1. ECO - we can help with that! Claire Harrold, Head of Business Development Green Deal and Obligations

2. About npower The Energy Company Obligation (ECO) and Green Deal The cost of ECO & factors that impact this Our strategy An ideal ECO project Accessing ECO funding Questions What we will cover today

3. Part of the RWE Group A major UK energy company – one of the Big 6 We generate 10% of the electricity used in Great Britain We supply electricity and gas to ca 6.5 million customers We have 12,000+ employees at UK sites Specialist Energy Services Division with a proven track record - successfully discharged our previous obligations npower is committed to the Governments Green Deal initiative and has been an approved Green Deal Provider since October 2012 About npower

4. npower has already delivered against its Carbon Emissions Reduction Target (CERT) and Community Energy Saving Programme (CESP) obligations Both of these energy efficiency schemes were established by the Government to assist the UK in meeting targets surrounding the reduction of greenhouse gases Through CERT we insulated ca.470k cavity walls and 720k lofts CESP involved the insulation of ca. 10k solid walls and nearly 2k district heating schemes Clacton Case study Clacton, Essex is a former holiday-resort, now in decline. Our work in the area targeted the most deprived homes. Key facts – it makes a difference! 53 homes treated (under CERT) in late 2012 External Wall Insulation installed as primary measure Delivered homeowners bill savings of up to £475 annually c. 6k t/CO 2 saved Our Energy Efficiency Expertise Before After

5. Average home heat loss Reduce energy use through What is ECO? ECO = Energy Company Obligation ( replaces the CERT and CESP schemes ) As one of the Big Six energy providers, its the new legal obligation were under which will help drive energy efficiency improvements in qualifying homes across England, Scotland and Wales. Npower need to fully or partly fund c. 150k compliant energy efficiency improvements by March 2015. The Green Deal works alongside ECO to provide energy saving & renewable energy improvements to householders who dont qualify for ECO, with no upfront cost.

6. The Obligation ECO is split into three individual obligations: Home Heating Cost Reduction Obligation (HHCRO) Supporting vulnerable private householders on qualifying benefits Carbon Saving Community Obligation (CSCO) & Rural sub-obligation Helping people living in pre-defined areas of deprivation and rural locations Carbon Emissions Reduction Obligation (CERO) Making funding available for energy-saving improvements that would not otherwise qualify for Green Deal

7. The ECO and Green Deal Relationship

8. State Pension Credit Child Tax Credits and a household income of less than £15,860 Income- related employment and support allowance Working Tax Credit and a relevant income of £15,860 or less Income Support OR income- based job seekers allowance Plus a qualifying component We can help homeowners and private tenants who are receiving: OROR OROR Plus a qualifying component The aim is to provide fully funded energy saving improvements to eligible householders so that they can affordably heat their homes Were focusing on the replacement or repair of inefficient boilers If appropriate loft and cavity wall insulation can also be installed Home Heating Cost Reduction Obligation HHCRO

9. Carbon Saving Communities Obligation INSULATION IMPROVEMENTS IN DEPRIVED AREAS The objective is to save energy by improving insulation (preventing heat loss and reducing energy needed to heat the home) Helps people who are living in pre-defined areas of deprivation (based on Index of Multiple Deprivation) Sub-obligation: 15% of the target has to be delivered in low income RURAL homes Also includes connection to a District Heating (i.e. communal) system – appropriate for flats & apartments INSULATION IMPROVEMENTS IN DEPRIVED AREAS The objective is to save energy by improving insulation (preventing heat loss and reducing energy needed to heat the home) Helps people who are living in pre-defined areas of deprivation (based on Index of Multiple Deprivation) Sub-obligation: 15% of the target has to be delivered in low income RURAL homes Also includes connection to a District Heating (i.e. communal) system – appropriate for flats & apartments CSCO

10. HARD TO TREAT HOMES The emphasis is on improving the insulation of hard to treat properties (usually due to type of construction and age) Improving insulation in hard to treat cavity walls Offering solid wall insulation Connection to district heating system Fully funded by npower or partly funded as part of a Green Deal plan HARD TO TREAT HOMES The emphasis is on improving the insulation of hard to treat properties (usually due to type of construction and age) Improving insulation in hard to treat cavity walls Offering solid wall insulation Connection to district heating system Fully funded by npower or partly funded as part of a Green Deal plan Carbon Emissions Reduction Obligation CERO

11. DECC Impact Assessment £1.3bn per annum: DECC estimate a cost of £400m to npower £55 per household energy bill per annum Industry estimates are costs could be double that Knock on effect on bills More people could be tipped into fuel poverty Responsibility to keep costs down The Cost of ECO

12. Experience from achieving previous Obligations Brokerage *NEW* Partners Marketing/lead generation companies npower own marketing/Green Deal Provider activity *NEW Flexible – adaptable – innovative npowers ECO and Green Deal Strategy VALUE DRIVERS CONVENIENCEAFFORDABILITY TRUST EASE Make the process as quick and as painless as possible Minimise the disruption in my life and home, help make it a less painful experience I t must not cost me anymore and hopefully saves me money Treat me like an individual, be honest, do not hard sell and help me through the process VALUE PROPOSITION energy saving made easier

13. Ideally, but not necessarily, previous experience of obligations Current knowledge of the housing stock Knowledge of residents and their needs Combining initiatives with innovative community centred projects Working closely in partnership and with planners Using proven communication channels Willing to combine a variety of funding sources A good local partner

14. Measures must be compliant with the Ofgem guidance Rules about: Types of projects Types of beneficiaries Evidence Measures Technical rules Timelines Reporting We can help with that! And, always mindful of the Ofgem Guidance!

15. Know the people, their needs and their houses Provide proof of CSCO areas where relevant Take responsibility for lead generation/assessor access Mix measures to improve cost effectiveness of scheme (solid wall properties only are less likely to be attractive) Bring planners in early Provide an assessment of expected carbon savings (and methodology used) Provide estimated costs Be innovative and source a combination of funding sources and/or delivery strategies Take communication seriously A good ECO Project

16. Thank you Any Questions ? Claire.Harrold@npower.com