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Written Statement - Welsh Government Energy Efficiency Programmes Update

Alun Davies AM, Minister for Natural Resources and Food

With several of Britain’s energy companies announcing price rises of over 8 % and average energy bills rising to nearly £1, 500, many households right across Wales are worried about the impact that this will have on their household income.  

With pressure already on many household budgets, the recent rise in energy prices will inevitably lead to a greater number of people in fuel poverty across Wales. 

With the levers we have here in Wales, we are committed to doing all that we can to help householders address this issue through our ambitious energy efficiency and fuel poverty programmes. These are helping consumers throughout Wales build their resilience to price rises and, unlike the UK Government, we have no plans to change the definition of fuel poverty and are committed to helping those fuel poor households
Nest is providing households across Wales with a range of advice on how to be more energy efficient. It also provides debt advice, access to benefit entitlement, and, for the most vulnerable living in the least energy efficient properties, it provides a package of home energy improvements. 

From April to September this year, Nest provided 10, 852 householders with advice and support to reduce their fuel bills. 2, 650 of these householders, who were on a low income and living in the most inefficient properties also had their homes improved with a package of energy efficiency measures. 

Our ground breaking energy efficiency programme, Arbed, is providing energy efficiency improvements to some of the most deprived communities across Wales. Over its three year lifetime, the second stage of Arbed is projected to help over 4,800 homes across Wales. In 2013/14 Arbed has already completed energy efficiency improvements to 852 homes with a further 2081 to be completed by the end of March 2014. 

These programmes are doing more than just improving the energy efficiency of Welsh homes, they are also helping to develop the energy efficiency market in Wales and create new opportunities and jobs. Since 2012 Arbed 2 ERDF has created over 379 jobs and Nest has created 26 new jobs, apprenticeships and training opportunities and is supporting over 300 installer jobs in SMEs based in Wales.   

Further detail on the progress of our energy efficiency programmes was shared with Members earlier this week.

Given the scale of the challenge and the pressing need to make our homes energy efficient, I announced in October an additional £70m to attract investment from the Energy Company Obligation ECO into Wales. ECO provides support for energy efficiency improvements to households throughout the UK. 

The UK Government last week announced a reduction in the cost of the Energy Company Obligation (ECO) which will result in up to £50 off energy bills next year. Whilst this reduction in bills for householders is welcome, this announcement will reduce the amount of support available for householders for energy efficiency improvements, particularly those living in hard to treat properties. In addition, it will have an impact on the businesses delivering energy efficiency improvements, who will have taken on new employees in readiness to deliver ECO but will now not have contracts and work going forward. I have written to Gregory Barker, Minister for State, regarding the announcement and seeking further detail for us to be able to address the implications for Wales.

In addition to becoming more energy efficient one of the ways homes and businesses can increase their resilience to rising energy prices is through generating energy close to where it is used.  The Feed in Tariff, and the Renewable Heat Incentive can make it very attractive to install renewable energy kit in homes and businesses.  These can also help to tackle fuel poverty. In Newport Gen Community Ltd is running a locally funded share option scheme, which provides an investment opportunity for citizens through installing solar panels for communities on low incomes.  

Community groups across Wales are starting to generate renewable energy that can provide a long term income directly to them, through the Feed in Tariff, and from selling the energy they produce. Our Ynni’r Fro scheme has been supporting almost two hundred communities across Wales in their efforts to find viable projects and take them forward.  
We welcome the fact that both Ofgem and DECC have today made announcements regarding the future of the energy market. We will continue to push for the operation of an effective energy market through the Energy Act 2013 and the implementation, delivery and design of the Electricity Market Reform and development of secondary legislation. We know from developers with potential major projects in Wales that lack of certainty in the energy market is affecting investment decisions and undermining our energy aspirations in relation to economic benefit to Welsh communities. We will also continue to press UK Government to devolve the consenting of major energy projects to Welsh Government; a policy which I know has the support of all parties in the Assembly. 

We will continue to deliver and manage these and other policy interventions in relation to energy and energy efficiency in a co-ordinated manner as set out in Energy Wales. 
This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Assembly returns I would be happy to do so.