Tag Archive: environmental

Is the Green Deal stagnating ?

Prior to its launch in Jan 28th 2013, Climate Change minister Greg Barker described the Green Deal as “the biggest home improvement programme since the Second World War…”  Unfortunately last week the Parliamentary Select Committee on Energy and Climate Change criticised ministers for having no clear targets for the scheme.  It is easy to understand why – in the first month just 1,803 Green Deal assessments were requested.

A May 2011 report “Financing the Green Deal” predicted minimal take-up of the Green Deal unless loan rates are subsidised down to 2% (they are currently near 8%).  Competition amongst the 50 lenders of The Green Deal Finance Company shows little sign of improving rates by natural means.

The Green Deal scheme is intended to increase the uptake of energy efficiency measures, particularly in households who would otherwise struggle to raise the capital sum outright.  In order to discover if a property is eligible, an assessment is required.  A recent Guardian survey discovered these assessments cost between £95 and £150 – a significant investment for lower income households, particularly with no guarantee of recouping the outlay.  Moreover, an April 2013 survey by Which magazine discovered that 46% of prospective house purchasers would insist that any outstanding Green Deal loan be paid off before proceeding with the purchase.  This could prove a fatal flaw – property owners must purchase an assessment without knowing whether it will be beneficial.  If it is not, they have wasted the assessment fee.  If it is, it may suggest a long term loan which will hamper any future sale of the property.

Is the Green Deal stagnating ?

Renewable energy shots it’s own foot

England is the windiest country in Europe, therefore wind turbines are our favoured large-scale renewable energy source (solar PV in the domestic market).  Because no fuel source is required, once installation and maintenance costs are repaid the resulting power is “free”.  Carbon-fuelled electricity generators must increasingly compete with an opponent whose marginal cost of manufacture is close to zero.  This threatens future profitability and consequently credit rating agencies and banks have begun to selectively downgrade carbon-heavy electricity suppliers.  The knock-on effect will be to increase their borrowing costs and negatively impact their share price –  in turn threatening their future profitability, and so on…

This would not be such an issue if we could dispense with conventional generation with impunity – however the wind doesn’t always blow and the UK still needs carbon-based generation on standby.  Power stations are most economic when running at full capacity – keeping them idling on standby is expensive and undermines the benefits of the renewable capacity they support.

The downward price pressure caused by the ingress of “free” power causes a further problem –distribution.  “Free” power becomes saleable only when distributed to the customer via cables, wires and sub-stations.  In some areas of the UK this distribution network is at full capacity and financially attractive renewable energy projects are stymied by insufficient local infrastructure with which to export their output to the grid.  Ironically, the damage might be self-limiting -without investment the grid will lack the capacity to accept additional renewable energy generation.

Further information concerning the progress of “green” generation in the EU can be found here.

Renewable energy shots it’s own foot

Money down the drain

Does your company have a large water usage, or your premises have a sizeable roof area which sheds rainwater to the main drainage system ?  Do you wash vehicles, water lawns and plants or maintain a swimming pool ?  Have you ever reviewed the charges you pay for these two services or considered how they might be reduced ?  This is a relatively specialist area and because incidences of overcharging are rare, opportunities are often overlooked.  However, once an overcharging has been identified not only will it produce a permanent cost saving for the future – it is often possible to obtain retrospective rebates for the previous six years.  Auditel have specialists in these areas who can swiftly determine if a claim is possible, and pursue the claim through to settlement.

Money down the drain

Before you fit a new boiler…

Education Item:

The UK government wishes to encourage the use of renewable energy sources in the home.  It subsidises renewable electricity production via Feed In Tariffs (FiTs).  The Treasury will subsidise certain types of heating from renewable sources.  These subsidies are called Renewable Heat Incentive (RHI) payments.  Unlike FiTs, RHI payments will be paid for by the government – FiT payments are recouped from energy customers.  RHI payments  for commercial installations are already available, but domestic RHI payments have been postponed with an anticipated start of spring 2014.  However, households who have installed eligible technology after 15th July 2009 will be eligible for domestic RHI payments when available.

