things to come - gerry miller, ciga / swiga

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Gerry Miller Things to Come

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Things to come - Gerry Miller, CIGA / SWIGA. Big Green Deal event, 16th September 2011 Aylesbury

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Page 1: Things to come - Gerry Miller, CIGA / SWIGA

Gerry Miller

Things to Come

Page 2: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

WHERE ARE WE STARTING FROM?

o Existing framework based on CERT/Warm Front/CESP has delivered successive step changes in insulation activity - but market dominated by subsidized offers

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ann

ual I

nsta

llati

ons

CWI Retrofit Trends

E E C 2 C E R T ExtE E S o P E E C 1

Forecast

Page 3: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

REMAINING POTENTIAL

Insulated, 10.8

Insulated, 13.2

Uninsulated, 7.9

Uninsulated, 10.1

7.9

3.3

0 5 10 15 20 25 30

Walls

Lofts

GB Housing Stock/Millions

Solid Wall

No Loft

Page 4: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

WHAT NEEDS TO BE DONE?

o Potential for Easy Cavity Wall and Loft Insulation installations remains but is finite

o Focus over coming years will shift to harder to treat properties including 6.6m with Solid Walls.

o Involve inherently more complex, diverse, disruptive and costly treatments

o CC Targets imply that that 2.3m Solid Walls will need to be treated by 2022 - a 10 fold increase

o Requires considerable industry Investment in developing solutions, training and scaling capacity

Page 5: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

WHERE WILL IT COME FROM?

EWI, 32%

IWI, 27%IWI major ren, 9%

LA EWI, 11%

LAEWI Flat, 11%

EWI major ren, 11%

Solid Wall Forecast Delivery Segmentation

DECC A Energy Bill High Case

Page 6: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

GREEN DEAL AMBITION

• Government see Green Deal as a “Game Changer” that will transform the UK’s housing stock

• 14 million homes to be assisted by 2020• Support 100,000 Jobs by 2015 and 250,000

when activity reaches peak• Integrated with an Energy Company

Obligation focused on the dual objectives of Fuel Poverty and Carbon savings.

• Delivered by strong National brands and Local knowledge and innovation

Page 7: Things to come - Gerry Miller, CIGA / SWIGA

Things to Come

Page 8: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

WHAT COULD SUCCESS LOOK LIKE?

o A successful transition to a combined ECO/GD could deliver real benefitso Increasing levels of insulation activityo Deeper inroads into Alleviation of Fuel Povertyo Neighbourhood and Housing stock

improvementso Development of thriving local businesseso Creation of local Employment o Delivery of Carbon savingso Product Innovation

Page 9: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

MEASURES INSTALLED

0

500,000

1,000,000

1,500,000

2,000,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Inst

alla

tion

s pa

Feasible Delivery Trajectory Installations pa

Loft

CWI

SW

Page 10: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

VALUE OF MARKET

0

500

1,000

1,500

2,000

2,500

3,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Market Value £m

Loft

CWI

SW

Page 11: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

EMPLOYMENT

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Employment

Loft

CWI

SW

Page 12: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

LIFETIME CO2 SAVINGS

0

5

10

15

20

25

30

35

40

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Lifetime CO2 Savings

Loft

CWI

SW

Page 13: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

THE COST OF GETTING IT WRONG

• Getting it wrong could result in • a meltdown in current CWI and LI activity

and loss of Jobs• Failure to develop the necessary

investment in expanding Solid Wall capacity

• Increase in Fuel Poverty over BAU and reduced consumer non fuel spending

• Failure of Building sector to achieve CC goals.

Page 14: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

STRENGTHS

• Creates a socially equitable model to drive higher cost energy efficiency improvements.

• Embodies a holistic ‘whole house’ approach to treating buildings

• Provides a real opportunity to improve the building stock and local neighbourhoods.

