So What Will Happen in 2015

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SO WHAT WILL HAPPEN IN 2015?

Our predictions for what will and won’t happen this year

7 January 2015

A Happy New Year to everyone!  So that’s the end of 2014 – apart from chasing up your late payments – but it’s worth looking back at a few of the events and asking how many we were expecting this time last year.

Who could have predicted, for example, the Ebola outbreak which started in February, or the start of the Ukraine crisis in the same month, which led to Putin’s annexation of the Crimea, and Russia’s suspension from the G8 economic group, not to mention the horrific shooting down of a civilian airliner.  In fact it might have looked plausible for a while to predict that the third world war was about to start, though thankfully it didn’t.  And did anyone seriously expect the launch of a major offensive by Islamic State in early June, with all the consequences which are still continuing?

Closer to home, did you really expect the price of petrol to fall off a cliff this year?  No, me neither.  And certainly not the so-called experts, who seem to have been taken by surprise as much as the rest of us.  As late as October the respected This is Money website was predicting that the price of a barrel of oil could go as low as $80 in 2015.  In fact the price dropped to $50 while we had the 2014 Xmas decs up.  Come to that, could anyone have predicted that we would suddenly develop an interest in international oil prices, when we would normally just be comparing prices for turkey and mince pies?  I mean, do you know anyone who has ever bought a barrel of oil?  No, me neither!

Clearly trying to predict the future is a mug’s game.  So the mugs at EAM got busy and this is what we have come up with as our predictions for some of what will happen in the energy assessment industry in 2015.

Energy Assessor Organisations will continue to gain respect and influence

The determination with which a campaign for assessor organisation’ places on Conventions Groups has been pursued for several years, and the way in which three assessor organisations – IDEA, MEP and DCHI – all combined to present a united front to DCLG, proved that assessors are serious about – and capable of – taking more control of their industry, and led to the December commitment that places will be forthcoming.  We still have some way to go – as ever the devil will be in the detail – but assessors now have the opportunity to show what we can do, and prove that we can and should be considered as full partners in our industry.  The excellent IDEA Conference in September, which could become the leading event for the industry, also shows the direction in which the industry is going.  Expect to see assessors’ organisations increasingly taking a leading role in our industry in the future.

Sadly compliance will probably not improve in 2015

Despite research by several accreditation bodies over the years, and various representations to DCLG, compliance in some areas is bad, and looks unlikely to improve much any time soon.  Air con inspections show somewhere between 95% and 99% non-compliance, and DECs have been as bad in recent times.  Commercial EPCs, which had improved from appalling levels of non-compliance in the early days, seem to have sunk back down to lower levels in the recession – especially since building owners have realised that no-one is actually enforcing compliance.  Several assessors have taken complaints to the European Commission, and a year ago Eric Pickles was on an EC deadline to produce DCLG’s data on enforcement – which, as we all know, he hasn’t got!  Failing which – Euro court proceedings!  But since then – nothing!  EAM has no inside info on what is – or more likely isn’t – happening, but it seems likely that politics has played a part here.  After all, the ‘votes for prisoners’ judgement, which the European Court of Human Rights was very keen on, was suddenly kicked into the long grass some months ago.  Why?  It seems likely that UK government ministers have been making clear to their European counterparts that a continuing stream of ‘EU bashes UK’ stories in the British press in the months leading up to the May elections will only help the electoral prospects of parties with an ‘anti EU’ stance.  “So lay off us”, is likely to have been the message the French and Germans have been getting from the UK government.  (Yes, they did send us a demand for £1.7bn we didn’t owe late last year – but the numpties that run the EC probably didn’t think we would be bothered about that!)  And of course this is not going to go on just up to May.  After that there could be – if the Tories get back – the EU renegotiations, which will be a very sensitive time, followed by an ‘in-out’ referendum.  We are making no predictions about the elections (What do you think we are? Stupid?) but whoever wins, it seems likely that a ‘don’t rock the UK boat’ mentality will continue in Europe for some time – which would mean that we could be facing a very long wait for any EC action on EPBD enforcement.

