon Technologies exist which are viable alternatives to oil central heating and the Assembly has the opportunity to simultaneously address two major issues i.e. Fuel Poverty and Carbon Emissions by introducing solar thermal, ground and heat pumps to the scheme.

The Welsh Assembly’s policy on only supporting new build housing association properties if they reach Eco-homes standard of Very Good and subsequently Excellent has been an excellent example of the Assembly utilising their powers and delivering results.

Planning policy is moving towards encouraging carbon reductions through the planning process, but needs to be more robust.  

The recent consultation paper on proposed permitted development rights for microgeneration technologies is encouraging.

5.0 Could alternative targeting of Welsh Assembly Government financial resources lead to greater household emissions reduction than is currently being achieved? If so where could additional resources lead to greatest impact? (Please provide detail to support your evidence).

To deliver the ambitious targets set out in the Wales Microgeneration Action Plan and to deliver the 3% annual improvement more resources need to be directed toward this field otherwise the target will not be achieved.

Hypothecated fiscal incentives for Local Authorities to deliver energy reduction i.e. a similar framework as the Policy Agreements was in principle an effective driver however the Assembly would need to ensure

the targets were taken seriously by making them mandatory. There was no real penalty from the Assembly for non-compliance with this previous target hence very few authorities achieved the 12-14% improvement. It is also essential that grants provided from the Assembly for the achievement of such targets be hypothecated as to create a sustainable pot for long term activity within the field. The previous Performance Incentive Grant money was swallowed into general authority budgets and little money re-directed back to the main cause.

Introducing low carbon, renewable and microgeneration technology as part of the HEES Programme would be an effective way of tackling two major issues simultaneously and sustainably i.e. carbon reduction and fuel poverty.

Targeting the Fuel Rich is also an important action as this group tend to be the most wasteful. By providing grants for low carbon technology so that their cost falls within the timeframe of a payback period would stimulate the market.

The 'Feed in Tariff’ scheme cited below is a proven, effective and sustainable methodology for supporting the development of the industry. An alternative to directly funding the capital installation of these technologies could be to support the householder long term with an Assembly subsidy for contributing green electricity to the grid (see full example below).

6.0 What examples from other administrations (devolved, UK, and overseas), where other means have been used to achieve reductions in household Carbon Dioxide emissions, could be adopted in Wales under current powers?

England’s Code for Sustainable Homes

The forum encourages the adoption of the Code for Sustainable Homes, as used in England, to set targets for house building in Wales. The Code provides a framework for step change towards the 2011 Carbon Zero Aspiration. This code needs to be adopted quickly and targets made mandatory as large numbers of new build are planned in the near future with significant carbon potential. The document - 'The future of the Code for Sustainable Homes - Making a rating mandatory’ is currently out for consultation by Communities and Local Government and the resulting document will be a useful tool for the Assembly.

Scotland’s Low Carbon Technology Grant Scheme

Scotland have established their own renewable energy scheme to support householders; the Scottish Community and Householder Renewables Initiative (SCHRI). The Forum urge the Assembly to consider a similar scheme, one which is an improvement on the Low Carbon Building Programme which, we demonstrated earlier is incapable of stimulating sufficient uptake to deliver the Welsh Assembly’s Microgeneration Action Plan ambitious targets.

Germany’s Feed in Tariff

This tried and tested model would lay the foundations for a low carbon economy in Wales.  This scheme would stimulate the market for Renewables, lower fossil fuel consumption, lower carbon emissions, help eradicate fuel poverty, reduce pressure on the national grid and would give the industry the certainty of long-term demand thus leading to more jobs here in Wales and a stronger economy which is not so reliant on resources from geopolitically sensitive countries.  The following summary is taken from an article from the Guardian Newspaper.

"Germany has 200 times as much solar energy as Britain. It generates 12% of its electricity from various Renewables, compared with 4.6% in Britain. Its created a quarter million jobs in Renewables - a number that is growing fast. Britain has only 25,000, a number that represents the amount of jobs created in the industry in Germany in the past year alone.”

"The secret of Germany’s success is the "feed-in tariff” (FIT). Anyone generating electricity from solar PV, Wind or Hydro gets a guaranteed payment of four times the market rate - currently about 35p a unit - for twenty years.”

"This reduces the payback time on such technologies to less than 10years and offers a return on investment of 8-9%. The cost is spread by generating companies among all users and has added about one cent/kwh to the average bill, or an extra €1.50 (£1) a month.”

"The Germans introduced the FIT in 1999 and tweaked it in 2004, since which time activity has gone mad. FITs have now been adopted in 19 EU countries, and 47 worldwide, but not in Britain. German renewable firms are now world beaters and the German economy has been strengthened, not weakened, by a rush into Renewables.”

Guardian Unlimited (July 24^th 2007). Germany sets shining example in providing a harvest for the world [online].  Available: http://www.scenta.co.uk/Nature/1701647/germany-sets-shining-example-in-providing-a-harvest-for-the-world.htm [accessed 19th September 2007].

Uttlesford Extension Energy Efficiency Policy

Uttlesford District Council requires cost-effective energy efficiency improvements to be carried out on dwellings when they are extended. In this way, the extra energy that is used and carbon dioxide that is produced by the extension is compensated for by improvements elsewhere. As well as benefiting the environment, this requirement reduces energy bills and improves comfort. Undertaking these measures at the time an extension is carried out can also save money on their installation. UDC is the first local authority in the United Kingdom to introduce a requirement of this kind.

