Select Committee on Environmental Audit Twelfth Report

3  Zero carbon homes

19.  Following the then Chancellor's announcement of the zero carbon homes target in the 2006 Pre-Budget Report, the Department for Communities and Local Government (CLG) outlined further details in a consultation paper entitled Building a Greener Future: Towards Zero Carbon Development.[33] This set out a timetable for progressive mandatory improvements in the energy efficiency of new buildings, with a 25% cut in carbon emissions from 2006 standards by 2010, a 44% cut by 2013, leading to the zero carbon standard by 2016. The Government projects that meeting these targets would save at least 15 million tonnes of CO2 per year by 2050.[34] The UK Green Building Council's Zero Carbon Task Group hailed the 2016 zero carbon target as "perhaps the most ambitious environmental policy this Government has introduced."[35]

20.  As numerous witnesses (including the UK-Green Building Council and the Home Builders' Federation) pointed out, the steps up from the 2010 standard, and even more from the 2013 standard to the zero carbon standard in 2016, will be very demanding. The 2010 standard can be met by improving the energy efficiency of the building fabric. While this may cost more money and be logistically challenging to achieve at volume, it is essentially a case of standardising designs and materials that are already in use; it lies wholly within the competence and control of construction firms. The 2013 standard will require new homes, not just to have greater thermal efficiency, but to provide some of their own energy from onsite renewable sources. Achieving the 2016 zero carbon standard will require supplying all the energy used in the home—i.e., heating, water, lighting, and all household appliances—from renewable sources. This will add a great deal of extra complexity to new housing developments, in terms of the skills and technologies required for building electricity generating capacity. Neil Jefferson of the National House-Building Council told us that the requirement to provide all the energy for household appliances from renewable electricity made the UK's zero carbon target the most exacting and ambitious standard that he was aware of in the world.[36]

21.  Even more important, individual sites for development will vary widely in terms of their potential for generating electricity. For example, urban sites will generally not be suitable for wind turbines, blocks of flats may be too densely populated relative to surface area to supply their own energy from solar panels, and diseconomies of scale will mean that it may be very expensive for small developments to generate their own energy.[37] In August 2007 the Renewables Advisory Board estimated that at least 11.6% of new homes built from 2016 would not be able to generate all their own energy. A report in May 2008 by the UK-Green Building Council's Zero Carbon Task Group reanalysed this finding, and suggested it might apply to as many as 78.4% of new homes.[38]

22.  In order to help make the zero carbon standard practicably deliverable, CLG had originally announced that zero carbon developments could, in certain circumstances, achieve the required standard by funding the building of new renewable energy capacity off-site.[39] The Treasury then announced[40] a more restricted definition of what could qualify as zero carbon, stating that off-site renewables would only be acceptable if they were connected to the new housing development by a private wire, rather than connected to the grid; CLG then amended its definition to match. This provoked considerable controversy, with both construction and energy firms arguing it was too restrictive. For instance, E.ON told us: "[…] the current definition of a zero-carbon home shows a lack of understanding of how energy infrastructure, particularly networks, actually works. A requirement for any 'offsite' generation to be connected to the site by dedicated 'private wire' is not a sensible approach."[41]

23.  One argument E.ON made was that any decentralised energy network would still need to be connected to the grid, partly as a back-up when it was not generating enough power to be self-sufficient, partly to export energy to the grid where it was generating more than it needed. Another argument was the national grid is a natural monopoly, and that it would be inefficient to allow housing developers to begin to duplicate it through constructing dedicated private transmissions networks. More fundamentally, E.ON argued that grid electricity would be progressively decarbonised anyway, and that zero carbon housing developments could contribute to this by effectively buying offsets to help fund the growth of renewable energy generation nationally.[42]

