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26th September 2007
Existing Housing and Climate Change
Please find attached the response by the Energy Saving Trust to the above inquiry.
You will see that the main points we wish to raise are as follows: · There is a need for an overarching Government strategy for reducing emissions from our housing stock by 60% (or more) by 2050. · There is a need for Government funding for the roll-out of a Sustainable Energy Network, a one-stop shop for householders and sub-regional strategic co-ordination service on sustainable energy. · A support programme for the home moving supply chain and for consumers, to convert Energy Performance Certificates (EPCs) to action. · The installation of smart metering in new homes and during major refurbishments, and a full-scale roll-out of smart meters completed within the next ten years. · The development of a "post-Decent Homes" standard, for social housing providers to prepare for and incorporate in their longer-term investment plans. · A range of legislative and support instruments to fill the gaps that schemes such as the obligation on energy suppliers to meet energy saving targets (CERT) cannot comprehensively cover. · Well-evaluated, large-scale demonstration projects to pave the way for the next generation of refurbishment technologies beyond the currently cost-effective measures.
EXISTING HOMES AND CLIMATE CHANGE
SUBMISSION BY THE ENERGY SAVING TRUST
SEPTEMBER 2007
This is the response by the Energy Saving Trust to the inquiry by the Communities and Local Government Committee launched on 25th July 2007, on the existing housing stock and climate change. The response should not be read as representing the views of any individual member of the Trust.
Executive Summary
The Energy Saving Trust welcomes the CLG Committee inquiry into existing homes and climate change. Homes account for 27% of national carbon emissions, and it is therefore essential that they are addressed.
Whilst there are a number of Government and other initiatives targeted at reducing emissions from the housing stock, the Energy Saving Trust believes there is a need for a long-term Government strategy, setting out the pathway to reducing emissions by 60% (or more) by 2050. Only then will the full range of necessary policy interventions become clear.
In the meantime, the Energy Saving Trust believes there is a need for the following changes: · Government funding for the roll-out of a Sustainable Energy Network, a one-stop shop for householders and sub-regional strategic co-ordination service on sustainable energy. · A support programme for the home moving supply chain and for consumers, to convert Energy Performance Certificates (EPCs) to action. · The installation of smart metering in new homes and during major refurbishments, and a full-scale roll-out of smart meters completed within the next ten years. · The development of a "post-Decent Homes" standard, for social housing providers to prepare for and incorporate in their longer-term investment plans. · A range of legislative and support instruments to fill the gaps that schemes such as the obligation on energy suppliers to meet energy saving targets (CERT) cannot comprehensively cover. · Well-evaluated, large-scale demonstration projects to pave the way for the next generation of refurbishment technologies beyond the currently cost-effective measures.
Attached is the Energy Saving Trust's report: "Scoping Study: Improving the Energy Performance of Existing Homes," that we believe provides more detail on these issues.
Background to the Energy Saving Trust
The Energy Saving Trust was established in after the Rio Earth Summit in 1992, to address energy efficiency in housing. Since that time, the Trust has expanded its activities to address all mass-market sustainable energy solutions, covering domestic energy efficiency, microgeneration, and cleaner transport. The Trust therefore has expertise both in consumer attitudes and behaviour, and in technologies and market transformation. We believe that both behaviour change and technology development are essential, if we are to achieve a significant reduction in carbon emissions from our housing stock.
The Significance of Existing Housing Compared to New Build and the Different Levels of Performance Each Display
The existing housing stock accounts for 27% of climate damaging carbon dioxide emissions. We expect the vast majority of these homes still to be standing in 2050, because the rate of demolition and/or replacement of housing is very low, at less than 0.01% per year. Addressing the currently existing housing stock is therefore essential if Government is to meet its long-term national carbon reduction goal of 60% by 2050.
The average emissions from a home in the UK are 1.6tC (tonnes of carbon), of which 1.3tC is from heating and lighting (i.e: not appliance use). This compares with 0.86tC from a newbuild home, of which 0.56tC is from heating and lighting. A householder in a typical existing home is responsible for almost twice the carbon emissions of someone living in a new home.
