This summer has certainly been one to remember. After 18 months of uncertainty and isolation I have finally been able to leave the house to go on holiday (at least in the UK), and meet with friends and family inside or outside the pub! In addition to the obvious downsides of lockdown all that staying at home over the past year has come with another hidden cost.
Energy demand in 2020 was at levels last seen in the 1950s as Covid-19 restrictions affected industrial output, work, leisure, and travel, yet one area of consumption bucked the trend. The consequence of prolonged periods at home for many of us has been higher domestic energy consumption. Despite warmer temperatures, demand for natural gas for domestic consumption was up 1.5% compared to 2019. Energy prices are also on the up with the recent announcement by Ofgem that the energy price cap will to rise by £139 a year due to increasing wholesale gas prices.
As the cost of heating our homes increases, action to address fuel poverty takes on increased importance. The Department for Business Energy and Industrial Strategy (BEIS) recently published its consultation on the fourth phase of the Energy Company Obligation (ECO4). ECO and its predecessor schemes have provided millions of free or low cost energy efficiency and heating improvements to qualifying homes in fuel poverty over the past two decades.
Proposals for ECO4 seek to target the most vulnerable in the UK and elevate them out of fuel poverty. Few dispute that fuel poverty is an issue that has effects which ripple throughout society. It can cause cold and damp homes, has impacts on health, physically and mentally, and puts pressure on an already strained healthcare system.
ECO4 will run from March 2022-2026 and will see £1 billion investment in targeting low income, vulnerable and fuel poor households.
ECO has always focussed on low income and vulnerable households who cannot upgrade their homes and heating systems. ECO4 will go one step beyond this, increasing focus on the least efficient homes and making more significant improvements to them. There are some important changes for heating proposed throughout the consultation which may also provide an indicator of future focus for able to pay consumers too.
ECO4 will focus support on owner occupied households with additional flexibility for Local Authorities to target support where they deem it most appropriate. However, tenants within the private rented sector and social housing will be eligible for support under certain conditions.
A fabric first approach is driven via minimum insulation requirements for Homes Receiving Heating Measures. Support for heating repairs, where economical to do so, will be encouraged via a new scoring uplift to discourage the replacement of boilers before the end of their expected lifetime. Efficient Boiler and Electric Storage Heater repairs will be capped at 5,000 homes per year
Further steps have been taken to encourage a switch to low carbon heating systems in rural homes with Oil and LPG boilers no longer be eligible for support.
Finally, all wet central heating systems installed through ECO4 will must be installed as “low temperature heating systems” (a system sized to operate with a flow temperature of 55 degrees Celsius or lower, with some exceptions outlined in the full consultation document). This is an important proposal intended to create parity of system design between gas and other forms of low carbon heating and to deliver benefits irrespective of the system installed.
There is still a very long way to go on heat decabornisation
The proposals seem like a step in the right direction toward mitigation of fuel poverty. Yet there is still a very long way to go on heat decarbonisation across the entire building stock and a strategy is required that addresses key infrastructure questions and provides clear guidance and support to owner occupiers in the able to pay sector. I know I’ve said it before, but the Heating and Buildings Strategy has been delayed long enough, we must see its release as soon as possible to ensure that policy to decarbonise buildings and alleviate fuel poverty is joined up and sustainable.