Energy Saving Trust response to ‘Energy Strategy for Northern Ireland: Consultation on Policy Options’

Contents Context, strategic framework and scenarios to net zero ...... 1

Placing You at the Heart of our Energy Future ...... 7

Grow a Green Economy ...... 18

Develop a Low Carbon Skilled Workforce ...... 25

Do more with less ...... 28

Replace Fossil Fuels with Indigenous Renewables ...... 43

Transport ...... 53

Create a Flexible and Integrated Energy System ...... 59

Heat networks ...... 61

Context, strategic framework and scenarios to net zero Q1. Do you agree with the overall goal of achieving net zero carbon energy no later than 2050?

Yes.

The climate emergency is urgent, and swift action is needed to progress towards a decarbonised future. We recognise the desire to set ambitious targets (such as net zero energy by or before 2050), and we support the delivery of decarbonisation at pace. It is our view that as far as possible climate targets and budgets should be evidence-based, this favours the approach proposed within this Policy Options consultation. We think it is essential that consumers are at the heart of the strategy. This consumer centric view is vital, as the strategy will only be successful if people are taken along with it.

Northern Ireland has particular challenges, with 68% of homes heater by oil boilers, higher levels of fuel poverty than elsewhere in the UK, high reliance on personal vehicles and under-developed electric vehicle (EV) infrastructure. Achieving overall or energy sector decarbonisation earlier than the date proposed in this consultation would prove challenging given the nature of emissions in Northern Ireland as highlighted by the Climate Change Committee (CCC). The impressive progress made in rolling out renewables in Northern Ireland over the past decade is encouraging. If reducing emissions from the energy sector proves to be easier than previously predicted (e.g. further dramatic reductions in the price of renewables or home retrofitting) timelines should be adjusted.

It is good to see a willingness to adjust target dates to reflect changes in circumstance in the consultation document but we believe that there should be periodic reviews of progress towards this target, with the potential to strengthen targets if possible. It is important that flexibility be built into the Strategy to account for any emerging evidence or change in circumstance.

Q2. Do you agree with the proposed vision of “net zero carbon and affordable energy” for the Energy Strategy?

Yes.

This aligns strongly with our own organisational vision and approach. Achieving net zero carbon energy in Northern Ireland as part of the wider UK net zero emissions target as soon as possible is critical. Our view is that adopting a ‘fabric first’ approach and focussing on energy efficiency will reduce the amount of energy required in homes, making the net zero carbon energy target easier to achieve while helping to address affordability by reducing energy bills.

It is our view that the transition must be just and that the significant economic (as well as social, wellbeing etc) benefits of this change should be equitably distributed. Northern Ireland is well-placed to capitalise on the economic opportunities that will result from action to combat climate change including investments in renewables, improving the thermal efficiency of homes and transitioning to a decarbonised transport system.

Q3: Do the five principles identified provide clear direction around the approach that we want to take with the Energy Strategy? Placing you at the heart of our energy future; Grow a green economy; Do more with less [energy efficiency]; Replace fossil fuels with indigenous renewables; Create a flexible and integrated energy system

Yes. Overall, we welcome the five guiding principles. They look to offer a balance between rapid decarbonisation, fairness for consumers, and economic sustainability while looking forward to the role of flexibility and integration to deliver a net zero Northern Ireland.

In particular we welcome the focus on energy efficiency. Energy efficiency reduces the costs of energy for consumers by reducing their bills. The Northern Ireland Sustainable Energy Programme (NISEP), which is delivered by Energy Saving Trust and targets vulnerable customers, has been successful in delivering energy efficiency upgrades across both the domestic and commercial sectors.

While we support the desire to grow the renewable energy sector in Northern Ireland and source renewable energy from indigenous sources as much as possible, greater interconnection between NI and the Republic of Ireland (particularly the proposed North-South interconnector) and between NI and Great Britain offer significant opportunities alongside indigenous renewables to decarbonise the power sector at lower cost and maximise the use of renewable energy overall. It is our view that this approach should not be ruled out if it means decarbonising more rapidly at lower cost.

We would also suggest that DfE considers including a sixth principle to support innovative local energy systems and community action along similar lines the to the fourth priority in the Scottish Government’s Energy Strategy (see page 10 of: https://www.gov.scot/publications/scottish-energy-strategy-future-energy- scotland-9781788515276/). While local energy has not been as prevalent in Northern Ireland as in other parts of the UK, a more decentralised, flexible, digital and renewable future energy system offers opportunities for communities to engage more directly with the transition. Communities who wish to do this should be supported in doing so as a key principle.

The co-benefits of local and community energy projects have been well- documented in several regions and contexts (see: https://www.sciencedirect.com/science/article/abs/pii/S1364032118304507). These include:

• emission reductions • improved energy efficiency • the stimulation of local economies and job creation • increased local awareness of climate and environmental issues • increased acceptance of renewables and the transition more generally (see: bit.ly/CEEbriefing).

Through community benefit funds these projects also invest in services and support for local people (see: https://www.localenergy.scot/what-is-local- energy/community-benefits/).

The transition to net zero will require significant changes to the way we live our lives. If communities feel invested in the transition it is more likely to be a success but this will not be achieved without their consent and involvement. By considering and adopting measures that involve communities to a greater degree, the process of transition can be made easier. Through our work delivering local energy-focused programmes for the Welsh and Scottish Governments (the Scottish Community and Renewables Energy Scheme (https://www.localenergy.scot/) and the Welsh Government Energy Service (https://energysavingtrust.org.uk/programme/welsh-government-energy- service/)) we have seen how community energy projects help with engagement and drive support for net zero..

More detail regarding our views on energy communities, the role they could play in the transition and how they can be supported can be found in our response to Question 77.

Q4: Are there any key delivery priorities for the Energy Strategy not captured? If so, please outline what you believe should be included. – six priorities: Security of supply; Costs; Intelligence [R&D, data, pilots etc]; Legislation; Regulation [reviewing energy regulation to promote consumer interests]; Governance [delivering a coordinated and joined-up approach to energy decarbonisation across all levels of government]. See pg 25.

The six priorities are welcome, particularly the focus on costs and consumer protection. There is a need for cross-departmental working and strengthened governance in order to ensure that efforts are not duplicated, action can be taken efficiently and it is clear who leads on given policy areas. This was recently highlighted in a Northern Ireland-focused report into the governance of the energy transition produced by University of Exeter academics and so it is good to see this as a key part of the Strategy. The report suggests the possibility of creating a dedicated ‘Department for Climate and Energy Transition’ where all decisions related to addressing climate change and the energy transition could be situated. An approach similar to this has recently been taken by the Welsh Government with the creation of a dedicated Climate Change Ministry which has oversight of housing, fuel poverty support programmes, planning, transport, energy and environment.

One area that is missing is around emissions reduction. We believe that the need to make decisions that prioritise emission reductions is at least as important as the other six priority areas. Ultimately, this new Energy Strategy is being driven predominantly by the need to significantly reduce greenhouse gas emissions and create an energy system fit for a warming world. For this reason we believe emission reduction should be an additional key delivery priority. Q5: Do our proposed indicators adequately allow us to measure success at achieving the proposed Energy Strategy outcome? If not, please advise on what alternative metrics should be used. - a. Carbon emissions from energy-related sectors b. Jobs and turnover in the low carbon and renewable energy economy c. Domestic energy costs relative to household income d. Business energy purchases relative to business turnover e. Households in fuel poverty f. Relative electricity & gas prices a. While we understand that the scope of the Strategy is focused on energy and emissions from energy-related sectors, we think that the high level strategic ambition should be to measure emissions from all sectors. This will be necessary to meet the UK-level targets as well as any future targets created as part of a Northern Ireland-specific Climate Change Bill. In reality emissions from energy- related sectors are difficult to disaggregate from the remaining emissions. c. The ‘domestic costs’ of energy are a key consideration but we argue that these should be measured directly or modelled based on actual usage in homes (e.g. through smart meters) rather than using a figure derived from the wholesale price of energy and average household incomes. It will be important to account for energy efficiency improvements, because if a home is well insulated and the heating system is appropriately sized and used correctly should reduce demand and therefore pressure on energy costs. These issues will have to be increasingly under consideration as the large scale energy efficiency retrofit of people’s homes gathers pace. It is also important to note that this argument holds true whichever fuel source is being used to heat a home. It will also be important to consider the impact of demand side response and any time of use tariffs on domestic costs. e. The commitment in the Strategy to further develop “the methodology and potential data sources to measure affordability” is welcome. Quantifying and tracking affordability is challenging, particularly in an energy system which is transitioning. The measurement of fuel poverty has always been a challenge and so we recommend working with Department for Communities (DfC) to undertake annual measurements using a range of measures. In the first instance a measure of extreme fuel poverty should be incorporated into any new Fuel Poverty Strategy. Elsewhere in the UK this is characterised as a household spending 20% or more of their income on energy. The Welsh Government in their new fuel poverty plan ‘Tackling Fuel Poverty 2021-2035’ use the 10% and 20% metrics as well as an 8% of income on energy metric to try and account for those households who are vulnerable to falling into fuel poverty as well as measure of ‘persistent fuel poverty’ when households are deemed to be in fuel poverty for two of last three years. This reflects the transient nature of fuel poverty and allows for those on the margins to be supported.

The Welsh Government will also be collecting data using the Low Income High Costs metric and the new Low Income Low Energy Efficiency (LILEE) metric now used in England. They will also report on the fuel poverty gap. While this information will not be directly used to determine new policy or assess the success of previous work it is useful data to collect and allows for comparison across the UK nations. It is our view that whichever measure of fuel poverty is ultimately used to assess the impact of policy in Northern Ireland it will be worthwhile to also measure and report fuel poverty estimates using other methodologies, such as LILEE, to allow for comparison across the other UK nations. The fact that the Northern Ireland House Condition Survey adopted this approach in 2016 is welcome as comparative data is now available between the 10% income methodology and Low Income High Costs methodology.

While currently it is useful to assess relative gas and electricity prices between Northern Ireland, the UK, ROI and Europe this is likely to become less useful as time goes on due to higher levels of housing stock efficiency (i.e. the kWh cost of fuel might increase but households will use fewer kWh due to living in more efficient housing). Any changes to the price of gas to disincentivise its use and encourage households to switch to electric heating may also have impacts in the future. If this metric is to continue to be used it should be kept under review so that it remains useful and doesn’t give the wrong impression to policymakers and other stakeholders. It may also be useful to measure the relative costs of hydrogen fuel across these different jurisdictions when this data becomes more readily available.

Q6: Do you think there are significantly different illustrative scenarios which should be developed? If so, please provide further information.

No. In general terms we think that these illustrative scenarios are correct. However, it is our view that elements of the high gasification and high electrification scenarios would benefit from further consideration. We note that the high gasification scenario states that the thermal efficiency of homes will not need to be improved to the same extent as under the high electrification scenario. We argue that this should not be the case. If we want to reduce household costs and increase security of supply while cutting emissions as efficiently as possible we need to employ a ‘fabric-first’ approach regardless of the fuel. Energy efficiency minimises primary energy demand, and in doing so lowers overall system costs as the efficiency of the energy system is optimised. We also note that the high gasification scenario relies heavily on imports where costs may fluctuate on world markets. As Northern Ireland is blessed with abundant renewable energy resources there should be less need for imports. The import of gas can incur emissions in transportation and leakage. Because of this we think gas imports should be minimised.

The grid reinforcement required to transition to a more electrified energy system due to greater electrification of heat and transport alongside greater renewable deployment will take time. Energy efficiency, flexibility and storage should allow greater deployment of heat pumps, EVs and other renewables on the existing grid in the near-term. It is for this reason that energy efficiency and flexibility must be priorities in both scenarios as they are proven technologies that can deliver carbon and cost savings rapidly while easing pressure on the grid.

Regarding the need for very high levels of energy efficiency as laid out in the high electrification scenario, heat pumps will work in less efficient properties they will just cost more to run relative to a home with very high thermal efficiency. The same is true for any heat source. The more thermally efficient the home, the less the heat source has to work, therefore producing lower emissions. Higher running costs (eg in heritage homes) can be addressed with the co-location of renewable generation such as solar PV. We have also seen examples of high heat pump running costs resulting from poorly sized and installed systems. This is why quality assurance and installation standards are so important.

Placing You at the Heart of our Energy Future Q7: Do you agree with the four consumer population groups we have identified? Please advise on key considerations within each. a) Domestic vulnerable consumers b) Other domestic consumers c) Small businesses d) Larger businesses

We agree that these four groups are important but we also argue the strategy should consider people on the margins of vulnerability and the public sector. It may also be worthwhile considering how support may differ depending on domestic tenure type – particularly whether a household is renting their home.

The strategy should consider those households who will find themselves on the margins of vulnerability (eg those using between 8% and 10% of their income to heat their homes) who may be at-risk of falling into fuel poverty (see our response to Question 5 around assessing fuel poverty). We think there is a risk that reviewing “future energy policy options from the perspective of four distinct consumer populations” could mean that someone who is ‘nearly fuel poor’ but does not qualify for fuel poverty schemes may not be able to access appropriate support as their needs will differ to others in the ‘other domestic customers’ group. This segment of the population will be important in the context of retrofitting homes, where consumers may not have access to capital but could benefit from low cost loans or innovative (eg PACE) financing.

Currently in Northern Ireland, those living in fuel poverty can access the Affordable Warmth scheme and those ‘nearly fuel’ poor will access NISEP support which offers a range of fully funded and partially funded grants for ‘vulnerable’ customers. The Northern Ireland Executive should ensure continued or increased levels of grant support across the range of vulnerable customers under a new strategy and programme of work. This should look to expand on the existing twin track approach by offering bespoke support to all.

In terms of which groups are categorised as ‘vulnerable consumers’ this process must be evidence-led and open to change. This was something that needed to be done in Wales as part of the creation of the Welsh Government’s new fuel poverty plan because in the decade since the last fuel poverty plan the make-up of those who were experiencing fuel poverty had changed. In 2008 72% of fuel poor households received a means-tested benefit, by 2018 only 31% did, meaning that 69% of those in fuel poverty in Wales were not receiving any means-tested benefits – a complete 180o reversal in 10 years (see: https://gov.wales/sites/default/files/statistics-and-research/2019-12/fuel-poverty- estimates-wales-2018.pdf). While the circumstances in Northern Ireland differ, this example illustrates why it is so important to regularly assess who is in fuel poverty and for policy and support to be led by the evidence.

