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The government's much vaunted programme to transform the energy efficiency of 14m homes over the next decade will fail and only reach around 2-3m households, according to a document originating with their own climate advisers.
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The warning comes from the Committee on Climate Change (CCC), which on Tuesday for the first time published an open letter criticising government policy. It follows soaring energy bills and the news that one in four homes are now in fuel poverty.
The "green deal" plan, which will start in October 2012, will allow homeowners to take out loans to pay for insulation, with a guarantee that the savings on their energy bills will be greater than the loan repayments. Currently, energy companies have a legal obligation to enable their customers to improve their energy efficiency.
Lord Adair Turner, who announced this week that he is resigning as chair of the Committee on Climate Change in order to focus on his role as chair of the Financial Services Authority (FSA), wrote to Greg Barker and the secretary of state Chris Huhne, expressing concern about the detail of the Green Deal and Energy Company Obligation (ECO).
He slammed the current proposals as being "an inefficient way of spending ECO funding", which would not cut energy bills for householders or enable the government to meet its carbon budgets.
He pointed out that DECC’s own draft Impact Assessment projects show that between 2013 and 2020, six million lofts and 6.3 million cavity walls must be insulated.
But the government itself estimates that just 700,000 lofts and 1.7 million cavity walls will be insulated under the ECO.
Yet this policy is supposed to account for much of the cost-effective potential to improve energy efficiency in the residential sector.
Lord Turner therefore proposed that the current Carbon Emissions Reduction Target (CERT)'s targets for insulating lofts and cavity walls be included in its proposed replacement, the ECO, making it much more likely that target emission reductions would be achieved (e.g. 4-5 MtCO2 in 2020, rather than 2 MtCO2 as currently projected).
Lord Turner added, "a less energy efficient housing stock would raise costs and risks of investing in renewable heat" (under the Renewable Heat Incentive), because electric heat pumps work less efficiently in poorly insulated homes.
He rejected DECC's argument in the impact assessment that including loft and cavity wall insulation in the ECO would crowd out the Green Deal finance, saying that there is enough money to achieve this if the energy companies and Green Deal providers have appropriate incentives, which he describes, to keep costs down. Lord Turner's replacement as chair of the CCC is expected to be appointed by the end of March.
Further doubt on the ability of the Green Deal to meet its targets has been cast by Mike Ockenden of the Property and Energy Professionals Association, writing in the current print edition of Energy and Environmental Management magazine. He points out that there is only one local authority in the country, East Sussex, which is still monitoring the adequacy of Energy Performance Certificates (EPCs). These are the documents which will be used to estimate the energy efficiency of homes and buildings under the Green Deal.
A similar situation applies to Display Energy Certificates (DECs), which are meant to be displayed by public buildings over 1000 ft.². Many of these do not have a DEC, and yet not one has been prosecuted for this omission.
Trading Standards Offices are supposed to police the situation, and yet their departments have had their funding cut and enforcement activity has ceased completely, says Mr. Ockenden.
Without a monitoring system in place, and certification available to purchasers of homes to show how energy efficient they are, the nation's energy consumers are being forced to consume more energy and have higher bills.
At the root of all of these troubles for the government's energy policies can be found the spending cuts and the dispute between the Treasury and the Department for Energy and Climate Change over budget allocations. This dispute looks set to continue in 2012, with the low carbon industry sectors looking anxiously for the reassurance they need that their future is secure.
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