32 Energy performance of buildings
| (30196)
15929/08
+ ADDs 1-7
COM(08) 780
| Draft Directive on the energy performance of buildings (recast)
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| Legal base | Article 175(1)EC; co-decision; QMV
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| Department | Communities and Local Government
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| Basis of consideration | Minister's letters of 14 December 2009 and 13 April 2010
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| Previous Committee Report | HC 19-iv (2008-09), chapter 6 (21 January 2009) and HC 19-xxiii (2008-09), chapter 2 (8 July 2009)
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| Discussed in Council | See para 32.9 below
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| Committee's assessment | Politically important
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| Committee's decision | Cleared
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Background
32.1 Directive 2002/91/EC aims to improve the energy performance
of buildings, and combines different regulatory and information-based
measures. In particular, it requires Member States to set minimum
energy performance requirements, and to ensure that these are
met by new buildings, and by existing buildings with a floor area
above 1000m2 when these undergo major renovation. It
also requires them to establish arrangements for the issue and
display of energy performance certificates, and for the inspection
of boilers and air conditioning systems of a specified output.
32.2 Since the buildings sector is the largest user
of energy and carbon dioxide emitter in the EU, and one which
the Commission considers could produce cost-effective savings
substantially reducing energy consumption by 2020, it put forward
in November 2008 this proposal to re-cast Directive 2002/91/EC.
The proposal would thus retain many of the Directive's existing
provisions, but it would also extend its scope, and clarify and
strengthen a number of its provisions, notably:
- by extending to all existing
buildings, irrespective of floor area, the need to meet specified
minimum energy performance requirements when they undergo a major
renovation;
- by requiring Member States
to calculate energy performance requirements which take into account
European standards;
- by introducing minimum energy performance requirements
for systems, such as boilers, water heaters and air conditioning,
installed in buildings;
- by requiring Member States to increase the number
of new and refurbished buildings for which carbon dioxide emissions
and primary energy consumption are low or equal to zero, setting
targets for the minimum percentages to be achieved by 2020 for
residential, non-residential and public buildings, and intermediate
targets for 2015;
- by introducing more specific requirements on
to the content of energy performance certificates, coupled with
new requirements governing their issue when buildings are constructed,
sold or rented, and where over 250m2 is occupied by
a public authority;
- by reducing from 1000m2 to 250m2
the area above which such a certificate has to be prominently
displayed if a building is occupied by a public authority, and
introducing a similar requirement for any building above 250m2
which is frequently visited by the public; and
- by extending the requirement on Member States
to establish regular inspections of boiler heating systems to
include all boilers with an output greater than 20kW.
These changes would have to come into force by the
end of 2010 for buildings occupied by public authorities, and
by the end of January 2012 for all others.
32.3 The main change, however, would relate to the
setting of minimum energy performance requirements by Member States,
which the Commission proposed should be gradually aligned with
cost-optimal levels calculated in accordance with a methodology
it would develop by the end of 2010. Member States would be required
to achieve those levels by 30 June 2017, and, as from 30 June
2014, they would no longer be able to provide incentives for the
construction or renovation of buildings which did not meet them.
32.4 Our predecessors noted in their Report of 18
January 2009 that, whilst the majority of the proposals were in
line with, or replicate, the measures which the UK had already
adopted, some would go much further, and were regarded as "extremely
challenging". In addition, some of the definitions in the
proposal needed to be clarified; and the financial implications,
though not yet quantified, were likely to be significant.
32.5 They were also told that the Government would
be able to produce an Impact Assessment once the proposals have
been agreed, and, although they recognised that a number of uncertainties
made it difficult to produce such an Assessment, they expressed
concern at the suggestion that this could only be done after
the measure had been adopted. In particular, they stressed the
need for a proper Assessment before any such agreement,
and said that, before they could consider clearing the proposal,
they would wish to see this (and to receive more information on
the progress of negotiations in Brussels).
32.6 Our predecessors subsequently noted on 8 July
2009 that they had recently received a letter from the Government,
together with a supplementary Explanatory Memorandum. These said
that, subject to the outcome of a consultation exercise, the Government
was in the main content with the vast majority of what had been
proposed, not least because the UK had in many such cases already
gone further (or was proposing to do so). However, they noted
that the Government had identified three main areas of concern
where issues of subsidiarity or costs might outweigh the benefits,
namely:
- the suggestion that there should
be a single methodology to calculate cost-optimal levels of energy
efficiency, where the impact could not in any case be confirmed
until this had been developed by the Commission;
- the setting by the Commission of the definition
of low and zero carbon properties, together with an obligation
on Member States to set targets for the number of buildings meeting
this requirement; and
- the extension to public buildings larger than
250m2 of a requirement to display an energy certificate,
where the Government considered that the focus should instead
be on encouraging the take up of the existing requirement applying
to buildings larger than 1000m2.