We would argue that by this logic a number of groups present themselves as being vulnerable to falling into fuel poverty. Recent analysis undertaken by the Centre for Research into Energy Demand Solutions (CREDS) through the FAIR project has identified several specific groups who are vulnerable to being in fuel poverty (as well as the double energy vulnerability of both fuel and transport poverty) (https://www.creds.ac.uk/publications/vulnerability-to-fuel-and- transport-poverty/). Black Asian and Minority Ethnic communities, single parent families and the recently re-housed were some of the additional groups identified by FAIR as being at risk of being vulnerable to fuel poverty. The FAIR research also confirms that people under-25 years of age, including student populations, are also at increased risk of living in fuel poverty. We note that the groups proposed here do not include the public sector. While we understand that the public sector accounts for a small proportion of overall emissions they play significant roles in communities across Northern Ireland. Schools, hospitals and local authority buildings can be pioneers in the energy transition. For example, they could be encouraged to host renewable assets wholly or partly owned by local people or community groups, with a contract in place to supply the host site with the generated electricity at a fixed rate through a power purchase agreement. This has the potential to benefit each of the stakeholders involved, with the public estate contributing to decarbonisation and paying a fixed rate for their electricity which is often below the market rate and the community in question receiving a fixed amount for the production of the electricity, which can then be reinvested to create additional value. This is a model which has already been successfully deployed in other parts of the UK.

The private rented and the social housing sector (NIHE and Housing Association), which together make up 34% of the Northern Ireland housing stock, could also be classified as a group in its own right. The mechanism for bringing consumers from an owner occupier group through the energy transition will, to a large extent, be different to that for a private tenant or social housing tenant. Private renters and social housing tenants have much less control of the heat source and energy efficiency improvements made in their home, often live in flats or shared spaces and may interact differently with the property’s energy suppliers if it is the landlord that selects the supplier and pays the bills on behalf of the tenants. There can also be a problem with incentivising in the private rented sector, as landlords pay for improvements, but it is the tenants that benefit from the improvements made (the so-called ‘split incentive’). In Scotland Home Energy Scotland delivers a Private Rented Sector Landlord Loan (see: https://www.homeenergyscotland.org/find- funding-grants-and-loans/private-landlord-loans/) to help landlords improve their properties to meet minimum standards when these are introduced. Landlords must first contact Home Energy Scotland to receive impartial advice on what the best options will be for their property.

Q8: Do you agree with the five measures identified to “enable and protect” consumers? If not, please outline what else should be included? a) Making available information and advice b) Offering proactive “wrap-around” support c) Providing financial support measures d) Driving change e) Reviewing statutory protections

We agree with the five measures, they encompass many of the policies we have argued for some time across the UK and appear to draw on best practice elsewhere. We do have some qualifying points and an additional measure to put forward for consideration.

Through our experiences delivering both Home Energy Scotland and Nest in Wales we know that it is not enough to just provide information, there needs to be engagement with people through a range of channels to encourage them seek the advice and support they need to make the right choices for their circumstances. This means having an up-to-date website and online information service as well as a phone service and also information provided in written form and accessible through, for example, in home visits, community centres and GP surgeries. Information should be available in a variety of languages and for those with audio or visual impairments.

The Executive may also want to consider facilitating display homes where innovative technologies and approaches can be viewed in operation by industry and households. In Scotland we deliver a Green Homes Network (see: https://greenhomesnetwork.energysavingtrust.org.uk/) which features more than 300 homes across Scotland, with homeowners or tenants who have installed home renewables and want to share their experiences. Green Homes events are also run across Scotland showcasing this work as part of the varied information sources made available to consumers. The recent consumer research published by the Utility Regulator supports this varied approach as results show a range of sources of information being sought. 41% of respondents stated Internet search engines, 19% said energy efficiency companies / insulation companies, 17% said local councils and 15% said energy suppliers. Six percent offered other responses. This demonstrates that consumers want a variety of information sources but also suggests information and advice is fragmented at present.

It is welcome to see a commitment to offering financial support but care must be taken in designing these programmes and making them fit for purpose. The likelihood is that a one size fits all approach will not deliver the results required and so a range of programmes and incentives should be considered for particular groups. For example, long term low interest loans or PACE financing (see: https://www.europace2020.eu/) may work best for self-funding owner occupiers while grant funding may be necessary for those not able to fund their own energy efficiency improvements. The cost of necessary repairs pre-installation may also need to be factored in. This is something that is being piloted through the Scottish Government’s Home Energy Efficiency Programmes for Scotland (HEEPS) Equity Loan (see: https://www.homeenergyscotland.org/find-funding-grants-and- loans/equity-loan/) Regarding behaviour change, again it is welcome to see this important aspect of the energy transition being considered here but behaviour change must also refer to day-to-day in-home behaviour as well as at the big trigger points in people’s lives (such as replacing a heating system or moving house). This means helping people to efficiently heat their homes and learning to use appliances and optimal times. These efforts will be increasingly aided by smart and flexible technologies but it is important to recognise this crucial element of the behaviour change issue. The Behaviour Change Pilot (see: energysavingtrust.org.uk/sites/default/files/reports/SEEP - Advice Information - Behaviour change pilot - FINAL_06Jul16.pdf) managed by the Energy Saving Trust on behalf of the Scottish Government showed that as many as 30% of households found that their properties became too warm following the installation of energy efficient measures because they continued to use their heating systems as they had done before the measures were installed. Ensuring that households understand how to operate their heating systems effectively will ensure that the environmental, comfort and fuel bill savings of the physical measures are maximised. Evidence from the second phase of this pilot showed that such advice is welcomed as part of an energy efficiency upgrade to the property and that it can be easily integrated alongside other advice provision. Coupling this with ‘smart’ enabled advice, where advisors are able (provided they have consumer consent) to see householders’ energy use and energy use patterns could play a key role in facilitating and further refining this type of advice.

And finally, when it comes to protecting consumers it is vital that they are confident that work they have done on their homes will be to a good standard and will not leave them in a worse situation than when they started. It will be vitally important that consumers are confident that the measures are appropriate to their home, that they are fit for purpose and reliable, designed appropriately and installed by operatives who have the appropriate skills for their trade and who work to industry standards. The skills of the assessors, designers and installers are therefore of paramount importance. However, in addition to this, protections need to be in place should any link in the supply chain fail. For example, by ensuring designers have indemnity insurance and installers use products that come with a manufacturer’s warranty as well as a workmanship warranty which is also backed up either by insurance or by a trade body to ensure that consumers have redress even if the original company ceases to trade. As added protection we believe independent inspections of the work need to be carried out and should the work be deemed unsatisfactory then the supplier should be required to rectify it. If there are frequent non-compliance issues then there needs to be robust enforcement including the swift removal of suppliers from any approved, public facing, supplier directory pending any investigation with a route to redress available to any consumer affected.

To ensure high standards in a rapidly expanding sector, the Northern Ireland Executive should promote certification of installers under relevant industry standards such as the Microgeneration Certification Scheme (MCS) and PAS2035 etc. by:

• Requiring appropriate certification for any installer working on installations supported by public money. • Supporting the costs of certification for SMES through grants or loans.

The recent call for evidence regarding poorly-installed Northern Ireland Housing Executive (NIHE) cavity wall insulation illustrates why it is crucial to have quality assurance. Work undertaken in Northern Ireland to retrofit people’s homes, or as part of new-builds, must be independently checked and accredited by a recognised body and built to stringent pre-determined standards such as those set out in PAS2035.

Q9: Do you agree with the proposed scope of the “one stop shop”? Please advise on any different activities you think should be included.

Energy Saving Trust very much welcomes the Northern Ireland Executive’s intention to “…make sure that all consumers have access to adequate, tailored and easy to understand information and support that makes this transition as simple as possible”, and the proposal that the one stop shop delivery body will be “the main interface for consumers on energy-related matters, working collaboratively with and complementing existing bodies.”

The consultation document notes that “The role and remit of the “one stop shop” would likely develop over time, with the long-term ambition being an organisation that provides a wide range of services including information, advice, “wrap-around” support, financial assistance, education, behavioural change campaigns, research and monitoring of the energy transition. It would report to and advise central government and work alongside the energy sector and local government to develop and implement local energy solutions.” We wholeheartedly agree that all of these services, and more, will be essential in Northern Ireland’s transition to net zero. We note that this proposed scope is not dissimilar from the scope of Energy Saving Trust’s existing work in other parts of the UK – particularly our Scottish Government funded work in Scotland through Home Energy Scotland (HES) and our Welsh Government funded work in Wales through the Nest programme. Key Functions of a “one stop shop”

HES provides wrap-around energy information, advice and support. HES acts as a gatekeeper to Scottish Government support programmes, taking a proactive approach that sees routes into the service coming from a range of other organisations as well as through its own outreach and promotion of the service. Central to the mission of HES is the prioritisation of the consumer. The key functions of HES are as follows:

• Engaging with consumers and other stakeholders through dedicated and proactive marketing and promotion of the service and by building partnerships to open up referral pathways. • Providing advice for homes, businesses and landlords. • Gatekeeping – signposting and directing consumers to support programmes. • Linking to local authorities’ own schemes and activities so that HES is not just a national service but is embedded within communities. • Working with communities, with this activity supported by links to the Scottish Community and Renewables Energy Scheme CARES (the Scottish Government community energy programme). • Addressing fuel poverty through income maximisation and reducing the cost of energy and providing access to financial support, through HES loans and grants • Further supporting retrofit activities through an equity loans scheme which allows households to undertake funded preliminary maintenance and repair work ahead of energy efficiency improvements. We have seen that this can otherwise be a significant barrier to undertaking retrofit. • Engaging with the employees of large employers through outreach work around energy saving, food waste and transport and by linking up with Scottish Government business support services. • Integrating behaviour change into our advice and support programmes (e.g. advice for households on how to use their new heating systems to improve efficiency and engagement through the use of smart meter data). • Linking into low-carbon transport programmes such as the Scottish Government EV and e-bike loan schemes which are accessed through the HES network. • Giving advice around saving water as this is integral to energy efficiency. • Supporting the supply chain so that they understand what consumers need and are better placed to deliver it. • Providing wider advice on carbon reduction, for example on reducing food waste.

The above list gives a flavour of what we are able to deliver, alongside partners, for the Scottish Government through the Home Energy Scotland programme of advice and support. HES is the most complete example in the UK of the kind of one stop shop being proposed in the consultation document.

We outlined our support for a “one stop shop” approach in our response to the Department for the Economy’s 2019 Call for Evidence and were pleased to read in the current consultation that other respondents “showed overwhelming support for a “one stop shop” approach as the best mechanism to deliver clear and easy to understand information, advice and support for energy consumers.”

Reducing barriers to change

We believe that the provision of free, independent and impartial advice and support should be an integral part of Northern Ireland’s energy landscape. Advice has a central role in overcoming the barriers to a well-functioning market in domestic and non-domestic energy efficiency and in driving uptake of new and unfamiliar measures in homes/buildings at a faster rate than would be achieved by the market alone. These barriers include:

• Awareness – many householders/building owners/occupiers are not aware of options for improving the energy efficiency of their homes/buildings or the potential benefits of installing measures nor are they necessarily aware of how to ‘behave’ in the most energy efficient way. • Upfront cost - measures often involve significant investment and long-term paybacks. • Hassle – the complexity of installing measures. • New products and developing supply chains – finding out about and buying new technologies can be difficult when there are few companies in the market and neighbours and friends and even people on the internet have little experience of the measure. • The split incentive – in rented homes/businesses it is the landlord who takes the lead on the energy saving investment while tenants benefit from the energy savings.

Through our work on HES and Nest we know that advice can help overcome all these barriers and is most effective when the message is clear and the advice is joined up. It can help consumers to understand what they can do in their home and how measures can be installed most effectively alongside other improvements, the practical steps involved and how they can access funding and finance, skilled installers and the right products. Advice can also help overcome the split incentive, encouraging landlords and co-owners of tenements to see the full property investment case for improving energy efficiency.

The need for effective advice will become even more significant in the coming years as many of the most cost effective, easiest-to-implement energy efficiency measures will have already been installed. Indeed, across Europe advice is increasingly recognised as a central part of the transition to a low-energy building stock.

Helping with complex measures

Encouraging householders to take action on energy will increasingly mean persuading them to engage with measures that involve more complex choices and significant investment. Our evidence shows that where Home Energy Scotland provides specialist in-home advice on more complex measures such as small- scale renewables and solid wall insulation around 80 per cent of customers who received this support and took action attributed that action, at least in part, to the support they received.

In terms of scope, we note that other important services which could be supplied through or in association with a one stop shop include (but are not limited to):

- Development of standards - Supporting the development of the supply chain - Central co-ordination of activity

Q10: Which approach do you think should be taken to create this organisation? Please outline your rationale.

It is our view that the one stop shop should be delivered and managed by an independent and expert delivery body. The delivery body should have significant experience of designing, delivering and managing sustainable energy related programmes, working with relevant stakeholders, and providing advice, technical consultancy and financial support.

Q11: Do you believe that additional financial assistance to protect certain groups of consumers should be introduced? If so, please identify what consumers should be targeted and what support would be needed

Yes, Energy Saving Trust believes that additional financial assistance to protect certain groups of consumers should be introduced. As we noted in our response to DfE’s 2019 Call for Evidence we believe that there is a specific need in Northern Ireland for additional financial assistance, on top of the current Investment for Affordable Warmth, the Boiler Replacement Allowance and NISEP, to be provided to those living in fuel poverty and the hardest to improve homes. We believe additional financial support should also be available for ‘able to pay’ consumers to encourage and support the change to low carbon technologies. In its simplest form we believe a hierarchy of assistance should be provided – grant funding for those in fuel poverty or who are unable to meet the costs of retrofit, interest-free loans for those able to meet some of the cost and low-interest loans or alternative financing for those able to self-fund.

Providing a top-up fund for the hardest to improve homes

Some homes are costly to improve with energy efficiency measures. They may need non-standard insulation, or a wholly new heating system fitted. And sometimes structural or damp problems need to be treated before energy efficiency works can even begin. Such costly-to-improve homes are a challenge: to ensure that the available funding benefits the largest number of people, there is inevitably a limit on what Affordable Warmth and NISEP can spend on measures for any single property.

Having sufficient funding to enable measures to be fitted in these harder-to-treat homes, to bring them up to a good standard of energy performance can be vital. Sometimes, homeowners can contribute their own funds to the costs of works. However, we also suggest a flexible top-up fund could be established by the Northern Ireland Executive, offering further assistance for households most in need. This fund would ensure that any additional retrofitting or improvement work, that is vital to building performance and wellbeing, can be completed for those unable to fund this work themselves.

