Jan 20, 2021

Feedback on Energy White Paper

BEIS asked us, via our professional institute (IEMA[1]) for feedback on the recent Energy White Paper.  For domestic properties there is a lot mentioned:  EPC targets, new homes, hydrogen, electric heating and heat networks.   We have some suggestions and information to share gained through our work with social housing landlords across the UK. Existing homes Specifically the white paper states, “we want as many existing homes as possible to hit EPC Band C by 2035”.  There are issues here relating to “net zero” and using EPC as a surrogate target for achieving net zero.

  • This aim is good and will certainly reduce emissions, reduce the risk of fuel poverty and provide warmer homes. However, our SHIFT analysis, consistently shows that achieving 100% EPC band C or better falls far short of a net zero housing stock. This shortfall may be reduced if the right action is taken on new build homes – see new build below
  • A more realistic “net zero” target specific for housing is needed to allow owners and landlords to make plans for the future.
  • EPC and the related SAP rating seem to be good surrogate metrics for CO2 emissions but there need to be some caveats. It should be noted that these ratings related to the cost of heating a home, not the CO2 emissions. Nevertheless, a high EPC/SAP generally results in low emissions. The opposite is not always true, low carbon buildings do not always have high EPC/SAP, which means they cost more for occupiers to heat and run.
  • That said, there is historical correlation with high EPC/SAP and CO2 emissions. The following data is from Local Authorities carbon reports and English Housing Survey. It shows that, historically, per capita domestic CO2 emissions decreases correlate with average SAP increases.
  • Our analysis shows that this relationship may however breakdown in the future if heat pumps replace existing gas boilers without some significant interventions – see heat pump section below
  • The quality of EPCs can be improved. We have learnt of new technologies that measure heat loss coefficients of homes, instead of estimating U values etc which is the current methodology. This technology will be crucial for improving the quality of EPCs.
  • The information on EPC’s could be a lot clearer. For example, it should be made very clear that the CO2 emissions and £ costs on certificates are related to the property in that location, rather than a generalised location. This is increasingly more important as landlords are now having to report Scope 3 emissions.

New build

  • The Future Homes Standard and related stepping stone uplift are welcome, but they really need to come as soon as possible. One reason for this is that it “levels the playing field” in terms of land costs. This way clients can actually get the net zero homes they want, instead of having to accept what housebuilders build.
  • The more new builds that are SAP 95 / EPC A (currently average new build is ~SAP 83, low EPC B), the more they will improve the average CO2 emissions for UK housing stock. This will reduce the shortfall between EPC C or better target and the net zero target (see existing homes above). This, in turn, will reduce the retrofit burden and cost for existing homes. This is likely to be significant if all the anticipated new build over the next 30 years up until 2050 are taken into account.
  • We suggest having a SAP target (e.g. SAP 95) in the forthcoming Future Homes Standard as well as and/or instead of TER/DER target. TER/DER targets offer a useful method for reducing CO2 emissions in new builds but do not target the running costs an occupier could expect for their property.
  • We are conscious that these standards are not intended to prefer any technology over any other, but we feel that MVHR systems (coupled with energy efficient fabric) do offer many benefits over other heating systems: cleaner internal air, recycled heat (i.e. very low carbon), less need to keep windows open which means better security and less noise. These are ideal for new build (less so for retrofit due to the ducting) and we feel these should be promoted more e.g. include in Renewable Heat Incentive schemes.

Heat pumps Now that grid emissions have reduce significantly, heat pumps do seem like a good way to transition to a low carbon heat.  For many properties they can reduce emissions as well as reduce costs for occupiers.  Our analysis suggests that off-gas properties are good candidates.  However, we note that the white paper states that heat pump technology, “is not just a solution for offgrid buildings. We believe that significantly increasing the deployment of heat pumps for on-gas grid homes through the 2020s, on a voluntary basis, will be beneficial, whatever the eventual mix of technologies for clean heat in 2050.” Our analysis suggests (and clients’ anecdotal evidence supports this) that a direct swap for a gas boiler to a heat pump will end up costing occupiers more to run the home.  This is primarily due to the higher cost of electricity, but other factors such as hot water heating and unfamiliarity with controls seem to be contribute. In order to encourage more heat pump installs we suggest the following is needed:

  • The coefficient of performance of heat pumps needs to increase to offset the cost of electricity
  • The ratio of electricity to gas costs per kWh needs to decrease such that electricity, when used with a heat pump, is cheaper than gas boiler
  • A combination of the 2 points above
  • Require on-site free electricity generation to be installed at the same time as heat pumps, such that costs of heating are further reduced

If the points above are implemented this should be incorporated into EPC/SAP ratings, then these can be continued to be used for net zero targets.  This is a great advantage because these methodologies are increasingly well understood and used throughout the sector Hydrogen and networks We welcome the mention of “additional low-carbon networks, particularly focusing on the recovery of waste heat and the use of heat pumps”.  Caution should be used, because we have found that existing, albeit gas, networks are extremely inefficient and some cause overheating in buildings.  Again, we urge that the low carbon element should also result in low running cost for the occupier. We cannot contribute any analysis on hydrogen, but we do have some comments we have gleaned from talking to others:

  • Hydrogen generated from renewable sources, in general, could be an excellent way to store excess energy generated from renewable sources
  • There is potential for “false hope” that gas boilers could be simply switched for hydrogen/dual fuel boilers – a far easier task than retrofitting heat pumps in many properties.  However, if the technology proves unfit for domestic use, this could cause a lot of wasted time and effort.  It also potentially conflicts with heat pump install ambitions

If you are interested in working with us to develop your net zero plans, please contact us on [email protected]   [1] Institute of Environmental Management and Assessment