While refurbishment methods and technologies will not be identical to those in newbuild, there is a large potential for emissions reductions in the existing stock. Measures that are currently cost-effective (i.e: fuel bill savings recoup the cost of investment within three years) could alone save 9MtC, or over 20% of emissions from the housing stock. Further measures are also available, and combined with the basic measures the emissions reduction potential exceeds 60%.
Changes Needed
In view of the above, i.e: a) the shear volume of existing homes, b) their relatively high individual carbon emissions, and c) the availability of measures to reduce these emissions, it is clear that a programme is needed from now to 2050 for the improvement of the existing stock. It is also clear that Government needs to develop a long-term strategic framework for emissions reductions in existing housing, as it has done to some extent for newbuild. Without this, and a clear goal (such as an emissions reduction target for housing) to aim for, it will not be clear what further resources and what further policies are needed in this area.
The Respective Roles of Residents, Homeowners, Landlords, Local Government, Central Government, and the Energy Industry
The majority of housing is owner-occupied, with the rest in the social sector and privately rented. The person responsible for improving the property is different in each of these sectors, i.e: it is respectively the owner-occupier, the social housing provider, and the landlord. The aim with all activities and policies is to secure action by these three players.
The Energy Efficiency Innovation Review (2006) showed the three main barriers to action by owner-occupiers as: a) hassle factor, b) lack of trust, and c) price perception gap. While energy companies are playing an ever increasing role in promoting and offering incentives for the uptake of energy efficiency measures, we do not believe these three barriers have been fully addressed since the completion of the Review.
We support the Government in its approach to energy regulation, whereby energy companies are set carbon reduction targets ("CERT"), and thereby incentivised pro-actively to promote energy saving measures to householders. We believe this is the single largest initiative for improving the energy performance of the existing housing stock. However, energy companies are generally not trusted by householders, especially when they come in the name of energy saving, and this compounds the barriers of hassle and price perception, because the customer will feel they need to double-check and shop around just in case. As a result, energy companies will find it increasingly difficult and therefore expensive to find receptive householders, unless there is a wider, impartial consumer support network in place.
Changes Needed
The Energy Saving Trust is looking to roll out a "Sustainable Energy Network" on a national basis. This is essentially a one-stop shop for householders on domestic energy efficiency, microgeneration, and cleaner road transport, coupled with a strategic co-ordination service to bring about more coherence and direction to the activities of the various stakeholders in the area.
The SEN will continue to provide reactive impartial and expert advice on domestic energy efficiency that is currently provided by the Energy Efficiency Advice Centres. But, in terms of the three barriers set out above, it would also assist the householder with finding an installer who would do a thorough job and "leave the place as he found it" (hassle); advise the householder on the best course of action without any ulterior motive (trust); and provide the householder with information on technologies and indicative installation costs (price perception).
The roll-out of SEN is dependent a significant increase in Government funding.
Energy Performance Certificates
The Energy Saving Trust is very pleased to see the introduction of Energy Performance Certificates (EPCs) upon the marketing of a home. EPCs begin to address lack of awareness on the part of both vendors and buyers, in terms of the true quality and performance of the home, and the potential for improvement. We look forward to the roll-out of EPCs from 3-4 bedroom homes to all homes as soon as is practicable.
Changes Needed
EPCs are a pivotal tool for delivering action on the part of homeowners as part of the home purchase process. However, we do not believe the EPC is enough on its own. - The reality of moving home is that a certificate in the Home Information Pack is likely to be a low priority in relation to the many other things the customer has to do and look out for. And the EPC may well have been forgotten by the time the householder feels in a position to take action.
For this reason, the Energy Saving Trust would like to see: · A support programme for estate agents, raising awareness, explaining, and highlighting the potential business opportunities associated with the EPC. · A more general awareness raising campaign on EPCs and their relevance to climate change. · The provision of EPC data to an impartial, non-commercial agency such as the Energy Saving Trust, that can use this for the purposes of targeting and follow-up after the home moving process is complete.