Although yet to be finally decided, eligible technologies are likely to include ground source heat pumps, air source heat pumps (that heat water), biomass boilers and solar thermal systems.  The equipment and the installer must be accredited under the Microgeneration Certification Scheme (MCS).  Householders face two further hurdles to qualify:

a)      They must obtain an Energy Performance Certificate including a Green Deal assessment.

b)      They must install any insulation measures (excluding solid wall insulation) identified by ‘green ticks’ under the Green Deal assessment.  ‘Green Tick’ measures are those which would pay for themselves within 20 years and therefore qualify for Green Deal funding.

The Energy Saving Trust website describes the extent of the domestic RHI payments as follows:

“Payments for householders over seven years for each kWh of heat produced for the expected lifetime of the renewable technology and based on deemed heat usage.”

Until 31st March 2014 a “one off” government voucher of between £300 and £1250 is available towards the cost of installation, called the Renewable Heat Premium Payment (RHPP).  Recipients of RHPP can also claim RHI payments.  Further details can be found here.

Before you fit a new boiler…

April Fools Day for electricity prices

The EU’s Emissions Trading Scheme (‘ETS’) requires the union’s 11,000 power stations and major industrial installations to buy permits for each tonne of carbon they emit.  The quantity of permits issued will be gradually reduced year by year, progressively increasing both scarcity and price.  The intention is to “squeeze” the cost of conventional high-carbon fuels and drive investment towards low-carbon alternatives.  Unused permits can be retained for future use or sold.  They have real cash value – in 2011 hackers stole € 30 million worth of emissions allowances from government repositories.

ETS has now entered Phase 3 which runs from Jan 2013 to Dec 2020.  The quantity of permits issued in 2020 will be 21% fewer than when the scheme began in 2005, however the recession has reduced demand even faster.  Permit prices fell steeply from £25.50 in 2008 to £2.39 in Jan 2013 – hardly a strong disincentive.  Best estimates suggest that ETS permit prices would have to return to £25 to have any real effect.  The only recourse would seem to be to drive prices upwards by temporarily restricting supply.  On Jan 24th 2013, MEPs in the EU’s Industry, Research, and Energy (ITRE) committee voted against temporarily restricting issuance to support the price.

The decline in ETS permit prices carries a sting in the tail for the UK.  George Obsorne’s 2011 budget contained a commitment to maintain a carbon “floor” price of approximately £16 per tonne of CO2 from April 1st 2013, increasing to £30 by 2020.  ETS permits contribute towards this requirement.  When this strategy was formulated in 2010 ETS permit prices were expected to rise steadily, so any “top-up” would be modest (the Carbon Floor level actually set for April 1st is £15.70 per tonne).  But as explained above, ETS permit prices are minimal, and considered by some to be heading for zero.  The top-up required between an ETS permit price of £ 2.39 and a Carbon Floor commitment price of £15.70 could add 20% to UK electricity prices1 in 2013, and almost double them by 2030.

1 Daily Telegraph “George Osborne’s CO2 tax will double UK electricity bills” 29th September 2012

April Fools Day for electricity prices

Toucan Internet LLP publish environmental policy

Environmental Policy Published

As a demonstration of Toucan’s stance towards sustainability and the environment it has published its Environmental Policy Statement. Any suppliers to Toucan Internet LLP or Toucan eMedia should be aware of the aims that the business has with regards to the environment, and through their own activities and supplies, further support Toucan’s environmental objectives.

Toucan’s full set of policies including the environmental policy is available at http://www.toucanweb.co.uk/ti_legal.php

Thank you to Jessica Ward of Addington Consultants for her professional assistance in preparing this policy. You can find out more about Addington Consultants at http://www.addingtonconsultants.com/

To find out more about Toucan Internet LLP please feel free to contact Simon at the contact points below.

t: 01279 871 694.Toucan Internet LLP
e: simon@toucanweb.co.uk



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