Reform of household energy policy

Minister Rabbitte for Energy sketches several reforms of household energy policy in today’s Irish Times. These are plans for the longer term.

There are a range of fuel allowances. Some are means-tested, some are not. None are needs-tested. Houses may be insulated at the exchequer’s expense, but the occupiers are still entitled to fuel allowances. Minister Rabbitte suggests that, in the future, fuel allowances will be directed towards colder homes. That is a welcome improvement.

There are grants for home energy efficiency improvement and micro-renewables. These grants are optimized for administrative convenience rather than emission or fuel poverty reduction. These grants also imperfectly address the core issue: The lack of access to capital to invest in home improvement. Minister Rabbitte suggests that, in the future, grants will be replaced with cheap loans. That is a welcome improvement.

Lack of information is another issue with household energy use. Minister Rabbitte suggest that, in the future, Building Energy Ratings will be mandatory. They are already, but this is not enforced and many prospective buyers/renters seem to be unaware of their legal right to a BER. Reinforcement of this regulation is a welcome improvement.

I had a close look at BERs in England. An English BER is about half the price of an Irish BER, and it contains much more information on heating costs and potential improvements.

Minister Rabbitte also suggests that houses with a poor BER will be taken off the market. I’m not sure that that is wise. It is rather tough on the current owners of such houses. It will also drive up rent particularly in the lower price segments.

UPDATE: 30.9% of houses have a BER of E, F or G.

Three good ideas, so, and one bad one. There is plenty of time to reconsider and refine.

12 thoughts on “Reform of household energy policy”

  1. Blind Biddy welcomes all positive developments in this area since X-Minister Hanafin sthole her half bag of coal … during one of the coldest winters on record.

    As Biddy puts it: “May she &&&^%%%$$£££ etc

  2. I’m not sure if this is new or something that had been prepared earlier:
    http://www.dcenr.gov.ie/NR/rdonlyres/53F3AC25-22F8-4E94-AB73-352F417971D7/0/AffordableEnergyStrategyFINAL.pdf

    I wasn’t aware of the amount of subsidy paid out (€2 billion) since 2004 to compensate for a large share of the CER-sanctioned overcharging by the ESB and BGE in that period. This was a double waste and is still continuing, but, instead of tackling this because too many deeply embedded vested interests would be discomforted, there’s much more politcial kudos to be gained from being seen to be thinking about tackling fuel poverty.

  3. @Paul
    The Affordable Energy Strategy is new, although part of it is the re-labelling of existing policies.

    The quickest way to affordable energy is, of course, getting rid of all the unnecessary regulations that drive up the price of energy.

  4. Electricity increased by 13.8% in October. Correct? The general policy of the Labour Party puts me in mind of Mao’s criticism of Liberalism with the Chinese Communist movement. Marxism for everyone else but Liberalism for themselves. The idea that someone else should pick up the tab always for welfare policies is frankly worrying. The government decides to give certain classes of welfare recipient breaks on energy costs using the hackneyed widows and orphans argument, and then transfers cost of the subsidy onto other taxpayers. Rob Peter, pay Paul. The problem is that Peter’s income and turnover has shrunk and will probably continue to shrink for several years.

    BTW:the public deficit was meant to be around 10 billion going into this budget as far as I recall. What is the actual figure?

  5. @Richard,

    Indeed. But isn’t it amazing that so much time, effort and resource is being devoted to these matters so as to avoid tackling the bleedin’ obvious? It is futile, counter-productive and damned costly to seek to bolt on even sensible policies given the current state of dysfunction in the energy sector. It’s like throwing good apples in to a barrel where those at the bottom are rotten. Meanwhile, NewERA is being constructed, on a non-statutory basis, behind the wall in NTMA and, like a black hole, no light seems to be escaping from it – or any other signals.

  6. @ RT: “The quickest way to affordable energy is, of course, getting rid of all the unnecessary regulations that drive up the price of energy.”

    Unnecessary regs???? Like excise duty and VAT??? Luvley!

    In respect of our mandatory economic fossil fuel nutrient supply.

    Demand will, in conjunction with a flat-lining global supply of liquid fuels, determine the price. of energy Demand is declining in ‘west’ but increasing in ‘east’, so nett is zero. But, supply is in a bit of bother. Seems that a shortage of that other economic growth vitamin, credit, is leading to a slowdown in production. Situation not good.

    It’s about two decades too late to re-engineer our energy use profile. Only a nasty energy austerity programme will focus minds on the issue of energy use: like rationing. The canary in the coal mine: aviation costs.

    Meanwhile the price gougers and subsidy suckers will thrive.

    Brian.

  7. Very sceptical of these micro management energy pushes but they do help I guess – it will not counter the investment failure of larger strategic utilties over the past 20 – 30 years as almost all “investment” was channeled into consumption during those years.
    Penny wise pound foolish policies will merely accerlate this entropy.

    Sometimes bigger really is better – but it does take a measure of long term planning & stability that I am afraid is not there in the era of free floating unhinged currencies.

  8. BER should stand for Bullshit Energy Ripoff.
    I am an energy expert, a real one, and have been registered as a BER assessor as well and I can tell you it is a scam. Doesnt do a godamn thing to tell you what is really happenig in the house and is full of holes in its credibility. Never mind the price, the converstaion needs to be changed as to what is REALLY going on in a building verses this “thumbnail” scetch and waste of money this bogus rating gives. Anyway that wont happen and Im sure the minister doesnt even know how one is done so I will, one house at a time, keep helping my clients save money nad live comfortably, but not by the BER system of pure and utter shite. All the best Steve

  9. Steve, I think your comments in the BER are a bit out there to say the least. We’re monitoring real energy use in 100 homes, before and after an upgrade (albeit before is a little difficult). The BER is broadly accurate on average use, with the maintained internal temp being the big difference. A house with a G rating spends significantly more for lower service (temp). It is clear that lower performance houses are maintained at a lower temp. Only initial stages of data collection, but overwhelmingly obvious that actual BER is a large % behaviour based.

    I disagree with many of Richards statements, but I agree the advisory report is very poor. The costs are Market driven, there is real competition. Is the relative cost any different to the relative costs of any other profession between the uk and Ireland?

    Paul Kenny, senior energy consultant with the TEA.ie

  10. One third of our housing stock was built in the decade 1998-2007 using poor energy efficiency standards. In the short term, this provided revenue for the state by boosting the tax receipts from volume sales of cheaply built houses. In the long term, it wasn’t such a great policy. Will our future energy investment decisions follow a similar pattern?

  11. Inclined to agree with Steve Johnson above. Actually got a BER done on my house last week. €150 for someone to call out for about 20 mins to look at the house, go away and drop off a generic letter a few days later. Full of bland info anyone could get from the web e.g. insulation – good, doors open – bad. Very little specific to my house, exact energy usage, what my Gas and electric bills are etc. Coincidentally the assessor told me the best thing I could get was to get the external walls insulated, guess what his other job is? If it wasn’t so expensive and useless I’d consider getting a second opinion.

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