Smart meters and energy efficient behaviour

If there is one thing that is certain about the current Coalition Government in the England it is that there is nothing certain about its energy policy. That having been said it has invested significant time and effort into developing a programme for smart meters to be installed in all households from the end of 2015.

As part of my role in a UK Green Building Council Task Group developing incentives to encourage people to take up the Green Deal or other energy efficiency strategies I produced a report on how smart users might encourage energy efficient behaviour which is reproduced below:

UKGBC Green Deal Incentives EEFiT Sub-Task Group

 

Briefing Note:

Smart meters as part of an energy efficient behaviour incentive scheme

Paul Appleby

 

Rev 2: December2013

 

Introduction

 

This note has been produced as a result of discussions held by a working group considering one of a number of alternative schemes to incentivise energy efficient retrofit. The EEFiT (Energy Efficiency Feed-in Tariff) sub-task group was investigating potential financial rewards based on either deemed or measured energy savings.

The aim of this offshoot has been to investigate the potential for linking smart meters to an incentive scheme that rewards reduction in energy consumption due to the actions taken by the householder: whether through installation of energy saving measures or energy saving behaviours.

A smart meter system installed in a home as part of a supplier’s roll out obligation comprises an electricity meter, a communications hub, a gas meter and an in-home display (IHD). It is expected that over time a market for other devices that connect to the system to access consumption and pricing information will develop. These devices have a generic name “CAD” (consumer access device) and could come in a variety of forms.

CADs may be integrated into a number of devices, for example as part of a home network that can communicate with thermostats, fridges etc. This could allow communication through broadband so that third parties can access data.

The foundation stage of smart meter roll-out is based around Smart Metering Equipment Technical Specification #1 (SMETS1) which includes a CAD interface, but not the communications standard for the interface. However the next generation (SMETS2) mandates the ZigBee communication standard and will be rolled out in Britain from the end of 2015.

It is likely that the large majority of SMETS1 installations will use an earlier version of the ZigBee standard than that planned for SMETS2. It is also likely that IHDs and other CADs will have some degree of interoperability.

Two out of the 6 big energy suppliers are committed to early roll out of smart meters. British Gas and EON are the most advanced. It is thought that over 1 million will be installed before the beginning of mass roll out of SMETS2 meters. However it is understood that the approximately 500,000 meters that British Gas has installed under Phase 2 of its programme are not SMETS1 compatible, whilst its Phase 3 meters are SMETS1 capable using a remote firmware update.

A number of contracts have been let to handle the development and operation of the communications infrastructure for connecting smart meters to the energy suppliers and handling the data. This includes a Data Communications Company (DCC), Data Services Provider (DSP), Communications Service Providers (CSP) and Smart Energy Code Administrator (SECA).

The DCC will provide data and communication services for the whole of GB, with responsibility for managing the link between meters and suppliers, as well as other authorised third parties. It will have a mandate to attempt to connect to all smart meters. Time has been allowed in the roll-out programme to allow for this and avoid the risk of stranded assets. However data from SMETS1 meters not enrolled into DCC will be managed by energy suppliers. The DSP will develop and operate the system controlling the movement of messages to and from smart meters, the CSPs will provide wide area communications to and from the smart meters and the SECA will maintain and update the industry code governing the use of smart meters across the energy industry.

Subject to consumer consent, data will be available over the wide area network (WAN) including 13 months of half hourly data.

Algorithms for analysing data from smart meters would be run on central servers since SMETS compliant meters would not have the computational means to implement them locally. The data from all versions of SMETS compliant meters will be the same and hence can be run by anyone who can get access to the data.

 

Discussion

 

It is interesting to note that Guy Newey of the UK Policy Exchange think tank in his report Smarter, Greener, Cheaper, dated January 2013, supports the introduction of an EEFIT but expresses some doubt on its relationship to ‘behaviour change programmes’:

Measures to subsidise changes in energy behaviour in the domestic sector through ECO should not preclude introducing an energy efficiency feed-in tariff (EEFIT), to offer fixed payments for verifiable reductions in electricity demand (as the Government is consulting on). Such an instrument should allow electricity demand reduction programmes to compete with new low carbon generation, potentially bringing down the overall cost of meeting the UK's carbon targets and energy bills. However, it is unlikely such a measure will support behaviour change programmes in homes.

The following is extracted from a Box towards the end of the report setting out the ‘Practicalities of proving cuts in demand have taken place’:

One of the complexities of a market that rewards demand reduction is proving that such reductions would not have happened anyway, i.e. that the cuts in energy use are additional. A reduction in energy use could be the result of several factors, unrelated to any intervention. This could include warmer weather reducing the demand for heating. Such a problem is not impossible to overcome and methodologies have been successfuly used in the United States.

(Weather compensated controls have been used in commercial buildings for many years of course, but have had limited success when applied to residential applications, possibly due to the lack of experience amongst installers and householders)

 There are two broad options for making comparisons:

1. Compare energy use for individual households following the intervention to energy use (before) the intervention. This requires suppliers (or whoever runs the programme) to establish a baseline. The data would have to be normalised depending on weather.