32.7 Our predecessors also noted that the Government
had provided an Impact Assessment, which suggested that there
would be a one-off cost of about £2.5 million, as well as
annual costs of £8 million arising from the wider display
of energy certificates within the public sector, but that the
average annual monetised benefit would be only £1.3 million
(though there would also be certain non-monetised benefits arising
from an annual reduction in emissions of carbon dioxide). The
Assessment further noted that there would be additional, as yet
unquantified, costs in meeting the requirements relating to cost-optimal
improvements and arising from a single definition of low and zero
carbon buildings (together with the associated targets to increase
the number of such buildings).
32.8 In commenting on the complexity of this apparently
straightforward document, our predecessors also noted that the
costs and benefits quantified so far would result in a small net
cost, and that the Government still had a number of outstanding
concerns, including the timetable envisaged by the Commission,
and the subsidiarity implications of achieving cost-optimal levels
of energy efficiency, and of the projected increase in the number
of low and zero carbon buildings. They therefore said that they
intended to continue to hold the document under scrutiny, pending
further clarification on these points, and the outcome of the
Government's consultation exercise.
Minister's letters of 14 December 2009 and 13
April 2010
32.9 Despite a request to be kept informed of developments,
our predecessors were next sent a letter on 14 December 2009 by
the then Parliamentary Under-Secretary of State at the Department
for Communities and Local Government (Mr Ian Austin), indicating
that political agreement had been reached on 19 November. Moreover,
that letter did not in fact reach them — a fact which only
came to light at the end of March 2010, as a result of which the
Minister wrote again on 13 April 2010, enclosing a further copy
of his original letter.
32.10 In these letters, the Minister highlighted
the following main changes which had been made to the original
proposal:
- the suggestion that the number
of low or zero carbon new and existing buildings should be increased
had been dropped, and a concept of "near zero energy building"
introduced, including a requirement that, in such a case, the
energy should to a very significant extent be from renewable sources,
including that produced on-site or nearby: this would be accompanied
by a requirement that all new buildings receiving planning permission
after 31 December 2020 (or 31 December 2018, in the case of new
buildings occupied by public authorities) must comply with it;
- the definition of "cost
optimal level" had been revised, and has now been defined
as the energy performance level which leads to the lowest cost
during the estimated life cycle — which is to be determined
by each Member State — taking into account energy-related
investment costs, maintenance and operating costs, and disposal
costs, where applicable; and
- the thresholds for the display of energy performance
certificates had been changed, so that for buildings occupied
by a public authority and frequently visited by the public it
would now be reduced from its present level of 1000m2
to 500m2 (reducing further to 250m2 five
years after implementation), whilst the proposed new threshold
for commercial buildings has been increased from 250m2
to 500m2.
32.11 The Minister said that the UK fully supported
the definition of near zero energy buildings, which fitted very
well with its own definition of zero carbon homes, and that, although
it was initially concerned that any requirement on the reliance
of renewable energy sources could increase development costs,
the Commission had issued an assurance that this represented an
aspiration rather than an obligation. He added that, in view of
the change made to the definition of cost-optimal, the Government's
earlier concerns over subsidiarity had been allayed. In particular,
he suggested that the standards currently in force in the UK would
equal, and may exceed, the level of performance which would now
be required, and that the UK would not in any case provide incentives
for the construction of renovation of buildings which do not comply
with minimum energy performance standards. His Department has
also provided a revised Impact Assessment, which suggests that
there would now be a one-off cost of £2.5 million and an
average annual cost of £760,000, whilst the annual benefit
would be £2.5 million, thus giving rise to a net benefit.
Conclusion
32.12 It is evident from the information provided
— albeit belatedly — by the previous Government to
our predecessors that the UK's earlier concerns about this proposal
have now been met, and also that, rather than a small net cost,
there will now be a small net benefit. In view of this, and the
fact that the proposal was agreed by the Council as long ago as
November 2009, we see no point in holding the document under scrutiny.
We are therefore clearing it.
32.13 However, in doing so, we would like to register
two concerns over the way in which this document was handled by
the Department. First, although our predecessors specifically
asked in their Report of 8 July 2009 to be kept informed of developments,
the then Minister did not write until 14 December 2009 to say
that political agreement had been reached a month earlier. This
demonstrably unsatisfactory situation was then compounded by the
fact that this letter did not reach us — a fact which only
came to light at the end of March, when departmental officials
asked whether the Committee had seen the letter.
32.14 We appreciate that these difficulties cannot
be laid at the door of the present Government, but we would expect
the Department — and indeed all Departments — to keep
us fully informed of developments, particularly where there has
been an explicit request for this to be done, and above all to
provide information before a document has been agreed.
Secondly, if a Minister has sent us a letter which evidently merits
a response from us, but no such response has been received within
(say) two or three weeks, we believe that departments should,
as a matter of course, check whether we have indeed received the
letter. That would at least help to avoid the further delay which
occurred in this instance.
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