£14 billion worth of private sector investment in home energy improvements over the next decade will help insulate households from rising global energy prices and create thousands of jobs in the British insulation and construction sector, Chris Huhne said today.
A consultation on the Green Deal, which will provide home energy saving upgrades to householders at no upfront cost, was published as part of the Energy and Climate Change Secretary's Annual Energy Statement to Parliament. He also published a new government analysis showing that homes will on average be cheaper to heat and light in future than if the Government was not pursuing policies to keep the lights on and emissions down.
Chris Huhne,Energy and Climate Change Secretary, said:
The Green Deal is about putting energy consumers back in control of their bills and banishing Britain's draughty homes to the history books. By stimulating billions of pounds of private sector investment, the Green Deal will revolutionise the way that we keep our homes warm, making them cosier, more efficient - and all at no upfront cost.
The Green Deal is also a massive business opportunity for firms up and down Britain, helping to power the economy and creating jobs. From one-man bands and local authorities, to the big supermarkets and DIY stores, we want as many providers getting involved as possible because that's what will give consumers the best deal.
I want to insulate Britain's homes not just from the cold weather, but also from the chill winds of global fossil fuel prices. It's these that are pushing up consumer energy prices, and it's why our balanced package of policies aimed at achieving energy savings and shifting to more home grown alternatives is the right one for the economy and all of us who pay energy bills.
There are certainly costs to replacing our ageing energy infrastructure with modern, clean power stations, and we take very seriously any impact of our policies on what consumers and businesses pay. We've repeatedly taken steps to reduce this - by removing some planned levies on bills and making others more cost effective and within budget.
But a crucial and too often ignored priority of our whole strategy is to reduce the amount of energy we use in our homes.
The Facts and Framework
The Green Deal framework will be launched from October 2012. This month's consultation outlines the followingthree big benefits of the ground-breaking scheme - and asks for comments from industry and the public:
- Every British home and business will be able to install packages of energy-saving technologies such as insulation at no upfront cost, making their property warmer and cosier straight away,with repayments made over time out of the energy savings. Strict standards will be put in place to prevent consumers being ripped off by cowboys.
- A new requirement on energy companies to provide £1.3 billion a year to ensure everyone is able to benefit from the Green Deal - no matter their income or the type of house they live in. Additional help will be available to ensure the fuel poor get better boilers and fix draughty homes, while subsidy will also be provided to help tackle homes that are hard to insulate“includingsolid wall homes.
- The Green Deal is expected to kick start around £14 billion of private sector investment over the next decade
Separately, the Chancellor announced in Budget 2011 that the Government is committed to the success of the Green Deal and will act to encourage and incentivise take-up sothe Green Deal will appeal to households, businesses and prospective providers alike, before it is introduced in 2012.
The Green Deal - Impacts on Energy and Climate
The annual estimate of the impacts of energy and climate change policies on energy prices and bills, published this month, shows:
- By the end of 2011 household electricity prices will have increased by around 16% and household gas prices by 25% since the start of the year. This has been due mostly to global fossil fuel prices. Over the past year alone the global gas price increased by nearly 40%. Many experts expect global fossil fuel prices to continue to rise over the medium- and long term, meaning energy bills are likely to increase with or without policies.
- Government policies currently account for around 7% of an average household energy bill and have contributed very little to these recent price increases. In fact, accounting for the efficiency savings policiesalready delivered, the average household energy bill in 2011 is only 2% higher than it would have been if these policies were never introduced.
- In 2020 the average household bill will be 7%, or £94, lower than if the Government was not pursuing policies to achieve energy savings and incentivise the shift from fossil fuels to alternatives.A net saving will start to kick in from around 2013 and, over the remaining lifetime of this Parliament, average household bills will be lower than they otherwise would be,as a result of energy and climate policies. This assumes a central gas price estimate of nearly 70p/therm in 2020. If the gas price was to be higher, householders would be even better off.
- Government policies will enable more of the most vulnerable to heat their homes more affordably, as they will receive extra help through the new Warm Home Discount, existing energy efficiency schemes andthe Energy Company Obligation announced today.
