ECO scheme – carbon reduction or wealth redistribution?

Andrew Eastwell, BSRIA CEO

Andrew Eastwell, BSRIA CEO

The issue of retail energy prices is now THE political hot potato.  The invisible green taxes attached to household energy bills have suddenly become glaringly revealed and politicians of all hues are now looking at these supplements as serious vote losers.  But are they such a bright idea anyway?

The question really is about the use of hypothecated funds harvested from energy bills and used to create a kind of wealth redistribution in favour of energy-poor households.  Under this scenario there is a transfer of wealth from richer households to improve the lot of lower earning households by improving the energy signatures of their homes. The ECO scheme is not so much a carbon reduction scheme as a wealth redistribution tool.   The scheme does however have the twin benefits of deriving a relatively secure revenue stream and, by increasing the costs to “donor” households, acts as an  additional incentive for them to be efficient with energy too.

The problem, as always, lies in the continued confusion between issues associated with energy (and cost) and the release of carbon.  If carbon is the real enemy (as I believe it is) then this scheme is at best sub-optimal.  This is because although renovation of homes will undoubtedly improve the comfort of energy-poor households there is little compelling evidence to me that the costs involved (including the not insubstantial cost of administering the schemes) provide the biggest carbon reduction bang for the buck.  This is partly because improvements in dwelling performance are likely to be taken as comfort gains rather than energy saving.

We have just seen that it has been necessary to use Chinese money and what is widely regarded as a substantial central support mechanism in the fixing of a strike price for generated new nuclear electricity in order to stimulate the building of new nuclear (non carbon generating) capacity.  It is the very high up-front costs of building these facilities that is the problem.  Would it not be better to use the ECO funds as cash support as  low carbon generation building programme – nuclear, wind, tidal or whatever gives the best CO2 return per pound?

by thinkpanama

by thinkpanama

This then begs the question as to who should fund the improvement of poor dwellings.  Actually this is not so much a carbon issue as a social equalisation programme.  In all normal circumstances this has historically been met from general taxation in the form of grants and I can see no reason why this should not be the case in the future.   Perhaps, rather than distributing a £200 annual winter fuel allowance this might better be used in improving dwelling energy (not necessarily carbon) performance.  The private market for Green Deal products simply does not seem to have become excited at adding debt to the household for what are perceived as intangible gains.  Households understand cash and a more direct approach to funding Green Deal improvements through this means or indeed other mechanisms such as stamp duty may be a more efficient means of getting to the problem homes.

In summary:  Use hypothecated funds, such as ECO for the purpose they were intended  – getting carbon out of the system.  Use the money to support the most cost efficient means of doing this irrespective of mechanism for delivering this objective.

Don’t confuse wealth re-distribution with carbon saving – it distorts process and gets caught up with political weather cocking.

What happens when the lights go out?

In July we posted a blog about whether the lights will go out in the UK. This blog discussed the startling fact that the peak demand on our electricity supply network is perilously close to the supply capacity. With this comes the real risk that consumers will be exposed to outages “blackouts” and voltage dips “brownouts”. There is debate about whether this could happen, Datamonitor’s director of energy and utilities research and analysis, Neil Atkinson has commented that in practice the lights won’t go out in the UK or at least not for a long time, but that doesn’t mean we shouldn’t be worried or ignore the problem all together. He states that the Government hasn’t put sufficient contingency plans in place for the future of the UK’s supply and demand, that the Green Deal and the dwindling hopes of Nuclear power aren’t enough.

The ECA are less optimistic than Datamonitor. Bill Wright, head of energy solutions, states that the intended increasing reliance on wind power assumes that the UK as a whole will not be affected by periods of cold weather at the same time as minimum wind. This is something that has to be considered though, for if the UK were to suffer a harsh or long winter like we saw in 2012/2013 then there is a real risk that we could end up facing lights out this year or during any winter that is out of the ordinary.

Fuel poverty in England – 10 per cent, 1996 to 2011

Fuel poverty in England – 10 per cent, 1996 to 2011

There is also Ed Milliband’s pledge to freeze energy costs for customers to consider. Will this pledge speed up the process of blackouts and brownouts or it will have no impact at all? The government’s Fuel Poverty Report 2013 suggests there are already 4.8 million households in the UK that are already suffering with blackouts so Ed’s pledge won’t necessarily make any difference.

But what if it does? What will happen if the lights do go out?

