Oireachtas Joint and Select Committees

Wednesday, 10 July 2019

Joint Oireachtas Committee on Climate Action

Housing and Retrofitting: Discussion

Mr. Michael Manley:

I thank the committee for the invitation. As the Chair said, I am joined by Mr. Robert Deegan who is principal officer in the Department's energy efficiency and affordability division. Energy efficiency has long been a part of Irish energy policy. It is deemed to be the first fuel. Energy efficiency measures are among the most cost effective methods for reducing emissions. The buildings sector accounts for approximately 24% of Ireland’s total energy usage and approximately 10% of our overall greenhouse gas emissions. For that reason, it is very much centre stage in the all-of-Government climate action plan.

To date, the central plank of efforts to drive demand for energy efficiency upgrades has been grant schemes funded by Government and administered by the SEAI. These include free upgrades for households in energy poverty; fixed grants for a defined list of energy efficiency measures, covering approximately 30% of the total cost; and a pilot scheme offering 50% grants for people who want to upgrade to an A3 deep retrofit. The total funding allocated for these schemes for 2019 is €85 million. Overall the funding for energy in the Department's Vote has an increased from about €50 million in 2015 to €140 million in 2019.

Since 2000, more than 400,000 homes have received direct support under these schemes, mostly for lower intensity measures rather than deep retrofitting. Despite this investment, more than 80% of homes still have a building energy rating, BER, of C or lower. When compared with other European Union, EU, countries our homes use 7% more energy and emit nearly 60% more emissions. The Government has accepted in the all-of-Government action plan the need to redouble efforts to improve the efficiency of our homes. This is central to the plan.

The plan represents a significant step-up in ambition. Indeed, it is not just a step up, it is almost a new staircase. It sets out, for the first time, 2030 targets to reduce greenhouse gas emissions and also puts Ireland on the right trajectory towards net-zero carbon emissions by 2050. The plan also sets out new governance arrangements that will be put in place to provide effective oversight of implementation of the plan. This very much aligns with the relevant recommendations from the Oireachtas and the Citizens' Assembly.

Regarding targets for retrofitting homes, the climate action plan has identified a target of upgrading 500,000 homes to a BER of B2 or cost optimal equivalent, by 2030 as well as the installation of 400,000 heat pumps, to replace older heating systems. This is an enormous step up and a real challenge. The plan identifies a range of actions that will drive achievement of the retrofit target. A central commitment in that regard is the development of a new retrofitting delivery model, which will group retrofits together to achieve economies of scale, leverage private finance, and ensure easy payback methods. The savings on energy bills from using less energy can help fund this, while homes will be warmer, produce lower levels of emissions and be better for us all.

Other measures identified include reviewing and redesigning the grant schemes to ensure alignment with Government objectives and value for money and the introduction of improvements to the BER certificate to provide more guidance to homeowners. In addition, all buildings undergoing a major renovation, greater than 25% of the building envelope, must bring the rest of the building up to minimum BER of B2 or cost optimal equivalent. Interactive tools and reports for homeowners will also be developed to identify the impact of energy efficiency upgrades. There will also be development of the supply chain and training and, crucially, strengthened regulatory and fiscal measures.

Achievement of the target will be supported by Project Ireland 2040 with a financial allocation of €3.7 billion to 2027. This is clearly a significant level of Exchequer investment, but the Government and Ministers have repeatedly acknowledged this will not be enough to meet the level of retrofit required. That is why it will be important that we move to establish a new retrofitting delivery model, which will support people to make the decision to play their part in addressing climate change by investing their own money in upgrading their homes. The plan sets out a range of actions to identify additional financing options, including affordable loan schemes that will complement the new delivery model and fill the funding gap. The plan also commits to the introduction of enhanced delivery models and supports for households with lower incomes.

We are at the start of implementing a climate action plan. It is an enormous task. Significant progress has been made but we have more to do. We must now learn from what has worked in the past as well as the experiences in other jurisdictions to design the additional interventions required to meet the Government’s new level of ambition for energy efficiency and carbon emissions.

We are very happy to be here and we will work as best we can with the committee to answer any questions.