The requirement has been introduced via the planning system, through the Supplementary Planning Document on Home Extensions (adopted November 2005) and all planning approvals for home extensions arising from applications submitted after 1 April 2006 carry the 'Energy Efficiency Condition (C8.28)' which states:

"Within four weeks of the date of the commencement of the development hereby permitted or other such period as agreed by the local planning authority details of Cost Effective Energy Efficiency Measures to be carried out to the extended dwelling shall be submitted to and approved in writing by the local planning authority. These measures shall be implemented during the construction of the development, unless otherwise previously agreed in writing by the local planning authority.”

Although this is a planning condition, UDC building surveyors provide onsite advice on how to comply with the condition, as they do for compliance with building regulations.

7.0 In the context of the Government of Wales act 2006, which further means of reducing Carbon Dioxide emissions from households could only be achieved with the introduction of further legislative competence for the National Assembly for Wales.

Welsh Assembly Government Home Energy Efficiency Scheme

The Wales HECA Forum strongly recommends that the measures delivered through the Home Energy Efficiency Scheme be reconsidered. Currently all Energy Utilities are committed through their 'Energy Efficiency Commitment (EEC) 2005 - 2008’ to saving energy in fuel poor homes. In April 2008, EEC is to be replaced by the 'Carbon Emissions Reduction Target (CERT) 2008 - 2011’ which is a similar framework but with a doubling of energy saving targets to be achieved in the fuel poor sector. There is no need for doubling up of efforts by both parties. The Welsh Assembly Government through the HEES Scheme and all Energy Utilities are competitively 'fishing in the same pond’ for a diminishing

number of properties which still need insulation. The National Assembly does not need to fund measures that will be financed by private companies i.e. loft and cavity wall insulation. It is not an efficient use of WAG funding.

The HEES Programme should predominantly focus on central heating measures and low carbon technologies and leave the Energy Utilities to fulfil their social responsibility without competition from the Assembly. This will lead to a greater number of energy saving measures being installed in Wales.

The HEES Programme should however, continue to provide discounted and free insulation for the over 60’s and over 80’s respectively as the energy utilities do not currently provide for this vulnerable group.

The Assembly, through the new Government of Wales Act, is in a strong position to redefine the eligibility criteria for the Home Energy Efficiency Scheme which would ensure households in genuine fuel poverty receive this vital assistance and lead to further carbon savings. Fuel Poverty is defined as 'a household which spends over 10% of its income on keeping the home sufficiently warm’. The eligibility criteria for the HEES scheme are a select list of certain benefits. Households who do not receive these benefits, but who are genuinely fuel poor are very much neglected at present. This issue has been recognised and one scheme in Wales has developed a solution which assists this vulnerable group. The Warm Wales Scheme, currently operating in Wrexham and Neath Port Talbot use the Home Energy Efficiency Scheme eligibility criteria to refer vulnerable individuals but they also carry out a more detailed analysis which examines a householder’s income to determine whether they are above or below the 10% threshold of Fuel Poverty. Of all those assessed 16% were deemed to be Fuel Poor however the software used calculates fuel costs based on 2001 figures. Fuel costs have risen significantly since

then and the true Fuel Poverty percentage is more likely to be above 20% based on current costs. This has lead to households receiving assistance for energy saving measures which they would not have been able to afford otherwise and hence has delivered additional carbon savings.

The HEES Programme should also address older inefficient central heating systems. Currently a system has to be 'broken down’ to be replaced and then that HEES Plus eligible householder is not prioritised before insulation applications and has to wait for anything up to 22 weeks which is unacceptable. The HEES Programme should look at supporting the installation of new boilers and central heating systems when the current system is over 20 years old and the householder is HEES eligible. This would ensure that the vulnerable householder would not have to wait for up to 22 weeks without central heating when their boiler eventually breaks down, their bills would be smaller and carbon reduced as the modern system would be significantly more efficient i.e. an improvement in efficiency from 70% to 90%.

To deliver the Welsh Assembly’s aspirational target of zero carbon new build by 2011, it is essential that the Building Regulations are brought into the legislative competence of the Assembly which would allow for more stringent regulations and a framework of interim targets to take Wales through to its Carbon Zero goal. Such powers would also enable authorities to lay down more strict refurbishment and extension policies as demonstrated in Uttlesford Council, Essex.

Permitted Developments - TAN 8 states that all Planning Authorities should be encouraging renewable and low carbon technologies however few authorities in Wales have modified their planning laws to facilitate the installation of low carbon technology. Through the Government of Wales Act 2006 the Assembly has the ability to streamline this Planning Application process which will lead to greater carbon savings. The Welsh Assembly Government’s Microgeneration Action Plan will not be reached without simplifying the planning process for those eager to minimise carbon.  

8.0 If specific Carbon Dioxide emissions targets are to be set for Wales should those targets be subdivided into shares by sector? If so, what share of the total should reductions by household comprise?

The domestic sector in the UK is responsible for 25% of all carbon emissions and any subdividing of targets should ensure that household reductions equate to at least 25%.

There is also the argument that energy saving in the domestic sector is 'easier’ with the more advanced range of energy and carbon saving solutions available and hence higher weighting could be given to carbon savings in the domestic sector. For instance, with the rural nature of Wales and its relatively poor transport network it may be easier to make savings in the domestic heating and electricity sector than to make savings from individual transport.

The Wales Home Energy Conservation Association would be happy to further discuss and enhance on any of which is contained in this response. We would be keen to work with the National Assembly to develop a framework for residential carbon reduction in Wales. Please do not hesitate to contact us to discuss:-

Nia Prys-Williams BSc
Home Energy Conservation Officer
Energy Unit
Flintshire County Council
County Offices
Chapel Street
Flint
Flintshire
CH6 5BD

T: 01352 703766
M: 07711 437928
F: 01352 703786

Nia_prys-williams@flintshire.gov.uk