Green Deal and Energy Company Obligation

Ed Davey Excerpts

Monday 11th June 2012 Written Statements

[The Secretary of State for Energy and Climate Change (Mr Edward Davey)]

Today my Department is publishing the Government response to the green deal and ECO consultation ahead of the introduction of the green deal this autumn.

Having considered over 600 written responses from a variety of organisations and individuals, I would like to thank all those who submitted a formal response or participated through the various activities held during the consultation. Feedback from the consultation directed our focus towards four key policy areas: strengthening consumer protection, reducing industry burdens, improving behind-the-scenes operations and revising ECO. I have acted on these areas, and full details of the final policy are set out in the Government response.

Following consultation, this week I am laying before Parliament the key statutory instruments which establish the market framework of the green deal and ECO, subject to the affirmative procedure. I am laying these instruments alongside the final impact assessment, which evaluates the net present value of the policies. My Department has simultaneously published associated research, which informed our final conclusions. Later in June, I will lay before Parliament a second tranche of more minor green deal statutory instruments subject to the negative procedure. I will also be bringing forward the green deal code of practice and modifications to energy licences and codes.

Having taken over this programme four months ago, I have spent this time talking to stakeholders and understanding how to ensure successful delivery. Mindful that we are creating the foundations for a market that will run through to 2030, and in light of representations I have received, the regulations I am laying today provide for a carefully managed introduction of the green deal starting this autumn.

Subject to parliamentary approval of the green deal legislation, accredited certification bodies will be able to submit applications to register with the green deal registration and oversight body from August. The certification bodies will then be able to register those assessors and installers they have certified. Similarly, potential green deal providers will be able to apply for their approval. This will allow participants time to seek formal authorisation ahead of the introduction of the green deal framework in the autumn. It is important that the market will be able to test systems properly during the first weeks following the introduction of the green deal framework and ahead of the first fully completed green deal plans in early 2013. In the meantime, the energy company obligation (ECO) legislation I have put before Parliament today will ensure that a new ECO is established from October this year. This will mean that an estimated £1.3 billion-worth per year of energy efficiency and heating measures can be delivered across Great Britain. This will be directed to vulnerable and lower-income households, and carbon saving measures. The Government remain absolutely committed to tackling fuel poverty.

An important aspect of preparations is training the work force, and I took an obligation in the Energy Act 2011 to report to Parliament on what steps I have taken to encourage green deal installation apprenticeships. On 8 March 2012, in co-operation with asset skills and construction skills, I announced £3.5 million to train up to 1,000 green deal insulation installers, and 1,000 green deal assessors to our new national occupational standard for green deal assessment. This training will also include the validation of existing installer training courses to meet the new green deal PAS 2030 requirements and the training of trainers to ensure quality training courses are available. I welcome the wide support from industry for this initiative and the huge level of interest reported by the sector skills councils. We believe the green deal has the potential to support up to 60,000 jobs in the insulation sector alone, more than doubling the number of jobs in the sector, and making a real contribution to green growth.

We will work with the insulation sector to explore the value of a second tranche of funding for training later in the year to help those moving from the carbon emissions reduction target (CERT) and the community energy saving programme (CESP) and into related green deal installations. In addition to this, my Department will continue to work with employers and the sector skills councils to ensure that the Government’s wider apprenticeship frameworks support not only the green deal, but also green and sustainable construction more generally.

We have created a robust legal framework, which enables a market in energy efficiency to flourish. We are committed to ensuring that the interests of green deal providers and financiers remain protected to maintain the security of green deal asset and thus secure the lowest possible cost finance for consumers.

It is only sensible to keep regulations under review and, for the sake of transparency, I will commit now to review these regulations, in consultation with appropriate stakeholders, before 31 January 2018 and to publish the conclusions in a report. The report will set out the objectives of these regulations and assess the extent to which they were achieved, whether they remain appropriate and, if so, the extent to which they could be achieved with a system that imposes less regulation.