BSRIA held a number of parallel workshops in June to discuss that possibility. The workshop covered the effects blackouts would have in the UK, the risks for business, the systems required, the continuity plans and what BSRIA will do. Here are some of the conclusions:

Effects of power outages

There are many potential effects that come with a long power outage. At the moment, most power outages don’t last more than an

An image of Channel 4's The Blackout

An image of Channel 4’s The Blackout

hour so there are minimal risks but the longer the outage, the more opportunity for chaos to ensue. The loss of power could lead to an increase in crime due to diminished security options e.g. alarms and security cameras leading to shops being broken into and civil disorder (a dramatization of the potential damage can be seen in Channel 4’s The Blackout). The country’s communication and transport systems would soon break down and there is a high risk to the economy due to closed businesses and lack of trade. There are few benefits to a power outage; the only redeeming effects being an increase in self-reliance and a chance for the standby power industry to shine.

Risks for business

If power outages have such an impact on society in general, then the risks to business are high as well, even more so due to the current lack of awareness in businesses. If they are unaware of the future problems, then they may well have made no contingency plan to keep their businesses running. Without a contingency plan, they face disruption to their work through either staff shortages (staff may be unable to get into work due to the breakdown of transport), or loss of process and equipment failure. If companies are dependent on computers or other technology, then they risk losing business or missing deadlines, resulting in damage to reputation and loss of profit.

Required systems and contingency plans

To help the UK prepare for the risk of future power outages, the workshop came up with some ideas for required systems and contingency plans that could help reduce the damage caused. Here are some of those. Firstly, education is key and more needs to be done to raise awareness. BSRIA is in a prime position to promote and facilitate this. Starting with the low-hanging fruit, buildings should make maximum use of natural light and ventilation to reduce base energy load. Critical areas or services need to be identified and ring-fenced to maximise the opportunity for them to run when other systems go down. There needs to be a way of controlling the amount of energy used in buildings and this is where energy services and building energy management systems could play a very important role. Incentives, such as variable tariffs from utilities, would encourage changes in consumer behaviour and more investment in smart technology. The debate over alternative fuels like shale gas needs to be had to assess its suitability and impact on the future of UK energy. Whilst standby generation may seem an easy option, and undoubtedly this will form part of the solution, it also needs to be highlighted that it cannot necessarily be relied on as a last-minute solution, for when the crunch comes, it will be in high demand and availability will plummet.

Continuity plans need to be made for a multitude of scenarios. The Government and businesses alike, need to prioritise the services

Graph taken from Bill Wright's presentation given at BSRIA Workshop

Graph taken from Bill Wright’s presentation given at BSRIA Workshop

they need most and make sure they are supported in the best possible ways. If blackouts are expected to become a regular part of our lives, then announcing them in advance will help companies to plan closures or change working hours. Companies also need to think about how their employees work; the fact is, we are highly dependent on technology like laptops and mobile phones. Without the means to recharge their batteries they quickly become redundant and we become unproductive, so companies need to think of alternative methods to keep their workforce useful – we may even have to resort to good old pen and paper!

What BSRIA could do

 From the workshops, it was suggested that BSRIA can help raise awareness and provide education on the subject. This could take a range of forms, and conferences, publications and guidance for continuity planning were just some of the activities suggested. BSRIA can also work with other organisations towards these goals to help limit the risks for everyone.

How to procure Soft Landings

BG 45/2013 Soft Landings procurement Guide

BG 45/2013 Soft Landings procurement Guide

BSRIA has just launched its latest guidance on the Soft Landings graduated handover process.   How to Procure Soft Landings – guidance for clients, consultants and contractors is designed to help clients and their professional and building teams frame their Soft Landings requirements in a consistent and structured manner.

 The guide is a response to two clear trends in the use of Soft Landings. Primarily, clients aren’t sure what they are asking for when they call for it in tenders. Construction firms are seeing wide differences in client requirements. The initiated clients may spell it out, but for every expert client there are 20 who simply ask for Soft Landings without a clear idea of what it is.

 Many builders and contractors, particularly those not up with current thinking, are similarly clueless on how best to respond. That’s one of the downsides with an open-source protocol – the viral spread of Soft Landings is a good thing, but a lack of certification and control means that the uninitiated can easily catch a cold.

 Second, Soft Landings is being adopted by central government as a formal procurement policy. This is Government Soft Landings (otherwise known as GSL), a Cabinet Office-inspired interpretation of Soft Landings for government clients. While it’s not a million miles away from the official version published by BSRIA and the Usable Buildings Trust, GSL takes a more facilities management perspective of the process and focusses far more on getting guaranteed outcomes from the construction industry. GSL is slated to be mandated for central government projects in 2016, along with the adoption of Building Information Modelling (BIM), with which Soft Landings is well-suited.

