The Green Deal for Housing Associations
The Green Deal for Housing Associations Plenary five:
Economics – Accessing ECO subsidy
Speakers: Siobhan Stanger, Head of Energy Company Obligations, DECC David Adams, Technical Director, Wilmott Dixon Energy Services
Chair: David Orr, Chief Executive, National Housing Federation
The Energy Companies Obligation (ECO) Siobhan Stanger DECC
What is the Energy Companies Obligation? • Target for energy companies set in terms of carbon (CO2) or notional bill savings (£) over the lifetime of the measures installed. Not a grant pot. • The initial obligation period runs until 31 March 2015.There will be no interim targets or regional sub targets to be met within ECO.
• ECO scores will calculated based on property specific information (such as RdSAP and SAP), so these reflect the benefits delivered over the expected lifetime of the measures installed. • Will allow carry over of ECO eligible measures from CERT and CESP
What is the Energy Companies Obligation?
Green Deal: demand-led, market driven. Measures that meet the Golden Rule
GREEN DEAL
Carbon Saving obligation (£760m pa) packages of measures that include solid wall or hard to treat cavity insulation Carbon Saving Communities obligation (£190m pa) targeted at insulation measures in low income areas Affordable Warmth obligation (£350m pa) heating and insulation targeted at the poorest and most vulnerable consumers,
ECO (£1.3bn pa)
Options for delivery
• Energy Company self-delivery • Bilateral partnerships between energy companies and delivery partners .e.g. Green Deal Providers, Local Authorities, Social Housing Providers
• New ECO brokerage mechanism
ECO Brokerage Frequency: Frequency dependent on anticipated liquidity (fortnightly)
Energy Companies bid against each other for lots over the course of a day’s trading. All transactions are blind. Lots awarded to the highest bid as at the end of the day. Broker
Market Price
ECs cannot see each others’ bids and cannot see sellers’ identity throughout auction The current winning bid is visible to all participant. EC knows if it is winning bidder
Blind
ECs bid for any number of individual lots on a price per lot basis
Market Price Blind
Energy Companies
All lots are loaded up onto platform before the start of the auction and are visible to the buyers at the start of the auction Lots awarded to highest bid as at a given point in time Max. Lot Price
Reserve Lot Price
Results are published after the auction Participants must agree to the Brokerage’s standard contractual terms
Green Deal Providers / ECO Providers
Payment made on certification of carbon savings delivered GDPs register their lots with the Brokerage ahead of the auction and can put forward a reserve price for their individual lots but not amend this during the course of the auction
Next steps
• 30 October 2012 – Revised ECO Order laid in Parliament • Ofgem draft guidance to be published shortly for consultation (plus open letters). Final in Feb? • Parliamentary debates will follow (late November?) • ECO comes into force no later than 1 January 2013 – But energy companies can count any delivery from 1 October. 7
Thank you for listening
Economics – Accessing ECO subsidy
Speakers: Siobhan Stanger, Head of Energy Company Obligations, DECC David Adams, Technical Director, Wilmott Dixon Energy Services
Chair: David Orr, Chief Executive, National Housing Federation
The Energy Companies Obligation (ECO) Siobhan Stanger DECC
What is the Energy Companies Obligation? • Target for energy companies set in terms of carbon (CO2) or notional bill savings (£) over the lifetime of the measures installed. Not a grant pot. • The initial obligation period runs until 31 March 2015.There will be no interim targets or regional sub targets to be met within ECO.
• ECO scores will calculated based on property specific information (such as RdSAP and SAP), so these reflect the benefits delivered over the expected lifetime of the measures installed. • Will allow carry over of ECO eligible measures from CERT and CESP
What is the Energy Companies Obligation?
Green Deal: demand-led, market driven. Measures that meet the Golden Rule
GREEN DEAL
Carbon Saving obligation (£760m pa) packages of measures that include solid wall or hard to treat cavity insulation Carbon Saving Communities obligation (£190m pa) targeted at insulation measures in low income areas Affordable Warmth obligation (£350m pa) heating and insulation targeted at the poorest and most vulnerable consumers,
ECO (£1.3bn pa)
Options for delivery
• Energy Company self-delivery • Bilateral partnerships between energy companies and delivery partners .e.g. Green Deal Providers, Local Authorities, Social Housing Providers
• New ECO brokerage mechanism
ECO Brokerage Frequency: Frequency dependent on anticipated liquidity (fortnightly)
Energy Companies bid against each other for lots over the course of a day’s trading. All transactions are blind. Lots awarded to the highest bid as at the end of the day. Broker
Market Price
ECs cannot see each others’ bids and cannot see sellers’ identity throughout auction The current winning bid is visible to all participant. EC knows if it is winning bidder
Blind
ECs bid for any number of individual lots on a price per lot basis
Market Price Blind
Energy Companies
All lots are loaded up onto platform before the start of the auction and are visible to the buyers at the start of the auction Lots awarded to highest bid as at a given point in time Max. Lot Price
Reserve Lot Price
Results are published after the auction Participants must agree to the Brokerage’s standard contractual terms
Green Deal Providers / ECO Providers
Payment made on certification of carbon savings delivered GDPs register their lots with the Brokerage ahead of the auction and can put forward a reserve price for their individual lots but not amend this during the course of the auction
Next steps
• 30 October 2012 – Revised ECO Order laid in Parliament • Ofgem draft guidance to be published shortly for consultation (plus open letters). Final in Feb? • Parliamentary debates will follow (late November?) • ECO comes into force no later than 1 January 2013 – But energy companies can count any delivery from 1 October. 7
Thank you for listening
