News

Liz Truss’ announcement for supporting households and businesses has been announced today. Key implications for green policy include the freezing of the green levy on energy bills for two years, lifting of the fracking ban, a new licencing round for North Sea oil and gas, and plans to be a net energy exporter by 2040, through renewable generation, nuclear and fracking.

A review of net zero has been promised, to ensure net zero is achieved whilst supporting economic growth.

The package, live from October, is expected to reduce inflation by 5%, which cuts the current rate of inflation in half.

BEIS has confirmed that the Energy Company Obligation and the Social Housing Decarbonisation Fund Wave 2.1 will continue to operate as per the regulations and the operation of these schemes, and is not directly affected by today’s announcement.

If you have any questions or concerns please do not hesitate to contact the NIA (details below).

Households

• Energy Price Cap to be set at £2500 annually for the average home, saving £1000 annually for households, as agreed with energy price retailers. This is in addition to the £400 previously promised. Those on heat networks, park homes and heating oil will have a separate fund.
• A new Energy Price Guarantee will enable this by limiting the price which suppliers can charge customers per unit of gas.
• Applies to Great Britain. Northern Ireland will experience the same level of support.

Businesses 

• Businesses, charities and public sector organisations will have their energy costs capped for six months. This is to be capped at the same price per unit that households pay. This will be reviewed in three months to see if vulnerable sectors should be targeted.
• Liz Truss called for businesses to focus on energy efficiency to reduce bills further.

Funding the support

• There will be no further windfall tax.
• Kwasi Kwarteng to release the expected costs of the support package later this month. Cost projections are uncertain but are expected to be in the range of £100-£150 billion.

Future energy supply

• Announcement of a new Energy Supply Taskforce. This includes long-term contracts with gas suppliers, a new licensing round for North Sea Oil and Gas and increased deployment of hydrogen, solar, CCUS and wind. Nuclear is to enter the Contracts for Difference scheme.
• Energy regulation review to address supply and affordability in the long run.
• Review of net zero to ensure net zero is achieved whilst growing the economy.
• Ban on fracking removed. Will pursue fracking where there is local support.
• Ensure UK is a net energy exporter by 2040. Business security to set out a plan within the next two months. This is to be achieved through the expansion of nuclear, fracking and renewable energy generation.

All NIA members will soon receive an email regarding your membership renewal, and we hope to see you return once again!

The NIA has had a fantastic year, including holding its first Parliamentary event, feeding into numerous consultations, and inputting into governmental discussions. Your input is vital to ensure the good work continues, to promote quality and collaboration across industry, so that the challenge ahead can be possible.

The NIA consists of industry experts, installers, system designers and product manufacturers. It promotes high quality insulation in terms of products and service, so that consumers get what they expect and deserve. One of the ways we do this is through our close relationship with the Department of Business, Energy and Industrial Strategy and actively responding to government consultations. To find out more about the NIA membership, please visit our website here.

NIA members looking to play a part in the drafting of consultation responses are invited to subscribe to our policy mailing list.

Subscribe by emailing Fiona.chestnutt@gemserv.com to be added to the policy mailing list.

Liz Truss has officially been appointed Prime Minister with 57.4% of the vote.

Here is a brief email summary of her policy positions (specifically on decarbonisation, net zero and cost of living) followed by a timeline of upcoming events.

• Truss has announced interest to enforce a temporary moratorium on the green energy levy, and has indicated support to lift the ban on fracking, offshore oil and gas developments. She is expected to issue up to 130 new oil and gas drilling licenses in the North Sea. She has shown interest in investing in new nuclear, and furthermore so with her likely Chancellor, Kwasi Kwarteng who is supportive of new nuclear projects like Sizewell C.
• Although there have not been any comments on hydrogen policy, Truss has shown support for hydrogen blending within the gas network
• She has criticised the use of onshore wind and solar power as part of the UK’s energy mix. It has also been reported that her Government will consider capping the price at which wind and solar energy can be sold into the UK grid by produced, with aim of restraining rising costs

• Truss has pledged to maintain the commitment to Net Zero by 2050 and is highly supportive of new UK developed technologies and manufacturing related to Net Zero.
• She has shown interest to review the EU’s habitat directive and develop stronger Britain-focussed biodiversity targets.

