Green Deal Challenges & Opportunities - Steven Heath, Knauf Insulation

Green Deal – Challenges and Opportunities

Steven HeathExternal Affairs Director

First some context?

.. Europe’s Energy Bill..

€400 Billion a year

€270 bn of this can be saved with existing cost effective technology…

That’s;3 million barrels of oil a day460 million tons of CO2 a year*

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*Ecofys VII report for Eurima

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… more energy is used in buildings than in transport or industry

UK’s share = £3bn** - £7bn a year (household and business waste)

** DECC (2010) Green Deal Summary proposals

My house = £577 of £3bn

Roof

Windows

Floor

Chimneys

Walls

Heating System

=

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The cost of upgrading the UK’s existing housing stock

Circa £7bn−£11bn per year over the next 15 years*

My house – c£12,000 - £15,000

ECO spending circa £1.3bn.

* E3G Financing the Green Deal

So what is Green Deal?

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Green Deal Energy Company Obligation

• Commercial loan, tied to electricity bills to provide energy saving measures

• Primarily for low income and vulnerable households who cannot afford Green Deal

• Also for ‘hard to treat’ households who cannot afford financing solely through the Green Deal

The Green Deal offer to customers

Customer Journey

An impartial Green Deal assessor recommends measures specific to your house

You choose what improvements you have (Insulation, boiler etc) A Green Deal Provider manages the install of measures You pay back instalments through your energy bill The amount you pay back each month has an upper limit fixed to

the amount the assessment says you will save - THE GOLDEN RULE

Loan stays with the property not you (the occupant is not credit checked with the ambition being to have a common interest rate for all)

What does success look like?

Finance?Supply chain?Customer (Private)?Customer (Stock owner)?Customer (Commercial)?

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How do we get there?

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Supply chain?

single measure delivery whole house solutions

Theoretical performance real performance

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Supply chain - Opportunities for installers

Green Deal Measures - opportunities Loft insulation Rafter insulation Cavity wall insulation Solid wall insulation Floor insulation

Massive opportunity in solid wall insulation 7 million homes in UK housing stock Current install rate of circa 30k per year Major uplift needed to hit carbon reduction targets Installation capacity needed to allow uplift ECO funding – carbon target element includes solid wall insulation

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Opportunities for installers with KI

Knauf Insulation training ThermoShell Internal Wall Insulation ThermoShell External Wall Insulation Cavity Wall Insulation

ThermoShell Training Academy Birmingham Theoretical and Practical facilities

On-site support Regional Technical Managers

Details & contacts www.thermoshell.co.uk

Customers? Stock owners

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What can RSLs / LAs do to get best value for their tenants?

Economies of scale

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Easier to meet golden rule

Installation Costs

Product costs

Finance Costs

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Why limit the economies of scale to your stock?

UK domestic building stock26.7m homes in Great Britain23m have lofts 18.8m have cavity walls7.8m have solid walls

How many private properties would benefit from new windows, doors, roof repairs, boilers, re-rendering programmes nearby your stock?

We as a company are being forced to look at our business model under Green Deal;

The construction industry to date is siloed with few links between supply chains – if ‘whole house’ solutions are to succeed this must change.

As one of the main customers of Green Deal, RSLs and LAs must also look at their business models – their worst performing stock may now prove to be an important asset;

What’s your business model?

RSL approach to retrofit

1. At the very least – Green Deal / ECO offer the chance to improve the energy performance of that home

2. At best – the programmes offer RSLs GD provider or installer business models or even investment opportunities with sustained paybacks; possibly even partial freedom from unpredictable and intermittent Government grant funding cycles (with no limit like FITs)

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Knauf Insulation Contacts

Cavity Wall Insulation – Chris Nicholls 07553 354 023Chris.nicholls@knaufinsulation.com

External Wall Insulation – Kevin O’Keefe 07501 727 504Kevin.OKeefe@knaufinsulation.com

Internal Wall Insulation – Craig O’Donnell 07739 446 412Craig.O’Donnell@knaufinsulation.com

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