Fuel Poverty: Scottish Government response to working group reports

Chapter 4 - Energy Performance

The two groups highlighted that improving the energy performance of homes can have a significant impact on fuel poverty and made a number of recommendations for the Scottish Government including:

• SEEP should have a central objective to eliminate poor energy performance of a property as a driver of fuel poverty, including all properties of fuel poor households to be upgraded to at least an EPC band C by 2025;
• Introduce regulations for a minimum standard of energy performance at the point of sale and rental for the private housing sector;
• Use new powers over supplier obligations to ensure that the Energy Company Obligation supports the objectives of SEEP;
• Influence the next iteration of the Reduced data Standard Assessment Procedure ( RdSAP) assessment methodology so that it properly reflects the range of climate conditions and other characteristics in rural and urban parts of Scotland;
• Ensure SEEP grant and loan funding is made available to support the costs of essential building repair and improvement works;
• Change the criteria for the HEEPS: Warmer Homes Scotland scheme to include funding for enabling measures such as domestic oil and LPG tanks, electrical upgrades, flue lining and the installation of the most efficient storage heaters;
• Develop a new scheme for private sector landlords which would require, but incentivise, them to bring their rented properties up to an affordable warmth level; and
• Ensure that programmes are capable of delivering the rates of grant funding support required to fully meet the potentially higher costs of installs, particularly in rural and remote Scotland.

This Chapter addresses the following recommendations:

Strategic Working Group Recommended Actions

Rural Fuel Poverty Task Force Recommended Actions

*please refer to Annex A of this report for full details of each recommended action

What the working groups said

The Strategic Working Group set out an aim "to virtually eliminate poor energy performance as a driver of fuel poverty" noting that, to achieve that "it is vital to significantly expand the number of homes in which energy efficiency measures are installed".

In that respect, the Strategic Working Group made recommendations that focussed on how energy performance should be factored into the delivery of current and future programmes. The Group recommended that Scotland's Energy Efficiency Programme should have a central objective to eliminate poor energy performance of properties as a driver of fuel poverty. This includes setting a target that all properties of fuel poor households should be upgraded to at least an EPC band C by 2025. The Group made clear that this should not be a maximum ambition and it should be considered whether SEEP should go beyond an EPC band C. The Group advised that SEEP should meet householders' needs, be targeted on those properties for which energy efficiency is the main driver for fuel poverty (mainly rural properties), ensure the best use of public funds and build on the Scottish Government's current energy efficiency programmes ( HEEPS).

The Rural Fuel Poverty Task Force also addressed the energy efficiency of dwellings, with a particular concern about the assessment methodologies used to determine the energy performance of a building. The Task Force recommended making changes to the RdSAP to better reflect climate conditions and other characteristics in rural and urban parts of Scotland. It recommended that the Scottish Government works with protocol organisations to improve the consistency of assessments and that assistance is provided to organisations who are interested in becoming accredited assessors. The Task Force also recommended that SEEP considers support for any essential building repairs that are required before energy efficiency measures can be installed and that there be a review of eligible measures for existing energy efficiency programmes to ensure particular rural and off-gas issues are taken into account.

Both groups asked the Scottish Government to do more about the energy performance of private sector housing, including introducing regulations for a minimum standard of energy efficiency. The Task Force felt any regulations should be accompanied by a new scheme for private sector landlords which would support and incentivise them to bring their rented properties up to an affordable warmth level. Both groups also recommended that the Scottish Government uses innovative approaches to funding, including the use of newly devolved powers over the Energy Company Obligation, to ensure a holistic approach to the development and delivery of energy efficiency programmes.

What the Scottish Government is doing

Scottish Ministers announced in June 2015 that energy efficiency would be a national infrastructure priority, to be delivered through Scotland's Energy Efficiency Programme. SEEP is a co-ordinated programme to improve the energy
efficiency of homes and buildings in the commercial, public and industrial sectors.
Its vision is that "Scotland's buildings are near zero carbon by 2050 and that this
is achieved in a way that is socially and economically sustainable".

We are committed to investing more than half a billion pounds for SEEP over the next four years, to improve energy efficiency and reduce fuel poverty through, setting out a clear commitment with substantial annual public funding. SEEP will be an unprecedented, large-scale, long-term programme across all parts of Scotland.
It will make our homes warmer and places of work more comfortable, promote
more affordable energy for consumers, help to tackle fuel poverty, improve competitiveness of the Scottish economy, create substantial market and supply chain opportunities, and contribute to meeting our climate change targets.

As part of the development of SEEP we have specific workstreams exploring a number of the recommendations made by the Groups around energy performance, including:

• a workstream looking at the assessment mechanisms used to measure the energy performance of buildings;
• one looking at advice and support provision, with a view to deciding what is likely to be required for both the domestic and non-domestic sectors;
• a finance workstream looking at ways to attract private sector investment into energy efficiency; and
• a workstream looking at regulations and standards.

There will be various consultations on different areas of SEEP that explore these issues in more detail and allow us to further develop our thinking. The first of these, concerning the programme and policy design of SEEP ^[3] , was published recently alongside the wider draft Energy Strategy Consultation.

We will also be consulting shortly on minimum energy efficiency standards for homes in the private rented sector. The consultation will propose a minimum standard, linked to the EPC rating of the property, and will seek views on a range of issues, such as when the standard would apply and what the level of energy performance should be.

In addition, as part of SEEP, we will consult on phased regulation of other existing buildings to bring them up to higher energy efficiency standards as well as look at financial incentives. And we will consult on new heat regulations to support the development of heat networks. We have published a timetable for these consultations as part of the climate change plan and wider draft energy strategy consultation.

Improving the energy efficiency of properties is an important step in tackling fuel poverty, but a one-size-fits-all target, such as EPC band C, may not be appropriate for something as diverse as the housing stock, let alone offices, shops and industrial sites. However, as indicated in the draft Climate Change Plan, through SEEP we will be significantly scaling up the installation of energy efficiency measures, like wall and loft insulation, so that by 2032 all homes, where technically feasible, are insulated to appropriate levels. We are continuing to model options for the design and delivery of SEEP and will engage with a wide range of stakeholders in assessing them, including as part of the wider consultation on the draft Energy Strategy.

Actions

The Scottish Government is committed to the following actions:

• We will continue to develop SEEP as a co-ordinated programme to improve the energy efficiency of homes and buildings in the commercial, public and industrial sectors and to decarbonise their heat supply;
• We will continue to explore assessment mechanisms used to measure energy performance and consider how these should be taken forward in SEEP;
• We will consult on various strands of SEEP throughout the course of 2017 including on programme and policy design, regulation and standards in the private rented sector and heat regulations; and
• Following the above consultations, we will further develop target-setting as part of SEEP, including the role of minimum standards in private sector housing.