2. Compare the energy use of those households who get the intervention to a control group who do not. This is the approach used by Opower in the United States. Households with similar charactersitics are identified and those who do not have the intervention are used to provide a benchmark (this allows for factors such as different weather in different years to be less important). Any energy savings from those within the group who have the intervention are then scored, and would (be) paid a subsidy.

Such approaches are not perfect and may not account for changes such as different levels of occupancy. Robust methodologies need to be developed before behavioural programmes can be rolled-out nationally and allowed to fully compete with insulation measures for subsidy, which is why the first step for Government should allow new pilots to be subsidised through ECO. It is worth stressing that current support for technical measures relies on assumed or 'nominal' savings rather than actual savings. A comparison approach based on real energy (and therefore carbon) savings helps tackle problems like the rebound effect.

Another problem is ensuring that the changes people make in behaviour are sustained. While there is a reasonable certainty that insulation will continue to work for several decades (although no guarantee it will lead to overall reductions in energy use), there is a concern that behavioural steps will 'wear off' and people will revert to old habits.

Currently, there is some evidence that changes in how people use energy are sustained over a period of more than two years. Improved data collection, aided by smart meters, should make it easier to monitor whether changes in behaviour have been sustained (although checking will add extra cost). The subsidy could be paid for each year the savings can be shown to continue compared to a baseline (or) benchmark.

In a recent study that pulled together the results from ‘publicly available large-scale independent evaluations of comparative energy use feedback programs in the United States Agnew et al of energy consultants DNV KEMA concluded that:

·         Energy savings of between 1 and 3% resulted from providing householders with comparison data with their neighbours’ energy use

·         Savings increased year-on-year and with the frequency of reports

·         Householders found comparison reports useful

·         Savings were generally smaller than confidence intervals.

The critical factor in any scheme that rewards behaviour is the determination of the baseline or benchmark referred to by Newey above. The approach by US-based Opower uses what it refers to as ‘Big Data Analytics’⁴.  It claims that data is analysed from some 35 million smart meters and in-home displays across the US to determine trends in energy consumption, determine benchmarks and assess the success of energy efficiency programmes. However it is understood that Opower’s platform is struggling with the volume of data incoming, and it may be towards the end of 2014 before it has been upgraded to handle this volume.

Without detailed information from individual households it is not easy to determine what factors are impacting energy use at any point in time.

Key factors that impact on energy use that are not dependent upon behaviour or energy efficiency measures being installed  include weather, number and type of occupants, number and type of appliances and change of use. Essentially there are two methods of differentiating between behaviour/measure dependent and other changes to energy profiles:

1.       Compare energy consumption against average for homes with similar accommodation, normalised for local climate.

2.       Compare with previous year’s energy profile, corrected for differences in weather and atypical changes in profile.

If, for example, a baby is born into a family home then energy and water consumption are likely to rise quite suddenly. Similarly if an occupant retires or starts working from home, hours of occupancy will increase with correspondingly greater energy and water use. These will result in steps in the energy profile which can be identified through trend analysis in a similar manner to water leak detection.

In the research for this note the author has spoken to a number of authorities who are involved with developing the software and technologies for the smart meter roll out in the UK, as well as civil servants and energy suppliers involved in the programme (see Annex). None of those consulted were involved in developing systems that would provide this trend analysis, although Onzo⁶ has developed IHDs that can discriminate between different types of appliance through using data that is collected at 1 second intervals.

Clearly DECC understands the potential power of smart meters to collect information and augment energy efficiency programmes. This is illustrated in the following extracts from DECC’s consultation document for its Smart Metering Implementation Programme Consumer engagement strategy dated April 2012:

There is some evidence from supplier trials that customers with smart meters are more likely to take up offers of energy efficiency products. There is also some evidence that providing detailed feedback and information alongside ‘retrofit’ energy efficiency programmes can significantly increase energy saving levels. With smart metering, it will also be possible to interpret consumption patterns and offer additional advice on how to reduce waste. Accurate feedback on savings could also be valuable in increasing credibility and providing reassurance on the achievement of projected savings under the Green Deal.

It also leaves the door open for using smart meters as part of an energy efficiency incentive scheme:

In the medium term we will also carry out further policy analysis to decide whether there is a positive case for adjusting specific policy levers in order to provide additional incentives for suppliers to help consumers save energy in ways enabled by smart metering.

Conclusions and Recommendations

 

It is the author’s view that there is scope for developing a scheme that can be used to monitor and analyse data from individual smart meters designed to distinguish energy saving behaviour from other factors that might change energy consumption. An alternative scheme that compares energy consumption against similar dwellings has already been piloted by Opower in the United States. In the UK DECC should consider a pilot, perhaps in concert with an energy provider such as British Gas, that is designed to compare these two schemes. This pilot should address the following issues/questions:

1.       Can a methodology be developed that accurately separates energy savings due to behaviour or installed measures from other factors?

