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National Energy Action Policy Update October 2012 NEA Sponsored by.

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1 National Energy Action Policy Update October 2012 NEA Sponsored by

2 Cabinet reshuffle The DECC Ministers

3 We agree with Professor Hills assessment of the weaknesses of the current definition, and agree that the Low Income High Costs framework provides a better approach to understanding the issue of fuel poverty and intend to adopt it as the main measures of fuel poverty in future The number of individuals in fuel poverty as well as the households affected will also be reported on As well as using the Low Income High Costs indicator as the main measure of fuel poverty, we expect to continue to report on numbers under the 10% definition in our annual report of fuel poverty statistics Defining fuel poverty - Hills fuel%20poverty/6406-fuel-poverty-changing-the- framework-for-measureme.pdf Responses to the consultation, which can be accessed at the above address, should be submitted by 30 November, 2012.

4 There have been some energy price rises announced and we expect more to follow. Energy Prices SupplierCurrent billNew billEffective from British Gas£1,260£1,336November 16 EDF Energy£1,202 Pending E.ON£1,260 No increase in 2012 npower£1,244£1,356November 26 ScottishPower£1,349£1,368December 3 SSE£1,235£1,354October 15 Average£1,258£1,312Pending 'We are calling on you to launch an urgent, expert, independent review into the rising cost of domestic energy bills and whether competition among energy suppliers can be made to work more effectively in the consumer interest.' “I can announce, which I am sure you will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers”

5 Simpler Tariffs British Gas has unveiled a new energy bill design – and a new pricing structure. At the last look there were 26 different tariffs for gas and 28 for electricity as well as 25 for Economy 7. E.ON has simplified their tariff range. They now have five new, simpler tariffs. All new plans, plus E.ON's standard plan, now come with a single rate and a simple standing charge. ScottishPower will write to all its customers who pay for their energy on a quarterly basis, with a personalised quote to estimate how much they can save by making changes to their energy account.

6 Supplier social obligations Ofgem, Domestic suppliers’ social obligations: 2011 annual report, October 2012 Regulator positive: Disconnections decreasing Repayment periods lengthening Number of customers in debt decreasing Number of PPM installations decreasing But also consider: The average level of gas debt has increased by around 10% whilst debt levels for electricity are largely static Prices are on the up Decline in energy advice provision Improved situation for PPM customers: can switch with a debt of up to £500 as against previous £200. Ofgem say disconnections have generally fallen and repayment periods lengthened among PPM customers.

7 HDS/Documents1/WHD_AR_08_Oct_2012.pdf The Warm Home Discount Scheme (WHD) is now in its second year The Warm Home Discount is a scheme funded by energy suppliers It replaces social tariffs and voluntary arrangements previously offered by energy suppliers. The annual discount payment will be £130 and will be paid by March The Warm Home Discount scheme separates eligible households into two groups – the ‘Core’ group and the ‘Broader’ group Warm Home Discount Scheme ‘Meanwhile we will continue to deliver policies that we know are making a difference.’ Oi! It’s coming off our bottom line, and forcing us to raise our prices. Ofgem has recently published a review of the first year of the Warm Home Discount scheme and reports general success across all areas of supplier obligations. The Core Group – 702,00 rebates made – 99.9% compliance – 99.8% of payments made on time Broader Group – 234,297 payments made costing £28 million Legacy Spending - £86.9 million on discounted tariffs, £16 million on rebates. Assisted 1.45 million households Industry Initiatives – £22.3 million spent on benefit entitlement checks, referrals, energy efficiency advice, fuel debt assistance

8 Winter Fuel Payments The EU is insisting that households who became eligible (through meeting the age criteria) after they had relocated abroad should receive the Winter Fuel Payment. “This will not happen and I will introduce a temperature threshold to thwart this injustice.” If you live abroad, you may be able to receive Winter Fuel Payments if all the following apply: you have reached women’s State Pension age you live in another European Economic Area (EEA) country or Switzerland you have a genuine and sufficient link with the UK, for example, you have lived or worked in the UK for most of your working life The Warmer Weather Payment

9 What will Local Authorities be required to do under the Home Energy Conservation Act (1995) in the future? The guidance under the Home Energy Conservation Act 1995 (HECA) to English local authorities with housing responsibilities was published on 26 July It sets out requirements for those authorities to report on the measures they propose to take to significantly improve the energy efficiency of all the residential accommodation on their areas. The guidance links with the delivery of the Green Deal by local authorities. Home Energy Conservation Act (HECA) energy-co2/5992-guidance-to-english-energy-conservation-authoritie.pdfhttp://www.decc.gov.uk/assets/decc/11/tackling-climate-change/saving- energy-co2/5992-guidance-to-english-energy-conservation-authoritie.pdf.

