Saturday, 5 October 2019

The Future Homes Standard Consultation

Where next for Building Regulations?



In the week where Extinction Rebellion activists were arrested for hosing the Treasury in 'blood' in protest at the lack of progress on tackling a climate emergency, the consultation on the Future Homes Standard came out.  There's talk of solar panels for all new homes - so let's take a look under the hood of the consultation.

The consultation itself consists of two main parts - consideration of the Future Homes Standard due to come into force in 2025 which is intended to deliver "world-leading levels of energy efficiency" for new homes and  an update to the Building Regulations Part L (energy efficiency) and Part F (ventilation) in 2020 to provide a "meaningful but achievable" uplift in energy efficiency as a first step towards the 2025 vision.

There's also a raft of supporting documentation

The Standard Assessment Procedure (SAP) calculation version 10.1
An Impact Assessment, which includes details of cost assumptions
Approved Documents L and F 

2020 Part L - a Stepping Stone to Future Homes 2025


There's a lot to talk about here.  This is no 'tweak' but a significant revision, at least in part forced by the significant changes to the carbon intensity of grid electricity, but also by the Grand Challenge Mission for Buildings, announced by Theresa May about a year ago.


1. Primary Energy Use is the new Gold Standard

Until today, Part L has always used carbon dioxide emissions as its measure of compliance with regulations.  Buildings had to achieve a certain Dwelling Emissions Rate (DER) in kgCO2/m2.

DCLG has rightly concluded that as the electricity provided by the grid comes with a lower and lower carbon intensity, developers could switch to electric heating and hit a carbon target without improving the energy efficiency of buildings.  If energy efficiency of buildings is not improved, then decarbonising the grid becomes more challenging and costly.  So a new measure is required and primary energy, which has the benefit of aligning UK regulations with the measures chosen in the EU Energy Performance of Buildings Directive, is added as a new metric.

(See this article on the rapid progress made in decarbonising the grid.)

The latest revision to the government's Standard Assessment Procedure (SAP) version 10.1 has been published alongside the consultation.  This is the calculation used to demonstrate a house complies with the building regulations.  In this version of SAP the carbon intensity of electricity is set to 136gCO2/kWh, a projection of the average from 2020-2025, and a massive reduction from the value of 519gCO2/kWh in the current version of SAP 2012.  Electricity now produces less than 65% of the carbon emissions of mains gas (which is at 210gCO2/kWh).

By contrast, the primary energy content of a unit of electricity is 1.501 compared to gas at 1.130.

This document explains primary energy and how the values were arrived at

Fitting solar PV to a property reduces the grid electricity that is needed by the house, solar PV generation used in the building (self-consumption) reduces both the carbon emissions and primary energy by the same factor as grid electricity.

Electricity sold to grid also reduces both the carbon and primary energy use of the dwelling but it's primary energy factor is only 0.501.

The impact of this is that a unit of electricity generated by PV and used in the building would save 1.501 kWh of primary energy use, but a unit of PV generated electricity exported to the grid would only save 0.501 kWh of primary energy use in the calculation.

Since the benefits of battery storage (SAP Appendix M) and PV diverters (SAP Appendix G4)  have also been added to this update to SAP, the combination of using primary energy as the main regulatory target and the low primary energy factor for PV export has the effect of incentivising measures such as these to use as much PV-generated electricity within the building.

The trouble with this is that

(a) developers prefer combi boilers so there's no hot water cylinder in most new homes for a PV diverter to divert excess electricity into.
(b) batteries are approaching cost effectiveness but are likely to be seen by developers as an additional cost and not a sellable benefit.

We understand that the logic for choosing this value for exported energy is that the exported energy has a primary energy factor of 1.0 (renewable energy), and displaces a unit of energy from being fed into the grid at the grid average of 1.501, so the net benefit to primary energy added to the grid is 0.501.

The solar industry might argue that considering things from the point of view of the building produces a different logic (and after all what we're supposed to be modelling is the energy performance of the building).  The net primary energy consumption of the building is the electricity imported at a primary energy factor of 1.501 less the PV generated electricity exported which should have a primary energy factor of 1.0. 