 So what we have, then, are commercial clients still a little confused in their (voluntary) adoption of Soft Landings. On top of that is an incoming group of government clients, building anything from schools to prisons to aircraft hangers,  for whom Soft Landings is a huge unknown but who will be mandated to adopt it. BSRIA’s view is that it might be a good idea to lay out the best ways of expressing Soft Landings in client requirements, pre-qualification questionnaires, and invitations to tender, so that the clients and industry alike get greater consistency in Soft Landings projects from the very outset.  

 The procurement guide has benefited substantially from the Soft Landings User Group, a BSRIA-run team of clients, architects, consultants and contractors who have learnt from experience on Soft Landings projects what works well and what doesn’t. This learning has been used to create practical, generic requirements for Soft Landings activities that can be used in project documentation. 

 A body like the User Group is absolutely vital for the practical development of Soft Landings. BSRIA knows it doesn’t have all the answers, and in any case should not dictate how Soft Landings is put into operation on real projects. Each project has its own needs and objectives, and each form of procurement throws up its own set of opportunities and challenges. The trick is to find out what works in each context, and try and find ways round thorny issues like novation and cost-cutting for instance, both of which can compromise the best of intentions.

 The guide provides specifically-worded requirements for each step in each of the five stages of Soft Landings.  The guidance is split into three sections, with requirements worded for clients appointing professional designers, clients appointing main contractors/builders, and contractors appointing sub-contractors.  Inevitably, there is some repetition, but the guide gets round that at relevant points by referring the reader to sections in the guide where a specific requirement is more logically located. 

Stage 3 - Pre-handover

Stage 3 – Pre-handover

The example shown is typical. Energy metering installations are proving to be a major problem – they are installed to satisfy Building Regulations, but are often not set up in a way that makes them useful. Although the Soft Landings Framework calls for an energy metering strategy, the procurement guide goes a step further by spelling out what should be provided, in this case at the pre-handover stage. Each requirement is supported by explanatory text that gives the main contractor, in this instance, some background context and the reasons for the requirement.

 Some Soft Landings stages may have more than one worded requirement. Some optional requirements have also been provided, for instance in the aftercare stages where it may be important to spell out precisely who should be involved and for how long.

 For example, under the core requirements for main contractors appointing sub-contractors, contractors have the option of requiring a subcontractor to be retained to assist the client and other members of the project team during handover, and afterwards to monitor the building’s performance. Some sub-contractors may be required to be based on site full-time during the initial aftercare period to assist with end-user queries and to undertake fine-tuning of systems. This would not typically apply to a ductwork sub-contractor, but it would usually apply to a controls sub-contractor. More critically, it could apply to any contractor whose systems or components come with automatic controls, particularly those with bespoke communication protocols (seemly most of them) which can only be adjusted by the supplier after payment of a fat call-out fee. If you’re nodding at this point, you know how it is. The Soft Landings procurement guide now covers this issue, and many others like it.

 An opportunity has been taken to fill gaps in the Soft Landings Framework, published back in 2009 when practical experience was a bit thin on the ground. For example, the guide contains a generic design work stage which was not included in the Framework. The procurement guide also provides more detailed advice on principles of procurement and tendering, how to include Soft Landings in tender processes and interviews, and some advice on the best way to budget for Soft Landings.

 The timing of the guidance also coincided fortuitously with the publication of the 2013 RIBA Plan of Work, which gave BSRIA the opportunity to align Soft Landings stages against the new RIBA stages, and those published by the CIC. There’s also a public sector Soft Landings decision tree included to help government and local authority clients dovetail their procurement requirements with Soft Landings requirements.

 Building performance research is identifying many critical aspects of procurement where clients and the construction industry need to tighten up their respective acts. The commissioning manager is a critical role, and the earlier they can be appointed the better. The procurement guide offers some advice on how to do this, and what their role should be in Soft Landings.

 Soft Landings is not job in itself but a set of roles and responsibilities shared among the client and project team. However, on large jobs particularly a co-ordinator may be needed to make sure the administration is carried out. Paperwork – which could include updating operational risk registers in BIM models for example – needs to be done by someone. If this isn’t covered, Soft Landings might fail ‘for want of a nail’.

 BSRIA hopes that How to Procure Soft Landings – guidance for clients, consultants and contractors will provide all that clients and project teams need to put Soft Landings into operation.  It is a practical guide to accompany the Soft Landings Framework – still the industry bible on what Soft Landings is about, and why you should adopt it.

