G8 Environmental Futures Forum 2000

Detailed Description of Best Practices
United Kingdom No.12

I. Title of the Best Practice

The New Home Energy Efficiency Scheme

II. Overview of the Best Practice

The New Home Energy Efficiency Scheme (HEES) is designed to improve the energy efficiency of low income households in England. There are some 4.3 million such households - the so-called fuel poor - who find it difficult to keep warm during winter due to inefficient heating and insulation in the home. These households face costs of up to £1,400 a year to maintain a satisfactory heating regime compared to about £600 for the average household. The main reason for this difference is poor energy efficiency with fuel poor households lacking insulation and using expensive, inefficient heating systems.

Most fuel poor households are unable to meet these higher costs and so suffer from cold homes. The principal effect of this is on their health and typically 30,000 more people die in winter in the UK than would be expected given the average death rate for the year. Although this excess mortality is caused by both exposure to outdoor conditions as well as cold homes, it is much higher in the UK than in other countries which have more severe winters but where homes are more energy efficient.

In addition cold homes have been shown to increase the incidence of respiratory illnesses, heart attacks and strokes. Fuel poor households are also thought to suffer from social exclusion caused by having to use a large portion of income on heating.

The UK already provides personal subsidies to households to help them keep warm such as Cold Weather and Winter Fuel Payments. In addition the level of VAT has been reduced on fuel and on energy efficiency measures provided under Government funded grant schemes.

The existing scheme, HEES, has operated since 1991 and assisted over 3 million households, principally through the provision of either loft or cavity wall insulation. However a wide review of the whole area showed the need for the scheme to be radically improved.

New HEES will be focussed on those most at risk of ill health from a cold home - the elderly, the young and the disabled. It will use a network of health professionals and local government officers to identify and reach these households.

The scheme will begin improving homes from June 2000. It will provide increased grants of up to £2,000 per household compared to the £315 available under the present scheme. It will provide complete packages of assistance to household covering both insulation and heating improvements, including the provision of high-efficiency central heating systems.

The heating improvements will be funded through the private sector, with the use of operating leases to fund the installation of these central heating systems. A major UK gas utility - Transco - is supporting the provision of these systems by underwriting the residual value of the system.

New HEES will reduce the heating and hot water costs of households by up to £1,000 a year, about 10 times more than under the present HEES. Most of these benefits are likely to be taken in the form of increased comfort, but New HEES will still reduce carbon emissions from the domestic sector by on average 0.07tC per household per year. As all household incomes increase, the need to not have to spend more on fuel means the carbon reductions will be greater in later years than would be the case otherwise.

New HEES will begin to improve homes from June 2000 and it is expected to have helped 460,000 households by March 2002.

The widespread introduction of high efficiency heating systems through New HEES should also help their take up in the wider domestic sector which would deliver further carbon reductions.

III. Categorizing the Best Practice

1. Classifications
( ) Regulatory approach
( X ) Practical action
( ) Social network mechanism

2. Social actions involved
( X ) Citizens
( X ) Central Government
( ) Local Government
( ) Business

3. Sector(s)
( ) Energy
( X ) Household
( ) Transportation
( ) Industrial enterprises
( ) Other (Non-Industrial) Business
( ) Agriculture/land use/forestry
( ) Other

4. Target greenhouse gas(es)
( X ) CO2
( ) CH4
( ) N2O
( ) HFC
( ) PFC
( ) SF6
( ) Other

IV. List of Attachments

See attached paper: Fuel Poverty: The New HEES

V. Contact

Philip Walker
DETR
Zone 6/E14
Ashdown House
123 Victoria Street
London SW1E 6DE

Tel: 0171 890 6662
Fax: 0171 890 6679

Detailed Description of Best Practices - United Kingdom No.12

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