2.       The extent to which the rebound effect can increase energy consumption

3.       Will year-on-year comparisons better promote long term behaviour change than using a fixed benchmark?

4.       Can a scheme be developed that is accessible by all, including those in fuel poverty?

5.       Does this scheme need to reward the installation of energy saving measures and if so how can the resultant energy savings be distinguished from other factors?

 

 

Annex: Notes of meetings and telephone conversations

 

1.       Telecon with Peter Morgan, Smart Meters and Fuel Poverty Team, DECC - 28/3/2013

Meters store 13 months of half hourly consumption that can be accessed via a consumer access device via HAN or the WAN.  . In addition, real time consumption and pricing data is available to the CAD over the HAN.

An authorised third party such as an aggregator or ESCO will be able to access the data via the WAN ( as a Data & Communications Company (DCC) service) subject to consumer consent.  In addition, any party can enter into an arrangement with a consumer (subject to consumer consent) to access data over the HAN. This avoids complication of rewriting billing software – hence a traditional trend analysis algorithm can be applied similar to that used to identify major water leaks.

 

2.       Telecon with Chris Shelley, Smart meter consultant – 28/3/2013

DECC are keen that smart meters be used to change behaviour.

Smart meter system in home comprises electricity meter with integral comms hub (CAD) and gas meter which talks to comms hub, and an in home display (IHD): all wireless.

The foundation stage of smart meter roll-out is based around Smart Metering Equipment Technical Specification #1 (SMETS1) which does includes and interface for a consumer access device (CAD). CADs may be integrated into the IHD and establish a wireless home network that can communicate with thermostats, fridges etc. This would allow communication through broadband so that third parties can access data.

3.       Meeting with Peter Morgan (PM) and Charlotte Middleton (CM), DECC Smart Meter and Fuel Poverty Team – 14/5/2013

The potential for using smart meter consumer access devices (CAD) as a hub for an energy efficiency incentive scheme was discussed. This could use the energy demand profile or signature for a home as a basis for comparing year-on-year changes in energy use based on behaviour. It was agreed that there is potential to develop an algorithm that adjusts the baseline profile for both step changes that might occur due to change of use and atypical weather conditions – using either outdoor sensors or Met Office data.

 

PM referred to an extensive programme of work being carried out by British Gas (BG), including a survey of 18,000 of its customers fitted with smart meters, who are providing regular feedback on behaviour-related factors. BG has access to ring-fenced Warm Front money and may be able to assist in assessing the feasibility of a measured incentive scheme.

 

PM also suggested that the Consumer Energy Display Interest Group (CEDIG - a part of BEAMA) might be able to help The key is being able to demonstrate that access by the vulnerable and fuel poor will be improved by this incentive. It is possible that for many the very fact of having a smart meter with an in-home display (IHD) will improve their energy saving behaviour – for example a major international review of smart meter programmes by VaasaETT in 2011 reported that across some 450,000 homes worldwide IHDs resulted in an average reduction in energy use of 8.7% compared with between 5 and 6% for detailed billing or information provided over the internet, although whether this will lessen as the novelty wears off is uncertain. The VaasaETT report concludes that where consumer engagement is maintained reductions tend to continue over time.

 

PM agreed to supply contacts at the Energy Services Trade Association (ESTA) 

The roll-out of SMETS2 meters has been delayed and will now occur between 2015 and 2020.

 

Based on DECC consumer research and feedback from energy suppliers already deploying smart meters. CM suggested that uptake of smart meters is likely to be very high. There is no Government policy at present that will require those that refuse a smart meter to be charged extra.* 

 

CM also referred to Acorn profiling, that uses census data and consumer profiles, but we didn’t elaborate on how this might be used.

 

*In their response to a question concerning this issue from the Energy & Climate Change Committee published in their 7^th report of the 2013/14 session published in October 2013, Ofgem stated that:

 

Our Retail Market Review reforms forbid the levying of additional surcharges, such as a surcharge for opting out of smart meters. However, as the roll-out progresses, the underlying costs of serving traditional consumers may increase, due to reductions in economies of scale and scope as the number of smart meters increase. Suppliers may look for ways to recover these increased costs from consumers who have traditional meters. Smart meters will also lead to efficiencies for suppliers and they may, over time, choose to pass related savings on to consumers with smart meters only.

 

Note: according to its own publicity ‘Acorn is a powerful consumer classification that segments the UK population. By analysing demographic data, social factors, population and consumer behaviour, it provides precise information and an understanding of different types of people. Acorn provides valuable consumer insight helping you target, acquire and develop profitable customer relationships and improve service delivery.’ (http://acorn.caci.co.uk/)

 

4    Telecon with Simon Anderson, Chief Strategy Officer at Green Energy Options – 24/05/2013

 

SA is a member of the IHD group of CEDIG.

 

He suggested that consumers should be rewarded with lower tariff for using less energy than typical for type of property. Consumers should be bracketed within peer groups for comparison purposes.

 

Those working in this area include Opower in US*, Tom Hargreaves at UEA.

