EU Energy Policy Contents

1Energy Performance of Buildings

Committee’s assessment

Politically important

Committee’s decision

Not cleared from scrutiny; further information requested; drawn to the attention of the Business, Energy and Industrial Strategy Committee

Document details

Proposal for a Directive amending Directive 2010/31/EU on the energy performance of buildings

Legal base

Article 194(2) TFEU

Department

Communities and Local Government

Document Number

(38339), 15108/16 + ADDs 1–5, COM(16) 765

Summary and Committee’s conclusions

1.1The building sector is the largest single energy consumer in Europe, absorbing 40% of final energy. About 75% of buildings are energy inefficient according to the European Commission, yet only around 1% of the building stock is renovated each year.

1.2This proposal—one of the energy efficiency measures under the Clean Energy Package—is designed to accelerate the cost-effective renovation of the existing building stock by creating the right market conditions.

1.3It updates the existing Energy Performance of Buildings Directive (EPBD) by:

1.4The Minister for Housing and Planning, (Gavin Barwell), is supportive of some of the proposals but is concerned about the cost and proportionality of a number of the changes proposed by the Commission. The Government’s position is set out in greater detail below.

1.5The Government highlights a range of concerns relating to the proposal, notably the potential additional cost of some of the suggested changes. We ask that the Government supply further details of its analysis once further progress has been made. We would also welcome any early indication as to whether the Government’s concerns might be shared by others.

1.6We note that the Maltese Presidency intends to prioritise this proposal. We therefore look forward to the requested information as soon as possible.

1.7There is a 12 month deadline for implementation by Member States following adoption of the legislation. We observe that the possible swift adoption of this measure means that implementation may be required before the UK has left the European Union.

1.8We retain the document under scrutiny and draw it to the attention of the Business, Energy and Industrial Strategy Committee and the Committee on Exiting the European Union.

Full details of the documents

Proposal for a Directive amending Directive 2010/31/EU on the energy performance of buildings: (38339), 15108/16 + ADDs 1–5, COM(16) 765.

Background

1.9The Energy Performance of Buildings Directive was originally introduced in 2002 (Directive 2002/91/EC) and was then substantially amended and expanded when it was recast in 2010 (Directive 2010/31/EU). The aim of the Directive is to promote the improvement of the energy performance of buildings and to reduce energy consumption in both residential and non-domestic buildings by raising awareness of energy use, mandating minimum standards, and requiring inspections of key equipment such as boilers. The current requirements of the Directive include:

1.10A review of the Directive identified the need for changes (see para 1.3).

European Commission proposal

1.11The key elements of the proposal are as follows:

1.12 The Commission concludes that the proposed amendments “respect the principle of subsidiarity, and Member States will retain the same flexibility as today, allowing adaptation to national circumstances and local conditions (e.g. building type, climate, costs of comparable renewable technologies and accessibility, optimal combination with demand side measures, building density, etc.).”

Minister’s Explanatory Memorandum of 20 December 2016

1.13The Government agrees that the requirements of the Directive are in accordance with the EU’s principle of subsidiarity.

1.14The Minister considers that the proposal to move the requirement for national building renovation strategy from the Energy Efficiency Directive to the EPBD has no impact on business or consumers and limited impact on the Government.

1.15The proposal to remove the requirement for analysis and consideration of high efficiency alternative systems for new and existing buildings should, says the Minister, result in some cost reductions for industry and home builders.

1.16The Minister indicates that the Government will need to consider carefully the implications of the electric vehicle charging proposals “to ensure that they are proportionate and practical”. He acknowledges that installation of charge point cabling when new homes are being built is significantly cheaper and easier than retrofitting.

1.17The Government will also need to ensure the proportionality and practicality of the proposal that when a technical building system (e.g. built-in lighting, heating systems) is installed, replaced or upgraded the overall energy performance of the complete altered system is assessed, documented and passed on to the building owner. He explains:

“The proposal implies that the requirement to have an energy assessment, and lodge associated data on a database, could change from currently being on sale/rental of a building, to being every time a technical building system is altered. Currently the requirement is to update the assessment every 10 years. While the proposal could improve the accuracy of an assessment by ensuring an update when a building system is changed, it could also mean that a new assessment is required every time a fixed light fitting is changed or installed.