The European Directive on the Energy Performance of Buildings also requires the introduction of EPCs for rented accommodation, both in private and social housing. We look forward to more intensive and timely policy development in these areas.
The Provision of Information for Households and Prospective House Buyers
Information is essential for householders to be aware of their energy consumption, and therefore to be in a position to take action. But information alone is not enough; it needs to be provided by a trusted party, and it needs to be accompanied by support to action. This has already been explained above in relation to EPCs.
A further area is smart metering (automated meter management + interval metering + consumer interface). Smart metering provides significant opportunities to improve domestic energy efficiency by catalysing long term sustainable behavioural change and increasing the rate of installation of measures by making energy consumption visible. Smart metering also provides a visible link between energy saving awareness, information and advice and the action required to reduce consumption through instant feedback to the consumer.
International experience demonstrates that smart metering delivers energy saving. The Energy Saving Trust believes the implementation of smart metering and improved consumer feedback can achieve energy savings in the order of 5% which would provide a significant contribution to the Government's domestic carbon reduction targets.
Changes Needed
The Energy Saving Trust strongly supports the installation of smart metering in new dwellings and during major refurbishments, as well as a programme for full-scale roll-out completed within the next ten years. Real-time energy displays should be installed as part of this programme.
Government Efforts to Reduce Carbon Emissions from Existing Housing Stock (Private or Public Ownership)
The Government is introducing some valuable policies on energy efficiency in the existing stock, notably CERT (formerly EEC) for energy suppliers, EPCs for home movers, and Decent Homes for social housing. However, existing policies have not over recent years reduced absolute carbon emissions, as shown below:
Figure 1: Trends in Carbon Emissions from Housing by End-use
Changes Needed
The Energy Saving Trust supports the expansion of the Energy Efficiency Commitment scheme to a higher carbon saving target under CERT. We are concerned, however, that any energy supplier scheme will continue to miss households that are "too difficult," - whether they simply do not trust the energy supplier, or cannot accommodate the most cost-effective energy efficiency measures, or are for geographical reasons difficult to market to. We believe that pro-active Government housing policies are needed to fill such gaps. Examples include a requirements for tough energy efficiency improvements in all major renovation works; and a long-term legislative plan for ensuring that all EPC recommendations are implemented before a house is sold.
The Decent Homes target is for all social housing to meet the Decent Homes standard by 2010. Indications are that in reality this will be closer to 2014. However, it is important to ensure that the social housing sector continues to improve the energy efficiency of their housing stock. Social housing providers generally develop longer term investment plans for ongoing upgrade of their stock. As such, Government should be looking to develop longer-term rolling targets for energy efficiency improvements in the sector.
Similarly, there is a need for Government to look at the next generation of "advanced refurbishment" measures, beyond the staple cost-effective measures currently being promoted, and prepare for their support and roll-out. CERT promises to be one instrument for this in the long-term, but more is needed to pave the way for this. The Energy Saving Trust is supporting a number of advanced refurbishment schemes, to assess the issues inherent in improving homes beyond the staple measures. We would be keen to feed these results into the housing debate, and potentially the development of a larger Government funded pilot scheme, ready for wider roll-out in due course.
The Technologies Available to Reduce Emissions and the Government's Role in Facilitating Relevant Further Technological Development
As stated above, mass-market, proven, cost-effective technologies already exist that can reduce emissions across the housing stock by over 20%. These technologies include insulation measures (cavity wall insulation, loft insulation, hot water tank insulation), heating measures (controls and thermostatic radiator valves, high-efficiency condensing boilers), and efficient lighting measures. The Energy Saving Trust believes these measures need now to be installed as quickly as possible, through schemes such as CERT.
What seems to be missing is a long-term plan for developing mass markets in the next generation of technologies, including concerted action systematically to develop and evaluate their performance and acceptability. These technologies include external and internal wall insulation and various microgeneration (mass-market renewable energy) technologies.