 

*Opower has developed a customer engagement platform which they call Big Data Analytics, which in the US has involved storing and processing data from tens of millions of smart meters at 15-minute intervals, as well as second-level data from in-home devices (http://opower.com/products/big-data-analytics)

 

5    Telecon with Alastair Manson, engage-consulting/Energy UK – 20/06/2013

 

AM is not aware of anyone having developed a method of filtering out non-behaviour based changes in energy consumption.

 

CAD has not yet been defined but IHD has been specified to operate with 10 second updates. This interval is independent of Broadband performance.

 

AM is working on Home Area Network standard for appliances, taking into account conformity with ZigBee home automation standards (http://www.zigbee.org/Standards/ZigBeeHomeAutomation/Overview.aspx) which is intended for use worldwide but is US based.

 

6    Telecon with Nick Hunn, Onzo – 26/6/2013

 

Onzo has developed an IHD using funding from SSE (Scottish & Southern Energy). He has been working on disaggregation of energy consumption data using resolutions of down to 1 per second, producing large amounts of data which are compressed at source. NH is also looking at being able to identify energy saving behaviours.

 

NH reported that some $85bn is being spent in the US on smart metering and energy education (TV advertising is 1/3 of this). Studies have indicated that this has resulted in 1-2% reduction in energy condumption, although the contribution of smart meters has not been determined.

 

He is worried that the CAD specification being developed in UK is so complex that it will not be compatible with anyone else in the world.

 

7    Telecon with Michael Harrison, Head of Benefits & Evaluation, Smart Meter Implementation Programme, DECC – 27/6/2013

 

MH referred to the report ‘Smarter, Greener, Cheaper’ by Guy Newey of Policy Exchange, which advocates sharing data on energy consumption between similar dwellings. He also mentioned the Opower big data analytics model (see above) and work being done by Cambridge Architectural Research and Loughborough University for DECC analysing the results of the 2012 Household Electricity Survey. (https://www.gov.uk/government/publications/early-findings-demand-side-management). Loughborough Uni are also involved with a study measuring the impact of smart meters on energy consumption.

 

DECC has also published the most recent analysis of the National Energy Efficiency Data (NEED) Framework (https://www.gov.uk/government/publications/national-energy-efficiency-data-framework-need-report-summary-of-analysis-2013-part-1)

 

Approximately 1 million smart meters have been installed in UK (mostly by British Gas – see below)

 

8    Meeting with Jacqueline Mitchell, Head of Energy Insight at Centrica/British Gas – 8/7/2013

 

BG has supplied around 500,000 smart meters to their customers and are planning to offer a free Energy Report based on smart meter data. This will provide both historical energy use and benchmarking against similar homes, using an algorithm to provide an estimated break down between different appliances (based on typical energy use). IHD uses a 30 min interval. BG’s smart meters are upgradeable to SMETS1, but JM is unsure whether they will upgrade to SMETS2. In later communications it was gleaned that BG’s Phase 2 meters cannot be upgraded to SMETS1 or 2, whilst the Phase 3 meters, which currently constitute 20% of its installed meters, will be upgraded by a remote firmware update.

 

 

 

 

Transition to a 'Green Economy'

The UK Government has recently published a series of documents that set out its vision for a transition to a green economy Greeneconomy

I have provided evidence to an Environmental Audit Committee (EAC) Inquiry on what I consider to be the barriers to achieving this transition and issues surrounding Government policy, actions and inactions in this area. My report can be found at PHAevidence and is summarised as follows:



This memorandum provides my view on the preparedness of the UK for the transition to a ‘green economy’ by addressing each of the themes set out in the EAC Select Committee Announcement of 7 July 2011. In summary this memorandum suggests that:
• The Government’s own Sustainable Development Indicators could be used as a basis for establishing a scheme to monitor progress of the transition towards a green economy.
• More research is required on measuring the key metrics that define a green economy and these should be used to assess and compare the performance of the main developed world economies.
• The Government will need to develop a strategy to persuade the public, industry and investors that proposed measures are both risk free and the only alternative for preserving the future of the planet.
• The Green Deal is a central plank of the green economy, but there remain uncertainties about its likely uptake and funding, particularly in the light of the 30 to 35% of British homes that fall below decency standards and are likely to require considerably more than the £10,000 upper limit mooted for the Green Deal.
• Apart from funding, the attitude and behaviour of the public is the biggest challenge to the success of the transition to a green economy. For example resistance to disruption from energy efficiency works and inefficient operation of buildings. Incentives such as free loft clearance should be included in the Green deal, whilst smart metering should be rolled out in conjunction with the Green Deal.
• Businesses should be encouraged to measure and monitor their sustainability performance through such measures as the Green Building Management Toolkit, BREEAM In Use and the Ska
• Funding for the Energy Company Obligation may exceed Government tax and spend limits set for 2014 in the 2010 Spending Review.
• Government’s willingness to dilute feed-in tariffs and zero carbon has eroded confidence that it will not meddle with poorly designed schemes that are found to have unintended consequences
• Manufacturers of green products will have to contend with both increases in energy and fuel prices and competition from countries such as China and India.
• Reducing the carbon targets in future Building Regulations could threaten the assumptions made in the 2050 Pathways Analysis that require carbon emissions associated with building energy consumption to remain constant between now and 2050, despite an additional 10 million new homes.
• The major programme of improving energy efficiency of the existing building stock requires a massive increase in the number of professionals and contractors with the necessary skills. The Government has ask the Green Deal Skills Alliance to develop the framework to address the skills gap, however it is not clear where the people will come from, particularly with cuts in the education maintenance allowance and inactive benefits.
• There is real concern about the trend for a reduction in ‘ecosystem services’ exacerbated in both the intensification of agriculture and 10 million new homes projected over the next 40 years. The draft National Planning Policy Framework (NPPF) allows development that significantly harms biodiversity ‘as a last resort’.
• Government needs to support the development of anaerobic digestion, gasification and pyrolysis of waste as an alternative to landfill and incineration, but not reducing the amount of sustainable recycling.
• Government transport policy should focus on both reducing the need to travel and encourage the transition to lower carbon transport modes. However the increase in rail fares by a potential 30% by 2015 mitigates against this.
• In my view there is an inherent dichotomy between growth and a green economy, but this can be overcome by a reorientation of the types of products and services that support GDP from consumer orientated to ones that support sustainable development and climate change mitigation, or what the UNEP calls a ‘Green New Deal’.
• Government should prepare a spreadsheet that sets out the costs for the transition to a green economy, including what will be spent in each Department’s sector, how much is expected to be leveraged from the private sector, what will be the GIB involvement and what areas of the economy are expected to grow and by how much?
• Enabling the Transition to a Green Economy is a useful summary of key Government initiatives, although there are a number of important gaps, particularly with regard to local communities and enterprise zones.
• Priorities should be informed by the investment sectors proposed for the Green Investment Bank, with decarbonising the electricity grid representing the largest initiative in need of finance.
• The dilemma for the Rio+20 conference to address is how to achieve the Millennium Goal of halving extreme poverty by 2015 and subsequently creating a world where the prospect of economic prosperity is available to the hundreds of millions of people currently living below the poverty line, whilst reducing global carbon emissions and conserving threatened non-renewable resources.
I would conclude that although Government policy appears to tick most of the right boxes in enabling a green economy, it is questionable whether the various measures will have the teeth to instil sufficient confidence to leverage the vast amounts of money required at a time when recession and cost cutting permeate every aspect of the economy.

The Committee will be publishing its full report in due course and it will be interesting to see what conclusions it comes to and recommendations it makes to Government.

Green Deal or No Deal: Can the Government’s Flagship Scheme Work?

York Way, Kings Cross - Prime candidates for the Green Deal?

I’ve talked much about the Green Deal in earlier postings and, indeed, it is widely recognised as the flagship environmental policy of this Government, which anticipates that some 14 million houses will have been improved through Green Deal finance by 2020, leveraging £7 billion investment annually and creating 250,000 jobs.

It is currently proposed that a loan of up to £10,000 will be available for each household, but with repayments attached to the energy meter not the householder. Applications will be assessed by competent Green Deal Advisors, based on their ability to meet the “Golden Rule”. This will require that the value of work be recoverable within 25 years or within the predicted lifespan of the products involved, whichever is the least. Finance will be organised through the Green Deal Provider, who would normally be responsible for the installation. Repayments on the other hand will be via the Energy Company and be transferred to a new owner on sale of the property. It is unclear what will happen if properties remain empty for many years after, for example, the death of the householder.

The Energy Company Obligation (ECO) will replace previous subsidies, such as the Carbon Emissions Reduction Target (CERT) and Warm Front, that focus on low-income and vulnerable households, but share a common front-end and process to the Green Deal. Importantly it will also provide funding for measures that do not meet the Golden Rule, but represent the only feasible energy saving measure, such as solid wall insulation.

In a recent briefing note from the UK Green Building Council (UKGBC) to its members a number of questions were raised:

Will the cost of finance be low enough? It is hoped that this will be addressed by the promised involvement of the Green Investment Bank in funding the scheme, at least in the early years.
Will the proposition for consumers be compelling enough? This is yet to be addressed, but seems likely to be left in the hands of the Providers.
Will consumers be properly safeguarded? In a briefing note published in May of this year DECC stated that “The overall requirements for Green Deal Providers and Installers will be brought together in a Green Deal Code of Practice which is being developed by DECC with the assistance of industry experts.” Green_Deal_briefing

A Publicly Available Standard (PAS 2030) is being developed titled ‘Improving the energy efficiency of existing buildings: Specification of installation procedures, process management and service provision’. As the title implies this will be crucial in providing a framework and standard for works commissioned under the Green Deal. PAS_2030

The UKGBC expresses concern that the Government has failed to commit to setting targets for the Green Deal within the 2011 Energy Bill:
“This has led a large coalition of NGOs and businesses, including the UK Green Building Council and many of our members, to ‘Demand a Better Bill’ – a campaign pushing for the Energy Bill to include a commitment to “deliver policies that cut carbon by at least 42% (by 2020) and eliminate fuel poverty (by 2016)” Energy_Bill. This would be achieved through a “Warm Homes Amendment” to the Bill, which would place obligations on the Secretary of State for Energy and Climate Change to publish a plan for achieving energy savings from the UK building stock and report progress in delivering against that plan. At the time of writing, Government amendments have been made to tackle these issues, but these are some way short of those proposed under the campaign.” This Amendment was debated on 7 July, leading to a delay in the implementation of the Bill, and potentially more time to make the necessary amendments.

