Written evidence submitted by South Yorkshire Housing Partnership [FSS 078]
Background
The South Yorkshire Housing Partnership (SYHP) welcomes the opportunity to submit this additional evidence to the DLUHC Select Committee Inquiry into inquiry into the funding for social housing.
The Committee Chair has requested additional detail on the point made in our earlier submission relating to shared electrical supply decoupling and has requested additional details on the scale and potential financial impacts, as well as any solutions we might be able to propose. This has been requested as written evidence so it can be shared with the full Committee for their consideration and be published as part of the inquiry.
Context
The SYHP is made up of the 12 housing associations and four stock holding local authorities that work across the South Yorkshire region. We collectively own and manage in excess of 31,000 homes and each year add £88m to the regional economy.
Housing associations have a strong commitment to reducing carbon emissions and meeting the Government’s net zero targets. Many are already building new homes using low carbon solutions, including air source heat pumps and are looking at how solar power could be harnessed to provide clean energy and reduce residents' fuel bills.
For existing homes, a fabric first retrofit approach and improving the EPC ratings of properties can make heating homes more affordable. At a time when the cost of living is rising, retrofit and green heating solutions have an important role to play in alleviating fuel poverty.
It’s vital there is a focus on delivering green, sustainable and low carbon homes that are affordable to buy or rent as well as being affordable to live in.
The SYHP has a dedicated workstream that is looking to coordinate our ambitious investment programmes to decarbonise our existing housing stock. A key element among these is to remove fossil fuel heating systems from the housing stock. Savills have estimated that the average cost of decarbonisation works to each social housing property is £22,000.
The Decoupling Issue
For our existing homes one of the key challenges is that there are 9 million homes in the UK that need their shared electrical supply decoupling to enable low carbon solutions to be installed, such as air source heat pumps and EV charging points. This is because the supply going into the property is shared with a neighbouring property, in effect reducing the load capacity by 50%.
The lack of a clear plan for these works and there being minimal coordination or alignment with housing decarbonisation retrofit works is causing significant delays and additional costs.
This is significant in the wider context of housing having a crucial role to play in decarbonisation. The UK’s 26m homes create more carbon emissions every year than is produced by the 28m cars on our roads. This makes housing a crucial part of the climate emergency challenge and one that must be addressed to meet the country’s net zero ambitions.
Distribution Network Operators (DNOs) are the organisations that own and control the electricity distribution network, connecting generators, suppliers, energy users and consumers. The SYHP recognises that its ambitions are one part of the huge challenge faced by DNOs to decarbonise the grid, deal with power intermittency and the forecast exponential increase in demand from EV and electrified heat.
When considering SYHP members have over 30,000 properties with gas heating, this is central to our decarbonisation strategy and a major challenge. The use of renewable heat using Ground Source or
Air Source Heat pumps (GSHP or ASHP) means that the consent of the DNO is required to ensure the local network can manage increased demand for power and that the individual supply to the property is sufficient to host the pump.
The role of the DNO in this process becomes a mission critical risk area in planning the social housing investment. Early indications suggest that based on the experience of SYHP members, DNOs are not sufficiently prepared or organised to meet the demands arising from the planned investment programmes of social housing.
If this is not addressed then the role of social housing as market maker – acting at scale and mobilising of supply chains, skills and competition – is unlikely to be achieved. Likewise, the Government’s target of 600,000 heat pumps per annum by 2028 would be at severe risk.
Set out below are the key challenges faced by social housing when dealing with the DNOs.
The SYHP has recognised that building a strategic relationship with the DNO’s operating in the areas of our stock is a key factor in programme delivery. Several SYHP members also work in other areas outside South Yorkshire and have found that the responses of the DNOs differ by region. Each DNO has issued strategies to facilitate the process of decarbonising the electricity grid, but in practice the understanding of what this means in the localised engineering teams is very unpredictable and inconsistent with many claiming to not have the skills and capacity to respond.
The Role of The DNOs
There are some positive examples of building strategic relationships with the DNOs, with some agreeing to fund all network upgrade costs, de-looping and fuse upgrade costs.
All this is extremely positive and the issues with the DNOs are not due to a lack of intent, but in the structure of operating practice and available resources.
The SYHP would encourage all DNOs to have a single point of coordination with all proposals filtered down to local engineering teams. An approach for expediting works to support the delivery of social housing decarbonisation projects is required, with operating protocols to underpin the delivery of this with operational teams. We would also support each DNO accepting responsibility for funding the costs of de-looping, fuse change or sub-station upgrades.
In practical terms the SYHP would suggest that social housing providers could submit a list of target properties where it is proposed to change the heating system. Ideally this would need to be 12 months ahead of any decarbonisation works starting on site. This would then enable the DNOs to undertake an assessment and determine whether each property needs a main fuse upgrade or if it is looped (two domestic properties using a single incoming supply).
These are the main issues and, in many cases, would require a survey from the DNO. Housing providers could support the process through providing the DNO with sufficient evidence to speed this process up by providing photos and retrofit survey evidence. If the meter tails in a property are insufficient to support a heat pump then this action is pushed back to individual electricity supplier that has, in our experience, little or no interest in assisting the process.
Where a property requires a fuse upgrade or de-looping it is subject to separate survey. Works are completed by subcontract teams. The process of achieving this work on site is painfully slow, often taking at least 12 months for properties to be ready for installations to take place. In other areas such as Leeds, the timescales quoted by the DNO are between 18 months and two years.
These delays add additional risk to investment programmes by potentially affecting the delivery of funding programmes (such as Social Housing Decarbonisation Fund) as well as slowing the overall pace of decarbonisation.
To provide some context the following timeline is from a recent retrofit scheme Yorkshire Housing delivered at Staxton in North Yorkshire where the upgrade works took 10 months to be completed:
Summary
Whilst there is an increasingly more organised response from DNOs and they acknowledge their obligations to enable progress for large scale programmes of electrification and decarbonisation, the reality remains challenging and is a brake on the transition to renewable heat and EV.
The entire process is full of risk and uncertainty and is likely to further impact upon the confidence of the sector to commit the levels of investment needed to achieve our decarbonisation ambitions.
September 2023