Financial support for every household

As well as ensuring additional financial assistance is available for those living in fuel poverty and for those living in the hardest to improve homes it also will be important for the Northern Ireland Executive to ensure that a wide range of financial support mechanisms are available to everyone. Without an offering for all there is risk that certain groups of consumers will be disadvantaged.

As we noted in our response to response to the Department for the Economy’s 2019 Call for Evidence we believe that a dedicated financial support should be available for every household. This should include grants for the fuel poor and loans for self- funding householders. It is also important that those who are ‘nearly fuel poor’ who do not qualify for fuel poverty schemes but may spend a significant portion of a relatively low income on energy bills, so that loans are not an option, are able to access affordable finance for energy efficiency and low and zero carbon heating systems. In Scotland those with equity in their property and for whom loans are not an appropriate option are able to take advantage of an equity release scheme which can also fund preparatory or maintenance works. At the heart of any support programme for energy efficiency must be the provision of advice and we believe that there is considerable scope to build on existing advice provision in Northern Ireland, including the development of an energy carers type approach that offers intensive in-home support for vulnerable households.

Alternative finance

As the transition accelerates there will be a need to leverage and encourage greater levels of private sector investment. This could be done in many different ways. For example, the current financial climate presents an opportunity to attract more private sector finance than would otherwise be the case because borrowing costs are very low. There is therefore a possible route for ‘able-to-pay’ householders with equity in their properties, which is to simply go to their existing borrower. This would have the advantages of familiarity and of offering a simple process to get the necessary finance at low cost. However, householders are likely to need to be ‘incentivised’ in some way to do this. We think there could be merit in exploring whether a small cash grant could be used for this purpose. The success of the Home Energy Scotland loans, some of which offer cash-back to incentivise the installation of particular measures, suggests that this could be a viable option. Clearly, it would only be advantageous to explore this as a potential route if the cost (to the Northern Ireland Executive) of providing small cash grants was less than the cost (to the Northern Ireland Executive) of providing a low or zero-interest loan.

There are also a variety of alternative models that could be used to mobilise private investment. There could, for example, be a future role for on-bill financing. This approach is already being used in other parts of Europe. Within the social housing sector in the Netherlands, for example, the Energiesprong (see:https://energiesprong.org/) model works by replacing the bill that the residents would have paid to the energy companies with an Energy Plan (that costs the householder no more than the bill that was previously paid to the utility) that is paid to the housing provider. We also think there could be merit in exploring the potential for loans that can be attached to the home/land such as the PACE financing model (see: https://www.energy.gov/eere/slsc/property-assessed- clean-energy-programs).

We note that the Scottish Government propose in their draft Heat in Buildings Strategy to set up a Green Finance Taskforce to provide advice and recommendations on financing mechanisms and we think the establishment of an equivalent taskforce for Northern Ireland would be beneficial.

Finally, we would like to emphasise the importance of ensuring that support packages provided by the Northern Ireland Executive continue to provide a comprehensive approach to tackling fuel poverty – dealing with all of the causes of fuel poverty not just those relating to energy inefficiency i.e. high fuel prices, low incomes and householder behaviour. We are aware of the ‘Make the Call’ campaign in Northern Ireland to support householders in ensuring regular benefit entitlement checks are carried out which plays an important role in tackling fuel poverty. Similarly in Scotland, the provision of benefit and tax credit checks and the referral of households for help to reduce their energy costs have been important and successful elements of the Scottish Government’s fuel poverty schemes for a number of years and we would be happy to provide additional information about the success of this approach if it would be useful.

Grow a Green Economy Q12: Do you agree with the four identified priority clean energy sectors: a) Energy efficiency b) Renewable energy c) Hydrogen economy d) Circular economy

We do agree with the four priority clean energy sectors but feel that an additional priority sector for Northern Ireland should be the rollout of low emission vehicles. It will be important to invest now in proven technologies such as energy efficiency and renewable energy and in enabling the development of innovative technologies such as hydrogen while also looking to create greater economic circularity. We have recently responded to DEFRA’s consultation on the policy priorities that will facilitate a more circular economy (see: https://energysavingtrust.org.uk/report/our-response-to-defras-consultation-on- the-waste-prevention-programme-for-england/)

It is important to note that energy efficiency in the short to medium term can provide quick wins for saving carbon and is an easy option for consumers to adopt given its proven and well known effectiveness. Whilst there needs to be longer term plans to aid a rollout of renewables, such as tariff reform and the introduction of technologies such as smart meters, a large-scale energy efficiency programme can be rapidly implemented across sectors in the near- term to ensure homes and properties are ready for changes such as the introduction of heat pumps.

We provide our views on the role heat pumps and heat networks can play in greater detail elsewhere in our response but note here that the rollout of these technologies should be a priority (either as a separate low/zero carbon home heating priority or within the existing renewable energy priority). Much like energy efficiency, they represent proven technologies able to be deployed rapidly to reduce emissions in the near term and out to 2050.

It is our view that low emission vehicles should also be considered a priority sector. Transport accounts for 23% of Northern Ireland’s emissions (the second largest contributor after agriculture) with emissions having risen by 30% since 1990. Electric vehicle ownership is low and low emission public transport is in its infancy despite ambitious and innovative companies such as Wrightbus pioneering electric and hydrogen fuel cell transport solutions.

The fact that public transport is largely under public ownership in Northern Ireland gives the government greater scope to implement the changes required to upgrade the public transport sector, including the rollout of rail electrification and electric and low-carbon alternative fuel buses.

It is likely that the transition to net zero in Northern Ireland will require a strong reliance on electric vehicle rollout, both because of the high share of total emissions that come from transport in Northern Ireland and a higher reliance on personal vehicles in Northern Ireland than in the other nations of the UK.

Home and work charging will likely be the main locations consumers will use to charge their EVs. However, adequate charging infrastructure, including in rural areas and on residential streets with minimal capacity for off-street parking, is essential to supplement home and business charging.

The Northern Ireland Executive is at something of a crossroads given the relatively low levels of electric vehicle charger penetration. It can opt to be more strategic in its approach by following a course of action similar to that adopted by the Scottish Government, who were able to invest ahead of demand and so arguably provide a better network that addressed concerns around range, supplied sufficient chargers and was able to provide for challenging locations such as rural areas and urban areas with minimal off-street parking options. Alternatively, the Executive could maintain a more ‘hands off’ approach, similar to that undertaken in England, where the provision of charging infrastructure has largely been left in the hands of local councils and individual developers. This second approach will likely minimise cost in the short term but is demand-driven and may result in particular communities being left behind. The Executive will need to consider which elements of these two broad approaches are most suitable in the Northern Ireland context.

Supporting the rollout of EV charging infrastructure would provide employment across Northern Ireland and boost the connectivity of rural areas while incentivising the rollout of EVs which will be essential to meet the net zero energy goals set out in this Strategy.

Q13: Do you agree with the economic growth opportunities identified within energy efficiency? What supporting policies do you believe are needed to take advantage of these?

We do agree. However, we note that the economic growth opportunities from improving the energy efficiency of domestic properties and the appliances within them is not mentioned in the consultation. For the same reason that “energy efficiency helps to reduce energy bills and thus improve the competitiveness of businesses” (as laid out in the consultation document) consumers having more money in their pockets due to lower bills will also stimulate the wider economy. The economic benefits of improving domestic energy efficiency should be recognised alongside the social and health benefits within the Strategy.

To take advantage of the economic growth opportunities energy efficiency presents in the domestic sector, consumers must be given useful information and tailored advice with in-home advice and support available for those who need it with the outcome being a bespoke retrofit plan for their home which sets out sequential steps that can be taken to improve the thermal efficiency of the property alongside the introduction of low carbon heat. These services could be provided through a ‘one-stop-shop’ which we are pleased to see being proposed as part of this consultation. This is a model that has proven effective in Scotland through Home Energy Scotland which we deliver on behalf of Scottish Government and which works by engaging directly with consumers and guiding them through the retrofit process.

One crucial supporting policy is that households should have access to a range of financial support depending on their circumstances. In its simplest form we believe a hierarchy of assistance should be provided – grant funding for those in fuel poverty or who are unable to meet the costs of retrofit, interest-free loans for those able to meet some of the cost and low-interest loans or alternative financing for those able to self-fund.

For those most able to fund their own projects private ‘green mortgages’ may be suitable. For the majority a low or zero-interest long-term government loan would be a greater incentive. Another option would be Property Assessed Clean Energy (PACE) financing which sees repayments being placed on rates which remain with the property not the homeowner meaning the current occupant who is benefiting from lower energy bills and a more comfortable home is paying off the loan, though it is important that the rate of repayment aligns with the energy savings. For particularly hard-to-treat homes or for those on low incomes some element of grant funding for measures will be necessary. A central funding pot which can be used to undertake preparatory works or to ‘top-up’ other forms of financing for deeper retrofit or to address issues with hard-to-treat homes should also be considered. It is our view that any large scale energy efficiency retrofit programme should be considered an infrastructure priority able to access adequate financing. These funds could come from a number of places including the newly-formed Green Bank, direct support from Westminster, private green finance through high street banks or an allocation from the UK Shared Prosperity fund.

It is also welcome to see the Executive considering implementing Minimum Energy Efficiency Standards (MEES). These should apply to different tenure types and ratchet up over time. This will incentivise landlords and owners to access the funding support and improve their homes with the requirement triggered at change of tenancy or sale.

For the commercial sector support may need to differ depending on the size and capabilities of the business in question. Very large businesses will be able to fund a greater share of energy efficiency improvements and will be more likely to have the staffing capacity to identify these as a beneficial business opportunities. Support for these firms may involve the offer of free energy audits and advice with energy efficiency targets or MEES applied to encourage action. For SMEs without the same staffing capacity and available funds or access to private finance, financial support alongside energy audits may be required. This could take a similar form to the low-interest long-term loans proposed for domestic consumers with repayments split between landlord and tenant for building efficiency improvements. Alternatively, a commercial PACE financing model could be developed. Low interest loans could also be used to buy new, more efficient equipment with repayments made through business rates.

What will be essential for the economic benefits of energy efficiency to be felt across the domestic and commercial sectors will be support and investment in the supply chain and skills. Action should be taken now to encourage colleges to provide courses that provide the right skills and training. Those already working in related sectors should also be given the opportunity to retrain. Recent work in Scotland into the sustainability of the supply chain which we help to deliver (see: https://energysavingtrust.org.uk/business/energy-efficiency/support-for-supply- chain/) and future skills requirements (see: https://consult.gov.scot/energy-and- climate-change-directorate/skill-requirements-for-energy-efficiency-homes/) could offer useful insight.

Q14: Do you agree with the economic growth opportunities identified within renewable energy? What supporting policies do you believe are needed to take advantage of these?

We do agree. Northern Ireland is blessed with abundant renewable energy resources, the majority of which have yet to be fully utilised. We discuss some of the potential policy options in greater detail in other responses so will not repeat ourselves here. It is our view that as far as possible the economic benefits from investments in renewables should be shared equitably. This means enabling SMEs to engage with these processes (such as any expanded CfD) and seeing support for community energy projects as a viable and attractive investment opportunity able to galvanise support for the transition while increasing the share of renewables. With government support these projects can be made more beneficial, able to provide wider co-benefits such as local jobs growth and training, educational resources for children, the encouragement of indirect emission reductions, relieving constraints on the grid through local consumption or smart and flexible energy use. Boosting economic growth through investment in renewable energy does not need to only rely upon large infrastructure projects but can also be more granular and local.

We welcome DfE’s current skills strategy consultation and note that it references ‘dealing with the impact of climate change and the need for green growth’. There is an opportunity to ensure that the energy transition and skills strategy are aligned, which would ensure opportunities are maximised in the renewables sector. There is a need for significant growth in the number of qualified installers for renewables as well as home energy efficiency measures, this must be seen as a priority.

Q15: Do you agree with the economic growth opportunities identified for hydrogen production, demand and manufacturing within the hydrogen economy? What supporting policies do you believe are needed to take advantage of these?

We do agree. We recognise, along with many in the sector, that green hydrogen produced using renewable-powered electrolysis will form part of the future energy mix and will have a role to play in reaching net zero. However, we firmly believe that hydrogen will play a relatively minor role in decarbonising home heating and personal transport (a view shared by many others in the sector and expanded upon in our response to question 45). Where hydrogen is likely to play a role is in the decarbonisation of heavy transport and challenging-to-decarbonise industrial processes. Pilot projects targeting these priority areas should be begun using Northern Ireland’s abundant renewable energy resources to produce green hydrogen for these purposes with the potential to become a leader in this area and even export this valuable commodity. The Welsh Government have recently consulted on the future of the hydrogen economy in Wales and this may offer some lessons that could be adapted to a Northern Irish context (see our response to this consultation here: https://energysavingtrust.org.uk/report/our-response-to- welsh-government-consultation-into-the-future-of-hydrogen-in-wales/).

Green hydrogen vs blue hydrogen

Whist green hydrogen will play a valuable role in decarbonising Northern Ireland there is a risk that producing blue hydrogen will increase carbon emissions and could result in stranded assets once renewable methods of generating hydrogen are commonplace (see: http://www.woodmac.com/news/editorial/the-future-for- green-hydrogen/).

Northern Ireland should seek to position itself as a producer of green hydrogen from renewable-powered electrolysis and avoid costly and high-carbon imports of hydrogen. Avoiding unnecessary imports will mean being selective about which uses for hydrogen are developed and supported. Electrification should be the priority with any gaps left as a result of economic or technical infeasibility being filled by hydrogen.

Hydrogen generated using fossil fuels should be entirely avoided, even if this is intended to be coupled with carbon capture use and storage technologies as these technologies remain at an early stage of development and are unlikely to ever be able to remove all emissions and store them safely (see: https://es.catapult.org.uk/wp- content/uploads/2020/03/ESC_Innovating_to_Net_Zero_report_FINAL.pdf).

Q16: Do you agree with underpinning principles identified within the circular economy? What supporting policies do you believe are needed to take advantage of the potential economic opportunities? Principle 1: Design out waste and pollution to reduce GHG emissions across the value chain. Principle 2: Keep products and materials in use to retain the embodied energy in products and materials. Principle 3: Regenerate natural systems to build natural capital and sequester carbon in soil and products.

Yes we agree with the underpinning principles.