• Cost of living has been considered a key priority and her team is working with officials to make an announcement ahead of October.
• Truss has shared her intention of a temporary moratorium on the green levy for two years however, she has not committed to matching the spending.
• In the past week, it has been widely reported that Truss is planning to freeze energy bills. However, it is unclear what this entails. This may include eliminating VAT or extending the existing household handouts.
• Beyond this, Truss has not provided concrete details of her plans to address the cost of living.

With so much going on, please see the below summary of the upcoming government events.

6^th September
Her speech today will provide insight of new government priorities
Appointing of cabinet and senior departmental ministers

7th September
Further ministers to be appointed

11th September 
All ministers to be appointed

Before 2nd October 
A fiscal event to address cost of living and energy challenges

2nd October to 5th October
Conservative Party Conference

17th October
Parliament returns in full following party conferences

All NIA members will soon receive an email regarding your membership renewal, and we hope to see you return once again!

The NIA has had a fantastic year, including holding its first Parliamentary event, feeding into numerous consultations, and inputting into governmental discussions. Your input is vital to ensure the good work continues, to promote quality and collaboration across industry, so that the challenge ahead can be possible.

As a gentle reminder, the NIA consists of industry experts, installers, system designers and product manufacturers. It promotes high quality insulation in terms of products and service, so that consumers get what they expect and deserve. One of the ways we do this is through our close relationship with the Department of Business, Energy and Industrial Strategy and actively responding to government consultations. To find out more about the NIA membership, please visit our website here.

NIA members looking to play a part in the drafting of consultation responses are invited to subscribe to our policy mailing list.

Subscribe by emailing Fiona.chestnutt@gemserv.com to be added to the policy mailing list.

I was delighted to join Winifred Robinson on Radio 4’s ‘Yours and Yours’ on Monday 15th August, to speak on behalf of the National Insulation Association and talk about insulation.

The cost of energy prices has never been spoken about as much, and with rises of energy costs expected to further rise in October, and potentially into 2023, there is warranted concern amongst the population. Insulation is relevant to this debate, as it is one way to significantly reduce the energy demand of a property. This brings benefit to the homeowner, who needs less energy to heat the building, but also contributes to net zero and decarbonisation targets.

The NIA consists of industry experts, installers, system designers and product manufacturers. It promotes high quality insulation in terms of products and service, so that consumers get what they expect and deserve. One of the ways we do this is through our close relationship with the Department of Business, Energy and Industrial Strategy and actively responding to government consultations. To find out more about the NIA, please visit our website here.

I spoke to Winifred about the benefits of insulation, the various types, and how consumers go about making sure they are installing the right measure for their property, at the right level of quality so that they achieve the desired outcome. Step one would be for a consumer to find an accredited installer. The NIA has a postcode locator, where installers nearby can be located, many of which are accredited. The second step to add extra surety, would be to accrue a retrofit coordinator. This is an accredited professional who will undertake an audit of your property and advise of the correct measure that should be installed, as well as making sure the materials and service is accredited to the PAS 2035 standard. This essentially means that the necessary standards are being followed so that the homeowner experiences the desired outcome. To find a retrofit coordinator, please visit the Retrofit Academy website here.

Insulation is only set to become a more important form of energy efficiency measure for homeowners, and the NIA will support government to ensure that it is a viable means to deliver benefit to home owners and occupiers.

Click below to listen back to the episode on BBC Sounds.

Phase 3b of the Public Sector Decarbonisation Scheme (PSDS) is due to open to applications in September 2022 and up to £635 million is available. This is to be spent across financial years 2023/24 (£402 million of funding) to 2024/25 (£233 million of funding).

PSDS 3D Guidance

What is it? 