There will continue to be complaints about audits

This one should be pretty safe.  If you’re British you complain about the weather – if you’re an assessor you complain about audits.  Naturally.  There are important points to be aired about this issue though, which we have featured a number of times, most recently in December 2014.  There are undoubtedly differences in the way that domestic and commercial EPCs are audited, there are suspicions that different standards are applied to certificates lodged in some volume by commercial companies whose revenue is important to their AB, and there are proven instances where totally different rules are applied  at audit by different ABs.  Despite increasing rigour in the QA process, the DECC ‘Mystery Shopper’ report on assessments, released (not to say sneaked out) just before Christmas, identified significant differences between EPCs and GDARs on the same property.  It’s not surprising that there are assessors – including DCHI Chair Chris Read – who believe the QA system is just not fit for purpose and needs to be completely overhauled.  The ABs’ argument, that they can do nothing because the rules are laid down by DCLG, is hardly plausible when there are such differences in ABs’ audit practices – but they will continue to use this as an excuse for inaction.  This doesn’t mean that there can never be any change to the audit regime, but it does mean that we are unlikely to get any action until assessor organisations gain sufficient influence with DCLG to demand a working party with ABs to really examine the issue in detail.  Meanwhile, expect to be reading more on the subject in EAM.

Whoever wins the election, prospects for the Green industry probably won’t improve

This is a controversial one, because both main parties (and presumably one or other of them will be playing some part in government no matter what happens) will be making green spending promises in the run-up to the General Election.  But there is not much doubt that the lessons to be drawn from Green Deal haven’t done our industry any favours. Green Deal Home Improvement Fund (GD on steroids!) has been successful for exactly the same reason that Green Deal wasn’t – DECC put a decent amount of money behind GDHIF. The relative failure of Green Deal as it was originally conceived is no different to the response to similar schemes, with similar interest rates, in France, the US and elsewhere. Only in Germany is the scheme a success, and there they spend 1.5 billion euro a year on maintaining a 1% interest rate.  The other factor to consider is the likelihood of any government wanting to give itself the sort of target that the Coalition has wrestled with.  It looks as if they will hit their ‘improve a million homes’ objective by May, but would anyone really want to try that again?  ECO has inevitably played a major part in hitting the target, but it was inevitable that the ‘Big Six’ would do everything they could to wriggle out of their obligations (7% SWI!!), and even though the scheme has been extended to 2017, any government would be foolish to think that the utilities will be prepared to go again – not without a big chunk of government cash, which is unlikely to be forthcoming with the NHS under threat and education lobbying for more support.  And of course we all know that parts of the national press are deeply hostile to any increased Green spending.  All in all, whoever gets in in May, it seems likely that DECC will continue with the ‘talk big – spend small’ approach which almost sank the original GD and is doing DRHI no good at all.

Sadly assessors who become ESOS Lead Assessors will probably not see the bonanza they hope for

Most if not all of us have spent money in the past on training which proved worthless (stand up Home Inspectors and Commercial Green Deal Advisers!).  Despite this, there are still people prepared to give it a try when any new qualification comes along, and so it has been with the Lead Assessor role for the Energy Savings Opportunity Scheme.  Well good luck to anyone who has got involved.  It would be nice to be able to report in a few months time that they are doing well.  But they are going to face some major challenges.  As soon as the Environment Agency named the first batch of LA certification organisations, two of them immediately announced the approval of a total of 124 of their members.  These were presumably qualified professionals already working with environmental consultancies which will have a track record in exactly the sort of work required for ESOS assessments.  How exactly these LAs will be organising themselves is not yet clear, but assuming they are working with teams of professionals able to carry out, or supervise the collection of data for, the assessment, leaving the LA to check and sign off the whole thing at the rate of one a week, the 124 LAs already approved could be able to handle around 6,500 of the estimated 10,000 assessments which may be required.  There is also inevitably a question mark over how well assessors will be received as LAs.  This will be the first time that any significant number of assessors has tried to compete with environmental consultancy professionals for the business of major companies which are likely to want to see a solid track record of identifying opportunities for savings in all areas of the business.  It looks like being a tough year for assessor LAs.

This time next year we probably won’t be millionaires

Then again, you never know……