Northern Ireland is well-placed to capitalise on the economic opportunities that will result from a movement towards a circular economy based on sustainable use and reuse of products alongside investments in renewables, improving the thermal efficiency of people’s homes, and transitioning to a decarbonised transport system among other opportunities. There is widespread support for this approach from relevant organisations in Northern Ireland (see: https://www.nienvironmentlink.org/news/40-orgs-call-for-Green-Recovery)

We have recently responded to the UK DEFRA consultation concerning resource efficiency and the creation of a circular economy (our response can be found here: https://energysavingtrust.org.uk/report/our-response-to-defras- consultation-on-the-waste-prevention-programme-for-england/) outlining our views on issues related to the longevity, repairability and resource efficiency of products as well as labelling and materials registers among other topics.

Given our experiences managing standards and labelling programmes aimed at facilitating a movement towards a circular economy (see: https://energysavingtrust.org.uk/business/energy-efficiency/products- technology/) we would be happy to engage further with DfE and any other interested stakeholders on these issues.

Q18: Do you believe that we should work with the Utility Regulator to review how energy regulation can facilitate a green recovery and green innovation? If so, how can this be done in a way which protects consumers from the higher risks associated with innovation projects?

Yes, we believe DfE should work with the Utility Regulator in regard to facilitating a green recovery by encouraging innovation (e.g. through a regulatory sandbox approach) while ensuring consumers remain protected. The Utility Regulator’s current Consumer Protection Best Practice Framework should be finalised and rolled out with flexibility to ensure it can adapt to suit the energy transition and changes which consumers will face in the short, medium and longer term. The current Consumer Protection strategy focuses on networks and suppliers and we agree the regulation of these bodies has a significant role to play in protecting consumers via price control and via licencing arrangements in Northern Ireland. Monitoring and reporting of targets set will be important to ensuring industry and the energy sector are held to account in protecting vulnerable customers.

DfE can draw inspiration from Ofgem’s Innovation Link (https://www.ofgem.gov.uk/about-us/how-we-engage/innovation-link) service as it finalises the Consumer Protection Best Practice Framework or looks to more generally enhance the role of the Utility Regulator. Innovation Link offers support on energy regulation to innovators looking to trial or launch new products, services, methodologies or business models. A key part of this is Ofgem’s regulatory sandbox. Ofgem’s sandbox can support schemes operating in different parts of the regulated gas and electricity markets. It can enable trials (or pilots or demonstrators) in a live energy environment, involving consumers or interacting with market rules or the physical system: the sandbox can provide innovators with bespoke guidance, comfort and time-limited derogations (relief) from specific rules. For innovators considering market entry, the sandbox can confirm that an activity is permissible, and, where a rule is blocking an innovation, potentially remove this by way of a derogation.

Develop a Low Carbon Skilled Workforce Q20: Do you believe that utilising and tailoring existing education and training routes can meet the short-term skills needs of the clean energy sector? How can activities within these routes be shaped to meet the needs of the sector?

Yes we agree. But there is also a need to look ahead and think strategically about the needs of the transition (alongside the Energy Skills Forum). While we need to rapidly increase the number of skilled tradespeople able to work across the full range of the clean energy sector which means working with what we have currently we should at the same time be thinking strategically about any gaps in provision and whether the existing routes and qualifications are ideally suited to the changing work environment we will be expecting tradespeople to operate in.

As a first step DfE should look to engage with industry and wider stakeholders to identify where existing training routes can be adapted and where gaps are likely to remain. This should be the ultimate aim of the proposed Energy Skills Forum. The Scottish Government have developed a skills matrix which details installer roles within the clean energy sector and the qualifications required to achieve competence in those areas (see the Annex of: https://www.gov.scot/publications/consultation-scottish-skills-requirements- energy-efficiency-zero-emissions-low-carbon-heating-systems- microgeneration-heat-networks-homes/). We have recommended that Scottish Government expand this matrix to include qualifications from across the UK. Taking a similar approach in Northern Ireland would be a useful first step to identify any gaps in provision.

To incentivise upskilling and high-quality workmanship government-funded retrofit work or renewable energy installations should require accreditation through existing standards schemes with funding support available from government to help access this training.

Feedback that we continually receive from the supply chain through our work on the Scottish Government’s Sustainable Energy Supply Chain Programme suggests that the most important thing that can be done to ensure that local supply chains are expanded and up-skilled is for government to provide them with long term certainty – in terms of what their plans are and how much funding will be allocated. With long term certainty of funding comes long term confidence to invest in training and staff and the view from some suppliers is that ’long term’ needs to be at least 5 years.

Q21: Do you agree with the proposal to establish an Energy Skills Forum to shape the future skills needs of clean energy sector? If so, what do you believe the role, remit and membership of such a group should be?

Yes we agree with the proposal to establish an Energy Skills Forum to identify skills needs and make recommendations to the proposed National Skills Council, DfE, and the Executive. While we recognise that these are early stage proposals with a dedicated Skills Strategy to be consulted on following this consultation ,we feel it will be important to distinguish the work of the Energy Skills Forum from that of the National Skills Council to avoid a duplication of effort and ensure close collaboration. We see no reason why an Energy Skills Forum could not be convened prior to consulting on the Skills Strategy given the urgent need to address the various skills gaps evident across the energy sector.

The role of the Forum should be to convene as wide a group of stakeholders as possible to identify current and future energy system requirements, what skills and roles will be needed to meet those requirements and then propose tangible recommendations to government on how these can be met. Given how critical the energy sector in its broadest conception is to meeting net zero it is our view that the remit of the Forum should itself be broad with the members given the flexibility to explore the skills needs of any area it feels there would be value in pursuing.

Membership should be accessible to representatives from each level of government, industry, academia, enterprise and skills agencies and the third sector with expert witnesses able to be called for specific inquiries.

It is also worth noting here that Energy Saving Trust has been heavily involved in recent Scottish Government work which has focussed on the quality, skills, supply chain and consumer protection requirements of energy efficiency and heat decarbonisation. Specifically, a member of Energy Saving Trust’s staff chaired the group (the Quality Assurance Short Life Working Group) that the Scottish Government convened to look at these issues and was seconded to the Scottish Government to take forward this work. The group published their final report in March 2019 and this included a number of recommendations in relation to skills – including, (and as referenced in our response to question 20 above) that under Scottish Government funded programmes installations must be based on competencies, and a skills and qualifications matrix should be developed and clearly communicated to the supply chain to reflect this. We would be happy to provide more information about this work and discuss how it might inform any approach taken in Northern Ireland if this would be useful.

Q22: Do you believe that there is a need for specific measures aimed at ensuring a just transition in Northern Ireland? If so, please advise on what the focus of these should be in addition to the education and training routes already proposed for a low carbon workforce.

Yes we do believe that there is a need for specific measures aimed at ensuring a just transition in Northern Ireland. Alongside investments in low-carbon infrastructure all governments should be seeking to ensure that the societal transition required to ultimately reach net zero is fair and just. The transition to net zero offers all nations the opportunity to create sustainable and prosperous economies that work better for all citizens and Northern Ireland is no exception.

As a foundational step on the road to achieving a just transition, DfE and the Executive should set out as clear a roadmap as possible in terms of climate goals and targets. This will signal the direction of travel to businesses and wider society, allowing for investment and tailored support, making achieving a just transition more likely. Engaging early and effectively with a range of stakeholders, and the people of Northern Ireland more generally, will also help to facilitate a just transition. This could mean setting up regional citizen assemblies to discuss people’s concerns and the opportunities that may come from the transition in terms of new employment and businesses.

Northern Ireland should consider a body tasked with analysing how the Executive’s policies and proposals align with the need for a just transition and ensuring that the need for a just transition is accounted for in decision-making across departments. We welcome the recent publication of the ‘Programme for Government: Draft Outcomes Framework’ which will help to guide the Executive’s future work and align policy with a just transition. In Scotland the Just Transition Commission (www.gov.scot/groups/just-transition-commission/) has been created “to advise Scottish Ministers on how to apply Just Transition principles to Scotland”. The Commission is tasked with producing a written report to Scottish Ministers with “practical, realistic, affordable recommendations for action”. The Commission has recently published a report into the key opportunities and challenges Scotland faces in achieving a just transition (see: https://www.gov.scot/publications/transition-commission-national-mission- fairer-greener-scotland/pages/3/). Their remit has also recently been extended so that their work can continue with the newly-elected Scottish Government taking some of the Commission’s recommendations on board already with a new ministerial position covering Just Transition and a commitment to “Implement the recommendations of the Just Transition Commission and maintain the commission to advise us throughout the next Parliament”. The creation of a similar body to the Commission in Northern Ireland could be beneficial.

Do more with less Q23: Do you agree that an energy savings target should be set for Northern Ireland?

Yes.

Taking a target-setting approach has proven beneficial in other nations and can galvanise action while providing the basis of a monitoring and reporting framework. In Scotland the recently updated Climate Change Plan now lists reducing the energy intensity of both domestic and non-domestic buildings as an indicator with a target of a 30% reduction by 2032 for residential. Accurately measuring national energy savings can be a challenge but some relevant methodologies are already used in current Northern Ireland programmes and those developed by other nations could be readily employed in Northern Ireland. NISEP currently collates energy savings from every measure installed and reports these to the UK Department for Business, Energy and Industrial Strategy which in turn feeds into efficiency targets set as part of the European Energy Efficiency Directive. We would be happy to discuss this methodology further if this would be useful.

Q24: Do you agree that Minimum Energy Efficiency Standards should be set to drive improvements in energy efficiency? If so, what buildings should be the early priorities for introducing minimum standards?

Yes, we strongly support the introduction of energy efficiency standards across tenure types. The setting of energy efficiency standards for particular tenure types elsewhere in the UK (e.g. social housing in Wales through the Welsh Housing Quality Standard, similar standards also operate in Scotland) has driven significant improvements in the energy efficiency of these properties while upskilling relevant supply chains.

A business-as-usual approach will not be sufficient to ensure the delivery of the EPC improvements required to meet net zero. A legally-binding energy efficiency standard, that applies at a number of trigger points, such as at sale or new tenancy for owner-occupied and privately-rented housing, would be an effective mechanism to drive up minimum standards and to ensure that as many homes as possible are brought up to a minimum EPC C standard (with additional benefits for going further where possible). This is an approach already in place in England and Wales and will soon be implemented in Scotland too through Minimum Energy Efficiency Standards (MEES).

We recognise that regulation alone may not deliver the improvements required and so there is also a pressing need for the Northern Ireland Executive to significantly ramp up the support it provides to households to undertake retrofit work. This should happen as soon as possible (before any regulatory requirements kick in) to ensure that business-as-usual rates of voluntary improvement are not only maintained but increased considerably. This is important not only because it will help to increase installation rates but also because the more successful the voluntary approach the less need there will be for regulation to apply extensively.

We also think that, as early as possible, householders should be made aware that regulation is coming. A long lead-in time for regulation will be important to allow people to anticipate and respond before the regulations take effect. It will therefore be important to communicate as soon as possible to the private sector that regulation is on its way, what the standards will be, how these will develop over time and when they are likely to apply. This would also help to make it clear how people are able to go beyond initial regulated standards. A framework of incentives could be considered to encourage this.

Social housing should be an early priority. Although NIHE homes have higher SAP ratings on average than other tenure types and in fact average a low EPC ‘C’, change may be easier in this sector and offers a quick win. Many social housing buildings are controlled by a few large entities who have pre-existing schedules of maintenance work which can have energy efficiency improvements readily incorporated. There is more oversight of this sector from central government and social landlords have a duty of care to their tenants, further incentivising action. Taking action in this area would also stimulate the local supply chain and build capacity for action is other sectors later on. MEES for other tenure types will prove more logistically challenging to set and enforce but would have a greater impact on overall energy efficiency and rates of fuel poverty. Our view is that MEES should be announced as soon as possible to cover all tenure types in order to drive change at the scale and pace required. Setting standards and providing the necessary support to meet them will not only reduce energy use and emissions and help the housing sector play its part in decarbonisation, for many households currently living in poorly insulated housing which is expensive to heat it will mean no longer being in fuel poverty and being able to live comfortably in their homes.

Q25: Do you agree with the general scale and proposed pace of change outlined in DoF’s five phase plan for building regulations? If not, please outline what achievable timescale or programme should be implemented and your rationale for this.

Yes we do agree with the proposed scale and pace. As the consultation document points out building regulations can play an important role in reducing emissions from the building sector. It is welcome to see the focus on future-proofing housing ready for low carbon heat and net zero.

Low carbon homes can and are being built now at comparable cost to more traditional buildings. This is an important consideration for the Building Regulations (Northern Ireland) Order 1979 (as amended) which states “the standards set can only be those which ‘can reasonably be expected to be attained’”. The Climate Change Committee has undertaken a considerable amount of research into this area, finding that:

i) Building to ultra-high energy efficiency and a heat pump adds between 1 to 4 percent (https://www.theccc.org.uk/publication/the-costs-and- benefits-of-tighter-standards-for-new-buildings-currie-brown-and- aecom/) to build costs (depending on the build type), a cost will fall as supply chains adjust, delivers lifetime savings for occupants and avoids future retrofit costs. In 2019, two of the UK’s largest housebuilders, Barratt and Persimmon testified (https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/1730/1 73009.htm#footnote-061) to a Westminster select committee that they were confident of being able to bring down the additional cost of the proposed 2016 zero carbon homes standard quickly. In practice, Exeter City Council, despite its small scale, has already found that it can build Passivhaus homes (homes that require almost no heating) on sites of 100+ units at no additional cost (see: https://www.uk100.org/publications/power-shift). ii) Retrofitting homes at a later date will cost 4-5 times more than integrating these measures at the new build stage iii) Electric heat pumps will result in lower lifetime costs for the occupant even where the increased upfront cost of the measure is passed through to house-buyers.

In addition, there is evidence that supply chains can adjust rapidly to the necessary changes. Barratt and Persimmon, (in the same Westminster committee) confirmed that higher standards could viably be delivered within 18 months.

It will be important to ensure that any standard incorporates the most efficient fabric standards. Energy efficiency is the most effective long-term guarantee of a housing stock that uses less energy. Strong ‘fabric first’ standards lock in energy saving and make dwellings much cheaper to heat (because less heat is needed) and more comfortable to live in. They also reduce system costs as there is less demand on the grid.

Phased approach

The proposed five phase approach is quite congested. The other UK nations are planning similar uplifts but with fewer individual steps. The initial interim uplift in phase 1 must go at least as far as the corresponding regulations in the rest of the UK nations. We have some concerns that the Phase 4 uplift is some way off and that if buildings consented under lower standards retain that consent even when standards rise (our understanding is that these issues are still open questions) then that could lead to buildings being constructed to old standards right out to 2030.

