1. CERT implementation Charles Hargreaves 11 December 2007

2. 2 Overview Drivers for the changes Changes from EEC2 Overview of the tools

3. 3 Key drivers for changes in accreditation of measures The Government’s objectives for the installation of measures Changes in the market and the rate of market transformation Ease the administration burden for both the suppliers and Ofgem –But the system that is implemented needs to be robust

4. 4 Broadening the scope of activity In EEC1 and EEC2 the suppliers could only be accredited for improvements in Energy Efficiency In CERT suppliers will be accredited with the promotion of –Improvements in energy efficiency –Microgeneration measures –Demonstration action aimed at determining the energy saving from new measures In addition they will be incentivised to –deliver certain measures to the Priority Group  The incentives make up a small fraction of the overall target, the bulk of the target will be met with standard energy/carbon saving measures

5. 5 Estimation and determination of a reduction in carbon emissions The CER target is in lifetime tonnes of CO2 as opposed to lifetime discounted energy savings in EEC2 Carbon saving = energy saving * carbon coefficient * lifetime Most measures will be assessed on an ex ante basis, but it will be possible to get accreditation of measures on an ex post basis Carbon savings for insulation and heating measures will be accredited based on the property type and the number of bedrooms

6. 6 Measures - insulation Ofgem intends to remove the distinction in savings between fuel types for insulation measures Professionally installed loft insulation –the variation in categories is proposed to be removed; carbon savings will be accredited from less than 60mm and 60mm and above –The range of final thicknesses would remain the same as in EEC2 (200mm, 250mm and 270mm) DIY loft insulation –Marketing plan is proposed to be used to demonstrate additionality Cavity wall insulation –Average carbon savings would be accredited in line with Defra’s model

7. 7 Measures - heating The distinction between fuel types will be maintained for heating measures Boilers –as the market is already transformed, we consider that it is no longer appropriate to accredit the saving for replacing a B-rated boiler with an A-rated boiler –However, the replacement of D-rated exceptions to the Building Regulations with an A-or B-rated boiler can be accredited Fuel switching –Suppliers need to demonstrate how their promotion will lead to an increase in the uptake

8. 8 Measures - appliances As the cold appliance market is nearly transformed, it is no longer appropriate to accredit savings based on the difference between the market average and A- rated appliances. –only A+ and A++ appliances are accredited based on the difference between the market average and the consumption of A+ and A++ appliances The fridgesaver mechanism will continue to operate. Consumer electronics – to ensure additionality, we will consider market penetration of the efficient models. This will be assessed on a case by case basis.

9. 9 Measures - lighting The government has an aspiration to phase out GLS lamps. In line with Defra’s model we will to increase the lifetime attributed to CFLs from 6,000 hours to 10,000 hours The distinction between medium/high and low use will be removed and one carbon saving would be accredited to all CFLs, including promoted through the retail route Halogens and diachroics will be accredited separately

10. 10 Assessment and reporting Assessment procedures –The assessment procedures and processes for CERT will be similar to those for EEC2 Quarterly reporting –The procedures for quarterly reporting will also be similar –However, to enable more robust reporting, suppliers will be required to provide more detail on the number of measures installed

11. 11 The Priority Group flexibility mechanism Priority Group flexibility schemes will submitted in the same way as other activity The eligible measures promoted will get an ‘uplift’ The savings including the uplift are capped at 5% of CERT target

12. 12 Eligible measures for PG flexibility activity Solid wall insulation Ground source heat pumps

13. 13 Innovation in CERT 2 routes: –Market transformation (new to the programme eg microgeneration) –Demonstration (new tech. or delivery of savings) Market transformation will work in a similar way to Innovation in EEC2 Demonstration will allow the suppliers to trial new measures and will be accreditable in relation to the money spent

14. 14 Demonstration action ‘A Demonstration action is an action that may reasonably be expected to promote a reduction in carbon emissions’ Trialling a technology Trialling the consumer reaction to a technology Trialling consumer reaction to better information

15. 15 The scheme submission spreadsheet

16. 16 EEC2 Supplier progress

17. 17