Second Progress Report on the Energy Efficiency Action Plan -Supplementary

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2. Domestic Energy Efficiency

"Improving the energy efficiency of the domestic sector is vital, as around 29% of all energy consumed in Scotland is used in our homes for space and water heating, cooking, lighting, and running electric appliances"

Action plan commitments

We made eight specific commitments in Conserve and Save. Progress on each of these is summarised below.

Action 2.1 Within available resources, we will continue to provide ongoing support and financial assistance for energy efficiency in existing housing, levering investment from energy companies and private householders wherever appropriate.

The Scottish Government allocated over £55 million to support its energy efficiency and fuel poverty programmes in 2011-12. More than £13 million of this was made available for local authorities through the Scottish Government's Universal Home Insulation Scheme, enabling them to offer energy efficiency advice and free insulation to more than 200,000 households in Scotland. The scheme also drew in significant private funding through the Carbon Emissions Reduction Target - around £0.5m for every £1m Scottish Government funding.

Case study - Universal Home Insulation Scheme

Mr M., 66, lives in a semi-detached end terraced house in Bonnyrigg. He had the cavity walls of his property insulated at the beginning of the year through the Midlothian Council free insulation offer, which was supported by funding under the Scottish Government's Universal Home Insulation Scheme. He recalls that the installation process went quite smoothly: "It didn't take long at all, maybe about one to one and a half hours."

Like many pensioners, Mr M admits that he would not have been likely to insulate his home if it wasn't for the offer. "I had a rough idea about cavity wall insulation, but I hadn't really considered it until I read the leaflet that came through the door," he explains, "To be honest, I probably wouldn't have been able to afford it, if it wasn't free."

As for recommending cavity wall insulation to others, Mr McIntyre says: "I would definitely recommend getting it done; they say it reduces heat loss in the property, so I should be saving energy and money in the long run. I've mentioned it to a few people and a couple of friends have applied and have had it done."

We also continued to support householders needing to replace an old gas boiler by providing a voucher towards a new energy-efficient model, enabling people to keep their home warm while cutting carbon emissions. Each voucher is worth £400 and the balance of the cost is met by the individual household. The Scottish Government allocated £4.7 million to the boiler scrappage scheme in 2011-12, allowing around 13,000 households to benefit. A separate scheme for private sector landlords was launched last October with funding of £500,000 from the Scottish Government.

The four-stage Energy Assistance Package (EAP) is designed to tackle fuel poverty as well as carbon emissions and was supported by a budget of £37.7 million in 2011-12. Since it was launched in 2009 more than 200,000 households have taken up offers of help. Last year EAP was extended to additional vulnerable groups including families with children under 16 and in receipt of a qualifying benefit or disabled children under 16, people with severe disabilities and the terminally ill. For the first time, help may also be available to people living in residential mobile homes and it is estimated that up to 7,000 households may benefit from the extension of EAP to Carers in November 2011. From April 2012 eligibility will also be extended to pensioners receiving war disablement pension.

Action 2.2: we will regularly review energy efficiency programmes to make them more effective in achieving the outcomes of reduced fuel bills for Scottish households, reduced emissions, reduced fuel poverty, and a strong energy efficiency industry in Scotland. This includes increasing the uptake of GB-wide programmes.

The Universal Home Insulation Scheme (UHIS) we introduced in 2010-11 and successfully built on our previous Home Insulation Scheme (HIS) to increase the additional funding drawn in through the Carbon Emissions Reduction Target (CERT). As CERT will be replaced by the Energy Company Obligation (ECO) and Green Deal towards the end of 2012, we have worked with the Scottish Fuel Poverty Forum to develop plans for our future programmes to make the most of the private funding available. We intend to have new programmes in place for April 2013.

Action 2.3 We will continue to work closely with DECC in the development of future GB-wide programmes to improve deliverability in Scotland to make it easier for Scottish householders to benefit from these schemes.

We worked with the UK Government Department for Energy and Climate Change (DECC) as they developed proposals for the ECO and Green Deal, to be in place at the end of 2012. The aim of these new policies is to drive improvements in the energy efficiency of housing and other buildings. The ECO will replace the existing energy company obligations, the Carbon Emissions Reduction Target (CERT) and Community Energy Savings Programme. (CESP).