The proposed standards seek to follow the standards set elsewhere (mainly in England). While we understand the desire to go with what works and has been tested elsewhere, we see no reason why Northern Ireland cannot set its own path and be a leader in suitable areas. This is an especially important consideration given that the advice from the CCC is that by 2025 at the latest “no new homes should connect to the gas grid” and “instead should have low carbon heating systems such as heat pumps and low-carbon heat networks” (see: https://www.theccc.org.uk/publication/uk-housing-fit-for-the-future/).

We will be keen to feed into Phase 2 and discuss our views in this area in more detail. We have been engaging with similar discussions around standards in England, Scotland and Wales. Two key considerations from our response to the Future Buildings Standard (England) (https://energysavingtrust.org.uk/report/our- response-to-the-future-buildings-standard-consultation/) that are relevant here are:

• Energy: ‘Future-fit’ buildings are ones in which energy use has been minimised from the outset. Prioritising relative metrics like primary energy (PE) and carbon dioxide (CO2) focuses on impact now rather than lifetime impact. This can mask high energy requirements which could be a drain on tomorrow’s decarbonised grid. For this reason we think Energy intensity (kWh/ m2) would be a better lead metric than either PE or CO2. Energy intensity is a stable metric (the energy demand of the building will stay the same unless improvements are made) whereas both PE and CO2 are relative metrics (meaning that an assessment based on either of these will improve as the electricity grid decarbonises). By 2030, the grid is likely to be very low carbon (with unabated fossil fuel generation potentially phased out from 2035). With a low carbon grid and an increasing electrification of heat, the focus will be on the total energy demand of buildings and extent to which loads can be shifted to periods of the day when the electricity grid is less busy (and therefore electricity is cheaper). A further disadvantage of relative metrics like PE and CO2 is that they are confusing for end-users, making it harder to compare properties. The same design of homes for example, would be rated differently if built in a different year because the carbon intensity of the grid will differ. To drive appropriate action here, we support the use of two metrics:

o Energy Use Intensity (kWh/m2/year) to capture all operation energy (‘at the meter’ rather than regulated energy use) o Space heating and cooling (this supports the decarbonisation of heating).

• Heating: we do not support an approach where gas/oil heating and PV can be substituted for heat pumps/low carbon heating or where short-term CO2 savings from building services can be traded for lower fabric efficiency. Instead, we would prefer an’ energy hierarchy’ approach where the first priority is to reduce energy demand as much as possible. The next step is to supply heating as efficiently and in as low carbon a manner as possible before finally offsetting residual demand/emissions by onsite renewables such as PV.

DfE, DfI and the Executive may also wish to consider some of the existing building standards around component performance and how these also apply to significant extensions or changes of use of existing buildings. For example, in Wales, the Welsh Government have recently consulted on Parts L and F of the building regulations and explored this approach as well as changes to ‘consequential improvements’ that are additional retrofit measures triggered by the undertaking of significant work (e.g. extensions of conversions) on an existing home.

Q26. Do you think that we should seek to explore how the rates system can be used to encourage energy efficiency? If so, please outline key issues that would need to be considered.

Yes. Exploring how the available devolved powers can be best leveraged to support the transition to more energy efficient homes would be worthwhile. We agree in principle that linking energy efficiency to local taxation could encourage householders and non-domestic building owners to improve the energy efficiency of their homes and buildings. In 2015 we undertook some analysis on energy efficiency and local taxation to feed into wider work being undertaken by the Commission on Local Tax Reform, DfE may be interested in this work. It can be found here: https://www.energysavingtrust.org.uk/sites/default/files/Paper%20for%20Commissi on%20on%20Local%20Tax%20Reform_11August15.pdf

We share some of the concerns raised within the consultation document that a system which reduced rates for the most efficient homes could be regressive without adequate support for more vulnerable consumers and has the potential to negatively impact upon district council funding in the medium-term as more homes reach the higher EPC bands.

The UK Green Building Council recently published a report into the potential to use a modest adjustment to Stamp Duty Land Tax to drive greater investment in energy efficiency and low carbon heating improvements (see: https://www.ukgbc.org/ukgbc-work/a-housing-market-catalyst-to-drive-carbon- emission-reductions/). These proposals would address the potential issues around rate changes being regressive but may not be sufficient to prompt improvements in the private rental sector and should be seen as a component of a wider retrofit proposition.

The New Economics Foundation (NEF) and academics at the University of Sussex will soon be publishing a report, to which Energy Saving Trust has contributed, that investigated how best to finance retrofit in Wales, proposing a series of recommendations targeted at different sectors. DfE maybe interested in this work once it is published.

One approach which could prove effective is to use the rates system as means of delivering PACE financing which we discussed in our response to question 13. In this model households could receive upfront financial support to undertake energy efficiency improvements with the debt repaid through the rates the household pays. Crucially, these repayments should be equal to the energy saving achieved as a result of the installed measures. A model such as this could be a more effective and equitable (and revenue neutral) means of using the rates system.

Q27: Do you agree that we should introduce a pilot domestic retrofit scheme by spring 2022, followed by a substantive scheme as part of a “one stop shop” approach? If so, what changes are needed to the wider energy efficiency support landscape to ensure a joined-up approach?

Yes we agree there should be a pilot scheme, but we are keen there is clarity for consumers about how this works alongside current Energy Efficiency Programmes, including Affordable Warmth, the Boiler Replacement Allowance and NISEP.

Pilot Scheme

The experiences of the Green Homes Grant in England tell us that it is critical to get this pilot scheme right to give confidence and certainty to householders and the supply chain. It may take time to get the pilot programme right and so we would be comfortable if there was a slight delay if this meant the resulting programme was more effective and so would achieve the scale and quality of retrofit needed.

Any pilot will only be successful if consumers can access free, impartial and expert advice. The current advice service has a target of 7000 contacts per year, many of which are householders being signposted for grants such as Affordable Warmth and NISEP. We would question whether the existing advice service would have capacity to handle additional enquiries and handhold customers through this journey, while a ‘one stop shop’ is being established. Alternatively, the creation of a one stop shop could be accelerated to meet consumer’s needs during the pilot. Energy Saving Trust has considerable experience managing energy efficiency retrofit programmes for devolved governments. We would be keen to engage with DfE and any other relevant stakeholders to help ensure that any pilot domestic retrofit scheme can deliver effectively and be a blueprint for a wider programme as part of a one-stop-shop which we have championed in previous consultation responses.

New retrofit scheme

The experience in Scotland of operating their loan and grant scheme offers useful lessons here, as does the Welsh Optimised Retrofit Programme which has till now focused on social housing but is designed to identify the best retrofit routes for given housing types. We look forward to responding to the upcoming separate consultation on the details of the proposed domestic retrofit scheme.

A new retrofit scheme would have complement NISEP so that there is no confusion for consumers as to what is available and where to access the right information and advice to get the most appropriate support for them. An effective one stop shop could operate as a gatekeeper to these different programmes and so make the process of accessing the right support straightforward for consumers.

As stated above, Energy Saving Trust has considerable experience managing energy efficiency retrofit programmes as well as our ongoing role managing the current PSO (NISEP on behalf of the Utility Regulator in Northern Ireland). We also provide the Central Coordination Point for the Warm Homes Programme in Wales alongside partners, the Home Energy Scotland advice service, and Home Energy Scotland and Private Rented Sector Landlord loans and cashback schemes. Our current experience as Programme Administrator of NISEP, means we have extensive knowledge of the energy efficiency landscape in Northern Ireland, each year we update the NISEP Framework Document that Primary Bidders need to abide by as well as calculate all energy and carbon savings as well as gross customer benefit for all measures installed via NISEP. NISEP is in a unique position to install innovative, but proven technology such as high heat retention storage heaters, solar PV, external wall insulation and most recently we have endorsed a domestic heat pump scheme for the current NISEP year 2021/22. Smart controls are a prevalent feature in NISEP domestic schemes and intelligent heating controls have also been rolled out in commercial premises via NISEP. We have been monitoring and evaluating these schemes on an annual basis and have insight into levels of uptake, customer feedback as well as the data analysis on carbon and energy savings. We would be happy to share this experience with the Executive in developing any new retrofit scheme. Energy efficiency support landscape changes which would help ensure a joined up approach

Quality of installation is a key part of ensuring measures are effective and maintaining consumer confidence. Efforts must be made to ensure the high quality of future installations. Independent quality inspections are currently carried out by third parties however, there is no overarching body accrediting these inspectors. To ensure work is being delivered to a high and consistent standard we recommend that DfE refer to PAS2035 and introduce a Quality Assurance scheme that installers, and other industry members must adhere to before taking part in a new retrofit scheme. A crucial component of an effective quality assurance scheme needs to be a guarantee to rectify any work that fails or does not meet the required standard.

Cavity wall insulation (CWI) extraction may also need more investment for older housing stock where there is failed CWI as referred to in The Housing Executives ‘Cavity Wall Insulation Research Project 2019’. NISEP currently funds up to 10% CWI extraction per NISEP scheme but there is reported demand that is not being met.

Any pilot will only be successful if consumers can access free, impartial and expert advice to ensure that they understand all the options available to them, both in terms of appropriate energy efficiency and low/zero carbon heating improvements and in terms of routes for financing such improvements, as well as ensuring they receive advice on how to adjust their home energy use to get the full benefit of the improvements.

Q28: Do you agree that we should ring-fence the PSO funding for vulnerable consumers including the fuel poor? Please advise on changes you believe should be made to the level and scope of the PSO for energy efficiency.

Yes, we do agree that the PSO funding should be ringfenced for priority group consumers, provided that this forms part of a wider programme able to support both self-funding domestic consumers and businesses to improve their energy efficiency and transition to low carbon heating.

We think it would be fairer if the PSO was collected from gas and electricity bills. While we are aware, given our consumer focus, that increasing the cost of oil or gas runs puts pressure on bills we think that the ringfenced domestic energy efficiency scheme should help to alleviate the impact of part of the PSO being collected from gas. Additionally, the average annual impact of the PSO on electricity bills is £3.59 for domestic consumers which is low. The 2019/20 NISEP Annual Report shows that for the c. £6.9 million spent in this year, the overall lifetime gross customer benefit is c. £30 million. Collecting the PSO from both fuels would mean that overall dual fuel households are not adversely impacted but those using low-carbon electric heating will have some benefit.

It is not clear from the consultation document what the proposed future is for the Affordable Warmth Scheme and the Boiler Replacement Allowance Scheme, and whether these programmes will be rolled into the new ring-fenced PSO-funded scheme. We would welcome some more clarity on this issue.

Q29: Do you believe that green private finance solutions have a role to play in supporting domestic consumers to invest in energy efficiency? If so, what specific green finance solutions should be explored?

Yes. The estimated average cost of energy efficiency is £6k for Northern Ireland compared with £10k average in the rest of the UK (this figure does not include additional funds for a renewable heat source) (see: https://www.nihe.gov.uk/Documents/Research/Single-Downloads/Cost-of- carbon-savings-in-NI-housing.aspx). Our view is that where the costs of energy efficiency retrofit are moderate and the homeowner likely to recoup the investment and is able to pay then it is reasonable for homeowners to self-fund work.

We consider that the following principles apply to the ‘who pays’ question: a. It is reasonable for homeowners to finance the improvements where they: - Can afford to cover the upfront cost of the changes. - Are likely to financially benefit (bill savings and / or increased asset price). b. Homeowners should be partly liable where they: - Can afford (part of) the costs , - Are likely to realise (part of) the financial benefits, c. Homeowners should not be liable where they: - Cannot afford it (they are fuel poor/at risk and/or under-heating their home). - Are unlikely to realise the financial benefits whilst inhabiting the property.

For “able to pay” groups the option to access financing through private channels can be part of the solution. Self-funding householders with mortgages and equity in their properties could access finance through their existing borrower. This would have the advantages of familiarity and of offering a very simple process to get the necessary finance at low cost. However, householders are likely to need to be ‘incentivised’ in some way to do this. We think there could be merit in exploring whether a small cash grant could be used for this purpose. The success of the ‘cash-back’ for Home Energy Scotland loans suggests that this could be a viable option. Clearly, it would only be advantageous to explore this as a potential route if the cost (to the Northern Ireland Executive) of providing small cash grants was less than the cost (to the Northern Ireland Executive) of providing a loan.

Currently, within NISEP priority schemes, there are cashback grants available for energy efficiency measures, as well as 50/50 Whole House Solution grants which offer a 50% grant towards heating installation costs with the cost of installing some insulation measures being fully funded. Some of these 50/50 grants offer a zero interest finance option on the remaining 50%, ensuring that priority customers do not have to pay interest on the upgrade. Lessons from this scheme can be readily applied to any new financing option.

The Coalition for Energy Efficiency of Buildings (CEEB), established by the Green Finance Institute (GFI) is identifying different approaches to support homeowners to access private financing for retrofit. This includes mortgage-related finance such as mortgage extensions (additional loans to finance retrofit) and green mortgages (a lower-cost mortgage/ higher loan where the buyer commits to retrofit or to buying a more efficient home with lower energy bills). This is an area that the UK Government and Treasury are interested in exploring with a great deal of work going on behind the scenes to trial ‘green mortgages’ with high street lenders.

CEEB is also actively considering PACE financing (which we have discussed elsewhere) as well as long-term low- or zero-interest loans. Both should be considered as funding options for households who fit into the ‘b’ and ‘c’ categories above, with grant funding made available for those unable to meet the costs of retrofit. As well as PACE there are other on-bill financing approaches that are worth considering. Within the social housing sector in the Netherlands for example the Energiesprong model works by replacing the bill that the residents would have paid to the energy companies with an Energy Plan (that costs the householder no more than the bill that was previously paid to the utility) that is paid to the housing provider.

There are thus a wide range of potential funding options and it will be important in supporting domestic consumers to invest in energy efficiency that a wide range of financial support mechanisms are made available – there needs to be a suitable option available for all. In this context it could be valuable to consider taking a similar approach to the Scottish Government who have committed to setting up a Green Finance Taskforce to provide advice and recommendations on financing mechanisms.

Q30: Do you agree that Invest NI should deliver a pilot energy efficiency support scheme for businesses, to be followed by a substantive scheme delivered through the proposed “one stop shop” organisation? If so, what type of support do you believe is most appropriate for different groups of business consumers?

Yes. Through our work supporting businesses in Scotland and our work on various business energy efficiency-focused European projects we have seen the value of targeted support for businesses.