The PSDS provides grant funding for heat decarbonisation and energy efficiency measures for organisations within the public sector. It should be noted that heat decarbonisation remains the primary focus of the scheme.

How does it differ to Phase 3a? 

There have been refinements, namely: a proportion of funding is available for projects delivered over multiple years or more; a focus on cost effective heat decarbonisation; and emphasis on achieving savings in carbon emissions. There are also new additions to the guidance.

What are the new additions? 

• Sector soft caps – these are to ensure the fair allocation of funding across the public sector. This is based on carbon emission distributions across sub-sectors (find more information in Phase 3b PSDS Technical Annex here. See Page 3 in the PSDS Phase 3b Guidance for how the sector soft caps will work.
• Multi-year applications. PSDS Phase 3b funding is available across financial years 2023/24 and 2024/25.
• Planning year. PSDS Phase 3b funding can be applied for projects requiring expenditure in 2024/25, by using 2023/24 as a year to plan. This is to improve certainty in funding commitments.
• Applicant contribution. Applicant funding should be equivalent to the like-for-like costs of replacing their fossil fuel heating systems. This cost must be 12% of total project costs as a minimum and evidenced. If the cost is below this percentage, the applicant must make up the funding to 12%. If the cost percentage is above, the applicant must still contribute the full like-for-like replacement costs. For example, if 20% of total project costs is like-for-like, the applicant must fund the full 20%.
• ‘Whole building’ approach. This applies only to the buildings and parts which are being heated by the proposed low-carbon heating system, and the building expected to host the system. Buildings not served by the proposed low-carbon heating system are not eligible for measures under PSDS Phase 3b.
• Energy efficiency cap. The maximum grant proportion is 58% of total grant costs per application for energy efficiency measures.

Where does insulation fit in? The primary focus remains heat decarbonisation, however it promotes a whole building approach, and a fabric first approach is supported particularly where the low-carbon heating system is serving.

It also says that if the building’s heat or electricity demand can be reduced by energy efficiency measures and other enabling works, they can be included in an application for funding.

The guidance does support that heat demand within the building should be reduced, where cost-effective and practical, before installing new low-carbon heating measures.

To read the guidance, please click here. 

Key Dates

• September 2022: Application Portal opens. This will close when the budget has been met through the applications.
• January 2023: Outcomes of funding, including the announcement of successful projects.
• 31 March 2024: Projects awarded funding for a single year must be completed.
• 31 March 2025: Projects awarded funding for multiple years must be completed.

Thank you for your feedback!

Thank you to those who provided their feedback on the consultation response for the Welsh Housing Quality Standard 2023. This has now been submitted. Your feedback is much appreciated and helps to shape and influence industry.

Join our policy mailing list!

NIA members looking to play a part in the drafting of consultation responses are invited to subscribe to our policy mailing list.

Subscribe by emailing Fiona.chestnutt@gemserv.com to be added to the policy mailing list.

As promised, the Department for Business, Energy and Industrial Strategy (BEIS) has released guidance for the Social Housing Decarbonisation Fund Wave 2.

The £800m two year scheme aims to install energy performance measures in social homes in England. It was developed as part of the 2021 Spending Review Settlement and will look to tackle fuel poverty, reduce carbon emissions, improve comfort in the home whilst also developing the retrofit sector and supporting the green economy.

What does the guidance say?

The guidance provides an overview of the key headlines of Social Housing Decarbonisation, outlines the differences between Phase one and Phase two, talks about the funding available, and also gives additional considerations and an indicative timescale.

The next key date to be aware of is early August, when BEIS intends to release Application forms, further FAQs, Grant Funding Agreements, Grant Offer Letters and Data Sharing Agreements. The competition is then set to launch at the end of August, closing 8 weeks after it launches.

To read the guidance, please click here.

What are the performance and delivery considerations?

