Government energy-efficiency policy is misdirected
Mike Malina explains why the Government’s reliance on market forces to deliver energy efficient buildings will not work — despite all the opportunities that are ripe for exploiting.
David Cameron’s claim in 2010 that he would preside over the ‘greenest government ever’ was quickly exposed as something of an empty promise, to say the least — confirmed when he later dismissed many schemes as ‘green crap’. Even so, few people were fully prepared for the sheer devastation his 2015 administration, free of its coalition shackles, has now inflicted on green policies.
Within weeks of winning the General Election, the Chancellor George Osborne cancelled the UK's zero-carbon buildings policy and sidelined plans to revise Part L while simultaneously loosening planning laws in a bid to ‘improve productivity’ and speed up house building.
He withdrew funding for the Green Deal and sold off the Green Investment Bank. He then took a knife to subsidies for solar and biomass projects, along with support for onshore wind power and followed that up by removing the crucial Climate Change Levy (CCL) tax exemption enjoyed by renewables.
Yet, Energy Minister Amber Rudd, whose own Department of Energy & Climate Change (DECC) has also had its budget slashed as part of these austerity measures, claims that the Government remains committed to a ‘long-term economic plan [that] goes hand in hand with a long-term plan for climate action’.
Yet, all their actions since taking office contradict this stated ambition and suggest that Osborne and Rudd clearly think it is time to leave energy efficiency and renewables entirely to market forces. Unfortunately for all of us, it won’t work — ironically because they don’t appear to understand the economics.
Osborne’s policy model is based on ‘leaky-bucket’ syndrome. Your bucket has holes in it, but rather than fix the holes you keep on pouring in more water. If you plug the holes and reduce demand, you reduce the price and suddenly your economic model starts to work. At the moment, the Government is thrashing around looking for more sources of energy to pour into its increasingly leaky energy bucket.
Energy security cannot be delivered simply by generating more and more hugely expensive nuclear and fossil fuel capacity. For one thing that will take too long. We are already running out of power, and the National Grid has warned that this winter our marginal capacity will be less than 2% as more old power stations go offline. For another it is too expensive. For a third it is not sustainable. The quickest and cheapest solution is to put huge impetus behind incentives to cut energy use.
The enemy of sustainability is short-term thinking, and people naturally think short term. We also have fixed 5-year Governments, but making our country sustainable requires politicians to think ahead 50 or 100 years.
However, there are some big, short-term economic gains to be had that are clearly pro-business.
The UK’s 1.8 million existing commercial buildings account for 17% of the country’s entire carbon emissions. Imagine the impact of a 10% cut in their energy usage and the benefit that would deliver to the businesses that use those buildings. Then imagine 20%.
In the wake of the post-election subsidy carnage, the renewable-energy groups proposed their own energy bill. This is focused on practical and affordable solutions around managing energy demand and decentralised energy production, which has the potential to reduce the country’s overall energy bill by £12 billion a year.
That’s market forces — not the complete low-cost-housing and planning free for all encouraged by Osborne and Rudd.
The zero-carbon policy was definitely flawed. It restricted innovation and suffered from the law of diminishing returns. Also, it was never likely to be enforced, but it did at least indicate an ambition and a direction of travel. Surely DECC could have come up with better definitions and more practical measures in consultation with the industry. Simply dumping the targets and throwing away almost a decade of investment is a retrograde and very business-unfriendly step. That is throwing the baby out with the bathwater… from a leaky bath.
However, this is not just about the Government. The building engineering industry needs to put its own house in order by focusing on building performance and delivering the targets we claim to support. We have some fantastic tools at our disposal — such as smart control technologies that ‘learn’ the building owner’s behaviour and adjust the services appropriately while simultaneously monitoring outside weather conditions to adjust internal temperatures.
There is lots of good work going on to retrofit controls and smart meters, but this needs to be joined up with efforts to make the buildings more energy efficient. Are the same people fitting the new systems also taking the opportunity to talk to homeowners about insulation and improving their energy demand?
Too many people have the attitude that it is not their job, but there is a big business opportunity here. More companies should partner with other specialists to offer a joined up approach to give the building user/homeowner a full service.
If the Government really wants to reform red tape, perhaps it could use the Building Regulations as a means of driving energy-reduction targets and give engineers free rein to design the right system based on what is best for the building in hand. This could encourage innovation and simplify designs so the installed systems are easier to understand and control — but you do need targets.
You can’t just leave it to developers to crunch the numbers, as they will, understandably, build as quickly and cheaply as possible with little thought for long-term operation and energy legacy.
Having targets that can be achieved via a range of sensible solutions would encourage designers and contractors to work more collaboratively to deliver buildings that perform better, are properly commissioned and can be maintained to a high standard. However, we also need to take commercial clients with us, and that means getting them to recognise the value in having a quality built asset that performs better for its occupants and provides the appropriate support for their core business.
Mike Malina is eastern counties and East Midlands regional manager for the Building & Engineering Services Association (B&ES). He is an experienced energy consultant and trainer whose book ‘Delivering sustainable buildings — an insider’s view’ is available through Wiley-Blackwell publishing.