Written evidence submitted by Policy Connect [PNZ 032]

This document forms Policy Connect’s response to the Housing, Communities, and Local Government Committee’s call for evidence on local government and the path to net-zero.

Policy Connect is a membership-based, not-for-profit, cross-party think tank. We bring together parliamentarians and government in collaboration with academia, business and civil society to inform, influence and improve UK public policy through debate, research and innovative thinking, so as to improve peoples’ lives.

We lead and manage an extensive network of seventeen all-party parliamentary groups, research commissions, forums and campaigns in key policy areas including: health; education & skills; industry, technology & innovation; and sustainability. We shape policy in Westminster through meetings, events, research and impact work. 

Policy Connect is submitting written evidence based on our longstanding expertise in sustainability policy.  We have drawn on the wide-ranging evidence and stakeholder input from industry, academia, and the third sector we combine by managing the All-Party Parliamentary Sustainable Resource Group (APSRG); the Sustainable Resource Forum (SRF); the All-Party Parliamentary Climate Change Group (APPCCG); Carbon Connect (CC), and the Westminster Sustainable Business Forum (WSBF).  We have responded to the questions from the call for evidence that are most relevant to our work across these areas.

The evidence presented covers a number of issues, including the respective roles of both central and local government in setting and delivering net zero strategies; different low-carbon heating technologies and their roles in both new and existing buildings; energy efficiency standards; consumer engagement and the Green Homes Grant; the Future Homes Standard and water efficiency; the contribution of Energy from Waste to reaching net zero.

New homes: the Future Homes Standard and Future Buildings Standards

1. Do the government’s proposals for improving the energy efficiency of new homes by 2025 go far enough?

Not yet. 

In its recent reports, Pipeline to 2050 and Uncomfortable Home Truths, Policy Connect recommends that central government set out the long-term target for net zero emissions in buildings, as well as a timeline for the delivery of a complete, detailed decarbonisation strategy before 2025.

The forthcoming Heat and Buildings Strategy should set out a long-term target of reaching net zero emissions in buildings, and in particular a timeline for delivery before 2025 for a complete heat decarbonisation strategy. It should include tighter targets for new buildings, as well as private-rented and social housing buildings.

Further, it should include an action plan for the immediate at-scale deployment of ‘low regret’ options. This should include the decarbonisation of heat in new build and off-gas grid properties. Although these represent a relatively smaller proportion of the overall housing stock, they are very important opportunities to encourage visibility and trust in low carbon heat, as well as build up skills amongst installers. Therefore, it is crucial to ensure that low carbon heating solutions work well and provide good consumer experience in off grid and new build properties. These include the roll-out of district heat networks, heat pumps and hybrid heat pumps in appropriate buildings, as well as a nationwide energy efficiency programme.

The government needs to set a target to phase out the installation of carbon emitting boilers that cannot be adapted to low carbon fuels from 2025 in all property types, combining this with an obligation to fit hydrogen-ready boilers once they are available at little or no cost penalty where no alternative zero-carbon solution is practicable or economic.

The government must bring forward the introduction of the Future Homes Standard to an earlier date. This currently outlines that all new homes will have low carbon heating and excellent levels of energy efficiency from 2025. By bringing the date forward, government could ensure that new homes that are built between now and 2025 will not have to be retrofitted at considerable cost to the householder/taxpayer. Furthermore, government should set a target to phase out high carbon heating technologies in off-grid areas from the mid-2020s.

2. The government has acknowledged the need to clarify the role of local planning authorities in setting energy efficiency requirements for new homes that go beyond the minimum standards. What role should LPAs play in determining local energy efficiency standards?

LPAs should play a critical role in ensuring decisions are practicable and deliverable.