• Homes must reach EPC rating C (with exceptions for F/G rated homes that cannot reach this level
• Installers must be TrustMark accredited
• PAS2035 must be used to ensure quality and safety

Feedback to the NIA’s response on Welsh Housing Quality Standard 2023

Thank you to those who have provided their feedback on the draft consultation response for the Welsh Housing Quality Standard 2023. The deadline for those who have yet to respond is 27th July 2022. Your feedback helps to shape and influence industry, and your input is much appreciated.

If you haven’t received this but would like to, please email Fiona.chestnutt@gemserv.com to be added to the policy mailing list. Any questions please let me know.

Updated Approved Document F1 – Ventilation 

Building Regulation Approved Document F (AD F) has been updated for England and Wales. It concerns ventilation to maintain indoor air quality and is specific to ‘Existing Dwellings’ only. It came into effect in England on 15^th June 2022, and will later come into effect in Wales on 23^rd November 2022.

The equivalent areas for background ventilation in specific locations  in an ‘Existing Dwellings’ has increased. These are as follows:

Notes

• Approved Document F: Volume 1 applies to dwellings
• Approved Document F: Volume 2 applies to buildings other than dwellings

Ofgem draft ECO4 guidance

Ofgem has published draft guidance; Draft Energy Company Obligation (ECO4) Guidance: New Measures and Products (NMAP) V0.1 | Ofgem for stakeholders who want to know about applying for and delivering new measures and products under ECO4. The document is shared on a comment basis alongside its ECO4 Administration Consultation Part 2.

It seek views on their proposed format and administration of the NMAP routes on ECO4. Please see the Ofgem ECO4 Administration Consultation Part 2 for further information on the type of feedback Ofgem are seeking, and on how to respond to the consultation.

If you have any questions, please contact Andy Morrall, Senior Technical Policy Manager Email: ECO@ofgem.gov.uk

For more information click here.

Ofgem’s Engagement Event

Ofgem are keen to hear from industry about their proposed administration for the Energy Company Obligation (ECO) 4 scheme as set out in their consultation which closes on 18th July 2022.

ECO4 intends to launch in summer 2022, to continue its support of low-income households to make their homes more energy efficient. ECO4 is intended to launch in summer 2022.

The event will provide an overview of Ofgem’s proposals as set out in the consultation. The event will be held on:
12^th July 9:30am – 11:30am

For more information click here.

Energy Security Bill

With so much going on in Parliament this week it has been a challenge to keep up. However, on 6th June, the Energy Security Bill was introduced to Parliament. It aims to deliver a more affordable, cleaner and secure energy system.

The date to consult on the powers is expected later on this year, and we will keep you up-to-date. For more information please see the below factsheet:

Energy Security Bill factsheet: Power to review the energy performance of buildings regulations energy certificates (publishing.service.gov.uk)

NIA members looking to play a part in the drafting of consultation responses are invited to subscribe to our policy mailing list.

Subscribe by emailing fiona.chestnutt@gemserv.com

From 1st April 2022 until 31st March 2027, a zero rate VAT applies to the installation of certain specified energy-saving materials.

The new rules, effective from 1st April 2022 in Great Britain, remove both the social conditions test and the 60% test for all installations of qualifying energy-saving materials in England, Scotland and Wales.

What Does This Mean?

Heat pumps and the installation of certain specified energy-saving materials with ancillary supplies are zero-rated in Great Britain. For example, installing loft insulation but having to cut a new loft hatch in the ceiling and making good to access the loft. The cutting of the loft hatch and making good is, in itself, a simple construction supply, but as the services have been carried out solely in support of the loft insulation, they become ancillary.

However, if you replace your existing roof with a new insulated one, the insulation clearly is a better way of enjoying the new roof and so the insulation is ancillary to the new roof. As the supply of the roof is standard-rated, this applies to the whole supply, including the insulation.

Click Here to Find Out More: https://www.gov.uk/guidance/vat-on-energy-saving-materials-and-heating-equipment-notice-7086

Following the lack of focus on Energy Efficiency in the Government’s Energy Security Strategy yesterday, the National Insulation Association has signed a cross-industry letter sent to HM Treasury today. Issued by the Sustainable Energy Association, the letter calls on the Government to expand the eligibility of the Energy Company Obligation scheme to prevent homes from falling into Fuel Poverty.

