Letter: Proposals for the Green Deal/Energy Company Obligation

Letter: Proposals for the Green Deal/Energy Company Obligation

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From: Lord Turner
To: Rt Hon Chris Huhne MP


I am writing to you to express the concern of the Committee on Climate Change about some of the detailed proposals for the Green Deal and the Energy Company Obligation (ECO).

In particular, DECC’s draft Impact Assessment notes that loft and cavity wall insulation account for much of the cost effective potential to improve energy efficiency in the residential sector, but projects that implementation of these measures will be very limited under the proposed policy approach. This is consistent with our own assessment, as set out in our third progress report to Parliament.

Low uptake would be problematic given the need to insulate lofts and cavity walls to meet carbon budgets, and to mitigate energy bill impacts from investment in low carbon power generation.

There has been good progress insulating lofts and cavity walls under the current Carbon Emissions Reduction Target (CERT) policy. We therefore propose that the new policy should build on this, and that DECC / the Government should seriously consider including full potential for loft and cavity wall insulation in the ECO.

The result would be a level of policy ambition that addresses much more of the potential for emissions reduction than the low level likely under the current proposal (e.g. 4-5 MtCO2 in 2020 rather than 2 MtCO2), while still achieving other policy objectives to contain funding costs and develop new markets for energy efficiency.