• Offers help to those in Fuel Poverty• Delivers Carbon savings to meet CC targets• Carries Government endorsement• ECO element will provide some certainty over

expected installation rates

Page 15: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

WEAKNESSES

• Over half of potential activity likely to be in ATP sector addressed by GD rather than ECO

• Market basis means no formal GD targets to give investment signals or track performance

• No planned transition - Construction is like a super-tanker – it takes time to turn and switch capacity into Solid Wall insulation

• Does not address risk of activity being stifled by building control and planning issues

• Lack of clarity over ECO GD interaction mechanism

• ECO represents a significant increase in cost to consumers, possibly £1.8bn pa or 10% of bills

Page 16: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

OPPORTUNITIES

• Could create significant opportunities for local businesses

• Could allow development of a Sustainable free market for Insulation

• Could catalyse creation of innovative delivery partnerships and mechanisms

• Market basis could drive innovation and allow differentiation of Products and Services

Page 17: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

THREATS

• Lack of demand certainty under free market GD

• Uncertainty over which particular Measures will be promoted in GD packages

• Exclusion of ‘Able to Pay’ CWI and LI from ECO will damage industry, reduce carbon savings and push up costs suppliers pass to consumers

• Entry of new players not experienced in building fabric measures could result in poor quality workmanship, seriously damaging consumer confidence

• Golden Rule could drive cost & performance down, rather than encourage innovation

Page 18: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

THREATS

• Slow uptake from consumers conditioned to subsidised insulation offers

• Risk of transaction costs making effective, low cost, measures such as CWI unattractive to providers and consumers.

• Risk of loan rates leaving no benefit for consumers

• Fears of default fears concentrating activity in low risk areas

• Risk of dominance by major players or Financial Institutions sucking value out of supply chain

• Risk of Energy Companies using ECO funds to control access to GD packages

Page 19: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

KEY FACTORS FOR SUCCESS?

o Clear ‘targets’ and effective design and integration of ECO/GD to maintain current activity in the transition and drive investment in Solid Wall training & capacity.

o Wide access to ECO funds to allow engagement of all delivery channels and range of local businesses

o Building Consumer confidence and demand:o Communications programmeo Robust Quality Assurance frameworks from day

1o Range of competing propositionso Involvement of trusted local partners

Page 20: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

WHAT IS INDUSTRY DOING?

• NIA Engagement with Government regarding development of key policies

• Research to validate remaining insulation potential and determine sustainable timelines and trajectories for main measures

• Work to develop solutions to non standards cavities

• NIA and CIGA Creation of Solid Wall Insulation Guarantee Agency and framework to Guarantees SW work meeting technical requirements.

• Builds on Proven Cavity model which saw CWI activity safely increase 5 fold

Page 21: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

SWIGA FRAMEWORK

25 Year Guarant

ee

3rd Party Surveillan

ce

Registered

Installers

1st and 2nd Party

Industry surveillan

ce

Research

Installation &

Assessment

Guidance

Technical Investig-

ation

Training & Skills Cards

Certificated

Products/ Systems

Page 22: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

SWIGA SUMMARY

o Comprehensive; covers all suitable property types and Internal, External or Hybrid Systems

o Provides assurance that work will be carried out correctly, as Framework aims not just to sort out problems - but prevent them

o Multi tier checks backed by independent surveillance

o Helps ensure consistent In Situ performance to support Golden Rule

o Simple, Guarantee covers defects in materials and workmanship and not restricted to installer insolvency

o Integration with CP scheme to ensure B Regs compliance

Page 23: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

THE ROLE OF LOCAL AUTH

• Perceived as Trusted partners – loft programmes of 1980’s

• Scope to develop innovative propositions, integrate Fiscal incentives based on Council Tax etc.

• Simplification of Building Control and Planning constraints.

• Detailed knowledge of local building stock• Existing Relationships and networks with local

contractors• Synergies with HECA commitments• Potential access to low cost finance

Page 24: Things to come - Gerry Miller, CIGA / SWIGA

The Solid Wall Insulation Guarantee Agency

CONCLUSIONS

• Green Deal offers the potential to deliver major benefits

• Must be designed correctly and accessible to range of providers

• Local Authorities have a natural role to play and CIC construct provides • Critical mass to allow effective competition

with major Brands.• Sharing of best practice• Scope for joint Communications• Additional route to market for Contractors