“The proposal potentially adds a burden on installers and associated costs could be passed onto home owners or landlords. Most installers and engineers are not accredited energy assessors and so currently could not undertake such an assessment. To meet the requirement installers and engineers would either need to be trained or an accredited energy assessor be employed after the work is complete, unless an alternative and more proportionate means of meeting the requirement was developed.

“If the solution was to train a wider range of professions to be able to undertake an energy assessment there would be an additional burden arising from the need for associated training, standards, guidance and auditing to prevent fraud. The cost of an assessment and residential EPC on sale or rent is currently around £50, this cost is usually borne by those receiving the assessment (ie the home owner or landlord). EPC costs for non-domestic buildings are usually higher, and could be well over £1000 if the building is large and complex (Note: the charges for EPCs are market led and are not set by Government).”

1.18Regarding the proposed smartness indicator, the Government considers that this could support the transition to a smart energy system, but emphasises that more details are required on what it would cover and how it would be implemented. The Government would also want more clarity from the Commission on how it sees the smartness indicator interacting with whatever option is pursued through the work on smart appliances being taken forward under the Ecodesign Directive.

1.19The Minister notes that a new requirement for Member States to create and maintain a national energy performance certificate database is implied in the proposals but that full details of the requirement are not set out. He adds that the UK has already implemented databases for England and Wales, Northern Ireland and for Scotland since 2007. Further clarity will be sought from the Commission on the database, particularly whether a single UK database would be required.

1.20The Minister expresses concern about the possible cost of the proposal to require an Energy Performance Certificate to be produced before and after renovation supported by public finance. He notes that the energy saving from most common energy efficiency improvements are already well established.

1.21The Minister expresses the Government ‘s view of the proposals for heating and air conditioning inspection regimes (or the alternative of mandating buildings over a certain energy usage to have a building automation and control system) in the following terms:

“The EPBD currently allows for the use of an ‘equivalence report’ instead of the inspection regime for heating systems and the UK meets the requirement through this approach. For air conditioning systems the UK applies an inspection regime.

“The impact of the heating systems proposal is that the UK would need to either put in place a new heating system inspection, with the associated cost and compliance regime, or legislate for building automation and control systems (including retrospective mandating of these systems in existing buildings over the specified energy usage). For either the inspection or legislation approach it would also be challenging to identify buildings with the proposed energy use threshold particularly in buildings where energy supply is not under the control of one body. There is no legal mechanism in the UK that compels tenants to tell the landlord how much energy they are using for the landlord to calculate the aggregate primary energy use.

“The impact of the proposal for air conditioning systems is likely to be less onerous as a regime is already in place in the UK and the energy use threshold for inclusion in the regime is raised in the proposal so fewer buildings are likely to be included. However, the legislative alternative to the inspection regime would face the same issues on identification as outlined above and would require retrospective action on existing buildings.”

1.22On the use of a primary energy metric in setting minimum energy performance standards, the Minister says:

“The proposed change to Annex I to the EPBD requires performance standards for the purposes of the Directive (new build and major renovation) to be expressed in terms of primary energy. This would mean the Government would mandate a primary energy requirement for new buildings instead of, or alongside, current carbon emissions requirements. Although it is relatively straight forward to calculate a primary energy target this could disincentivise the use of some technologies which are low carbon but poor efficiency, such as biomass heating systems.

“In relation to the EPC, it may mean less emphasis in the metrics on the cost of heating and more on energy reduction. This will mean efficient systems with more expensive fuels may get a better EPC rating.”

1.23The Government will complete the standard checklist for analysis on EU proposals identifying the potential impacts of the proposals in the UK. This will be submitted to the Committees in due course. The Minister considers that the Commission may have underestimated the costs to businesses of the proposed changes.

1.24Finally, explains the Minister, the Maltese Presidency will seek to agree a Council position in the first half of 2017, paving the way for discussions with the European Parliament under the Estonian Presidency in the second half of 2017.

Previous Committee Reports

None.





27 January 2017