The Green Deal is a new finance mechanism funded by private capital. It will enable occupants of buildings to have energy efficiency improvements installed at no upfront capital cost and to pay for them, over a period of years, through a charge on their energy bill. At the heart of this arrangement is the 'golden rule': that estimated savings on bills should generally always equal or exceed the cost of the work.

The ECO will work alongside the Green Deal. It will involve two separate obligations for energy companies, one relating to carbon saving and the other to affordable warmth. The UK Government aims to drive the market in solid wall insulation through the carbon saving target while the affordable warmth obligation will be directed towards vulnerable low-income households in the private sector with entitlement to defined benefits. In addition, the carbon saving communities money will have a significant focus on hard to treat homes in some of the poorest areas, with support loft, cavity and other insulation measures

These new policies will be important in supporting improvements to the energy-efficiency of Scottish housing. Our aim in working with DECC has been to make sure delivery of the new schemes is as seamless as possible across Great Britain and that Scottish householders and businesses are not disadvantaged or burdened because of their location.

Action 2.4 With relevant partners, we will investigate options for financing mechanisms for major energy efficiency measures in private sector housing.

In the run-up to the introduction of Green Deal we have been looking at innovative finance models to encourage uptake in Scotland, working closely with partners such as local authorities and the Energy Saving Trust and private companies. Local authorities, in particular, have a critical role to play in terms of their ability to influence demand because of the trust consumers place in them. While councils will already have arrangements in place to deliver UHIS we see these expanding from April 2013 to cover a wider range of fuel poverty works and to take account of the potential of Green Deal and ECO.

Action 2.5 Historic Scotland will take the lead in researching and promoting energy efficiency in traditional buildings. As part of this it will:

i. carry out research and case study projects, and disseminate findings to and through relevant partners, publications and digital media in order to improve advice provision, skills and qualifications for the public and professionals on energy efficiency improvement of traditional housing; and

ii. include energy efficiency in domestic properties in its existing and future regeneration and grants programmes, such as the Conservation Area Regeneration Scheme.

Having successfully completed pilot projects on eleven hard to treat properties including listed buildings and tenements, Historic Scotland (HS) carried out a further seven site projects last year in more exposed locations and additional house types to validate the earlier trials. HS also commenced a new project with the Building Research Establishment (BRE) and academic partners to carry out site trials on housing built between 1930 and 1950 (often known as 'four-in-a-block' housing).9 HS are also preparing guidance for publication in a range of media in summer 2012, and a series of events is planned for spring and summer 2012 to disseminate the message of appropriate site interventions.10

HS now requires applicants for its Area Grants Schemes to include energy efficiency upgrades in their submissions.

Case Study - Castle Rock Edinvar Housing Association and Adam Dudley Architects (project funded by Historic Scotland)

Refurbishment of five 19th century Tenement Flats in 16 Roxburgh Street, Edinburgh

This project concerned a series of improvements to 5 traditional tenements in Edinburgh, owned by Castle Rock Edinvar Housing Association. Part funded by Scottish Government through Historic Scotland, the work trialled a series of innovative measures to enhance the thermal performance of the traditional fabric, without the need for decanting tenants and wholesale removal of internal linings. Adam Dudley Architects designed and managed the project with technical input from Historic Scotland.

The project sought to demonstrate that modest improvement to older building fabric is possible, retaining fabric and resources yet improving the thermal comfort of the occupants. Works consisted of blown insulation to external walls behind existing linings, trial insulation onto the surface of existing wall linings, and advanced secondary glazing to front elevations. In addition, trial door insulation was fitted to existing doors to reduce heat loss in common areas.

Pre intervention monitoring consisted of in situ U-Value testing to all trialled areas, with subsequent post intervention U-Value testing. Infra red thermography on completion of the works allowed some of the improvements to be shown. Benefits were immediately apparent to tenants, with warmer and quieter internal environments. This project won the Carbon Trust Low Carbon Building Award 2011.

For details of the Historic Scotland Research programme and other related material see: www.historic-scotland.gov.uk/conservation-research

Action 2.6 We will further develop our powers to enforce energy efficiency standards in the private sector, including by publishing a Ministerial report on our position on regulation by the end of March 2011.

Section 64 of the Climate Change (Scotland) Act introduces broad powers allowing Scottish Ministers to regulate energy-efficiency in private housing. The report Regulation of Energy Efficiency in Housing11 published in March 2011, made it clear that Ministers do not intend to use these powers before 2015 as they consider it important to give private landlords and owners the opportunity to take up assistance and incentives such as the Green Deal on a voluntary basis before introducing compulsory requirements.

