Address to the Ecobuild Exhibition
Edward Davey speech to the Ecobuild Exhibition.
It’s great to be back here at Ecobuild.
This is my third Ecobuild conference on the bounce. And this event just keeps getting bigger and better.
Your first event back in 2004 was a small fee paying conference with a few seminars.
This year over 800 companies are taking part.
Today there are over 100,000 jobs in the UK’s multi-billion pound energy efficiency market.
And this illustrates my main theme today – the changing face of Britain’s energy efficiency market.
For I want to talk about the progress we’ve made. And how I think we need to approach the future.
Progress
The UK is now a recognised world leader on energy efficiency.
We have the least energy intensive economy in the G7.
Average household energy consumption has reduced by 20% since your first exhibition.
And this is because successive governments have put energy efficiency at the heart of energy and climate policy.
We have now the most comprehensive framework for energy efficiency that has ever existed.
From Feed in Tariffs to the Green Deal and ECO, from the Renewable Heat Initiative to Smart Meters, from Products Policy to the Energy Saving Opportunity Scheme for business.
It’s a little known fact – but true: last year the average household in Britain saved around £90 on their energy bills because of Government policies. Not green taxes – but green dividends!
Just look at how much has been achieved since April 2010. Achieved with home improvements to make people warmer - under ECO, under the Green Deal and under the legacy regimes they replaced.
Almost 2 million cavity wall insulations.
Over 3.5 million loft insulations.
Under the Green Deal and ECO alone over 300,000 new, efficient boilers have been installed.
To date over 1 million homes have been made warmer, greener and cheaper to heat through the Green Deal and ECO. In fact, we reached that one million target 4 months early, thanks to strong ECO investment.
And as you know, ECO has been extended - out to 2017. That decision alone represents more than £1 billion of additional energy efficiency investment in Britain’s homes.
Now as I admitted last year, the Green Deal hasn’t gone as planned or hoped for.
While we’ve had just shy of half a million Green Deal assessments, with the majority resulting in people investing in home energy efficiency, the Green Deal Finance package itself hasn’t proved attractive.
There wasn’t the mixing of ECO and Green Deal Finance we thought there’d be. There wasn’t a new market take-off we’d hoped for.
Yet the success of the Green Deal Home Improvement Fund shows you can stimulate investment.
The first two phases of GDHIF were worth almost £150m – and we estimate that already 13,000 homes have already benefited from GDHIF measures, with many more underway or in the pipeline.
And I will be announcing the third release of GDHIF imminently.
A number of you here today have said to me before that what is needed is a more stable, long term agenda.
Although there have been over 180,000 solid wall insulations since 2010, we all know that this energy efficient investment in particular can sometimes be a really difficult and invasive procedure. That puts people off.
So it’s with this in mind that the Green Construction Board has commissioned the Government’s Chief Construction Adviser – Peter Hansford – to consider all the evidence associated with Solid Wall Insulation and report on its long term potential for innovation and deployment.
This is about providing greater confidence for the sector to invest in skills, technology and innovation for the long term.
So in turning now to the future, let me explain why I want to make energy efficiency an even greater priority in the next Parliament, and how we plan to do it.
Energy efficiency as a social good
I am clear that meeting our climate change obligations cannot be achieved – at least in any cost effective way - without energy efficiency and demand reduction.
But we are not seeking to reduce energy demand just because of climate change – we should be doing this anyway.
Energy efficiency represents an all-round social good.
Energy efficiency contributes to energy security – the less we use, the less we have to generate or import.
Energy efficiency makes sound commercial sense.
Using less energy costs less - providing room for higher productivity, higher growth, more jobs, more exports.
And energy efficiency is one of the main tools for reducing the burden of energy prices on all consumers.
Above all, energy efficiency can be a tool for social justice.
Quite simply: the poorest and most vulnerable stand to benefit the most, if we help them save energy.
And that’s always been one of my reasons for fighting so hard within the Coalition to keep the reduction of fuel poverty as a top policy priority. And it has been a major fight.
So I couldn’t be more proud to publish today, here at Eco Build, our new Fuel Poverty Strategy. With you, the energy efficiency sector, at its heart.
The last Fuel Poverty Strategy dates back nearly 14 years.
Born of good intentions. Born from cross-party consensus. That strategy’s progress stalled in the last Parliament, as fuel poverty rose and rose.
Now you could say, with fuel poverty having fallen under this government – yes fallen – you could say that the old strategy is now working, albeit a decade or more delayed.
But you’d be seriously wrong.
For at the heart of the old strategy was a flawed framework – with a method of measuring fuel poverty that would often include the homes of the wealthy, would move in tandem purely with the price of gas and would thereby fail to signal to Ministers as to whether their policies were working – or not.
