3. Framework for valuation of energy efficiency measures
Air Quality Impact
Avoided Cost of
Renewables Valued at variable cost
Changes in energy
use
Other Environmental
Impacts
Security of Energy
Energy
Supply Efficiency
Changes in
emissions
Price Physical interruption Comfort taking /
Volatility of supply Rebound effect Measured separately from energy use.
Changes are valued according to the price of
Guidance requires If possible, valued at Valued at retail price carbon.
qualitative expected energy
assessment only. unserved.
Source: Valuation of energy use and greenhouse gas emissions for appraisal and valuation” (DECC, 2011)
4. Example:
Consultation Stage Green Deal Impact
Assessment
Benefits Energy savings (Variable element) £16,841
Non-monetised benefits
(£m) Comfort benefits £3,760
• Estimate that ECO worth
Air quality benefits £1,313
£1.3bn per, by the end of
Lifetime non-traded carbon savings £5,377 2022 reduction in the
Lifetime EU Allowance savings £1,917 number of households in
Total benefits (£m) £29,209 fuel poverty of between
Carbon & 2020 Non-traded carbon savings (MtCO2 pa) 2.11 350,000 and
Energy - Domestic GD and CT measures 2.49 550,000, compared to
savings - Domestic AW measures -1.28 how many households
- Non domestic sector 0.90 could have been in fuel
poverty at the end of
2020 Traded carbon savings (MtCO2 pa) 3.77
2022
2020 Energy savings (TWh) 21.22
• The health benefits
Life time non-traded carbon savings (MtCO2) 114
arising from warmer
Life time traded carbon savings (MtCO2) 53 homes have not been
Average cost effectiveness £/non-traded tCO2 monetised
-£29
Not finalised: will be updated later in 2012
6. Fuel Poverty
• A household is in fuel poverty if it would need to spend at least 10% of its
income in order to heat the home to an adequate level of warmth (21˚C for the
main living area, and 18˚C for other occupied rooms).
The Government commissioned Professor Hills to undertake a review of the fuel
poverty target and definition. This will be made public shortly.
7. What are the variables of fuel
poverty?
Energy Efficiency Income
Reduces amount household has Energy bills constitute a smaller
to spend % of income
Fuel Prices
Energy bills constitute a smaller
% of income
8. Current DECC Policies:
Energy Efficiency
Energy Efficiency Income
WARM FRONT
• Mostly provides heating measures to fuel
poor households.
• Exchequer funded
• Assisted over 2.3m vulnerable
Fuel Prices
households since 2000
• Due to close March 2013
CARBON EMISSIONS REDUCTION
TARGET (CERT) SUPER PRIORITY
GROUP (SPG) • Green Deal Eco due to launch
• Mostly provides insulation to 2012/13. Affordable Warmth
households at risk of fuel poverty obligation to assist low income
• Energy Supplier funded households.
• Estimated spend of £200m
pa, due to close end 2012.
9. Current DECC Policies:
Energy Bills
Energy Efficiency Income
Fuel Prices
Warm Home Discount
• Mostly provides discounts on energy bills for fuel poor households
• Most recipients receive discounts on their electricity bills. Discounts are
£120 this year, rising to £140 in 2014/15
• Energy Supplier funded
• Worth up to £1.1bn across CSR period (April 2011 to March 2015)
• Assists around 2m vulnerable households per year
10. Fuel Poverty Health Impacts
• Fuel Poverty is linked to a broad range of physical and mental health
impacts.
Physical Health Impacts Mental Health Impacts
• There is strong evidence relating to
• Warm Front customers 2.5
specific health impacts e.g.
times more likely to report
Cardiovascular and respiratory
moderate or high stress
problems below certain
levels than those reporting
temperatures, especially for the elderly
no difficulty to pay
• CMD households less
Excess Winter Deaths
likely to reach a desired
• Hills review suggested that around 2,700 level of heating
EWD may be caused by fuel poverty
Source: Hills Review of Fuel Poverty Interim Report (October 2011)
12. DECC Approach to Ex Post Evaluation
• DECC Evaluation Board provides strategic leadership, challenge and prioritisation of
policies / programmes
• Evaluations are:
– Considered for all policies / programmes, with monitoring of inputs, outputs and