The Committee on Climate Change 3rd Progress Report on Meeting Carbon Targets published at the end of June stated that “the Green Deal and the new Energy Company Obligation (ECO) should be aligned with the ambition to insulate all lofts and cavity walls by 2015, as well as 2.3 million solid walls by 2022.” It pointed out that the take-up of solid wall insulation (SWI) in particular has been very low, with only 13,000 walls treated in 2010 under CERT, whilst the take-up of Community Energy Saving Programme (CESP), which was intended to drive the installation of SWI, had only 7 schemes approved in 2010. CCC_Report_3

The CCC report considers that the way the Green Deal and ECO are currently configured encourages neither whole-house nor area-based approaches. The CCC’s analysis indicates that the £10,000 limit placed on the Green Deal will preclude a comprehensive approach to carbon reduction. For example the German CO2 Refurbishment Programme offers up to 50,000 euro per property. The area-based approach “...applies the whole-house approach on a street by street basis. It strengthens incentives for uptake of measures, based on evidence that suggests people are likely to be more willing to act when they can see others acting. It also offers scope for cost reduction through scale economies.” This is unlikely to fit with Green Deal Providers such as B&Q and M&S who will most likely deal with individual householders.

The CCC also warns that “ECO funding may be restricted under limits on DECC spending, given that this may be classed as tax and spend, limits for which were set to 2014 in the 2010 Spending Review.”

Clearly there are massive opportunities for those who position themselves correctly to service the Green Deal and ECO. However uncertainties over uptake mean that many companies will hesitate before investing in the staff, training, equipment and premises required. The willingness of Government to dilute Feed-in tariffs and zero carbon has eroded confidence that it will not in future meddle with poorly designed schemes that are found to have unintended consequences. As the Green Deal and ECO schemes evolve in coming months it is critical that industry uses the opportunity to consult on the legislation, codes of practice and standards to ensure that the risk of failure is minimised.

UK Low Carbon Construction Action Plan: The Government's Response to the IGT Report

The Innovation & Growth team (IGT) Final report (summarised in my posting dated 20 February 2011) was a clarion call to Government for urgent action to drive the construction sector towards a low carbon future. Paul Morrell, chair of the IGT Steering Group states in his introduction that “the scale of the challenge, and the degree of market failure, is such that only Government can set the framework for action.”

Published about the same time the Public Accounts Committee issued a report on funding the development of renewable energy technologies that, with equal vehemence, concluded that “the Department (DECC) needs a greater sense of urgency and purpose to drive the dramatic increase in renewable energy supplies needed to meet the 2020 target (15% of energy from renewables by 2020) and secure the new technology innovation to help meet the 2050 target” (80% reduction of carbon emissions compared to 1990 levels). PAC_renewables_report

Since the publication of these reports the Government has, amongst other things, published its Carbon Plan, the 2011 Budget and associated ‘Plan for Growth’, ditched their commitment to truly zero carbon buildings, excluded large PV installations from the Feed-in Tariff (FIT), legislated for the Renewable Heat Incentive (RHI) RHI, updated its 2050 Pathways Analysis and responded to the IGT report. It is also in the process of drafting a new Energy Bill and developing its landmark Green Deal and Energy Company Obligation mechanisms.

There have also been calls for action from other Government Committees. For example in May the Committee on Climate Change (CCC) published its Renewable Energy Report in which it stated that “...new policies are required to support technology innovation and to address barriers to uptake in order to suitably develop renewables as an option for future decarbonisation.” Whilst the Environmental Audit Committee report on the Budget 2011 and Environmental Taxes expresses disappointment in the fact “that there was very little in the Budget and Plan for Growth to help drive the low-carbon economy. The Government must focus on delivering growth that is genuinely sustainable, and that does not degrade the environment or entail increased consumption of resources.”

In this posting I would like to look at the gaps; i.e. what the Government is not doing (and is undoing) and the implications of this for the UK’s long term climate change commitments.
In its response to the IGT Final report the Government has produced an Action Plan, which although extensively referencing the IGT’s recommendations, only occasionally adopts them wholeheartedly. Mostly the Action Plan avoids committing to action from Government which wasn’t already in its Carbon Plan and was not undone in the 2011 Budget (see posting of 25 March 2011).