Our new Fuel Poverty Strategy has the distinct advantage of being based on the seminal work of Professor John Hills, who reviewed fuel poverty measurement and policy.
Not only does his Low Income, High Cost measure prevent perverse findings such as the Queen being counted as fuel poor, but it also helps us identify where the most severe fuel poverty is – with off gas grid households undoubtedly very exposed.
And, as Hills recommends, at the core of our new Fuel Poverty Strategy is energy efficiency. And specific targets for improving energy efficiency.
Over 320,000 fuel poor households in England live in properties rated below band an “E” level EPC rating.
For them, this means having to spend on average £1000 a year more on energy to heat their home compared to a typical home.
So this strategy says that a key early milestone - for policy success to be measured against - is getting as many fuel poor homes as practically possible to an “E” rating or better by 2020.
With another milestone of “D” by 2025.
Helping the worst affected households as quickly as we can.
But the strategy goes further.
The new fuel poverty target for England – in place since December 2014 – sets an ambition that as many fuel poor homes as reasonably practicable achieve a Band C energy efficiency standard by 2030.
Yet setting an overall target is one thing. Setting out the practical ways to meet those targets is another.
That’s why, with almost a fifth of our housing stock in the private rented sector, and a third of the fuel poor living in rental accommodation, I have prioritised addressing private landlords.
So we are putting through Parliament regulations to improve the energy efficiency of housing stock in the private rented sector.
Once these regulations are passed, from April 2016, residential private tenants will be able request their landlord’s consent for energy efficiency improvements where Green Deal finance or subsidies are available to pay for them.
And landlords will not be able to refuse such a request without strong reason.
From April 2018, it will be illegal for private domestic and non-domestic landlords to rent out properties to new or existing tenants unless their properties reach at least an E EPC rating, or have installed those improvements that could be funded using available Green Deal finance or subsidies available to pay for them,
This is win-win.
Many of the poorest tenants will benefit and, with government support, landlords can improve their properties, at no upfront cost to them.
Yet for this strategy, I wanted to do a lot more than simply pass new regulations – vital though they are.
I want to turn fuel poverty into one of the next big public health campaigns of the future.
For the link between bad health and fuel poverty is undeniable.
From asthma to bronchitis, from exacerbating mental health issues to serious respiratory diseases, a cold home can be the root cause of much poor health.
So I am announcing today a £3m pilot programme to scale up local ‘warmth-on-prescription’ projects, and other innovative fuel poverty schemes.
The initial round of projects worth £1m will build on the work of pioneers such as Wigan Council and Wigan Borough Clinical Commissioning Group.
They have already created a fund to target an extra 2,000 people likely to be in fuel poverty who could face hospital admission due to illnesses caused or made worse by living in a cold home.
We will also be working with the Royal College of General Practice to develop their plans to pilot a new electronic referral system for health and fuel poverty which already has local support in areas such as Wiltshire.
Up to another £2 million will support local fuel poverty innovation and by the end of March we will invite stakeholders to come forward with their own ideas for tackling the types of fuel poverty they believe would benefit from pilot funding.
I believe bringing together health and fuel poverty will be the most significant boost your sector has ever seen – and I wanted to create the platform to do this.
A future plan for energy efficiency
Across the piece, from the Green Deal to ECO, from Demand Reduction to our Fuel Poverty Strategy, the action we are taking on energy efficiency is a recognition that, on their own and left to their own devices, the markets will struggle to stimulate the activity we need if we are to meet each of our objectives.
So it is right for Government to intervene.
So let’s look forward to the next five years and think about how Government, working alongside industry and the third sector can effect real change.
My experience in Government has taught me this:
First – That we won’t meet our objectives on fuel poverty, on carbon reduction, or affordable energy for consumers without greater investment in energy efficiency.
Second – as I have said many times before, regulation has a vital role to play. And in coalition with a Party that has a knee jerk antipathy to regulation we haven’t been able to go as far and as fast as we would have liked.
Third – A one size fits all approach to all households and businesses does not work – we need a much more segmented approach targeting different sectors in different ways.
So a new approach will require a mix of legislation, financial support – and action from you too – the energy efficiency industry.
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Conclusion
Ladies and gentlemen, the age of smarter homes has arrived.
The level of control we now have over our energy was unimaginable just a few years ago.
The challenge now is to make this the norm.
We need the energy efficiency offer to be bold, inspiring and comprehensive. And we need it to include the renewable heat drive too.
And that means, on the Government side, making sure that support, subsidy and incentives are properly aligned.
And making sure that targets and ambitions are properly regulated for, providing you with stability and driving your work.
In a moment or two, I will be crossing the exhibition floor to debate with the other political parties how we make this vision a reality.
But I am convinced that without the ambition I have set out today, we cannot hope to bring about the warmer, cleaner, greener Britain that we all seek.