A minimum carbon emissions requirement is retained in addition to the primary energy requirement as this remains an important consideration for government and there is concern that certain solutions could produce low primary energy figures with high carbon emissions - for example heating oil and coal both have low primary energy but  high associated carbon emissions.

Finally, the current fabric efficiency requirement is dropped to make way for a new householder affordability target, with fabric efficiency now considered adequately protected by tougher minimum heat loss standards for building elements.  As discussed, electricity has low and falling primary energy and carbon emissions factors, and government is concerned that direct electric heating would be a viable option for meeting both the carbon and primary energy targets, but with the side-effect of saddling occupants with too-high energy bills.  To guard against this the new affordability rating is likely to be set at a level that means direct electric heating would only be an option when combined to other measures to reduce electricity bills such as increased thermal insulation, PV panels or battery storage.

2. Uplift of the Minimum Standard


The minimum performance standard is defined by publishing a build specification (insulation levels, heating system, light fittings, microgeneration technologies) to be used by the developer to model a 'notional house'.  The developer then has to design the house they plan to build to produce modelled carbon emissions and primary energy lower than that of the notional house.  It's an elegant way to allow the developer complete freedom in design but control the outcome.

 The consultation proposes two options for the minimum performance standard:

Option 1 - "Future Homes Fabric"


This specification would produce a 20% reduction in CO2 emissions when compared against the specification in current building regulations .  The standard is based on a notional home with improved insulation measures (including triple glazing) plus a gas boiler and waste water heat recovery.

The estimate given in the consultation is that this option adds £2557 to the build cost of a semi-detached house and saves households £59 a year in energy bills.  (Payback 43 years)

Given that by 2025 the Future Homes Standard needs to be at a 75% of the carbon emissions of 2013 regulations, 20% does not seem like a big enough step - it only brings England roughly to the level that  Scotland's developers have been achieving since 2015.  DCLG appears to agree, stating that it's preferred option is Option 2.


Option 2 - "Fabric plus Technology"


In this option, the specification of the notional house is set at a level to produce a 30% reduction in carbon dioxide emissions across the build-mix.  The specification has slightly lower insulation than Option 1 plus waste water heat recovery and a solar PV system.

SAP 10.1 Appendix R outlines the specification for the notional house.  The size of the PV system in kWp for the notional house is 40% of the building foundation area divided by 6.5.  So for example for a typical two-storey semi-detached house of total floor area 85m2, this would be

[40% x (85/2) ] / 6.5 = 2.6kWp (around 9 or 10 panels)

DCLG's modelling estimates that building to this new notional home adds £4847 to the building costs and saves £257 a year in energy bills.  (Payback 19 years).

The costs used in the accompanying impact assessment for solar PV are £1,100 fixed costs plus £800 variable per kWp installed.  This implies the following installed costs:


1kWp  £1,900  £1.90/kWp
2kWp  £2,700  £1.35/kWp
3kWp  £3,500  £1.17/kWp


Solar is a fast-paced technology and it would be unusual if a government consultation were to use up-to-date cost information.  My understanding is that solar installers operating in the new-build sector are typically charging an installed price the range of £1.10-£1.20/kWp for four or five panel systems (1 -1.25 kWp).  So it is likely that the costs of Option 2 are over-stated relative to Option 1.

If the solar industry can provide evidence that costs in Option 2 are over-stated, it will make it easier for government to hold the line on its preferred option.

DCLG reckons that Option 2 might result in developers moving away from gas boilers to air-sourced heat pumps.  A specification based on ASHP alone over-shoots the Option 2 target at a lower cost than the notional house (£3,134), which would allow some relaxation of the fabric for further cost savings.  The experience in Scotland suggests that housebuilders will avoid ASHP for as long as possible because customers neither like nor understand them.


3. Heat Pumps - "Lord Make Me Chaste - but not yet!"


The consultation steps away from banning gas heating in 2020, this change is timetabled for 2025.  However it does impose extra conditions on wet space heating systems to ensure that they are 'future proof'.  In practice this will mean that 'emitters' (normal people call them radiators) will be increased to a size that would work at lower temperature, and so the house would be suitable for later conversion to a heat pump heating system without the cost of replacing all the radiators.

