ECO - we can help with that! Claire Harrold, Head of Business Development Green Deal and Obligations.

ECO - we can help with that!

Claire Harrold, Head of Business DevelopmentGreen Deal and Obligations

• About npower

• The Energy Company Obligation (ECO) and Green Deal

• The cost of ECO & factors that impact this

• Our strategy

• An ideal ECO project

• Accessing ECO funding

• Questions

What we will cover today

• Part of the RWE Group

• A major UK energy company – one of “the Big 6”

• We generate 10% of the electricity used in Great Britain

• We supply electricity and gas to ca 6.5 million customers

• We have 12,000+ employees at UK sites

• Specialist Energy Services Division with a proven track record - successfully discharged our

previous obligations

• npower is committed to the

Government’s Green Deal initiative

and has been an approved

Green Deal Provider since

October 2012

About npower

• npower has already delivered against its Carbon Emissions Reduction Target (CERT) and Community Energy Saving Programme (CESP) obligations

• Both of these energy efficiency schemes were established by the Government to assist the UK in meeting targets surrounding the reduction of greenhouse gases

• Through CERT we insulated ca.470k cavity walls and 720k lofts

• CESP involved the insulation of ca. 10k solid walls and nearly 2k district heating schemes

Clacton Case studyClacton, Essex is a former holiday-resort, now in decline.Our work in the area targeted the most deprived homes.

Key facts – it makes a difference!• 53 homes treated (under CERT) in late 2012• External Wall Insulation installed as primary measure• Delivered homeowners bill savings of up to £475 annually• c. 6k t/CO2 saved

Our Energy Efficiency Expertise

Before

After

Average home heat loss Reduce energy use throughWhat is ECO?

ECO = Energy Company Obligation (replaces the “CERT” and “CESP” schemes)

As one of ‘the Big Six’ energy providers, it’s the new legal obligation we’re under which will help drive energy efficiency improvements in qualifying homes across England, Scotland and Wales. Npower need to fully or partly fund c. 150k compliant energy efficiency improvements by March 2015.

The Green Deal works alongside ECO to provide energy saving & renewable energy improvements to householders who don’t qualify for ECO, with no upfront cost.

The Obligation

ECO is split into three individual obligations:

• Home Heating Cost Reduction Obligation (HHCRO)

Supporting vulnerable private householders on qualifying benefits

• Carbon Saving Community Obligation (CSCO) & Rural sub-obligation

Helping people living in pre-defined areas of deprivation and rural locations

• Carbon Emissions Reduction Obligation (CERO)

Making funding available for energy-saving improvements that would not otherwise qualify for Green Deal

The ECO and Green Deal Relationship

HHCRO Who will we be helping?Vulnerable and low income households in private tenure

Customer share of cost:Assumes that no cost is paid by the customer.

Measures: Heating and insulation

Bear in mind: identification, trust, tenancy

CERO Who will we be helping? People in hard-to-treat properties, including social housing.

Customer share of cost:Customer takes Green Deal funding for part of the cost.

Measures: Insulation and secondary measures

Bear in mind: property types; consumer needs; planning; timing

CSCO Who will we be helping? People in deprived areas and rural circumstances.

Customer share of cost:Assumes that no cost is paid by the customer.

Measures: Insulation, district heating

Bear in mind: make projects accessible to all; know your stock; power of WOM; timelines

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• State Pension Credit

• State Pension Credit

• Child Tax Credits anda household income of less than £15,860

• Child Tax Credits anda household income of less than £15,860

• Income-related employment and support allowance

• Income-related employment and support allowance

• Working Tax Credit and a relevant income of £15,860 or less

• Working Tax Credit and a relevant income of £15,860 or less

• Income Support

OR income-based job seeker’s allowance

• Income Support

OR income-based job seeker’s allowance

• Plus a qualifying component

We can help homeownersand private tenants who are receiving:

• Plus a qualifying component

• Plus a qualifying component

• The aim is to provide fully funded energy saving improvements to eligible householders so that they can affordably heat their homes

• We’re focusing on the replacement or repair of inefficient boilers

• If appropriate loft and cavity wall insulation can also be installed

Home Heating Cost Reduction Obligation

HHCROHHCRO

Carbon Saving Communities Obligation

INSULATION IMPROVEMENTS IN DEPRIVED AREAS

The objective is to save energy by improving insulation (preventing heat loss and reducing energy needed to heat the home)

•Helps people who are living in pre-defined areas of deprivation (based on Index of Multiple Deprivation)

•Sub-obligation: 15% of the target has to be delivered in low income RURAL homes

•Also includes connection to a District Heating (i.e. communal) system – appropriate for flats & apartments

INSULATION IMPROVEMENTS IN DEPRIVED AREAS

The objective is to save energy by improving insulation (preventing heat loss and reducing energy needed to heat the home)

•Helps people who are living in pre-defined areas of deprivation (based on Index of Multiple Deprivation)

•Sub-obligation: 15% of the target has to be delivered in low income RURAL homes

•Also includes connection to a District Heating (i.e. communal) system – appropriate for flats & apartments

CSCOCSCO

‘HARD TO TREAT’ HOMES

The emphasis is on improving the insulation of ‘hard to treat’ properties (usually due to type of construction and age)

• Improving insulation in ‘hard to treat’ cavity walls

• Offering solid wall insulation

• Connection to district heating system

• Fully funded by npower or partly funded as part of a

Green Deal plan

‘HARD TO TREAT’ HOMES

The emphasis is on improving the insulation of ‘hard to treat’ properties (usually due to type of construction and age)

• Improving insulation in ‘hard to treat’ cavity walls

• Offering solid wall insulation

• Connection to district heating system

• Fully funded by npower or partly funded as part of a

Green Deal plan

Carbon Emissions Reduction Obligation

CEROCERO

• DECC Impact Assessment

• £1.3bn per annum: DECC estimate a cost of £400m to npower

• £55 per household energy bill per annum

• Industry estimates are costs could be double that

• Knock on effect on bills

• More people could be tipped into fuel poverty

• Responsibility to keep costs down

The Cost of ECO

Mix of measures

Cost to aquire

Matchfunding/customercontributions

• Experience from achieving previous Obligations

• Brokerage *NEW*

• Partners

• Marketing/lead generation companies

• npower own marketing/Green Deal Provider activity *NEW

• Flexible – adaptable – innovative

npower’s ECO and Green Deal Strategy

VA

LU

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CONVENIENCE AFFORDABILITY TRUSTEASE

“Make the process as quick and as painless

as possible”

“Minimise the disruption in my life and home, help

make it a less painful

experience”

It must not cost me

anymore and hopefully saves me money”

“Treat me like an individual, be honest, do not hard sell and help me through the

process”

VA

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energy saving made

easier

• Ideally, but not necessarily, previous experience of obligations

• Current knowledge of the housing stock

• Knowledge of residents and their needs

• Combining initiatives with innovative community centred projects

• Working closely in partnership and with planners

• Using proven communication channels

• Willing to combine a variety of funding sources

A good local partner

• Measures must be compliant with the Ofgem guidance

Rules about:

• Types of projects

• Types of beneficiaries

• Evidence

• Measures

• Technical rules

• Timelines

• Reporting

• We can help with that!

And, always mindful of the Ofgem Guidance!

• Know the people, their needs and their houses

• Provide proof of CSCO areas where relevant

• Take responsibility for lead generation/assessor access

• Mix measures to improve cost effectiveness of scheme (solid wall properties only are less likely to be attractive)

• Bring planners in early

• Provide an assessment of expected carbon savings (and methodology used)

• Provide estimated costs

• Be innovative and source a combination of funding

sources and/or delivery strategies

• Take communication seriously

A good ECO Project

Thank you

Any Questions ?

[email protected]