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South East Wales Energy Agency (Newport)

Origins

The original focus was on combating climate change although that has now expanded to include a reduction in fuel poverty and health issues associated with rising energy prices and the poor energy efficiency of most of the region’s housing.

Success Factor

Growth to some extent was born out of necessity. The old method of working was primarily to provide consultancy services to local authorities and run government schemes promoting energy efficiency actions to householders. However, in 2008 central government stopped supporting the local energy efficiency network which, combined with the squeeze on local authority budgets, was going to have a serious impact on income. Where in the past if householders wanted to take action, the agency would refer them on to an installer or an appropriate grant scheme, the big step of becoming a scheme manager was taken. This also met with customer approval as they simply wanted a One-Stop-Shop facility for all of their energy saving needs. This meant that as well as the initial promotion and advice, the tasks of securing the grant funding for schemes, carrying out the property surveys and then sub-contracting the installation, were also taken on. The management fees generated the income needed and customers were delighted as by managing the whole process it removed the hassle of things such as planning permission, building control, legal notices, and insurance as well as appointing and paying a reliable contractor. This, in turn, also resulted in the bonus of far more customers going on to have measures installed as the drop-out rate was reduced by the removal of so many barriers. Finance is often a hurdle in expansion, but the agency was fortunate having steadily built up its cash reserves and so had access to all the working capital needed to manage the cash flow associated with large installation schemes. It also allowed new opportunities to be seized as they arose without the delays or business constraints associated with external funding or bank loans. Having adequate funding also meant sub-contractors were able to be paid through frequent stage payments and by offering prompt payment of invoices, often on the same day they are received. As a result, favourable rates could be negotiated and a quality job ensured for customers. Another significant factor in the agency’s success is that it does not do any cold calling, be it via telephone or on the doorstep, which differentiates it from other organisations and so helps build relationships with both customers and local authorities.

The Future

Accept or deny climate change, what is indisputable is that supplies of fossil fuels are finite and with higher extraction costs, prices are going to keep on rising. Whilst renewable energy sources are being developed to replace fossil fuels, they are again expensive and so there is no getting away from the fact that energy bills are going to keep rising and affecting all households, especially those in fuel poverty. This means that there is always going to be a need for what the agency does namely improving the energy efficiency of homes and introducing renewable energy technologies. The decline in fossil fuels, as well as their environmental impact, is bringing about a shift towards renewable energy systems, and so the intention is to invest some of the funds available in a purpose-built environment centre to showcase and promote a wide variety of both energy saving measures and renewable heat and electricity generation systems.