As we argue in our recent reports, the delivery of heat policy needs local knowledge planning, as well as local civic engagement. Decisions taken in Whitehall may not prove suitable for the local area. As the results of the recent Climate Assembly showed, 89% of assembly members supported ‘local plans for zero carbon homes’ and this would ‘involve central government giving local authorities the powers and resources to develop an area-wide plan for moving to zero carbon homes’.[1]

Place-based decarbonisation programmes have been recognised as core tools to allow local and regional governments to drive the local deployment of low carbon heating systems. Local and regional leadership has a more granular knowledge of local conditions and priorities, and can therefore ensure that local strategic objectives are met. Local and regional authorities are also the best placed actors to combine locally appropriate solutions for heating, transport, power generation and storage, and consider synergies and efficiencies between them to drive decarbonisation in a cost effective manner.

Moreover, they must make sure that all aspects of heat decarbonisation (low carbon heat, energy efficiency, fuel poverty, climate and environmental objectives, job creation and economic imperatives) are considered in the round, while simultaneously contributing to national targets. In addition, adopting a place-based approach is crucial to the targeted deployment of certain low carbon technologies, such as heat networks, where zoning – the process in which local authorities strategically define the locality of e.g. heat network developments – helps maximise the potential of low carbon systems.

Therefore, we recommend Local Area Energy Planning as a structured, data-driven approach to enable local authorities to find the locally most appropriate, cost-effective low carbon heating options that bring together all locally relevant stakeholders and build up regional supply chains and skills.[2] To avoid the potential problems arising from local authorities needing to plan in a vacuum, as well the tension that might arise between a centralised approach and locally-specific solutions, it is important for central government to support local authorities with a standardised planning framework which can be flexibly deployed for planning and implementation at each local area. Local authorities must be supported in developing the appropriate skills as well as being able to access expertise and experience from designated support services to assist in planning and delivering local transitions. While BEIS should set national guidelines and quality controls to ensure a nationally coordinated approach and support local authorities with an overall planning framework, local and regional leadership must ensure that the national effort of heat decarbonisation is carried out in a way that corresponds best to the needs of each local area.

3. Is the government right to anticipate that heat pumps will become the primary heating technology for new homes?

Not necessarily.

Although heat pumps will play a crucial role in decarbonising heat in homes, it is important to take into consideration other available forms of low-carbon heating depending on the local area, especially given the number of other demands net zero will put on the electricity grid. In particular, hydrogen heating and district heat networks provide viable alternatives to heat pumps. Hydrogen can use existing pipelines into existing homes. Especially in areas where new properties are built, heating technologies will need to be considered in order for the right infrastructure to be put in place.

In its 2019 report, Uncomfortable Home Truths, Policy Connect assesses the different heating technologies for net zero:

Most of the low carbon heating options likely to be used for long-term heat decarbonisation in the UK are not widely deployed, which means it is important there are at-scale pilots to establish how well they work in households around the UK. Different low carbon heating options have different implications for households from the perspective of disruption, choice, heating experience and installation cost. Hybrid heat pumps may present a good medium-term option, with relatively low impact on heating experience, disruption or choice. Full electrification or switching to low carbon gas for heat have relative advantages and disadvantages, but both are likely required to be used in the long term to reach full decarbonisation of heat. Pilots should work to reduce some of the barriers these low carbon heating options currently face to enable at-scale deployment later on.

Hydrogen-ready heating

It is thought that hydrogen boilers could match key features of existing gas appliances like efficiency, lifetime, maintenance and size, but would require complete replacement of the natural gas boiler in existing homes at the time of a switchover. On the other hand, hydrogen-ready boilers are likely to require only a short conversion (currently estimated to be 70 minutes) to switch from components that burn natural gas to those that burn hydrogen. Hydrogen-ready boilers could therefore minimise disruption to households during a low carbon heat transition. Hydrogen boilers are also expected to deliver a similar heating experience and operate in the same as natural gas boilers so they would not require significant behaviour change in how households interact with their heating system.