I think it is quite illuminating to examine the differences between the IGT report and the Government’s response. The headline component of the Action Plan is the establishment of the joint industry and Government Green Construction Board (GCB), which will be formed in consultation with the Strategic Construction Forum – a collaborative forum with representation from professionals, clients, contractors, product suppliers, site workers and Government. Although not a specific recommendation of the IGT this complies broadly with a 2050 Group recommendation (8.1) and it seems likely that the GCB will take on board some of the more difficult recommendations from the IGT Report that need a cross-industry effort.

The Government’s response gives no reasons for including some recommendations rather than others, which is a pity because we need to know, although it seems likely that in most cases either cost or impact on growth will be at the heart of the omission.

Incorporation of whole life carbon (embodied and operational) appraisals into the Treasury Green Book is neatly side-stepped by referring to providing continued support for the development of an embodied carbon measurement tool under the CEN TC350 Sustainability of construction works group of standards that are under development. There is no commitment to incorporating whole life carbon assessment into the decision making processes for public sector construction contracts, which is what the IGT were looking for.

There are a number of recommendations in the IGT report (3.13, 6.3, 6.4) that deal with the measurement of the energy performance of existing buildings and comparison with that predicted through the models used to assess compliance with Part L of the Building Regulations and the EPBD. Although referred to in the text of Chapter 3 the Action Plan does not deal with this directly other than mentioning the Technology Strategy Board’s ongoing £8m Building Performance Evaluation programme, which requires successful applicants to monitor performance of building fabric, energy and services; evaluate designs and the perception and satisfaction of building occupants, with no reference to predicted carbon performance.

This is an important omission since there is a widely recognised disparity between predicted and actual carbon emissions has already eroded confidence in building performance guarantees made by designers and that will significantly undermine commitments to zero carbon.

The Treasury has already withdrawn Enhanced Capital Allowance (ECA) from renewable technologies that benefit from FIT and RHI subsidy, so it is perhaps not surprising that the Action Plan ignores the IGT recommendation (6.16) that ECA’s be extended to cover low carbon whole building structures. This again is a pity because there is no doubt that for the foreseeable future low carbon buildings will cost more than those that achieve minimal compliance with Part L. A tax break that encourages developers to go beyond minimum compliance would encourage innovation and provide a basis for a gradual reduction in carbon emission targets.

Another overlooked recommendation by the IGT (4.2) required carbon reduction to be given greater prominence in Environmental Impact Assessments, with targets set by the proposed Major Project Review Group. Following the model established in the London Plan this could be used to encourage major projects to perform better than minimum Part L requirements.
The current draft of the Energy Bill requires that, where applicable, privately rented homes be enhanced to an EPC rating of E from 2018. This is an imported move, but only covers around 680,000 homes. The Action Plan states that the Part L 2013 review will have “to require additional energy efficiency improvements to existing buildings where work is already planned”. This does not go as far as the IGT recommendation (6.5) that all existing non-domestic buildings should have an EPC rating of F or better by 2020.

The above is not a comprehensive review of IGT recommendations that have been ignored or ‘interpreted’ by the Action Plan, but it is to be hoped that the Green Construction Board will revisit these when they come up with their “core work programme...based on key shared priorities from the IGT report, the Government’s response and the existing Sustainable Construction Strategy”. It is interesting that the Action Plan refers to this latter document which was published in 2008 by the previous administration, and which includes commitments that have already been reversed or forgotten by this Government. This includes the omission of non-regulated emissions from the definition of zero carbon buildings and the commitment for all Central Government Offices to be carbon neutral by 2012, for example.

The Government is committed to revising its National Infrastructure Plan in the autumn of this year. This will provide a “long term forward view of projects and programmes” in order to achieve the 2020 and 2050 targets, as well as the 5-yearly carbon budgets. It seems likely that much of the £3b initial capitalisation of the Green Investment Bank (GIB) will be used to fund major infrastructure projects. From the evidence so far however it seems likely that reaching carbon targets will be like one of those dreams where you are running as fast as you can to save a loved one from danger, but they just keep getting further and further away!

Sense and Sustainability (or joined-up Government part 2)

Abbotsford Road, Oldham – Some of the 8 million houses in Britain that have fallen below decency standards


Anyone who has even glanced at my book Integrated Sustainable Design of Buildings will be aware that I am passionate about the power of collaboration. I am firmly of the belief that most challenges can be more effectively met by a holistic approach that involves people from many different disciplines actually talking to each other.

Unfortunately a lot of people feel threatened by those outside their own discipline. They build walls of jargon and take comfort from the camaraderie amongst their peers that comes from a continuous state of conflict with ‘the opposition’. This enables them to blame anyone but themselves when things go wrong.

Of course we see this in the construction industry between architects and engineers, builders and sub-contractors; and in Government with the internecine strife between Departments and of course between opposing politicians.

