Carbon Emissions Reduction Target (CERT) Paul Egerton Energy Efficiency & Households 4 September 2009

Carbon Emissions Reduction Target (CERT) Key CERT Changes Increased target by 20% to 185 million tonnes of lifetime carbon. Permitted Real Time Displays (RTDs) and Home Energy Advice as allowable actions. Increased the Market Transformation ring-fence to a maximum of 10% of a suppliers’ overall obligation (12% with addition of microgeneration). Have removed direct mail CFLs wef Jan Moved towards voluntary reporting of measures.

Have dropped the proposed uplifts for professional loft top-ups and DIY loft insulation. Have decided to remove direct mail CFLs as an eligible measure wef Jan 2010 in response to stakeholders concerns. Introduced a cap on behavioural measures. Key Differences from April Consultation

Suppliers in their consultation response universally said that the scores proposed were insufficient to cause them to change their plans. This was supported by strong stakeholder opposition to the uplift from those that would benefit most. No evidence that uplift has caused any additional measures to be installed. Score would need to be uplifted by % for loft top- ups; this is an unacceptable carbon loss. Will the removal of the uplifts to insulation measures result in fewer measures?

We have made it more difficult to deliver “soft” measures: –Direct mail CFLs banned from 1 January –Cap placed at 2% of a suppliers target that can be met from Real Time Displays and Home Energy Surveys. Suppliers will just turn to soft measures to meet their obligation

The consultation was fairly evenly split between those in favour and those against behavioural measures. Government position is that behavioural measures offer significant potential to make savings and therefore on balance, they should be tested. Government acknowledges the strong concerns that suppliers might use behavioural measures to the exclusion of hard measures so it has introduced a cap and set this at 2% of a supplier’s target. Adding behavioural measures to CERT will lead to a loss of carbon.

What will Home Energy Advice cover? Ofgem are setting broad standards which they expect advice provision to cover and will expect suppliers to demonstrate that these issues have been covered. Issues we would like to see covered includes:- G:\CERT+20%\Consultation\Home Energy Advice.xlsx

Have decided to extend CERT for a 21 month period until 31 December 2012 to align domestic carbon emissions with the carbon budget process. Will consult on “CERT 2” during this autumn. Have yet to fully develop our thinking, –Likely to be pro-rata, the same level of ambition as the current CERT – somewhere around 121 MtC. –initial thoughts are that there will be increased focus on insulation. –More focussed support to vulnerable households. –Look to give early certainty. –Important not to unduly increase the administrative burden of obligation. Aiming to publish the Government Home Energy Saving Strategy by end Where are we going forward? CERT 2 and beyond.