In the meantime, the Scottish Government is working with stakeholders to identify the key issues to consider in developing possible options for regulation of both private rented sector (PRS) and owner-occupiers. It will be important that proposals to regulate the private sector take account of other developments - including uptake of the Green Deal and ECO - as well as stakeholders' views on possible options and the timing of any proposals to regulate. These will be subject to consultation as part of the public consultation on the Sustainable Housing Strategy.

Action 2.7 We will work with social landlords and other stakeholders to consider how best to meet carbon reductions from social housing, including the development of an appropriate energy efficiency standard beyond SHQS.

We established a number of stakeholder working groups which met regularly in 2011-12 to consider and develop options for a new energy efficiency standard for social housing. The proposed standard will be subject to a full public consultation in summer 2012 alongside the Sustainable Housing Strategy.

ECO and Green Deal will help landlords to fund the new standard and we will work with them to source other forms of green investment. We also worked with social landlords to develop microgeneration opportunities such as solar photovoltaic (PV) projects using Feed-in Tariffs.

Action 2.8 We will strengthen guidance for Local Housing Strategies by issuing supplementary guidance jointly with COSLA on local authority coverage of climate change as a key step in progressing further local councils' activity on energy efficiency and climate change towards a more strategic approach integrated with fuel poverty and mainstream housing policies.

Following publication of the supplementary guidance last year we continue to work closely with local authorities to support their work on integrating climate change with their other housing policies through the Local Housing Strategy process.

Looking ahead

We will build on last year's progress with a substantial increase in funding for Scottish Government fuel poverty and energy efficiency programmes - £65 million for each of the next two years, rising to £66.2 million in 2014-15. This will enable us to continue the Universal Home Insulation Scheme, Boiler Scrappage Scheme and the Energy Assistance Package in 2012-13 and to put new programmes in place for subsequent years. The increased funding means there will be potential to draw in even more funding from energy company obligations. We look forward to the introduction of the Green Deal and ECO and, in the meantime, will continue to work with the UK Government and other partners on implementation.

The Fuel Poverty Forum is expected to conclude its review in 2012-13. An early recommendation was to provide loans to enable the gas grid to be extended to communities within a reasonable distance of the mains gas grid. The Scottish Government has already responded by allocating £5 million to support a loan scheme. Gas heating has the benefit both of reducing carbon emissions and improving energy efficiency, at the same time as reducing heating costs compared to other non-renewable fuels.

The Sustainable Housing Strategy will be subject to public consultation later this year together with a consultation paper on the new energy efficiency standard for social housing.12

Domestic Energy Efficiency Case Study -Solid Wall Insulation

The Scottish Government funds the Energy Saving Trust (EST) and local authorities to deliver energy efficiency and fuel poverty programmes in the domestic sector, including the management of the Energy Assistance Package (EAP) and (through local authorities) the Universal Home Insulation Scheme (UHIS).

Mr B. and his family tried to heat up their chilly Edinburgh home by leaving the gas fire running for extended periods, but the resulting energy bills left them even colder. With rugs covering their sofas and beds to keep them warm, Chas, his wife Clare, and 2-year old daughter Erin, were all tired of the freezing temperatures.

Mr B said: "It got quite uncomfortable at times. We always tried to be careful though and did our best not to turn the thermostat up too high." In the very cold winter of 2010 Mr B decided enough was enough and had solid wall insulation installed in his tenement flat through a loan of £7,769 from the Energy Saving Trust home loan scheme. Mr B says "The installer was very helpful and informative. He gave us a quote based on each room and we also received a report which gave us even more detail. Solid wall insulation has made the house pleasant to live in. It's not as bitterly cold in the winter anymore and we don't need the gas fire on in the living room or blankets everywhere to make it warm."

The solid wall insulation has also helped the family to reduce their energy bills by around £240 a year, which could help to cut their carbon dioxide emissions by around 1 tonne a year. Mr B says: "We used to spend around £60 a month on our combined gas and electricity bills and having the insulation installed has reduced our bills by roughly £20 a month. I recommend solid wall insulation to all my friends. The installation took two weeks so it's important to plan the installation carefully but the benefits it provides are definitely worth it. We used the two weeks to visit friends and relatives, so we really didn't notice much disruption."