Through our work as a partner in the Horizon2020-funded LEAP4SME project (https://leap4sme.eu/) which looks to enable SMEs to access and implement energy audits we have identified some key considerations for a future business energy efficiency support programme after an extensive literature review of existing SME support programmes across Europe. Invest NI should consider including free in-person energy audits for businesses as an initial consultation step where businesses can understand their energy usage and what the optimal route is to improving it. This can be supported by dedicated and impartial telephone advice. Following the energy audit and retrofit pathway identified low interest loans should be made available for businesses to implement the plan using suitably qualified and accredited installers. Businesses will also benefit from being able to visit best practice examples so that new technologies and approaches can be viewed in operation.

In Scotland we have also played a role supporting businesses through the Scottish Government’s Zero Waste Scotland Energy Efficiency Business Support programme (https://energy.zerowastescotland.org.uk/). This includes the following:

• Free and impartial support and access to funding to help businesses save energy, money and carbon. • Funded by the Scottish Government, the SME loan scheme (see: https://energy.zerowastescotland.org.uk/SMELoan) can help organisations by offering interest-free loan funding of up to £100,000 for a variety of energy efficiency improvements, such as insulation, heating or double glazing. • The loan can also support the installation of a variety of renewable technologies, something which the consultation document suggests could be within scope of a future support programme. • Cashback of up to £20,000 is also available on eligible measures.

Q32: Do you agree that we should seek to develop skills and capability, enhance quality assurance and standards, and use an accreditation body to provide guarantees on work undertaken by the energy services for retrofit sector? If so, how can we help to prepare the sector for these changes?

Yes, we agree. Our response to question 8 gives our views on skills and training. It will be critical to signal to industry and consumers what changes are coming and how they can prepare. Industry will be willing to adhere to new standards, qualifications and accreditations if they are given ample time and support to prepare and if there is a guarantee of work afterwards. All of this should be achievable. The Welsh Government, alongside the Construction Industry Training Board and others, are in the process of creating ‘retrofit academies’ in Wales attached to existing FE colleges (see: https://gov.wales/written-statement- optimised-retrofit-programme-2020-21). A similar approach could be taken in Northern Ireland to meet the skills requirement.

Q33: Do you agree that information, awareness and behavioural change should be a key strand of future energy efficiency support? If so, what are the key behaviours that should be targeted?

Yes, it is essential that people are engaged and encouraged to change behaviour if we are to reach net zero. Household behaviour can also make a real impact to energy usage, household bills and thermal comfort (see: https://www.energysavingtrust.org.uk/sites/default/files/reports/SEEP%20- %20Advice%20%20Information%20-%20Behaviour%20change%20pilot%20- %20FINAL_06Jul16.pdf).

Household behaviour has a significant positive impact on fuel poverty. This is especially important for households who have had new heating controls, heating systems, and energy efficiency measures installed, particularly when they have not received guidance on how to use new devices or what a more efficient home will mean for their heating regime. Providing advice on heating controls and other energy efficient behaviours, not just physical measures, should be an integral part of any advice offering or support programme as otherwise the potential energy and carbon savings from physical measures will not be fully achieved. The Behaviour Change Pilot (referenced above) managed by Energy Saving Trust on behalf of the Scottish Government showed that as many as 30% of households found that their properties became too warm (and used more energy than necessary) following the installation of energy efficient measures because they continued to use their heating systems as they had done before the measures were installed. Evidence from the second phase of this pilot showed that such advice is welcomed as part of an energy efficiency upgrade to the property and that it can be easily integrated alongside other advice provision.

As we move to low or zero carbon technologies, it will be imperative that trusted information, advice and support is part of the customer journey through this transition. We know from our delivery of Home Energy Scotland that customers will need to be handheld throughout the process, especially when innovative technologies are installed in their homes. This engagement will be vital to the success of any roll out of new heat technologies, such as heat pumps, not only for the fuel poor but for all energy consumers across Northern Ireland. Customers need to be able to access trusted advice not only at the beginning of the journey but throughout the installation process, in managing the new system and with regards to energy bills. The ‘one stop shop’ approach outlined in this consultation would be able to support customers throughout this journey.

A further point that follows from the above is that it is important that installers are adequately trained in relaying technical information in a consumer-friendly manner and that they understand how to engage with a range of customers. The technical information needs to be accurate, evidence based and consistent with the advice being given by the one stop shop. The initial information and support provided by the installer on how to use a new systems is key to how efficiently the householder will operate it.

Q34: What measures do you think can have the most impact to support people to reduce the miles they travel in private vehicles? Please explain your rationale

We fully support the travel hierarchy approach to transport policy. Energy Saving Trust plays a significant part in supporting the UK’s transition to a zero emission transport system. We promote ultra-low emission vehicles (ULEVs) and the development of charging infrastructure, fuel efficiency and active travel by working with businesses, local authorities, national government fleets, private drivers and supply chains. Funded by the UK’s Department for Transport and Office of Low Emission Vehicles (OLEV), Energy Saving Trust helps to deliver the UK Government’s Road to Zero strategy and also delivers a wide-range of services under an innovative programme for Transport Scotland.

COVID-19 has forced many of us to spend more time closer to home and to work from home. Bringing services closer to people’s homes can reduce the number of trips taken by car – tackling emissions, encouraging active travel and strengthening local communities and economies. For all of these reasons it is welcome to see discussion of 15-minute neighbourhoods in the consultation document. Numerous projects (see: https://www.sustrans.org.uk/for- professionals/infrastructure/an-introductory-guide-to-low-traffic- neighbourhood-design/) have demonstrated that to ensure the benefits of low carbon transport infrastructure are realised, it is vital to invest in community and workplace engagement and training to shift habits, grow awareness of local routes and build confidence in active travel. While the following will require cross- departmental collaboration we feel that the Northern Ireland Executive should consider:

• Creating work hubs to support local people and businesses in better- connected ‘15-minute neighbourhoods’

• Invest in workplace training and engagement to build confidence in active travel.

• Set a target of 50% of journeys being made by active travel or low- carbon public transport by 2030 with more robust data collection in place to enable this.

Creating a seamless and linked up transport system should be a priority so that people can readily move from one low carbon form of transport to another. To help achieve this, when undertaking maintenance and improvement works to transport hubs and public buildings it should be a priority to improve links between low-carbon transport modes to create a more integrated service. New housing or service developments should be easily accessible by public transport and active travel options, with new shared work hubs created to service smaller towns reducing the need to commute into larger towns or cities.

The discussion elsewhere in the consultation document of a one-stop-shop is welcome and in time this should be expanded to also provide impartial and expert transport advice to support citizens and businesses to move towards more sustainable modes of transport. Recent research undertaken by the Behavioural Insights Team and the Transport Research Laboratory (see: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/att achment_data/file/914111/driving-and-accelerating-the-adoption-of-electric- vehicles-in-the-uk.pdf) found that while access to adequate infrastructure played a crucial role in promoting the adoption of EVs, awareness raising, access to accurate information, and affordability were fundamental prerequisites. Home Energy Scotland provides active travel advice. This has proven popular and has had a significant positive impact on those consumers who have engaged with the service. We have previously shared evaluation data of this service with DfE but would be happy to do so again if this would be of value.

On active travel, Energy Saving Trust propose that the Northern Ireland Executive offers grants and loans to support the purchase of e-bikes and eCargo bikes. They enable first and final mile carbon reductions and open up cycling, for both personal and business use, to people who might not otherwise be able to use this mode of transport. They are also able to make longer journeys more possible through active travel while being able to replace van use in urban areas for businesses. Energy Saving Trust delivers several ebike and e-cargo bike schemes on behalf of the Scottish Government and the UK Department for Transport. We would be happy to share details of these successful programmes with DfE, DfI or any other interested party if this would be useful.

The Bicycle Strategy for Northern Ireland represents a positive approach but has seen progress slow in recent years. When introduced in 2015 the 25-year plan sought to build an extensive network of bike lanes, support those who chose to cycle, and promote cycling as a suitable mode of transport for everyday use. This programme should be re-evaluated and enhanced with priority given to increasing the incentives for more Northern Ireland citizens to engage in cycling through subsidies for traditional, and ebikes, ideally through grants, or interest free loans.

Replace Fossil Fuels with Indigenous Renewables Q35: Do you agree with setting a 70% renewable electricity target by 2030, whilst retaining the flexibility to increase this to 80%?

We agree with the target set here and the flexibility to increase this to 80%. We support the roll out of renewables as far as possible, which will lower the carbon intensity of the electricity grid in Northern Ireland and reduce emissions from electricity generation and use. Work by Baringa for NIRIG shows that 70% by 2030 is both possible and cost neutral (see: https://www.iwea.com/images/files/70by30- report-final.pdf).

System operators have stated that they can manage their grids with high proportions of renewable generation. In response to last year’s Call for Evidence the System Operator for Northern Ireland (SONI) said they are currently establishing a programme to move from 75% to 95%+ renewable electricity on the system at any point in time. In GB National Grid ESO has committed to having the capability to run the GB grid carbon free by 2025. Increasing the amount of renewable generation across the system, alongside developing further flexibility on the network (e.g. through the use of battery energy storage and demand-side management) will help manage security of supply.

As well as being an indigenous power source, wind generation can lower costs. A study by Baringa demonstrates how wind has pushed down the wholesale cost of electricity and reduced fuel imports (http://www.ni-rig.org/wp- content/uploads/2017/02/NIRIG-The-Wind-Dividend-Report-WEBpdf).

According to the Department for Business, Energy and Industrial Strategy (BEIS), onshore wind and large-scale solar PV are cost competitive with combined cycle gas turbines, and cheaper than all other fossil fuel generators. Offshore wind is projected to become cheaper than all forms of fossil fuel generators by 2025 (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/att achment_data/file/911817/electricity-generation-cost-report-2020.pdf) Looking ahead Northern Ireland could also benefit from a range of marine renewables.

Q42: Do you agree that a strategic approach to planning the location of renewable projects should be taken? If so, please outline practical steps that could be taken to deliver this.

Yes, we agree that a strategic approach to co-location of significant electricity demand (e.g. data centres) and storage close to renewable generation (e.g. offshore/onshore) wind, or location of new renewable generation located close to demand (e.g. close to cities) would have benefits. Co-location would reduce the need to reinforce the grid and reduce transmission losses.

Planning authorities should be encouraged to set out ambitious Local Plans. These should designate all suitable areas as ‘suitable for wind generation’ in the Local Plan to facilitate onshore wind development.

The Executive, together with the Utility Regulator, should also support and fund an approach to Local Area Energy Planning that sets out a core role for community energy groups. Lessons could be drawn from the COBEN programme (https://civic-energy.eu/) which, through a Scottish pilot, sought to develop an approach to Community-led Local Energy Plans which viewed communities’ energy generation, energy efficiency, heat, transport, storage and future usage as a whole system. The Scottish pilot, led by Local Energy Scotland, developed a common local energy plan methodology and supporting toolkit (see: https://www.localenergy.scot/resources/community-led-local-energy-plan- toolkit/).

Q43: Do you believe that there should be a requirement for renewable developers to share some of the financial benefits of developments with local communities? If so, what share do you think would be reasonable? If not, please provide your rationale.

Yes. We believe that significant future renewable developments should be required to engage more deeply with the communities proximate to the development and share in the financial benefits whether through a degree of shared ownership or a community benefit fund. We do not take a view on what the exact share should be, as this will likely differ dependent on circumstance.

There are lessons to be learnt from other nations that could be used by the Northern Ireland Executive to develop a system of shared ownership or community benefit suitable for Northern Ireland. The Welsh Government have recently published their ‘Local Ownership of Energy Generation’ (LOEG) policy statement (see: https://gov.wales/sites/default/files/publications/2020-02/policy- statement-local-ownership-of-energy-generation-in-wales.pdf). Welsh Government has an expectation that all future energy projects should include an element of community ownership and has a target for 1GW of renewable electricity and heat to be in local ownership by 2030. Similarly, ambitious targets are in place in Scotland, with the Scottish Government targeting 2 GW of community and locally-owned energy by 2030. The Scottish Government also has an ambition for community benefit to be equivalent to £5k/MW (see: https://www.gov.scot/publications/scottish-energy-strategy-future-energy- scotland-9781788515276/). These policy ambitions send out clear signals to developers and communities alike that the local impacts and benefits of energy developments will be taken into account by Government and local authorities when considering planning applications and funding support.

In the Republic of Ireland, the government is developing an approach which takes account of local benefits in their version of a Contracts for Difference (CfD) auction – the Renewable Electricity Support Scheme (RESS) (see: https://www.dccae.gov.ie/en-ie/energy/topics/Renewable- Energy/electricity/renewable-electricity-supports/ress/Pages/default.aspx). The scheme will require all projects to meet pre-qualification criteria, which include offering local communities the opportunity to invest in and take ownership of a portion of renewable projects. The RESS will also see a national register of community benefit payments be established.

It is important to stress that adopting similar approaches in Northern Ireland and requiring an element of shared ownership or financial benefit to be distributed to the community will benefit not only community groups and individuals but also developers themselves. If the right policy framework and government support is enacted there should be minimal risk of these measures hampering project development. And by enabling local people and the public at large to have a greater stake in proximate projects and the energy transition more widely, there is likely to be a greater degree of public acceptance of new technologies and approaches, making developing projects easier. The scale of change required to meet our climate targets and safeguard our future necessitates strong public buy-in. This will not be achieved as easily without their consent and involvement. By considering and adopting measures which involve communities to a greater degree, the process of transition could be made considerably easier.

Another possibility which could be explored is for private and public institutions to enter into Power Purchase Agreements with community energy groups and wider public stakeholders. This is something we discuss in greater detail in our response to question 77.

Q44: Do you agree with taking separate approaches to on-gas grid and off-gas grid consumers? If not, what approach should be taken?

Yes. The needs of consumers in these two groups differ and so taking separate approaches will be beneficial. The installation of energy efficiency measures for any housing type is a no regrets option which will save money and carbon across both groups. For off-gas grid homes this must be a priority despite the higher average costs. We recognise the short term decarbonisation benefits of homes on the gas grid moving from oil to gas, but overall we think there is also support needed to help homes on the gas grid move to electrification where possible. Our view is that the long-term solution for Northern Ireland will be to electrify as much heat as possible.

On gas grid homes We accept that switching on-gas grid homes that are currently heated by oil to gas has a short term benefit in reducing emissions. However, the net zero pathway will require a shift to low carbon heat (electrification or hydrogen) at a later point unless these homes are eventually supplied by renewable bio- methane. This approach will therefore build in additional costs for a double transition and additional disruption and behavioural barriers for consumers. Overall we think that the long-term solution for Northern Ireland will be to electrify as much heat as possible. On gas grid homes should also have support if they want to move to electric heat and to install energy efficiency measures.