In this posting I would like to focus on one particular issue where this lack of joined-up thinking could have a major impact on our futures. There are 26 million homes in the UK in some need of improvement. According to a BRE Information Paper from February 2010: ‘The real cost of poor housing’ (IP 16/10) some 4.8 million homes in England alone came within the Government's definition of ‘poor housing’ in the 2006 English Housing Condition Survey. BRE_paper

This rates hazards arising from deficiencies in housing under the Housing Health & Safety Rating System (HHSRS). The potential hazards range from excess cold, damp and mould, falling on stairs through to asbestos exposure. A similar number of homes in Britain come within the definition of fuel poverty, which, with the recent announcement by Scottish Power of a 19% increase in gas tariffs and 10% increase in electricity tariffs from 1 August, is set to increase significantly.

BRE estimates that the total ‘cost to society of poor housing’, that is housing that has a Category 1 hazard under the HHSRS (see list below) is around £1.5 billion per annum in England alone, including at least £600m cost to the NHS.

Cost to Society:

Loss of asset value
Poor physical and mental health
Social isolation
Higher home fuel bills
Higher insurance premiums
Uninsured content losses
Underachievement at school
Loss of future earnings
Personal insecurity
More accidents
Poor hygiene
Cost of moving
Adopting self-harming habits

Unfortunately Lady Thatcher’s notorious statement that ‘there is no such thing as society’ does apply when one is attempting to come up with one coherent body that will foot the bill for these costs. ‘Society’ neither has a bank account nor a cost centre. BRE estimates that some £17.6bn is required to bring the 4.8m houses in England up to standard, representing a simple payback period of some 12 years. The problem is that multiple agencies would benefit from the resultant cost savings; for example the NHS, police, local authorities, education authorities and of course the occupants themselves, where they pay their own utility bills, home insurance etc.

The Decent Homes Programme, introduced by the previous administration, aimed to refurbish all social sector homes to a minimum standard between 2000 and 2010. By 2008 the percentage of council housing that had reached the decency standard was 69%. This compared with 49% of private rented and 65% of owner-occupied, although housing association social housing had reached 77%. The most common reason for non-decency is the presence of at least one Category 1 hazard under HHSRS. Housing_report

The Coalition allocated £3.7bn in the Spending Review for Decent Homes funding, £1.6bn of which has been awarded to 46 Councils to refurbish 150,000 homes, the remainder being allocated to 28 large scale voluntary Housing Associations that manage Local Authority social housing.

In parallel with the Decent Homes Programme the New Deal for Communities scheme, run by the DCLG Neighbourhood Renewal Unit, was launched in 1998 and provided funding for improving 39 deprived neighbourhoods in England. One of the early projects in Newcastle upon Tyne’s West End has resulted in an impressive 21% fall in recorded crime between 2000 and 2010. Funding for Round 2 of this scheme comes to an end this year.

However the social sector constitutes only 18% of the total housing stock in England, with the owner-occupied sector taking the lion’s share at 70% and private-rented at 12%. These last two sectors are obviously difficult for public sector initiatives to reach, although under the Housing Act 2004 Local Authorities are expected to keep all housing under review, with initially a target for 70% of private housing with ‘financially vulnerable’ occupants to achieve the decency standard (approximately 5% of all homes in England).

Since the Coalition has come to power this target has been removed and specific funding for Private Sector Renewal is no longer available. With Local Authorities now being squeezed financially it seems unlikely that there will be funds available to divert to the private sector.
However in another part of the woods there are currently grants available through DECC and the Warm Front scheme for those on income-related benefits and who live in homes that are poorly insulated and/or that have inadequate heating. This will be replaced by the Energy Company Obligation in the autumn of 2012, whilst the Green Deal will provide loans to individual households for energy efficiency measures that meet the so-called ‘Golden Rule’ – i.e. that the annual saving in energy bill is equal to or greater than the annual repayment cost within a specified pay-back period or the lifetime of the product.

The Energy Saving Trust (EST) reported earlier this month that some 22.7% of homes in England fall within the two lowest energy efficiency bands (F & G) as reported under the Energy Performance Certificate (EPC) methodology. EST_report

This represents around 5m homes, which the EST has estimated would cost an average of £3,000 to bring each home up to an E rating, resulting in a reduction of 5 million tonnes of CO2 per annum , or just less than half a Drax power station.

A recent amendment to the Energy Bill will require landlords to improve the energy efficiency of private rented homes that fall within these bands before 2018 or be forced to remove them from the market. This represents some 680,000 homes, most of which are also likely to fall below the CIEH decency standard.

It seems likely from the above that at this moment in time between 30 and 35% of households in Britain cannot be considered as decent by currently accepted standards. The collateral damage from this is not only socio-economic but runs into billions of pounds per year, much of which is a burden on the taxpayer. Although there has been a steady improvement in social housing, the private sector has been more difficult to reach, but even the limited funding that was made available through the Private Sector Renewal fund has been withdrawn. From 2012 householders will be able to take out long term loans to pay for energy efficiency improvements, but for those homes that remain below the decency threshold this will be like applying green wash to a mouldy wall.

The Department of Health also has funding available for ‘projects to prevent hospital admissions’ and support to Local Authorities and Primary Care Trusts to support social care. Perhaps DCLG, DECC and DH should pool their resources to tackle the outstanding decent homes problem.