ECO2t Overview ALEO North East 16th June 2017 Nicola Marshall Development Manager Government Obligations

ECO2e - The Reality of a simplified obligation……

ECO2 to ECO 2018-2022

ECO2e – Energy Company Obligation Extension ECO to be extended by 18-month from 1st April 2017 to 30th Sept 2018 £640m spend per annum Re-balanced to tackle fuel poverty and others on low incomes. “Deemed scores” to be introduced for assessing bill and carbon savings – replacing current SAP methodology. The Ofgem published deemed scores to be uplifted by 30% for both CERO and AW Government to collect more detailed information on ECO costs Affordable Warmth - AW (HHCRO) Increased as a proportion of the scheme, from c. 36% to 70% of spend Carbon Emissions Reduction Obligation (CERO) Decreased as a proportion for scheme, from 34% to 30% of spend Remove requirement for GDAR and CSR for CERO Carbon Saving Community Obligation (CSCO) Ended 31 March 2017

AW ECO2e - Modelled uptake of measures Installs Low-cost Cavity Wall Insulation 101,000 High-cost Cavity Wall Insulation 3,000 Loft insulation 148,000 Solid wall insulation Gas Boilers replacements 37,000 Oil boiler replacements 8,000 First time central heating 4,000 Heating controls 6,000 Total 311,000 Required up to 31st March ECO Transition requirements tbc – additional options for AWG qualifying criteria

ECO2e – Affordable Warmth (AW) Simplified and better targeted Sub criteria will be removed for recipients of some means-tested benefits. Income thresholds for Tax Credit and Universal Credit recipients amended to better reflect disposable household income Targeted at c. 4.2m private household in fuel poverty or low income plus c. 0.5 million social housing households Insulation measures extended to social housing in EPC Bands E, F, G Local authorities to determine eligible homes via the “flexible eligibility” mechanism. Number of qualifying gas boiler replacements limited to c. 25,000 a year (37,000 in total) Focus on insulation and central heating systems Solid wall minimum 21k year

LA Flex ScottishPower welcomes the introduction of LA Flex: LA flex increases the number of homes that can benefit from HHCRO/AW measures Helps households who were not able to benefit from ECO in the past because they were not on appropriate benefits Provides the opportunity to blend different pots of funding with ECO Supports an area based delivery approach – households may qualify for assistance from ECO via AWG eligibility, LA Flex or CERO Starts to link Energy Efficiency and Health Learning’s can be used to shape future Policy Development However: The range of measures under LA Flex is limited LA Flex will focus on cavity wall, loft insulation, a limited number of boilers (focus will be on Oil and LPG boilers) Solid Wall will only be included if the project is supported by significant sums of external funding

Benefits of LA Flex Energy Company Local Authority Help us to deliver ECO cost effectively – reduced search fees, access to homes which have not had energy efficiency measures installed and benefits of area based approach Blending Pots of Funding – Health funding, Local Authority funding, Warm Homes Discount Funding etc More homes to target – helps us to target ECO at homes which have not been eligible for previous schemes ECO funding will be used to help those most in need Deliver ECO measures to some of the lowest income homes and some of the hardest to heat homes Attract as much ECO funding into their LA area Key role to play in helping to find households who can benefit from ECO measures LA’s can help households who haven’t been able to benefit from previous ECO schemes Link ECO funding to existing projects which have been set up to target some of the most vulnerable homes in the area Bring together pots of funding Access to data (including HECA reports on what has already been done) Have resource on the ground visiting homes in the community Trusted by householders Local knowledge - know the area , improve targeting

What are we looking for? ‘Can do’ Local Authorities – able to mobilise quickly Access to pots of funding to support ECO funding Volume of properties occupied by Fuel Poor or Living in Vulnerable conditions that can benefit from low cost insulation measures LAs with existing projects that target low income and vulnerable customers – LA Flex can be bolted on to existing projects very easily LAs with resource to support the project particularly ‘targeting’ Structured Projects – clearly defined targeting and eligibility, clear understanding of the role of each Partner within the project LAs that understand ECO and understand the importance of Compliance LAs that are committed to making things work – CEO support for the project and speedy sign off process for the householder declarations Required up to 31st March ECO Transition requirements tbc – additional options for AWG qualifying criteria

Bath & North East Somerset Council 1st to Publish Statement of Intent LA Flex will contribute to the Council’s Corporate Strategy, Health and Well Being Strategy, Environmental Sustainability & Climate Strategy and Economic Strategy Welcome the Flexible Eligibility Powers to provide Affordable Warmth assistance to fuel poor households 13.2% (10,203 homes) in fuel poverty in centre of Bath and rural wards Cold homes are a particular issue for older and vulnerable persons Links to ‘Energy at Home Scheme’ which includes a strong focus on addressing fuel poverty BANES has procured 2 Partners: An Advice Service CSE and a Delivery Partner Dyson Energy Services £1m of grant funding support Clear eligibility criteria - Income of £20k or less and less than £30k in savings Score 35 or above in response to high cost questions Have one or more members with a long term illness, a disability, aged over 60 or with children under 18 www.energyathome.org.uk 1st to Publish Statement of Intent LA Flex will contribute to the Council’s Corporate Strategy, Health and Well Being Strategy, Environmental Sustainability & Climate Strategy and Economic Strategy Welcome the Flexible Eligibility Powers to provide Affordable Warmth assistance to fuel poor households 13.2% (10,203 homes) in fuel poverty in centre of Bath and rural wards Cold homes are a particular issue for older and vulnerable persons Links to ‘Energy at Home Scheme’ which includes a strong focus on addressing fuel poverty Required up to 31st March ECO Transition requirements tbc – additional options for AWG qualifying criteria

Energy Efficiency Supplier Obligation 2018-2022 Obligation 2018-2022 Timelines: Policy Development – Now Consultation – over summer 2017 Consultation Response – early 2018 Regulations – early Spring 2018 Obligation begins – 1st October 2018 Key Considerations: Fuel Poverty Low income households Manifesto commitment to insulate 1m homes Carbon budgets Devolution Simplicity and the consumer The need to understand Ministerial priorities going forward