Heat pumps

8% of current domestic heat in the UK is provided by electricity: and over 50% of off-gas-grid households use electricity as their primary source of heat. In existing homes, this tends to be direct electrical heating like storage heaters rather than heat pumps, although there have been 50,000 heat pumps installed in the UK since 2014 under the RHI. Heat pump technology is well developed and widely deployed in other European countries.

Full heat pumps are well-suited to homes off the gas grid. Ground source heat pumps (GSHPs) are more efficient than air source heat pumps (ASHPs), but they are also more costly and disruptive to install in existing homes, and are only suited to properties with good-size gardens. If garden space is limited, vertical boreholes can be used instead but this is likely to be more expensive unless done for multiple properties. The local geology also needs to be suitable.

Crucially, in order for heat pumps to operate optimally the property needs to be well-insulated. Heat pumps provide lower grade heat and are therefore unsuited to poorly insulated homes. The heating experience itself is also different to that of a gas-fired central heating system. In order to operate optimally, heat pumps may have to run continuously. Radiators tend not to get as hot and in the winter the heating may need to be on all of the time to maintain a comfortable temperature. This can be managed with appropriate consumer support and education.

In the longer term, in the case of higher rates of technology deployment, increasing demand from growing electrical heat will require significant upgrades and reinforcement of both the electricity transmission and distribution network. This means deployment of heat pumps will have to be well-coordinated with wider energy infrastructure changes on a regional and national level. It also means there will be potential disruption to homes and communities during the reinforcement of the grid. Mass roll-out will also need to take account of other major changes such as the impact on the grid of the move to electric vehicles.

District heat networks

District heat networks are suited to dense urban areas. While many existing networks use heat from a natural gas source, alternative heat sources (such as waste heat from industrial processes, heat pumps or other sources of low carbon heat) could be added to the network without disruption to the end user. However, housing does not generally have the density and heat demand profile to make heat networks worth investing in, unless it is also connected to buildings with a constant heat demand like swimming pools.

The initial building of district heat networks may be relatively disruptive to existing homes and communities. Heat supply pipes and cooler return pipes need to be laid between the heat generation source or the thermal store of heat, which would require some disruption to roads and other communal areas. Yet, for new homes and housing estates this is less of an issue, making district heat networks a more attractive option.

Once connected, district heat networks tend to be lower maintenance than other systems from a householder perspective (with no heating generation asset to replace or repair) and the heat experience of those on district heat networks, in combination with smart controls, should be similar to natural gas heating, with hot water supplied to radiators and hot water tanks. In an optimal scenario district heat networks could save an average consumer £100 a year compared to those using gas. In reality, however, there have been some negative experiences of higher costs for consumers on heat networks, which is partially due to the current lack of statutory consumer protection for heat networks.

District heat networks require the public or private sector sponsoring organisations which are planning to own the heat network to coordinate building new heat infrastructure with removing heating appliances in homes that are connecting to the network. One problem with planning a roll-out of district heat networks is ensuring that demand will be high enough to ensure certainty of return on the high capital cost of building the network, and reduce the risk of investment. In Denmark, where 60% of homes are supplied by district heat networks, they overcame this by introducing zoning of certain areas. This required areas to connect to district heat networks, thereby ensuring a certain level of demand. This might be an option in the UK, especially as much of the interest in district heat networks in the UK thus far has been through publicly owned social housing, which would be easier to ‘zone’ than the owner-occupier sector. However, this does mean that these households get a fairly limited choice over when and how their heating systems are decarbonised.

The importance of selecting the most suitable low-carbon technologies for the local area, types of housing etc, reinforces the need for such decisions to be taken at the local level, in place, where this knowledge exists and local authorities can engage with citizens about the decisions (our answer to Question 2).

4. Will the proposals address the performance gap between design intent and build quality of new homes?
5. Is the government right to introduce revised transitional arrangements? In addition, the Committee seeks evidence on any other issues relating to either the Future Homes Standard or the Future Buildings Standards.

Not yet, on addressing the performance gap of new homes; we include below evidence of other issues.

