Tuesday, 27 September 2011

Green Deal - The challenge from Kirklees Warm Zone.

Article produced for the Heating and Hot Water Industry Council Journal

How compelling an offer will Green Deal be?
 With the Government’s Green Deal a year away it is a good time to look back at ‘what works’ in delivering large scale energy efficiency programmes and think about how Green Deal might match, or hopefully surpass, the very best practice.

Kirklees Warm Zone is something I know a lot about. I proposed the amendment that made this insulation scheme free to private householders back in February 2007. It has since gone on to win awards, be regularly referred to by ministers and has been held up as a beacon of best practice. A strong team of people worked on it and it is backed by years of experience of project managing energy efficiency programmes by the Council. DECC regularly updates statistics for local authority insulation levels and Kirklees remains at the top of that list with the highest proportion of housing stock insulated out of all local authorities in the country. The properties that didn’t receive insulation either already had it installed, were hard to treat with conventional insulation or there were access difficulties.

There’s plenty of impressive statistics in the Kirklees Warm Zone final report from the 3 and ½ years that the programme ran for:

• 51,155 properties received insulation (either cavity wall , loft insulation or both measures)

• 16,111 households received Benefits advice

• £1.6 million new benefits entitlement levered in (estimate)

• 111,174 households received free low energy light bulbs

• 602 households received central heating funded by local or regional schemes

• 2033 households were referred to Warm Front for central heating

• 106 jobs created directly for the schemes

• 200-250 jobs created indirectly

• 5.5 points increase in SAP

• 1,375 households taken out of fuel poverty

• £3.9 million fuel expenditure saving per year

• 23,000 tonnes CO2/yr savings average

There’s plenty to comment on here. The issue I mention most often in Council meetings is the economic regeneration benefits of Kirklees Warm Zone. For an investment of little over £10 million by Kirklees (and a similar amount by Scottish Power from CERT funding) around £4 million goes back into the local economy each year from savings on household fuel bills. Every time that the cost of fuel goes up, so also does the value of the energy savings. With the recent rises in gas prices the ‘payback’ on Kirklees Warm Zone has shrunk considerably.

Kirklees Warm Zone was certainly influential to an extent, though not as much as many of us wished. The Scottish Government’s Home Insulation Scheme was introduced as a response to the Scottish Green Party MSP’s unsuccessful attempt in 2009 to get the Kirklees Scheme replicated in the whole of Scotland. Energy Efficiency programmes run by the Greater London Assembly and also a number of small scale area based schemes have been strongly influenced by the Kirklees model. Interestingly very few have followed the ‘free insulation for all’ approach we pioneered. There are a number of reasons for this lack of replication of good practice not least of which is the severe constraints on public sector funding that has put paid to many worthy projects as Councils concentrate on cost cutting and trying to deliver basic services. Another important factor is the long policy hiatus as we await the Green Deal to begin. There’s not a lot of point beginning a 3 or 4 year programme to insulate all the housing in your area if the funding mechanism that supports it, in this case CERT, will be abolished in 2012 and the Energy Company Obligation that replaces it will not significantly help replicate Kirklees style insulation schemes.

One of the key challenges Kirklees Warm Zone offers to Green Deal is to match or exceed the rate at which carbon is saved. The scheme was limited to just over 3 years as part of a systematic, door by door, street by street, area based approach, with the aim of been able to say “job done” for basic insulation measures in the district by 2010. By the end we were able to show how quickly we could save carbon with a concerted, time limited, programme with a compelling offer. If Government policy truly recognises the urgency of addressing climate change then it is the speed of carbon saving that is important. Green Deal needs to rapidly ramp up into being a big saver of carbon, not a half hearted option for householders to consider, for only the committed to embrace and one which many will discount and ignore.

Green Deal is of course a much bigger proposition in terms of measures that will be on offer. It is not just cavity wall and loft insulation but solid wall insulation, internal dry lining, better heating controls , efficient boilers and microgeneration too. So in many ways the potential for Green Deal to exceed any other energy efficiency scheme to date is huge. Green Deal does not however lend itself easily to area based approaches. There could be many providers in an area all trying to sell pretty much the same product. Consumer protection and confidence in the Green Deal offer is going to be crucial if the scheme is going to get off the starting blocks without a hiccup and also for its long term reputation as a trusted energy efficiency provider.

Like many others, I want Green Deal to succeed and the lesson from Kirklees Warm Zone is that the offer to the householder has to be compelling. In this case the loan arrangements have got to be unequivocally a ‘no brainer’ for the householder. The ‘golden rule’ by which savings in fuel bills meet or exceed loan repayments needs to be guaranteed. The costs of the work carried out under Green Deal needs to match or be cheaper than could be obtained independently from a contractor. The interest rates offered for loans under Green Deal should be attractive and better than could be obtained on the High Street.

The role of the Local Authority is key to the Green Deal’s success. Local Authorities are generally trusted bodies, they are permanent institutions, where people can go when they need support with concerns and issues. Local Authorities have access to householders through a range of media including letters, websites and an array of publications. Local Authorities now need to realise their power in assisting the delivery of Green Deal and conveying that effectively to the potential providers. The resultant partnerships should be good for Councils, the providers, the Green Deal itself and most importantly the householders benefiting from it.

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