Check against delivery
Good morning and thank you for coming today, I have great pleasure in announcing the third and final element of this year’s Renewable Heat Premium Payment - the Communities Scheme. Before launching into the detail of this new scheme, lets discuss why I believe renewable heat is so important and why we need to take action now.
The UK Building Stock & targets
Under the EU Renewable Energy Directive, the UK has a legally-binding commitment to generate 15% of its energy from renewable sources by 2020. An incredible 47% of the UK’s carbon dioxide emissions are attributable to heat generation.
Looking ahead, the DECC Carbon Plan sets out the Coalition Government’s aim to reduce emissions from heat in buildings from 124 Megatons to zero by 2050. To achieve these extraordinary targets, heating used in buildings will need to come from renewable technologies such as air-source or ground-source heat pumps. The RHPP is really the first step on the road to achieve this.
I don’t under estimate the challenge and this is an important first step. Throughout this decade, Government is really focussing its attention on working with industry to prepare the market. We are committed to renewable heating, driving innovation and supporting the UK industry to build supply chains - with the goal to bring down costs ahead of large scale roll-out. Creating British jobs, British firms and British expertise.
Phase 1: RHPP Success
So what has happened so far.
Under Phase 1 of the RHPP, which ran from August last year to the end of March this year over 6000 homes received help. These houses were previously on costly, high carbon fuels for heating and have now had their systems replaced with low or zero carbon renewable heating.
Phase 2: Building on success
Now let’s move to Phase 2, which is building on the successes of Phase 1. Under the RHPP, we are continuing to provide one-off grants to householders across Great Britain to help with the cost of installing renewable heating technologies. Since we reopened in March, we have issued a further 1,187 household vouchers - all helping to install renewable heating technologies in people’s homes.
Social landlords competition
In May this year, I launched the second social landlords competition. We received 72 applications and I can announce that all were successful in this competition at a value of just over £5million. A full list of winners will be published on the DECC website today.
The value of the applications received was just over £5 million -this is approximately half the £10million we have set aside for social landlords. We would have, of course, liked to have seen more applications, but I am still very encouraged that these applications are seeking to install a significantly higher number of heating systems - three times more than seen in the first competition for the same financial contribution from DECC.
We are now considering our next steps - Should we have another competition or not? If we do decide to do so, we will announce something very soon. I am very interested to hear views from the room today through the Q&A.
I am already convinced that low carbon heating systems have a role to play in social housing. Social landlords do not have to take my word for it, they can see for themselves. Tenants have told us that their new heating systems are saving them money and are easier to run.
Now let me turn to the Communities Scheme - the reason we are here today. The Coalition pledged to “support community ownership of renewable energy schemes” and we have said on many occasions that local people are best placed to decide what is best for their communities. Schemes such as LEAF have enabled communities to act on this and be at the forefront, playing their part in effectively delivering these priorities at a local level.
Communities have much to gain aside from the evident carbon benefits and energy bills savings. It has been shown that communities working together on low carbon energy projects enhance trust between local people and local organisations. This is a strong foundation to build future local capacity and further collective action.
I would like to take this opportunity to thank the Community Board for their help in developing this new Scheme. I am also extremely pleased to see so many of you have joined us here today and are interested to know more about this new initiative.
This new RHPP Scheme draws on the successes of the Local Energy Assessment Fund (LEAF), which closed in March 2012 and which some of you, I’m sure will already be familiar.
LEAF supported communities across England and Wales to play an active role in the development of a low carbon society where the energy supply is both secure and affordable.
There was widespread interest from around 600 communities, and 236 of them received funding from the £10million pot. The funds supported work by community groups and there were many inspirational examples of communities getting together, assessing local energy efficiency and renewable energy needs and produce local solutions tailored to their unique needs. We will be running an in-depth evaluation of learning from LEAF over the coming months.
Can I take this moment to give you a bit of detail about the Scheme. The objective is to facilitate the installation of renewable heat systems into privately-owned homes in England, Scotland and Wales.
It will work by supporting those who are currently unlikely to be able to benefit from the RHPP household voucher scheme, through additional Government funding and by encouraging community groups to negotiate bulk buying discounts. We would particularly like to focus on properties and communities which are off-gas, where bills and emissions are higher.
After this event and until the beginning of September, community groups will be able to register their interest with the Energy Saving Trust. Those projects that pass an initial assessment will progress to the development phase. Here, communities will be supported to develop their ideas into project proposal bids. These bids will be independently assessed and winners announced later in the year.
Innovation: Heat Strategy, the Green Deal & RHI
The RHPP Scheme is a piece in a wider jigsaw and we are working hard to deliver other key initiatives such as the Green Deal and the Renewable Heat Incentive. In recognition of this I was pleased to announce last month that we will be launching a Community Energy Strategy Document to bring together DECC’s strands of work on communities, which will be published in 2013.
The Green Deal launches this autumn helps people pay for home improvements like insulation through savings on their energy bills. It will help people to make energy-saving improvements to their homes to keep them warm and cosy. At the same time, it’ll reduce the amount of gas and electricity householders need and keep their heating bills down. ECO, a subsidy from energy suppliers, will provide extra help for those most in need and for properties that are harder to treat.
We know more and more families are being hit by the rising cost of gas and electricity. But our inefficient homes are using a lot more of it than they need to - more than half of our homes don’t have sufficient insulation.
The Green Deal is designed to address these problems, but in a truly revolutionary way. It places consumers at the centre of energy efficiency policy. It isn’t about stop start Government driven and owned programme of works. It is about consumers driving demand, and a competitive market responding.
And as the market grows and develops, homeowners, landlords and tenants will get access to a whole range of home improvements to increase the energy efficiency of homes.
The energy efficiency measures in the Green Deal also help to boost the effectiveness of many renewable heat technologies, such as air and ground source heat pumps. Having an energy efficient home is also a prerequisite for installing renewable hear technologies.
The RHI non-domestic scheme already incentivises community groups and social landlords to connect several households together to create local community heat networks and to supply renewable heat to community buildings such as schools and village halls.
We are on track to meet the RHI delivery timetable and we are publishing our longer term proposals for budget management, as well as proposals on biomass sustainability and air quality. I am also pleased to confirm that we are on track to launch the Domestic RHI consultation this September.
In conclusion it is clear to me that communities and a decentralised approach to energy generation is at the heart of any real long-term solution to climate change and the reduction of our carbon emissions. But I would like to go further. I’ve seen the way these local schemes bring neighbourhoods closer together. I’ve seen them build greater community cohesion. I’ve seen them catalyse new local projects that embed sustainability and resource efficiency and drive greater sense of responsibility. Decentralised energy efficiency is a great thing. Not just a means to an end. I hope that communities of all shapes and sizes will get on board and take advantage of all this scheme has to offer.