 With all this talk about the performance gap between design and building operation, we mustn’t lose sight of the fact that the act of procuring a building and constructing it is a team enterprise. No-one goes into the process with the intention of doing a bad job.  Events, like many things in life, can conspire against it. What Soft Landings tries to do is provide toeholds for everyone involved to do a better job in the face of budgetary, time and skills pressures.  How to Procure Soft Landings – guidance for clients, consultants and contractors provides a whole load more toeholds for everyone.

 BSRIA BG45/2013 How to Procure Soft Landings – guidance for clients, consultants and contractors is available from BSRIA bookshop.

Changes to Part L – is carbon neutral possible for 2016?

282px-AD-L_Part_2A2006 was a big year for building energy efficiency, the European Energy Performance of Buildings Directive started to be implemented. This triggered a radically new Part L, requiring all new building designs to meet CO2 emissions targets. The Code for Sustainable Homes was launched that year, and the government made bold plans to require new dwellings to be carbon neutral by 2016, non-dwellings three years later.

A glide-path to zero carbon was published with interim Part L changes planned for 2010 and 2013. Come 2010, and the first round changes took place, with a 25% reduction in CO2 targets. Then the following year, the government (now a conservative-led government claiming to be the greenest ever) watered down the definition of zero carbon to exclude appliances and cooking. Fair enough, absolute zero carbon perhaps wasn’t a feasible target anyway.

Fast forward to August 2013, and the second round of changes still hasn’t happened. The government has indicated that there will be a meagre reduction of 6% in CO2 targets for dwellings, and 9% for non-dwellings, and that these will kick in in April 2014. What this says to me is that the government, at the moment, aren’t all that interested in being green. Also, that 2016 is going to be very painful for housebuilders, who will have to make a huge leap to zero carbon. This zero-carbon commitment is still in place, and was even reaffirmed in the budget announcement in March. But of course, there’s another general election before 2016….

Response to the Chancellor’s Spending Review

The Chancellor’s statement yesterday was well trailed beforehand so there were few surprises. It seems that the “greenest government ever” is in fact true blue in tooth and claw with a continuing policy of reducing leadership in central government (by decreasing funding of staff) and increasing the expectation of self-reliance by industry.

Buried in the lengthy statement that dwelt very largely on the “back to work” theme was the commissioning of HST1, the prospect of a new North South Crossrail and additional funds for flood defences. All good news for the concrete farmers.

As far as greenness was concerned, there was little said but it is clear that the message concerning the long term availability of secure energy is now well embedded. A number of key issues were put forward:

  • Firstly there was the promise of a strike price for electricity that may bring the construction of new nuclear a little nearer. Without this underpinning of future revenues the private sector is always going to be shy of the massive investments needed with very long term recovery periods.
  • Secondly there was the promise of additional investment incentive for shale gas exploration. Shale gas has the potential to fill a difficult hole in energy supply whilst the nuclear builds take place. Hardly green but a pragmatic response badly needed.

One of the difficult issues our industry is going to face is the additional loss of leadership/sponsorship and infrastructure that civil servants have given us through departments such as DCLG, BIS and DECC. As their resources have been pared to the bone, it is unsurprising that delays associated with regulation, planning reform, energy reduction programmes (Green Deal for example) are becoming ever more visible. The question is do we have the energy will and resource to fill that void? The Chancellor specifically identified other industries as the future – “synthetic biology to grapheme” but did not repeat his earlier commitment to a zero carbon built environment.

In a nutshell my take-away from this statement is one of the need for self-reliance and the need to build better “regulation” from within our community rather than expect government to lead. Either that or don a cowboy hat.

Part L and the Green Police

It seems like just yesterday I was absorbing the 2010 incarnation of Part L. Now 2013 is creeping up on us fast, and the consultation will be closed 4 weeks from today. The plans for zero carbon homes in 2016 and non-dwellings in 2019 are ambitious, and rightly so. But what happens after 2019? It’ll be years before there are enough zero-carbon buildings to really make a dent in UK emissions. In the meantime there are thousands of inefficient buildings that won’t get touched by Part L, because no building work is being done on them. The ever-expanding list of actions that triggers consequential improvements may help – for example making works such as boiler and window replacements trigger further improvements. But there is a danger this will just discourage building owners from doing such works in the first place, or encourage them to hide their activities from the green police.

We need to come up with new ways of bringing the existing building stock up-to-scratch, that don’t involve waiting until someone decides to do some building work. Building MOTs? Mandatory follow-through of recommendations from EPCs, DECs and air conditioning inspections? Fines for excessive energy use? I don’t have all the answers, but what I am pretty sure of is that energy prices are going to keep rising as fossil fuels get scarcer and the world’s population gets bigger. Give it another few years, and businesses won’t need legislation pushing them to manage their energy use better, they’ll have to do it to survive.

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