10 Green Deal loans to be offered at 7.5% Green Deal and ECO Government is assuming that the loans to home owners under the Green Deal will be charged at an interest rate of 7.5 per cent. “..it will be a challenge to make the Green Deal a compelling proposition for consumers. “An interest rate of 7.5% could prove to be an major additional barrier to uptake of the scheme.” DECC have published some consumer-facing fact sheets on GD and ECO (available for householders, owners, tenants and landlords). See: d_quickguides/gd_quickguides.aspx d_quickguides/gd_quickguides.aspx

11 Renewable Heat Incentive - RHI The Department of Energy and Climate Change has published a consultation paper on proposals for the next phase of the Renewable Heat Incentive The main aims of the domestic RHI will be to: Contribute towards renewables targets under the Renewable Energy Directive Develop supply chains by boosting deployment Promote improved renewable heating technology performance This consultation will close on 7th December 2012, after which DECC is aiming to publish a response in early Pending Parliamentary approval, it is hoped that the scheme will be open to applicants in summer It is proposed that the following technologies should be eligible to receive the domestic RHI: Ground source heat pumps (GSHPs) Biomass boilers Air to water heat pumps (ASHPs) Solar Thermal

12 Anti-green taxation The European Commission has decided that the reduced rate of VAT imposed in the UK on energy saving materials is in breach of EU VAT rules The UK has been requested to amend legislation authorising application of the reduced rate to ‘the supply and installation of energy saving materials’ Failure to comply within a two-month period may mean referral to the European Court of Justice. The Commission argues that Annex III of the VAT Directive clearly lists goods and services that are subject to a lower tax regime and that energy saving materials are not included. This issue highlights the inequity between energy supply and energy saving within the EU tax system. saving%20materials%27%20in%20a%20nutshell.pdf

13 Use It or Loose It CERT Super Priority Group: Success rates vary from 62% to 12.2% Difficulty in identifying SPG claimed Warm Front: £50 million underspend in T: WARM FRONT/CERT/CESP There is work that still needs to be done, and there are still opportunities in these programmes.

14 Interesting surveys and reports 1.English Housing Survey: Household Report Ofgem: Vulnerable Energy Customers 3.Joseph Rowntree Foundation : How can we maximise the benefits of renewable energy for social housing? Links will be available on the slides which will be ed to you.

15 The Department for Communities and Local Government published the English Housing Survey reports last week. It highlighted strong links between: Poverty and damp Roof 10% Windows 15% Draughts 15% Floor 35% Through the walls 25% Poverty and inefficient homes Efficiency and security Many missing out on direct debit discounts surveys/englishhousingsurvey/ English Housing Survey: Household Report

16 Vulnerable Energy Customers Stakeholders have helped Ofgem develop five themes of: Developing targeted and effective regulatory obligations Promoting best practice among suppliers and distributors Taking account of vulnerability in our work and being informed by research and insight Prompting innovation in the provision of advice and support Using expertise and working with others to inform wider policy-making to address vulnerability or%20a%20new%20Consumer%20Vulnerability%20Strategy.pdf The consultation process closes on 3 December, 2012

17 How can we maximise the benefits of renewable energy for social housing? New researchNew research for the Joseph Rowntree Foundation Social landlords need greater certainty to plan investments in renewable energy and energy efficiency programmes. Social landlords face a huge challenge to invest in energy efficiency. Unless social landlords can access new sources of funding to support more expensive retrofit projects, they may be forced to sell many of their older properties. You can find out more about the Joseph Rowntree Foundation’s work by visiting

18 The Children’s Society, Citizens Advice and Disability Rights have published research looking at what the changes to the welfare system and introduction of Universal Credit will mean for disabled adults and families with disabled children. The impact of Universal Credit on families with disabled childrenThe impact of Universal Credit on families with disabled children, produced by The Children’s Society The impact on disabled people of the abolition of the severe disability premium within Universal CreditThe impact on disabled people of the abolition of the severe disability premium within Universal Credit, produced by Citizens Advice The impact of the Universal Credit on working disabled peopleThe impact of the Universal Credit on working disabled people, produced by Disability Rights UK Holes in the safety net: joint report Welfare changes and Universal Credit: Impacts on disabled adults and families with disabled children

19 Thanks for listening Questions at the end NEA Sponsored by


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