24.  Responding to these concerns, and at the invitation of Government, the UK-Green Building Council formed a Zero Carbon Task Group which reported on its recommendation for the definition of a zero carbon development in May 2008. This recommended that, where meeting the energy demand of household appliances from on- or near-site renewables is "not practicable or […] prohibitively expensive", developers could use either of two options. In the first, off-site solutions would be allowed (without requiring private wire networks), provided that they are demonstrably additional and have been built specifically to deliver the energy needs of the development. In the second, the developer would pay into a 'Community Energy Fund', that would ensure equal or greater net carbon savings are delivered through new installations.[43] Overall, the UK-GBC were clear about the need to ensure that in building or funding off-site renewables, developers were not financing something that would have been built anyway, given the existing targets and incentives on power companies under the Renewables Obligation.[44]

25.  We asked the Housing and Environment Ministers for their thoughts on the definition of "zero carbon". They stated that they were still consulting on the definition, but that their working ideas were along the lines of the UK-GBC's proposals. Bob Ledsome, Deputy Director of Climate Change and Sustainable Development at CLG, clarified the Government's thinking as being that funding off-site installations would be acceptable, and that: "We usually use 'off-site' in terms of the energy being transmitted through the Grid as opposed to it being a local system with connections but on a local distributing basis."[45] In other words, where off-site renewables are allowed, there will be no physical link between them and the development itself; their contribution will be to add incrementally to the decarbonisation of the grid electricity available to all households, rather than to supply 100% carbon-free electricity to the development of new "zero carbon" homes.

26.   We accept the concerns raised about the difficulties in—and in some cases impossibility of—fully meeting the target through on-site renewable energy sources. There are certainly dangers in allowing this requirement to be watered down: firstly, that it will become the default option; secondly, that it will be added to the funding of large-scale renewables that power companies are already incentivised and mandated to build; thirdly, that if developers fund off-site renewables that are connected to the grid, then the zero carbon status of the new homes in question will be greatly complicated. In fact, these homes will not themselves be using zero carbon energy—any more than any other household that draws its power from the grid.

27.  Even in this case, however, we believe that the zero carbon target could still make a significant environmental contribution. First, while the new homes in question would still be consuming grid electricity, they would be consuming less of it than the average home, given both their energy efficient design and the fact that they would still have to generate on-site all the power they would need for heating, lighting, and hot water. Second, by funding new renewable capacity they would be contributing to the progressive decarbonisation of grid electricity, thus helping to lower the carbon emissions of all households. Third, they would be helping to develop a mass market for energy efficient materials and microrenewable technologies and firms, thus reducing the costs of such products, in turn encouraging their take up, not just in the building of new housing but in the retrofitting of existing buildings. Finally, by providing renewable heat and power to surrounding properties, or by paying into the UK-GBC's proposed Community Energy Fund, new developments could play a vital role in accelerating the creation of community energy systems (otherwise referred to as district energy or decentralised energy systems).

28.  We recommend that, once the zero carbon standard comes into effect, the initial priority for developers must be to build on-site generating capacity and planning policy should reflect this priority. Where off-site renewables are used, these should not require the use of a private wire to connect them to the housing development that is funding them, but should simply be connected to the grid. However, it is essential that controls are established to ensure such off-site generation is additional to what power companies would build anyway. Whether new developments build on-site (or adjacent) generation, or pay into some kind of proposed Community Energy Fund, we recommend that the Government seizes the opportunity of the 2016 zero carbon target to accelerate the development of district renewable energy sources to supply existing neighbourhoods.

29.  We received some evidence to warn of potential problems in using the construction of new zero carbon homes as a spur to increasing the provision of district energy systems for existing neighbourhoods. One obvious potential problem is that the energy requirements of new, ultra-efficient homes will be very different to those of the existing housing stock. In some ways this mismatch could be fruitful; where new zero carbon homes use biomass combined heat and power (CHP) plants to generate electricity, they will have less need for the surplus heat, which could be usefully piped to older housing stock nearby. John Slaughter of the Home Builders' Federation told us:

[…] there is enormous potential to develop systems that work not just for new development but for the surrounding existing housing stock and nearby commercial, industrial and public service uses. That has a number of benefits: not only does it potentially provide a more cost-effective way of decarbonising everyone, it also means you have a more interesting investment proposition on the commercial side from an energy supply perspective—you will have balanced load, you will have a range of users and that makes configuration of a local system more attractive and more commercially interesting. I think therefore that if we look at that somewhat bigger picture in terms of how the new build and the existing stock can perhaps work together, then maybe we can actually make that a win-win for everybody.[46]

30.  In other ways, the difference between types of housing stock could cause problems; several memos stressed that the technologies required to build zero carbon homes may differ substantially from that which could usefully be retrofitted to existing housing.[47] Most importantly, although biomass CHP might make sense in providing for individual developments and districts, serious questions remain about how extensively it could be rolled out. E.ON, for instance, told us:

This may be a good option in certain circumstances, but under the present policy the wider environmental impacts of this technology will not be considered: impacts such as air quality and fuel transportation will be critical in dense urban areas, as well as issues such as the sustainability of the biomass fuel sources.[48]

Similarly, the LGA told us:

London Councils' research, modelling the potential cumulative impact of widespread small scale wood fuelled biomass use across London, has shown a potential for an increase in air pollutants such as nitrogen dioxide and particulates. Emissions from different biomass appliances vary widely, and it is therefore vital that councils are able to choose the best options for both air quality and climate change for their local area.[49]

31.  We recommend that the Department for Energy and Climate Change (DECC) and the Department for Communities and Local Government (CLG) urgently identify the practical difficulties in establishing extensive district energy systems, and implement a plan to address them. We further recommend that the Government commissions and publishes an assessment of the potential of biomass CHP, involving a detailed analysis of UK capacity to produce the requisite biomass (bearing in mind other demands for land use, and other demands for biomass), the sustainability of biomass supplies, and the effects of biomass CHP on air quality in urban areas and how to minimise them.

32.  We raised the issue of whether the Government was providing sufficient emphasis on the need for building design also to adapt to the impacts of climate change, notably the potential for increased incidences of flooding, drought, and heatwaves. We received one very interesting piece of evidence on this, from NGM Sustainable Developments, who drew our attention to the potential for new buildings to be built with basement buoyancy tanks, enabling them simply to float in the event of flooding.[50] This might potentially make it more feasible to build new communities on flood plains. We recommend the Government places much greater emphasis on adapting housing to the future impacts of climate change, both in terms of the designs for new housing and elements that can be retrofitted to existing housing stock. Critical to this will be the development of the skills and supply chains needed to support and apply innovative construction methods and design. The Government should ask the UK Green Building Council to investigate what further action is needed in this regard. In investigating these questions the UK Green Building Council should take into account the views of bodies such as the Environment Agency.

33   CLG, Building a Greener Future: Towards Zero Carbon Development, December 2006 Back

34   Cm 7191, p 5, p 7 Back

35   UK Green Building Council (UK-GBC), The definition of zero carbon, May 2008, p 4 Back

36   Q87 Back

37   Department for Business, Enterprise and Regulatory Reform (BERR), UK Renewable Energy Strategy, June 2008, pp 139-40 Back

38   UK-GBC, The definition of zero carbon, p 27 Back

39   UK-GBC, The definition of zero carbon, p 4 Back

40   UK-GBC, The definition of zero carbon, p 4 Back

41   Ev 145 Back

42   Ev 145 Back

43   UK-GBC, The definition of zero carbon, p 5. The essential difference between the two options proposed by the UK-GBC is that, under the first, the developer would be responsible for finding the land, gaining planning permission, and installing the renewable generation themselves; whereas, under the second, they would pay into a fund that would be managed centrally to finance the installation of district energy generation. Back

44   UK-GBC, The definition of zero carbon, p 33 Back

45   Q189 Back

46   Q107 Back

47   For example, ev 145 Back

48   Ev 146 Back

49   Ev 72-3 Back

50   Ev 204-5 Back

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