A side effect of this requirement is that increasing the cost and space requirements for wet systems could push developers towards direct electric heating with panel heaters, simple underfloor electric or radiant heat panels.  The removal of the entire cost of the wet heating system would offset a considerable chunk of the costs for the additional measures (PV solar, more insulation) needed to stay within the householder affordability target.  A house without a wet heating system would be low on maintenance and low cost to build, coupled with better insulation plus lower cost PV and battery storage to keep bills down this could become a favoured option for new homes.


4. Transitional Arrangements

This proposed change is likely to cause significant concerns at housebuilding companies.

The current situation is that as new Building Regulations come into force, they apply only to whole developments as new planning applications are lodged with local authority planning offices and work has started on site.

The practical outcome of this rule is that new homes are still being built to versions of building regulations in force many years ago, because:

(a) Developers rush to submit planning applications in the run up to new regulations coming into force, banking large numbers of homes to be built under the old regulations
(b) Large sites of many hundreds of homes are built out over many years, but there is a site-wide application of the regulations.

This was clearly demonstrated by the 2015 Scottish building regulations change, where it is only now (nearly 4 years later) that pretty much all new sites coming forward for tender require solar.

The consultation proposes moving from a site-based application of building regulations to one based on specific buildings.  Large developments spanning many years would have to redesign to meet new building regulations that apply as the building is being built.

Housebuilders will be alarmed by this proposal because all developments still under construction under 2013 regulations will be caught in this net.  The land for these sites would have been bought at a price based on the construction costs expected under those 2013 regulations and the housebuilders will argue that this measure is a retrospective action that will harm their profitability.  How much sympathy there is for the housebuilders having to shoulder the extra costs remains to be seen, when government has been subsidising the housing market through the Help to Buy scheme and the chief executives of some companies have been given bonuses amounting to £10,000 per house built .


 5. Other Stuff


Solar PV on Apartment Blocks


 In the original SAP10, PV on apartment blocks connected to the landlords' supply did not improve the DER of the individual apartment, whereas in SAP 2012 the carbon savings were apportioned across apartments by floor area.  The Solar Trade Association argued that connection to Landlord's supply was often by far the most cost-effective and practical way to install solar on apartment blocks, that the changes would force systems to be split into mini-systems serving each apartment at great cost, and that the carbon savings were real.  It seems that this argument has prevailed as SAP 10.1 has changed the treatment of solar PV in apartment blocks back to as it was in SAP 2012. 

Heat Networks Get a Free Pass


SAP 10 introduced punitive heat losses on district heating networks, based on evidence that large amounts of heat are lost in the underground pipework of these systems (40-50% even for best practice new ones).  It seems that government thinks that heat networks will be an important part of the energy future, and that their drawbacks should be ignored.  So a fudge-factor (they call it a 'technology factor') is applied to buildings that use a heat network.  These are allowed to emit 45% more carbon for heating and 5% more primary energy.

The Government's enthusiasm for heat networks is baffling considering that there is a perfectly good electricity network that loses far lower energy in transmission and is already connected to every single property.  A heat network is not of itself low carbon - it depends what you're doing to make the heat.

The Future Homes Standard - for 2025


The second part of the consultation is some early range-finding questions for the Future Homes Standard due to come into force in 2025.

The government reckons a 70-80% reduction in carbon emissions compared to current housing is possible.  This will be achieved by adding low carbon heating (heat pump or district heating) to the Option 1 fabric proposed in the 2020 regulations, and relying on further decarbonisation of grid electricity to do the rest.  Government is seeking views on whether this is achievable.

Local authorities which have been using planning powers under the Planning and Energy Act 2008 to require developers in their region to build to standards above those of the current building regulations.  This role for local authorities has been crucial for pushing forward on energy efficiency during a period of inaction from Westminster.  The consultation considers whether these powers should be removed alongside the 2020 regulations, the 2025 Future Homes Standard or not at all.


Summary

This change is significant and there's still some modelling to be done to figure out which packages of technology developers are likely to favour, but given the simplicity and popularity of solar it seems unlikely that the technology will not be a big winner from these changes to building regulations.





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