Changes Needed
The Energy Saving Trust would like to see a long-term strategy for carbon reductions in housing, including "next steps" for when all the staple measures are in place. This strategy would need to address the question: What do we want our housing stock to look like by 2050? How are we willing to change its appearance? What are we not willing to do, even in the fight against climate change? What are the alternatives, and how can these by developed? These questions are essential to address if we are to have a clear view of where we are heading.
As set out previously, the Energy Saving Trust is supporting a number of advanced refurbishment schemes, and is keen to feed these results into the housing debate for eventual wider roll-out.
The performance of individual technologies needs furthermore to be robustly and regularly assessed, through field trials and monitoring. The assessment must come with a form of accreditation. This allows consumers, but also local authorities, agencies, and others, to try the right technologies on the basis of scientifically gained evidence. The Energy Saving Trust is supporting a number of individual monitoring projects. However, there is a need for Government funding for a far larger, comprehensive monitoring programme for the next generation of technologies.
The Costs Associated with Reducing Carbon Emissions from Existing Housing, Who should Meet these, and the Interaction Between Carbon and Fuel Poverty Targets
The immediate priority in terms of mass-market action is to ensure the installation of the basic, cost-effective measures. These measures will typically (averaged over all housing in the UK) save £250-£300 per year, every year, on the back of fuel bills, recouping the cost of investment within three years. For those that can afford the upfront investment, therefore, it seems fair that they should bear the capital cost.
However, there are still many barriers to overcome in relation to the "able to pay" market, notably the aforementioned lack of awareness, hassle factor, trust issues, and price perception gap. It takes resources to overcome these barriers and help householders make the investment that is in their own interest. We support the Government in its approach to energy regulation, whereby energy companies are set carbon reduction targets ("CERT"), and thereby incentivised pro-actively to promote energy saving measures to householders. But we would also stress the importance of the Energy Saving Trust's own background / underpinning activities, such as the Energy Saving consumer awareness campaign, and the provision of impartial consumer advice through the Energy Advice Network. These provide the context for grant schemes and other promotions from players such as energy companies.
For the less well-off, we support the Government's funding of the Warm Front scheme (and its equivalents in the Devolved Administrations), which offers grant assistance for insulation and heating measures for low-income households. And we support the ringfencing of a "priority group" within CERT, requiring energy companies to direct a proportion of their activities at low-income households.
The interaction of climate change and fuel poverty targets is generally consistent. - We need to protect the most vulnerable households and ensure they are able to heat their homes, before introducing possible sanctions against energy use. The Government's target to eradicate fuel poverty by 2016 as far as is practicable is therefore welcome.
Changes Needed
On the issue of fuel poverty, there are a number of "hard-to-treat" homes that cannot accommodate the staple, cost-effective measures. Low-income householders in these homes therefore need something more, if the Government is to meet its fuel poverty target. This is an ongoing issue. The Energy Saving Trust would like the Government to fund a number of focused, well-evaluated refurbishment projects to see how more innovative technologies can be installed and how they are subsequently used in the homes of the fuel poor. We will be happy to contribute with evidence from our own advanced refurbishment projects, although these are not in the fuel poor sector.
The Specific Challenges which May Arise in Relation to Housing of Special Architectural or Historical Interest
The Energy Saving Trust accepts that there are some buildings of architectural or historical interest that need special attention when it comes to energy efficiency improvements. There are in general more solutions to the issues relating to such buildings than many would think, and for this reason the Trust has produced a guide to the renovation of heritage buildings (attached).
Changes Needed
There is clearly much scepticism and caution in planning spheres in relation to any changes at all to our most valued buildings. The Energy Saving Trust believes that planners should be given very clear guidance as to their responsibilities on climate change, within the forthcoming Planning Policy Statement (PPS) on Climate Change. But planners also need ongoing support in their understanding of energy issues from a range of perspectives - the design of low-carbon newbuild; advanced refurbishment of existing homes; refurbishment of heritage buildings; to name a few. We believe such support warrants additional resources from Government.
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