Select Committee on Trade and Industry First Report

6  Further action by central Government

125. The Government has made various recent policy interventions, which have gone some way to overcoming the barriers both to household and community take-up of local energy. These policy developments have sought primarily to influence the actions of others. However, there are ways in which central Government can change its own behaviour, reducing its carbon footprint by making greater use of local energy systems in addition to energy efficiency measures. In so doing, it can play an important role in helping to grow the industry and reduce costs in the long run. In this Chapter we look at the role public procurement can play in supporting local energy, and the Government's new Code for Sustainable Homes, which will apply to all homes built by the public sector.

Public procurement

126. Government purchasing power has the potential to leverage enormous support for the local energy industry. Around £150 billion of expenditure each year is defined as public sector procurement, with central Government alone spending £13 billion on goods and services.[192] Last year, the Sustainable Procurement Task Force recommended that the Government should commit to being amongst the leaders within the EU for sustainable procurement by the end of this decade.[193] To achieve this would require a step-change in its current approach. In evidence to us the Minister for Energy supported this approach, and gave the example of the Government's current schools investment programme as an ideal opportunity to build in local energy systems at the start. This approach has the added benefit of enabling schools to engage children in climate change and sustainability issues, and demonstrating how individuals and communities can take action to reduce their carbon dioxide emissions.[194]

127. There is some evidence that the public sector is at long last beginning to integrate local energy systems into its buildings. For example, five new schools in Gateshead being built under the Private Finance Initiative will incorporate solar energy and micro-wind technologies.[195] The Environment Agency's new offices in Wallingford, Oxfordshire, have incorporated around 200m2 of PV panels, which will provide 20% of the building's electricity needs.[196] In last year's Energy Review report, the Government also pledged itself to achieve carbon neutrality across its office estate by 2012. This is not likely to be achieved without incorporating some forms of local energy.

128. Government procurement is potentially a powerful lever for implementing its energy policy and can demonstrate its commitment to tackling the causes of climate change. We recommend that, as a first step, procurement policy should seek to maximise energy efficiency opportunities. But where appropriate and cost-effective, it should additionally aim to incorporate local energy systems in its infrastructure investment programmes. Public buildings and schools, for example, provide an ideal setting in which to showcase local energy technologies, demonstrate public sector leadership, and help engender greater awareness of the need to reduce carbon dioxide emissions.

The Code for Sustainable Homes

129. One way in which Government can make a direct contribution to promoting the use of local energy is through its housing stock. In December 2006, the Department for Communities and Local Government launched its Code for Sustainable Homes. This is designed to set a national standard to guide industry in the design and construction of sustainable homes. It places certain requirements on new build, covering nine design categories including energy use, carbon dioxide emissions, waste, materials, pollution and water conservation. Under the Code, new homes will be given a 'star rating' to indicate their environmental impact. The rating runs from one to six stars. The lowest is a standard that has been set above the current Building Regulations requirements; the highest reflects an exemplar development in sustainability terms. For energy use, the highest star rating will be awarded to homes which are carbon dioxide neutral.

130. The Code is intended as a successor to the Building Research Establishment's EcoHomes rating scheme, which is currently used to assess around 30,000 homes a year. At present, the Code is voluntary for the private sector. Housing built with public money, however, must achieve at least level three of the Code. Under the new conditions, this requires homes to achieve carbon dioxide emissions at least 25% lower than the Target Emissions Rate set out in the 2006 Building Regulation Standards. This could still be achieved through energy efficiency measures in the home. But higher star ratings are likely to require some use of local energy installations.

131. The Government intends the Code for Sustainable Homes to act as an indicator of the future direction of Building Regulations, which have themselves been gradually tightened in recent years to require better standards of energy efficiency. In addition, the Climate Change and Sustainable Energy Act 2006 amended the Buildings Act 1984 to allow the Government to require local energy systems in all new build in the future, should it choose to do so.[197] These developments should send a clear signal to the construction and local energy industries of the Government's intentions, allowing them time to prepare and increase capacity. Indeed, as costs fall for local energy technologies, this should also be used as an opportunity to tighten energy requirements under the Code.

132. Evidence we received was broadly supportive of the Code, though there was some concern about the transition from voluntary participation of the private sector to enforcement under the Building Regulations. One way of helping the industry to achieve this could be to establish a 'Builders' Obligation' under which large-scale builders would be required to construct a fixed percentage of their homes to meet Code standards each year.[198] Additionally, the Micropower Council argues that the Department for Communities and Local Government should set a timetable for incorporation of the Code's standards into the Building Regulations in order to further demonstrate the Government's intentions on future policy for new homes.[199]

133. The Code for Sustainable Homes provides a welcome demonstration of the Government's intentions for future Building Regulations. Standards under the Code should promote greater energy efficiency for all new homes built with public money. Further tightening of the Code in the future should also provide a lever for greater use of local energy installations in new build. We recommend that if costs for local energy technologies fall significantly, relative to energy efficiency measures, or relative to the cost of energy from other sources, the Government should then establish a framework for the incorporation of local energy into future Building Regulations, and that any such framework must place more emphasis on the role of local heat production than has been the case so far.

192   Scottish and Southern Energy, Response to "Our energy challenge-securing clean, affordable energy for the long-term", January 2006 Back

193   Sustainable Procurement Task Force, National Action Plan, June 2006 Back

194   Q 573 (Minister for Energy) taken from Trade and Industry Committee oral evidence on the UK's dependency on gas and coal imports, 10 October 2006 Back

195   Scottish and Southern Energy, Response to "Our energy challenge-securing clean, affordable energy for the long-term", January 2006 Back

196   Appendix 20 (Environment Agency) Back

197   Q 139 (Micropower Council) Back

198   Appendix 3 (Association for the Conservation of Energy) Back

199   Appendix 36 (Micropower Council) Back

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