The CCC in their 2019 report on Northern Ireland also see the main thrust of decarbonisation of heat though electrification saying that “a cost-effective pathway for heat decarbonisation in Northern Ireland is … likely to focus much more on a combination of increased energy efficiency alongside widespread electrification, based on both hybrid and full heat pump systems, with a more important (but still small) roles for biomethane or other biofuels in meeting demand on the coldest winter days.” (https://www.theccc.org.uk/publication/reducing-emissions-in-northern-ireland/).

Off gas grid homes If the domestic heating sector is to fully decarbonise, the Northern Ireland Executive must take steps to build confidence amongst customers, supply chains and wider stakeholders, in renewable heating systems. This should include, as recommended by the Climate Change Committee, the development of support packages to incentivise consumers to install low-carbon heating in homes off the gas grid. Heat pumps have been well tested and their ability to heat homes at low cost has been verified. The number of air source heat pumps being installed through Warmer Homes Scotland, the Scottish Government's national fuel poverty scheme, has increased year on year. 122 air source heat pumps were installed in the 2018/19 operating year, 138 in 2019/20. We would recommend the creation of demonstration homes able to show how heat pumps can work well in different types of Northern Irish homes and to test newer heat pump technologies (high temperature heat pumps, hybrid systems) in the Northern Ireland context.

The Executive and DfE should consider creating a specific funding pot for rural off- gas grid homes with higher funding caps and different measures prioritised. The Existing Homes Alliance (which Energy Saving Trust is a member) have called for a rural just transition programme/fund for Scotland. A similar approach could prove useful in Northern Ireland.

Once energy efficiency improvements have been achieved in off-gas grid homes using oil for heat, these households should be prioritised for the installation of heat pumps as a no- or low-regret option. Co-location of solar PV, batteries and use of flexibility (e.g. time-of-use tariffs) could additionally help lower fuel costs and address grid constraints.

The priority should not be to connect further homes to the gas grid as this locks in reliance on fossil fuel heating for a significant period. Rather than an approach that moves households from oil to natural gas and will then require a change to switch them to low-carbon heating, where possible it would be better to go directly from oil to low-carbon. The behavioural aspects of gas rollout in Belfast illustrates a challenge here. Only 89,510 of 143,830 (62.2%) households who could connect to the gas grid in Belfast had natural gas central heating in 2016 despite the infrastructure being available for 20 years and gas being cheaper and more reliable (see research findings of ‘Zero-in on NI Heat’ project: https://ukerc.ac.uk/project/zero-in-on-ni-heat/). This suggests that merely providing the infrastructure is not sufficient and that more interventionist approaches may be necessary. It also highlights that consumers do not quickly adapt to change and that a concerted effort must be made to engage with consumers at every stage of the retrofit journey. Helping consumers to retrofit their homes and install heat pumps would help a faster transition away from oil heating.

Q45: Do you agree that we should not rule out potential low and zero carbon heat solutions at this stage? If not, please outline your rationale.

We do agree. However, given the short time frames that we are all working to decarbonise the energy sector and tackle climate change it is our view that we should deploy proven technologies now to deliver certain benefit. The focus should be on electrification, and the long-term solution for Northern Ireland will be to electrify as much heat as possible. Heat pumps and heat networks are proven technologies that are available now, and so electrification offers the opportunity to make substantial progress towards decarbonising heat, on a low regrets pathway, in this decade. The CCC have suggested that retrofitting 25% of Northern Ireland's oil-heated homes to heat pumps by 2030 would result in significant savings of 0.5 MtCO₂. Hydrogen will be an important fuel for decarbonisation in general, particularly for heavy transportation and other “hard to decarbonise” sectors. There is less certainty around the extent of its role in heating. The CCC estimate for the UK as a whole that only 11% of homes would be heated by hydrogen based on their balanced pathway. We recognise that this fuel appeals because it could use a re- purposed gas network and the gas network in Northern Ireland is newer and more suitable for conversion that in the rest of the UK. Because Northern Ireland has abundant renewable resources the potential to generate green hydrogen as an energy store and utilise this fuel is particularly promising. Hydrogen generated using fossil fuels should be avoided wherever possible, even if this is intended to be coupled with carbon capture use and storage (CCUS). CCUS technologies should not be relied on as a solution as they remain at an early stage of development and are yet to be implemented at significant scale (see: https://es.catapult.org.uk/wp- content/uploads/2020/03/ESC_Innovating_to_Net_Zero_report_FINAL.pdf). To get to net zero we need to avoid the combustion of fossil fuels as far as possible under all circumstances.

This said, for some limited regions and sectors widespread use of hydrogen will either be preferable or necessary for full decarbonisation to occur in the medium to long-term. These regions will most likely be those situated proximate to hydrogen production facilities and with relatively small populations. In these locations close to the point of generation residential heating could be provided by hydrogen. It is important to note that this will be a marginal use of hydrogen under virtually all realistic decarbonisation scenarios provided by the Climate Change Committee, Energy Systems Catapult and others.

It is our view, and a view held by many in the sector, that electrification using primarily renewable sources of generation should be the priority, with hydrogen being employed only where this is not possible. Renewable hydrogen will be limited in supply and so the sectors which look likely to benefit most from hydrogen deployment should be prioritised. They will primarily include heavy transportation and hard-to-decarbonise industrial processes. In our view there is less of a case for hydrogen home heating where there are already viable alternatives in heat pumps and heat networks.

High quality, low carbon alternatives to natural gas already exist, and are proven, in the form of heat pumps and heat networks. Heat pumps are significantly more efficient than gas and oil boilers. Q46: What low and zero carbon heat solutions do you believe we should prioritise for trials? Please identify where such trials should be focused and what key issues should be tested within each.

It would be beneficial to trial the following:

Whole house approaches to retrofit This would involve low carbon heat sources alongside intensive fabric efficiency improvements, smart controls, renewable generation and storage, vehicle-to-grid etc. to demonstrate what net zero homes could look like. These should be trialled in a representative sample of the housing stock including rural off-grid.

Energiesprong (https://energiesprong.org/) and Heat as a Service (see: https://es.catapult.org.uk/reports/ssh2-introduction-to-heat-as-a-service/#) As well as trialling new technologies and new combinations of technologies it would be beneficial to trial new retrofit approaches and new approaches to accessing heat.

Financing mechanisms We have spoken elsewhere in our response about the different financing approaches that should be considered. It is our view that trials of these approaches should be a priority. The upfront costs are one of the most significant non-knowledge barriers to low carbon heat rollout, so this must be addressed and we also think that PACE financing may be particularly effective and should be tested.

Q47: Do you believe that the role of heat pumps will be different depending on whether consumers are on or off the gas grid? Please outline what you think the specific roles should be.

No we don’t believe the role of heat pumps will differ according to whether a home is on or off the gas grid, although there may be a role for hybrid heat pumps for some on-gas grid homes.

The suitability of a home to use a heat pump as its source of heat will be determined by other factors than whether it is on the gas grid or not. Heat pumps are a proven technology that is available to decarbonise heat in homes now, and we think they should be considered as a priority. The CCC Northern Ireland report states that ‘by 2025 no new homes should connect to the gas grid and should instead rely on low-carbon heating systems such as heat pumps’. Additionally, modelling of the housing stock in England and Wales undertaken by the UK Department for Business, Energy and Industrial Strategy (BEIS) to determine its suitability for heat pumps suggests that ‘around 90 per cent of homes in England and Wales are considered to have sufficient energy efficiency and internal electrical capacity for a low temperature heat pump, and even more would be considered suitable for a high temperature heat pump’ (see pg 6 of: https://www.parliament.uk/globalassets/assets/teams/commons- committees/eac/lord-callanan-to-chair-on-heat-pumps-29-01-21_redacted.pdf). Although there are differences between the housing stock in Northern Ireland compared to that in England and Wales, in general this BEIS analysis provides a useful indication of the suitability of heat pumps across the UK.

The consultation document is right to point out that “we do not see any viable pathway to reach net zero carbon which does not use this technology”. It is not about whether heat pumps will be needed but about how we will make them work because they are a crucial technology for reaching net zero. We would challenge some of the assertions made in the consultation document related to the operation of heat pumps, how energy efficient a home must be to use them, and how proven they are as a technology. In our experience heat pumps are suitable for a wide variety of property types (see below).

Heat pumps are able to operate in buildings that have not been retrofitted to very high energy efficiency ratings, heat pumps will operate perfectly well in EPC ‘C’ rated homes. The implication in the consultation document is that for both off gas grid and on gas grid homes heat pumps are not a viable option unless they are installed “alongside significant energy efficiency measures”. This is not the case. Heat pumps will operate and heat buildings adequately, in buildings which are less thermally efficient. It is true that they will operate at lower efficiency and higher cost in such buildings but they still provide a route to zero carbon. This said, we of course also advocate accompanying energy efficiency measures to improve comfort and lower costs. In our view the entire housing stock should be retrofitted to improve its thermal efficiency to as high as reasonably possible.

Heat pumps may not have been widely adopted in Northern Ireland yet but that does not mean that there aren’t useful lessons to be learnt from elsewhere that should go some way to assuaging the concerns people might have about their suitability (whether this be climate or housing stock related). Heat pumps are widely used in Scandinavia at temperatures down to -15C. They are also trusted by other devolved governments for use as part of their fuel poverty programmes, with heat pumps installed in traditional homes in the Highlands and Islands of Scotland and examples of people installing heat pumps in pre-1900 homes on the Llŷn Peninsula in Wales. Very few of these homes would have been highly thermally efficient before installation but they are able to operate year round at affordable prices. We can provide more detailed case studies if these would be helpful.

This summer Energy Saving Trust will be part of an in-use data monitoring trial across GB to monitor real life usage of heat pumps in a range of settings. We would be happy to keep DfE updated with this project’s findings.

Q48: Do you agree that Northern Ireland should develop a pilot grant scheme to support low carbon heat technologies for domestic and small non-domestic consumers? If so, please identify key issues that need to be considered in designing and delivering such a scheme. • See comments on Q27

Q52: Do you agree that the sale and installation of new oil boilers should not be allowed for consumers on the gas grid? Please outline your rationale and, if you agree, what a viable timeline for introducing this might be?

Yes. We would also like to see an phaseout date set for no new oil boilers to be installed off the gas grid. It is our view that the priority for homes not connected to the gas grid (which stands at 68% of households), whether a connection is available or not, should be to move towards electrification of heat alongside improvements to energy efficiency with consumers supported with capital costs to facilitate this transition. Otherwise, we would be concerned that households would be expected to transition from oil heating to gas and then have to transition again after a few years to low carbon heating, especially if any new gas boilers are installed that are not compatible with a switch to complete hydrogen supply given their 15-year average lifespan.

As we have set out elsewhere in our response heat pumps offer an effective and proven means of decarbonising heat for consumers. This view is consistent with the latest recommendations of the CCC who stated in their recent Progress in reducing emissions: 2021 Report to Parliament (see: pg. 222 of: https://www.theccc.org.uk/wp-content/uploads/2021/06/Progress-in-reducing- emissions-2021-Report-to-Parliament.pdf) that the Executive should “Publish proposals on the phase-out of fossil fuel heating, including standards to phase out the installation of new liquid and solid fossil fuel heating. Proposals should recognise the critical role of heat pumps and hybrid heat pumps in these homes…”.

Q53: Do you believe that off-gas grid consumers should have the option to retain oil boilers for use with biofuels? If not, what is a viable timeline for introducing a ban on the use of all oil boilers?

Energy Saving Trust believes that the Northern Ireland Executive should specify a firm end date for the installation of oil boilers together with other types of high carbon fossil fuel heating (I.e., coal, and LPG). Based on boiler lifetimes, Northern Ireland’s goal (as stated in the consultation) of achieving net zero carbon energy by 2050 and the need to leave some leeway we believe that this date should be set at 2030. Setting clear targets as soon as possible will drive investment and build the market more quickly, helping to drive prices down sooner through greater competition and economies of scale. This will mean low-carbon heating systems will become affordable more quickly for more homeowners than would otherwise be the case.

We note that the Climate Change Committee view is that biofuels will only have a very limited application in buildings. There may be some limited circumstances where biofuel could play a useful role in home heating and as such the Northern Ireland Executive should give consideration to whether there are some circumstances under which an exemption from any future ban on the use of oil boilers would be appropriate and the timescales over which any exemptions should apply.

Transport Q57: Do you agree that we should develop a Northern Ireland specific strategy that sets an overarching, long-term plan for cleaner, greener transport and shows how we will meet net zero emissions within the transport sector? If so, what Northern Ireland specific issues need to be factored into this in order to accelerate the uptake of Zero Emissions Vehicles?

Yes, we do agree. Transport in Northern Ireland is the second largest contributor to emissions after agriculture, accounting for 23% of emissions in 2018. Transport is projected to remain a significant source of emissions in 2030, when it is projected to account for a 25% share. Car dependency is high in Northern Ireland with many choosing their cars over public transport, particularly in rural and semi-rural areas where public transport provision is not as comprehensive as in the cities. Despite these challenges, significant opportunities exist across the traditional sustainable transport hierarchy (reducing travel – active travel – public transport – shared (electric) vehicles – personal (electric) vehicles) to decarbonise transport in Northern Ireland.

Producing a Northern Ireland specific low carbon transport strategy would help to identify and work towards these opportunities. This is an approach recently undertaken in Wales through the Llwybr Newydd consultation and policy document which sets out transport priorities out to 2040. Northern Ireland shares some similar challenges to Wales in moving towards low carbon transport including higher car dependency, less well-connected public transport links and active travel infrastructure and lower incomes than the UK average as well as significant rural populations.

Q58: Do you agree that an EV communication campaign should be run in Northern Ireland? If so, what key messages would be most impactful for consumers as part of this?

Yes, we agree. Levels of EV uptake are lower in Northern Ireland than the rest of the UK and efforts should be made to increase uptake through a communications campaign. Confidence in accessing infrastructure and a high quality, reliable user experience underpins the ability and willingness to switch to EVs. Recent research undertaken by the Behavioural Insights Team and the Transport Research Laboratory, ‘Driving and accelerating the adoption of electric vehicles in the UK’ (see: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/att achment_data/file/914111/driving-and-accelerating-the-adoption-of-electric- vehicles-in-the-uk.pdf), found that while access to adequate infrastructure played a crucial role in promoting the adoption of EVs, awareness raising, access to accurate information, and affordability were fundamental prerequisites. It is likely that the transition to net zero in Northern Ireland will require a strong reliance on EV rollout because of both the high share of total emissions that come from transport in Northern Ireland and a higher reliance on personal vehicles in Northern Ireland than in the other nations of the UK.

