W14 cutting carbon locally - dave allport

June 2011

Birmingham Energy Savers Local Government implementing the Green Deal

• Birmingham Energy Savers rationale

• BES Phased approach– Phases 1 & 2 – Roof

top generation– AIMHIGH– Phase 3 – whole

house refurb • Phase 3 Phase 3

procurement

Birmingham Energy Savers (BES)

• Cuts CO2 emissions• Cuts cost and level of energy used by homes and

businesses• Improves comfort and energy security• Cuts fuel poverty among tenants & home owners• Maximises job creation and investment through

capturing opportunities in the supply chain • Is self financing

Phases 1 & 2 Roof top generation

Phase 3 – Pathfinder

Phase 3 - Extension

Expansion Phase – Green Deal

Sep 2010 to Mar 2013 £14m = 2,100 properties (PV)

2012 – 2015 pathfinder programme£100m = 15,000 properties (Refurb & PV)

2018 -2020 extension programme£300m = 45,000 properties (Refurb & PV)

2018 -2026 Expansion£1b = 140,000 properties (Refurb / PV)

BES Phased approach

0

5,000

10,000

15,000

20,000

25,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

5

200,000 houses by 2026

Year

Houses/pa

End of Pathfinder

Re-procureBCC finance

Bank finance or warehouse

Green Deal plus Roof Rental

£5-7,000Roof rental

• Generation and export FIT

Free electricity (£100-200) pa

25 year Green Deal service charge

• Charge on energy bills• Help with hard to treat• Help with fuel poor

£5,000-£15,000

Lower cost energy bills

RenewablesEnergy efficiency

Green Deal

BES3 Operating Model

BES PP P3 Financing Model

Green Deal Paymentscollected via energy bill

Green Deal Payments (and Tariff)

Generator meter (if PV is fitted)

Benefits

Energy Companies

Surveying

Marketing

BES

I nstalling

Maintaining

DeliveryPartner

Green DealAgreement

Hard to treat subsidy (ECO)

BCC

Finance structure for Pathfinder

£25m

£100m

ECO

100%

BCC

5-6%

Illustrative

£75m

Cost per house - £6-7kNumber of houses = 15,000

Energy Companie

s

Long term fixed low

cost finance

Write-off

Borrowing(PWLB)

Hard to treat& fuel poor

ECO – Energy Company Obligation

Option 1 for extension phaseBanks provide non-recourse debt

£100m

£400m

ECO

25%

75%

BCC

Banks

7%

5-6%

Illustrative

£300m

Cost per house - £6-7kNumber of houses = 15,000

6.5%

£75m

£225m

Energy Companie

s

Long term fixed low

cost finance

Write-off

Low cost buffer

Non-recourse private sector

Hard to treat& fuel poor

ECO – Energy Company Obligation

Option 2 for ExtensionGreen Deal Warehouse refinance opportunity

Equity risk/buffer capital

Multiple LAs• New LAs can

join onto existing programme

• LAs make agreement with GD WH not with each other

Green Deal warehouse

ABS

BCC

NCC

?

?

£3-500m

Uniformity requirement

Bank finance including EIB

Illustrative

Potential role for GIB

Potential for BCC loan book to not to have to reach £75m before transferring loans to GDWH

The Challenge to Local Government; – Can you market the Green Deal– Can you build home owner trust– Can you deliver an anchor customer– Can you deliver customer aggregation

(localities and triggers)– Can you grow the green economy– Can you meet procurement and start up costs– Can you secure the borrowing and refinance

Issues

www.birminghamenergysavers.org.uk

dave.allport@birmingham.gov.uk

Thank You