The Future Homes Standard will require “new-build homes to be future-proofed with low carbon heating and world-leading levels of energy efficiency”[3]. One way of better assessing the standards for new homes is to adopt a ‘passive house’ methodology rather than the current EPC – Policy Connect will shortly publish proposals on this.

Furthermore, the Standard does not currently include performance targets for water efficiency. 

Heating water for cooking and personal washing is the second biggest use of household energy (behind space heating) and produces a quarter of the total CO2 emissions from our homes[4]. Research by the Energy Saving Trust[5] indicates that reducing per-capita water consumption to 100 litres per day would save households an average of £37 per year and would reduce CO2 emissions by 48.1 megatons over 25 years.

It would be straightforward to improve the water efficiency of new homes through introduction of a mandatory water label for all fixtures, fittings, and water using products.  Such a label would inform consumers about a product’s water efficiency, in the same way that the EU energy label does for appliance energy efficiency.  The label could be linked to minimum standards and underpinned by building regulations so that only water efficient products meeting pre-determined performance criteria would be installed in new homes.  Independent research[6] carried out for industry body, Water UK, also found that “the single most cost-effective intervention to save water is a mandatory Government-led scheme to label water-using products”.

We therefore believe that it would be a missed opportunity not to incorporate performance targets for water efficiency into the Future Homes Standard.  The Committee on Climate Change[7] agree, as detailed within their letter to the Secretary of State for Housing, Communities and Local Government in February 2020, which highlighted the importance of water efficiency measures and calling for the scope of the Future Homes Standard to be set now.

Existing homes

The Committee also seeks evidence on plans for improving the energy efficiency of the existing housing stock, including:

6. Local authorities’ progress towards reducing or eliminating the carbon footprint of their own building estate.
7. The role of local authorities in improving the energy efficiency of non-council building stock, including through take-up of the Local Authority Delivery scheme and the setting and enforcing of energy efficiency standards.

Besides the long-term target for net zero emissions in the buildings sector, it is important that government sets more detailed milestones regarding previously set targets in the upcoming Heat and Buildings Strategy. The recent consultation proposal to bring forward the targets for private-rented properties to reach Energy Performance Certificate (EPC) banc C level by 2025 and 2028 for new and all tenancies respectively is a welcome step. However, the previous Clean Growth Strategy set a target of reaching EPC band C level for energy efficiency upgrades by 2035 (where practical, cost-effective and affordable, and 2030 for fuel poor households in general), which, while provides a positive direction of travel, sets a the target is in 15 years for a large number of homes. Using a whole-house approach to avoid double spend, the Heat and Buildings Strategy should set interim milestones to catalyse continuous action. It is crucial that central government engages with local authorities on this in order to set the right targets and coordinate local delivery.

8. The role of local authorities in encouraging and enabling private owners to reduce or eliminate their carbon emissions, including through the development of loan schemes similar to the green deal and the delivery of existing grants, such as the Disabled Facilities Grant and Housing Renewal Assistance.

In relation to question 8, on 20 April 2021, Carbon Connect held an online roundtable to discuss the early closure of the government’s Green Homes Grant and recommendations for replacement schemes in light of the UK’s 2050 net zero greenhouse gas emissions target. Replacement schemes are urgently required to harness the consumer demand revealed by the Green Homes Grant and ensure the UK meets its targets to reduce greenhouse gas emissions, 14% of which are produced by home heating. Consistency, long-term timescales, and government relationships should be the core principles of successful replacement schemes. In addition to these, some specific recommendations were suggested:

1. All homes must be covered by future schemes and policy; a potential change of focus to social housing is welcome and likely to prove easier logistically. However, these homes represent only 11% of the problem; owner-occupied homes and private landlords must also be supported in the efficient energy transition. This may require a range of concurrent schemes to suit different markets.
2. Building passports would support future schemes by making clear how and when a home can be made energy efficiency. This implies a need to train more retrofit coordinators and inspectors, and may provide liability transparency for mortgage providers who could then provide financial support to consumers.
3. A minimum scheme length of ten years is required to allow industry to develop skills and provide investment confidence.
4. Accreditation processes should be made more accessible to encourage more businesses to become licensed and remove bureaucracy for early adopters, whilst ensuring the highest-possible accreditation standards for engineers
5. Financial incentives are required to encourage homeowners. This could involve grants or personal tax relief, although these will not incentivise all households. Public engagement is also required to raise consumer awareness of the additional benefit of reduced heating bills.