delivery process as minimum
– Undertaken and owned by programmes, with support and QA from central
Evaluation Team
– Planned early, alongside monitoring, as part of policy / programme design &
delivery
• Consistent approach to evaluation planning
1. Develop policy logic model (Theory of Change)
2. Identify evaluation use and questions
3. Select evaluation approach
4. Define monitoring and other data requirements, resources , timing etc.
• Approaches vary, but impact evaluations should consider broad range of impacts and
always use appropriate comparator / control group to assess counterfactual
• Meta-evaluations of DECC policies to be undertaken (yearly), to assess relative and
aggregate impacts of policies, where possible
13. Evaluation example: Carbon Emissions
Reduction Target (CERT) and Community
Energy Saving Programme (CESP)
National Local case study areas
•Analysis using National Energy Efficiency Data-
Process evaluation - stakeholders framework (NEED)
Scoping interviews •NEED links data at individual address level:
Stakeholder workshop Desk research •Annual gas and electricity consumption
In-depth interviews In-depth interviews •Energy efficiency (EE) measures installed
•Property and householder characteristics
Householder research – ‘customers’ / ‘non-customers’
•Change in energy consumption before / after EE
Qualitative in-depth
measures compared with matched ‘control’ group of
National population survey (GB)
household interviews households without that measure
Actual impacts
of measures on
energy
CERT process consumption Expected
evaluation & impacts of
household CERT
research (appraisal)
CERT delivery Evaluation
CESP
(monitoring synthesis evaluation
data) report
Evaluation findings identified:
•Success factors for delivery models;
•Drivers and barriers to uptake by households;
•Main benefits experienced by householders;
•Impacts of measures on energy consumption;
•Demographic distribution of uptake & benefits.
14. Carbon Emissions Reduction Target
(CERT) and Community Energy Saving
Programme (CESP) identified benefits
• Energy savings
– CERT: Between April 2008 and March 2011
• 2 million lofts professionally insulated
• 1.6 million households received cavity wall insulation
• 1.4 million households bought subsidised DIY loft insulation
– Measured energy savings around 10% for cavity wall insulation
• Comfort taking
• Easier to heat home and reduced energy bills.
• Perception that energy bills were now affordable
• Economic benefits: Stimulated development of energy efficiency industry
• Employment
• Innovation and cost savings
• Aesthetic improvements from wider renovations
• Social benefits
Hinweis der Redaktion
DefinitionA household is in fuel poverty if it would need to spend at least 10% of its income in order to heat the home to an adequate level of warmth. Given that this is a ratio (energy cost : income) it emphasis is on fuel prices. Left hand graph: Number of Fuel Poor HouseholdsEven though the government have a wide number of policies which tackle fuel poverty, the incidence of fuel poverty has been rising since 2003. STATUTORYTARGET to Eradicate fuel poverty in England by 2016, as far as reasonably practicable (Scotland have a similar target). Hills review has suggested that this is an unfair characterisation of the problem as it is dominated by fuel prices and as such the affect of government policies to tackle the issue is masked. Right hand graph: Impact of DECC policies on Energy Bills60% of households in the bottom 3 deciles get no measures from DECC policies – and see an increase in their bills40% of households in the bottom 3 deciles get measures from DECC policies – and see a decrease in their bills
Elements of Fuel Poverty:Energy Efficiency (increases in energy efficiency lower the required energy to heat a house)Fuel Prices (drives the cost of energy as a % of income)Income- Not going to deal with the Income related policies as these are DWP policies not DECC i.e. Winter Fuel Payment, which are not directly targeted at the fuel poor, and Cold Weather Payment, which is targeted at vulnerable individuals.
The discounts are off electric bills but is expected that this saving can be transferred by the household to allow them to afford to use more gas if this is what is used to heat their home.
Evidence taken from the Hills Review of Fuel Poverty Interim report (published October 2012)CMD is common mental disorderDECC FP Economists are undertaking work to value the health impacts associated with DECC policies. The model will look at building fabric/permeability in relation to key exposures (Radon, PMs etc) and the relationship with the chance of a health impact occurring. The impacts are then monetised.
N.B. work to improve evaluation in DECC is fairly new – over the last 18 months, and starting from a low base.So we do not yet have a stock of completed evaluation studies to draw upon for meta-evaluation
CERT identified as an evaluation priority – and designed to provide evidence to feed into new policy development (Green Deal and ECO)Approach – process and impact evaluation, made use of monitoring
Priority Group consumers, defined as those in receipt of certain income-related benefits and tax credits.