View letter: https://www.sustainableenergyassociation.com/resources/eco-letter-from-the-sea/

The Government has provided support for energy efficiency measures since 2013 under the Energy Company Obligation (ECO), which has since seen over 3 million energy efficiency measures installed in more than 2 million homes. However, while the tried and tested scheme targets vulnerable households, support for homes that fall outside this definition are not eligible.

Two million more UK households could in fact be plunged into fuel poverty due to the price cap increase this April according to National Energy Action (NEA), with the cost of living crisis expected to worsen in Autumn.

Backed by leaders across the energy efficiency industry, including the NIA, the letter calls on the Government to strengthen its Energy Security Strategy by expanding the eligibility criteria for ECO.

The proposed solution is an ECO + Scheme, which would run adjacent but separate to ECO to ensure the key support the scheme brings to vulnerable households is not impacted, whilst helping those who will soon be at risk.

It is proposed that the ‘ECO+ Scheme’ would build upon the success of the current ECO scheme, bringing its benefits to the ‘able-to-pay’. It would run adjacent, but separate to, the current iteration of ECO to ensure the key support ECO brings to vulnerable households is not impacted.

A key difference is that whilst energy bill payers fund the current ECO scheme to support action to benefit vulnerable householders, ECO+ would have to be funded utilising taxpayer funding as additional costs could not be placed on energy bill payers at the current time.

British Energy Security Strategy

The Government has published its Energy Security Strategy today as part of its plans to boost Britain’s energy security following rising global energy prices and volatility in international markets.

Whilst key announcements focus more on additional supply, there are also key aspects that cover energy efficiency and demand reduction. However, the vast majority of the announcement, summarised below, is old news.

Energy Efficiency in Products and Buildings

• Better labelling and product standards to be introduced so consumers can purchase more energy efficient products within heating, lighting, washing, and cooking.
• The installation of household’s energy saving measures to be VAT free for the next 5 years. This is estimated to reduce the cost to consumers of insulation, double glazing, installing solar panels and heat pumps saving families £200 off the cost of installation.
• A dedicated energy advice offering for smaller businesses to be established. This service is to deliver trusted advice on improving energy efficiency and decarbonisation.
• Clearer energy performance standards across all buildings to be introduced phased in over the long term. This is likely to be linked to the EPC Action Plan.
• Smart meters in new buildings to be deployed at a more accelerated rate.
• Doubling of funding available to develop and pilot new green finance products for consumers from £10 million to £20 million.
• Introduction of scheme under which lenders will work to improve the energy performance of properties.

Heat in Buildings

• Heat pump manufacturing to be expanded supported by a Heat Pump Investment Accelerator Competition in 2022. This is estimated to be worth up to £30 million to make British heat pumps, which reduce demand for gas.
• The UK hydrogen ambition to double up to 10GW of low carbon hydrogen production capacity by 2030. While this is to be used for cleaner power and transport, there is potential for fuelling heat.
• The UK’s current 14GW solar capacity to grow up to five times by 2035. There will be consultation on the rule of solar projects on domestic and commercial rooftops.
• Low-cost finance from retail lenders to be facilitated to drive rooftop deployment and energy efficiency measures.
• Performance standards to be designed to make installation of renewables, including solar PV, the presumption in new homes and buildings.
• From the industry, Neptune energy will invest to support the priorities through increasing production from Duva field in Norway to heat an additional 350,000 homes in the country.
• £450 million Boiler Upgrade Scheme.
• Commitment to ‘rebalancing’ the costs placed on energy bills away from electricity to incentivise electrification across the economy and accelerate consumers. This will also ensure heat pumps are comparatively cheap to run over time. BEIS will publish proposals on how to do so in 2022, considering overall system impacts and limiting the impact on bills, particularly for low-income consumers