These features may necessitate multiple schemes to cater to the diversity of the UK’s homes. Local authorities have a crucial role to play in the design and delivery of these schemes, by way of gathering data, coordinating between central government and local areas, engaging with consumers and businesses, setting the required standards, allocating funding and alike.

9. The role of MHCLG in making the existing housing stock more energy efficient, including through its review of the Decent Homes Standard.

MHCLG has a key role to play in making the existing housing stock more energy efficient.   Future updates to planning policy and building regulations should be targeted so as to make new homes carbon neutral.  However, these changes will have little impact on the performance of the existing housing stock.  More than 85% of buildings that will exist in the year 2050 have already been constructed[8] and therefore we must find a way to reduce the greenhouse gas emissions of the UK’s existing building stock: MHCLG can do this at least in part through the Decent Homes Standard.

Furthermore, as detailed above, water efficiency should not be overlooked when considering improvements to the performance of existing homes.  Introduction of a mandatory water label for fixtures, fittings, and water using products would help to improve the water efficiency of these properties as taps, showers and other products are replaced.  Legislating to introduce a water label would significantly reduce the carbon emissions associated with water use from both new and existing homes.

Local government’s path to net-zero

The Committee also seeks submissions on how else local government can help the UK achieve “net zero” emissions by 2050, particularly in relation to improved and decarbonised public transport, waste management and decarbonising the electricity grid.

Waste is an important aspect of the route to net zero and local government has an important role to play here.

The UK is currently introducing an ambitious range of measures to address resource challenges and encourage recycling. Continuing to drive recycling and waste prevention should be central to future innovation across the sector but there is also a need for greater public awareness of the links between personal waste responsibility and climate change. Calculations show that even if the UK does meet its 2035 recycling targets, there will continue to be large volumes of residual waste produced long into the future. The UK should therefore frequently reassess projections for future waste volumes, to account for the impact of new measures and externalities, and to allow necessary investment into capacity for management solutions, including energy from waste (EfW). This will enable maximum use of low carbon waste heat generated by EfW to support housing, industry, and other sectors. The UK is disproportionately lagging behind much of Europe in harnessing EfW heat, with less than a quarter of plants connected to heat networks. Based on research undertaken by Policy Connect in the context of its 2020 "No Time To Waste" report, there are currently a number of barriers preventing this on a larger scale, but that the primary challenge is finding the right sites for plants, located near to a potential heat off take. Our conclusion is that Government needs to play a greater role to realise this opportunity, working collaboratively with industries and local government to determine suitable sites and potential heat customers.

The UK public has come to expect clean, waste-free streets but there is a level of disconnect between producing waste and requiring infrastructure to manage it, often leading to an ‘out of sight, out of mind’ approach on an individual level. Government should do more to turn recent attitudinal shifts into actions, and education around this should be driven at a national level to avoid regional variance. This should aim to improve understanding of both waste hierarchy/materials impacts, as well as the appropriate treatment infrastructure required. To address this, the public education campaign should involve and engage local authorities. Councils are best placed to inform residents in a hard-hitting way how their waste is disposed, and some may wish to go further and communicate the specific end destination/site. Local authorities could achieve this by simply printing the relevant information onto their waste bins. Certain local authorities have already taken up this suggestion, but encouragement for all councils to do so would ensure a level playing field of information across the country.

April 2021