In terms of key messages the significantly lower running costs and environmental credentials of EVs should be front and centre. It will also be crucial to dispel the persistent myths around EVs, particularly related to the range and longevity of EV batteries.

The current EV infrastructure is currently poor in Northern Ireland which presents a challenge in the near-term. This issue needs to be addressed alongside any information campaign. This is a view shared by the Climate Change Committee in their recent Progress in reducing emissions: 2021 Report to Parliament (see: pg. 222 of: https://www.theccc.org.uk/wp-content/uploads/2021/06/Progress-in-reducing- emissions-2021-Report-to-Parliament.pdf). Currently the charging network in Northern Ireland is underdeveloped compared to GB. The Northern Ireland Executive is at something of a crossroads given the relatively low levels of EV charger penetration. They could opt to be more strategic in their approach by following a course of action more in-line with the Scottish Government who were able to invest ahead of demand. By doing this they arguably acquired a better network that addressed concerns around range, supplied sufficient chargers, and was able to provide for challenging locations such as rural areas and urban areas with minimal off-street parking options. Alternatively, the Executive could maintain a more ‘hands off’ approach, similar to that undertaken in England, which has left the provision of charging infrastructure in the hands of local authorities and individual developers. This approach will likely minimise cost in the short term but is demand-driven and may result in particular communities being left behind. If this approach is the one that the Executive opts for action must be taken to ensure that local authorities have the skills and capacity to meet the challenge.

Building the provision of impartial, tailored support for each authority to develop a strategic solution, appropriate for their area and the resources available, would be a valuable approach. This work with local authorities can dovetail with private sector partnerships, enabling local authorities to procure with confidence and deliver high quality infrastructure. A recently announced project being undertaken by UK Power Networks and local councils could offer useful lessons for Northern Ireland local authorities seeking public-private partnerships (see: https://www.current-news.co.uk/news/ukpn-partners-local-councils-in-bid-to- identify-and-incentivise-priority-ev-chargepoint-deployment). Support for EV uptake should include the following alongside any information campaign:

• Improved charging infrastructure (as discussed above), with support for both home and workplace chargers made available. • Financing through grants/subsidies/interest free loans for EV purchases perhaps through a generous scrappage scheme for older fossil fuel-powered vehicles. • Supporting dealerships with easily-accessible information on EVs. Energy Saving Trust is involved in a programme to upskill and provide resources to the retail sector with participating dealerships receiving easily recognizable ‘Electric Vehicle Approved’ accreditation (see: https://energysavingtrust.org.uk/about-us/news/national-franchised-dealers- association%E2%80%99s-electric-vehicle-approved-eva-pilot-scheme).

Q59: Do you agree that the private sector and local government have a key role to play in developing EV infrastructure? If so, what barriers can government address to ensure that such projects are commercially viable?

Yes. As well as the relevant points raised in our response to Question 58 it is our view that creating an effective chargepoint network that works for everyone in Northern Ireland will likely require public private partnerships and government intervention. Relying entirely on the market to provide chargepoints equitably for everyone in Northern Ireland is unlikely to be successful. It is our view that there is a need for public investment in chargepoints in situations where private companies are less likely to invest. We think that this needs to be local authority-led where possible. As landowners and local area experts, local authorities will play a pivotal role in the rollout of EV chargepoints in Northern Ireland, especially for households without off-street parking as these chargepoints are most likely to be on public land and will be the least attractive to the private sector. Action must be taken to ensure that local authorities have the skills and capacity to meet the challenge.

The Executive could offer ‘top-up’ subsidies to local authorities which could allow less profitable sites (due to high grid costs, low turnover in rural locations, or being situated in a less affluent area) to be included in the network from the beginning while still being able to draw on private sector expertise for installations and maintenance, if this is desired by the local authority. A Northern Ireland Executive top-up grant scheme could offer different levels of grant funding depending on the nature of the location and the desire for further co-benefits such as better connected communities or the promotion of tourism in a given area.

The Executive could also draw on two existing models in creating a support programme tailored to the needs of local authorities in Northern Ireland. These are:

• The Local Government Support Programme (https://energysavingtrust.org.uk/service/local-government-support- programme/) (England) – funded by the Department for Transport and managed by Energy Saving Trust. This provides tailored one-to-one support to upskill local authority staff so they can develop effective EV strategies and share best practice. A strong focus of the scheme is improving the understanding of chargepoint network business models and procurement options, helping to establish successful, strategic private sector partnerships. This is seen as a key local authority support programme in England and is, we believe, a model that could prove beneficial if adapted to a Northern Ireland context.

• Switched on Towns and Cities Challenge Fund (https://energysavingtrust.org.uk/service/switched-on-towns-and-cities/) (Scotland) – funded by Transport Scotland and managed by Energy Saving Trust. This scheme provides in-depth feasibility studies, assesses chargepoint requirements based on likely demand and identifies suitable sites. It has enabled local authorities to access a dedicated funding pot over several years.

Q60: Do you agree that we should develop an EV Charging Infrastructure Plan in collaboration with public and private partners? If so, what should the key priorities of the plan be?

Yes. We recently responded to a new EV Charging Strategy consultation from Welsh Government (see: https://energysavingtrust.org.uk/report/consultation- response-to-welsh-electric-vehicle-charging-strategy/) which could offer a useful starting point for what to include in a Northern Ireland-focused EV Charging Infrastructure Plan.

Some key priorities for the proposed Plan should be: • Achieving an equitable distribution of chargepoints across Northern Ireland • Working to address any concerns consumers face about the transition to EVs with supportive policy (including financial incentives) • Recognising that this work must be seen as an urgent infrastructure priority • Seeking to share the economic benefits of this transition across Northern Ireland with investment in skills and training • Support for LAs as key delivery agents of this transition • The provision of impartial and expert advice to allow households to make informed decisions regarding the purchase of EVs • Recognising that some groups will prove more challenging to engage with and may face additional barriers to EV uptake. Consideration should be given as to how the full range of communities and businesses can be supported in an equitable and fair way to benefit from the positive transition to widespread EV usage

Q61: Do you agree that public sector contracts can be a key driver for developing technologies and markets for alternative fuel vehicles? If so, what specific opportunities are there that could be progressed?

Yes we agree that public sector contracts can be a key driver for developing technologies and markets for alternative fuel vehicles. Public procurement can be a key driver of EV uptake and can help to stimulate the wider market by giving certainty to industry and boosting consumer confidence. Through our experience delivering successful fleet support programmes over several decades (see: https://energysavingtrust.org.uk/service/fleet-support/) we have seen how investing in closer engagement with fleet managers can deliver results quickly.

The Executive should prioritise the delivery of tailored, impartial advice for fleet managers to give them the confidence they need to make new business cases and ultimately make the switch to electric. The electrification of fleets also strengthens the second hand EV market and demystifies EVs for the general public.

The Executive could consider setting dedicated emission reduction targets for public sector fleets. This is an approach taken in Wales, as set out in the Welsh Government’s low-carbon delivery plan Prosperity for All: A Low Carbon Wales (https://gov.wales/sites/default/files/publications/2019-06/low-carbon-delivery- plan_1.pdf) which contains a proposal that “All new cars and light goods vehicles in the Public Sector fleet are ultra low emission by 2025 and where practicably possible, all heavy goods are ultra low emission by 2030”.

Taking a broader view, public contracts can be used to trial more innovative approaches such as vehicle-to-grid flexibility or fuel cell technology for the heaviest vehicles. Innovating in this way should be a consideration of the Executive as it looks to decarbonise the public sector.

Create a Flexible and Integrated Energy System Q77: Do you believe that energy communities have a role to play as part of the energy transition? If so, what support is needed to progress these? If not, what are the alternatives? Yes. Community energy could make a significant contribution to reaching net zero while the co-benefits of community energy projects have been well-documented in several regions and contexts (see: https://www.sciencedirect.com/science/article/abs/pii/S1364032118304507). These include emission reductions, improved energy efficiency, the stimulation of local economies and job creation, increased local awareness of climate and environmental issues and increased acceptance of renewables and the transition more generally. Through community benefit funds these projects also invest in services and support for local people.

The transition to net zero will require significant adjustments to the way we live our lives and communities must feel invested in the transition for it to be a success. Community energy projects help to facilitate this. We welcome the recognition in the consultation document that any policy options taken must be accessible to vulnerable consumers so that they are not left behind or face higher costs and a community approach can facilitate this goal.

Energy Saving Trust, along with partners, manages the Scottish Community and Renewables Energy Scheme (CARES) (https://www.localenergy.scot/) and the Welsh Government Energy Service (WGES) on behalf of the Scottish and Welsh Governments respectively. Through this work we have seen that there is a desire from communities to produce more renewable energy, spread benefits wider, tackle new challenges around transport and heat decarbonisation, and pursue new technologies and approaches such as the co-location of storage, flexibility markets, peer-to-peer trading, the generation of hydrogen and utilise emerging renewable technologies such as tidal and wave power. Dedicated Government support in the form of long-term financing and impartial and expert guidance could help to facilitate this kind of innovation and inclusion in Northern Ireland as well as the rest of the UK. While we recognise that the Power NI export tariff, which broadly aligns with the GB Smart Export Guarantee, is a useful first step following the closure of NIRO the level of payment is unlikely to stimulate sufficient growth in the sector.

Northern Ireland has a limited community energy sector at present. Both Wales and Scotland have well-established community energy sectors which benefit from devolved government support in the form of WGES and CARES. These programmes offer funding and expert support and guidance to community energy projects. Since the WGES was launched in July 2018 more than 190 projects have been supported across 22 local authorities. In 2019/20 alone the scheme helped to secure finance for 17.4MW of renewable projects in Wales, securing a total investment of over £28m (see: https://gov.wales/sites/default/files/publications/2020-07/energy-service-annual- report-2019-2020.pdf). Since its inception, CARES has offered funding of over £51 million and supported over 600 projects to develop, own or take a stake in local renewable energy projects across Scotland (see: pg. 164 of Scottish Heat in Buildings Strategy: https://www.gov.scot/publications/heat-buildings-strategy- achieving-net-zero-emissions-scotlands-buildings-consultation/).

We know through our work that, on the small scale where community energy tends to operate, relatively minimal Government support can tip the balance towards project viability. In the example of a Power Purchase Agreement approach (which we discuss in greater detail below), a Government ‘top up’ of 1p/KWh generated could help guarantee project viability and incentivise public and private actors to participate. This kind of strategic ‘top up’, which aims to leverage greater private investment, should be a priority action for supporting community energy in Northern Ireland. The Executive may also want to consider introducing long-term low-interest loans or grants for renewable technologies or battery storage community projects.

Local authorities can support community energy by identifying suitable sites on public estates while making fast-tracked planning available in these locations. Energy Saving Trust was a partner in the recent EU HEROES Horizon2020 project (see: https://www.euheroes.eu/) which brought together seven European nations with the overall aim of enabling the continued development of community-owned solar systems without the direct use of subsidies. A key lesson learned through this project was that an area planning approach which identifies suitable sites and supports their development by community energy groups was particularly valuable. Another key recommendation that has already proven effective elsewhere in the UK (and which we believe could be scaled up to increase the deployment of renewables and produce greater public benefit) is the use of Power Purchase Agreements (PPA) for direct sale of electricity from small scale renewables to on-site or local end users. This approach has been pioneered successfully by Egni Coop in south Wales which has amassed a strong multi- megawatt portfolio of small-scale community solar projects. Energy Saving Trust and the WGES played a significant role in enabling this programme of work and we can share further details with DfE if this would helpful.

Public buildings and assets such as hospitals, council offices, and schools, fully or partially under the control of local authorities or the Executive, should be encouraged to host renewable assets. These can be wholly or partly owned by local people, with a contract in place to supply the host site with the generated electricity at a fixed rate through a PPA. This has the potential to benefit each of the stakeholders involved, with the public estate contributing to decarbonisation and paying a fixed rate for their electricity which is often below the market rate and the community in question receiving a fixed amount for the production of the electricity, which can then be reinvested to create additional value.

Heat networks Q79: Do you agree that further trials of heat networks should be carried out? If so, what key issues do you think should be tested through these?

Energy Saving Trust agrees with the statement on page 141 of the consultation document that in Northern Ireland “Heat networks could provide an additional route to decarbonise heat using a mature technology that has been proven elsewhere.”

It would be worth considering a wider suite of potential heat network sources. We note that the only heat sources for heat networks discussed in the consultation are geothermal heat and biomass. There is no consideration of the potential for heat pumps (water, ground and air source) nor the potential for waste/residual heat capture. We think that the term “trials” is slightly misleading in relation to heat networks as they are, as noted in the quote above, a mature and proven technology (as evidenced in many other countries). In this context we believe that the Northern Ireland Executive should focus on developing “exemplar” schemes based on different technology choices which will be dictated by the availability of heat/energy source coupled with sufficient heat demand.

It will also be important that the proposed Energy Skills Forum considers the skills gaps and training needs for the development of district heating networks in Northern Ireland (including the skills necessary to design, commission, install and maintain heat networks) and ensures that the necessary work is undertaken to ensure these are filled.

Energy Saving Trust has administered the Scottish Government’s District Heating Loan Fund (DHLF) and provided expert technical and financial support to loan fund applicants since 2011. The DHLF is designed to help address the financial and technical barriers to district heating projects with loan funding focused on financing capital measures. The low interest lending available through the DHLF coupled with grant funding available through other Scottish Government funding has played a vital role in mitigating the initial investment risk for heat network developers in Scotland. To date the scheme has funded 54 projects through provision of £21M of loan funds. These projects have generated multiple benefits including providing affordable warmth to householders, creating local employment, reducing costs for businesses, building up local supply resilience, and reducing greenhouse gas emissions.

As a result of our work in this area Energy Saving Trust has considerable experience and expertise in heat network development and over recent years have been a part of the Scottish Government’s Expert Commission on District Heating as well as the Scottish Government’s Heat Networks Working Group. In this context, if it would be useful, we would be happy to provide further information about the development of the heat network sector in Scotland and be involved in any future discussions about the development of heat networks in Northern Ireland. One crucial consideration which has been a focus of the Heat Networks Working Group in recent months and should be a priority in Northern Ireland as well has been ensuring consumers have adequate protection via regulation of heat networks.