Green house effect

Eight years from now, all new homes in England must be zero-carbon. Is that possible? Can we afford it? And who’s leading the charge to make it happen? Terry Slavin and Roger East find some answers.

The future of housing is here now – though you have to go to Watford to see it. On the demonstration site at BRE, the building industry’s research establishment, there is concrete proof that it is possible to build ‘zero-carbon’ homes – so energy-efficient that they’ll need no more power to run than they can generate themselves.

The buildings on show there, admittedly, are streets ahead of the standards currently required on new housing developments. But watch those spaces. Because a smattering of niche eco-housing specialists are already creating little clusters of green and pleasant homes around the country, and even attracting buyers, too – no mean feat in today’s housing market. And now Barratt Developments has become the first of the volume builders to put the lessons of the prototypes into mass production, on a 200-home site at Hanham Hall near Bristol.

In eight years’ time this won’t be exceptional: it’ll be the rule. Every new home built in England from 2016 onwards must, by law, be zero-carbon.

It’s quite some target – nothing less than the world’s most ambitious programme to upgrade the energy performance of new homes. Since May 2008, all new domestic buildings have to state how they rate against the new Code for Sustainable Homes [see box right]. From 2010 they must meet at least level 3 of the code, and the mandatory minimum standard ratchets up over time to 2016’s level 6 – with zero net emissions.

But is it really going to happen? And if so – how?

Paul King, chief executive of the UK Green Building Council, is in no doubt that house builders are taking the target seriously. “What is incredibly positive,” he says, “is the fact that developers are anxious about how it will be delivered. Before December 2006 [when the target was announced] no one would have spent time worrying about how to deliver zero-carbon homes ten years down the road. There’s been an impressive amount of energy and resources poured into this.”

Martin Hunt, head of built environment at Forum for the Future, agrees that the industry is signed up to the principle of zero-carbon. “The big concern now is about financial, rather than technical, feasibility,“ he says.

Reality bites

Ah yes… finance. Even before the housing slump, the extra costs involved were always going to be an issue in a competitive market. Now, with homebuyers as scarce as hens’ teeth, the building industry is in the doldrums, haemorrhaging workers, mothballing sites, and wondering if the good times will ever come again. A cynic could well assume that in the struggle to stay afloat, developers would be keen to row back from demanding eco-targets. Yet the very day after Barratt Developments announced slump-affected annual results, its head of external affairs Dan Bridgett confirmed to Green Futures that work on its eco-flagship site at Hanham Hall was still scheduled to start in the new year – subject of course to final planning consents.

“Builders have had to throw away their templates and come up with something new”

Hanham Hall is the first of ten sites to be developed as part of the Carbon Challenge competition launched by national regeneration agency English Partnerships (EP). The aim: to find out early on what it will take to deliver zero-carbon homes in large volumes. EP is making the brownfield sites from its land portfolio available to ‘preferred developers’, who can “use the competition as part of their R&D”, says EP’s Jayne Lomas. “They have to throw away their existing template and come up with something new from first principles.” Some of the biggest names in the industry were attracted to bid for the sites, including Taylor Wimpey, Urban Splash, MJ Gleeson, and Crest Nicholson, as well as Barratt.

EP’s original stance was that projects had to ‘wash their own faces’ commercially. But between the award of the Hanham Hall deal to Barratt last December, and the decision this August on the second site, at Peterborough, the housing slump had changed the economic climate. Several potential bidders pulled out, unable to make a business case for such hefty investment in level 6 homes so far in advance of the 2016 deadline. It forced a change of tack. Eventually the land, valued at £6 million, was released for just £1 to the pPod consortium, headed by housing association Gentoo and regional house builder Morris Homes. Additional land remediation costs will be met out of the public purse, while the Housing Corporation will guarantee £7 million in funding for social housing. As EP policy director Steve Carr told Building magazine: “This is now effectively a joint venture with the public sector. It looks like schemes with higher levels of sustainability are going to have to be more public-sector-led.” Confirmation of this shift could come with the forthcoming EP decision on a third site, at the former Brodsworth colliery in Doncaster.

“The challenge now is to ensure that zero-carbon is genuinely affordable”

Costing the earth?

This has a certain logic, given that a substantial proportion of the units on each development must come into the category of ‘affordable homes’. As Barratt’s Mike Clare puts it, “the challenge now is to ensure that zero-carbon is genuinely affordable”.

But just how much more will these ultra-green houses actually cost to build?

Consultants Cyril Sweett recently worked out costings for each stepped increase in the spec required to meet the Code. Some would say they are alarmist; certainly they sound alarming. Building to Code level 6 standards might cost half as much again as building to current regulations – an extra £37,800-£47,500 for a three-bedroom detached house, and £20,000 just for a flat.

For a start, the fabric of the buildings must meet high standards – and be expertly installed – to make them airtight. Expensive triple glazing, rather than double, becomes de rigueur. Water saving systems can cost a few grand too. But by far the biggest bucks go on the kit to meet the renewable energy generation requirements.

Cyril Sweett’s report does predict, however, that these on-costs of getting to zero should come down by 25% by 2016. That might go some way towards meeting the Home Builders Federation’s plea that regulatory standards shouldn’t force builders to rely on as-yet-unaffordable technologies. There’s consolation, too, worth up to £15,000, in the government’s stamp duty exemption for zero-carbon homes bought before 2012. And the initial capital outlay also needs to be seen in context of lower operating costs. In a level 6 home the energy bill might be £1,000 less than the current average (at today’s prices). The Lighthouse prototype [see box 'Lighthouse landmark' below] came up with an annual cost of space and water heating as low as £30 a year – and nothing on electricity. Bearing in mind the likelihood that energy bills will be far higher in eight years’ time, and that starts to look like a really substantial saving.

All the same, if hefty extra costs for onsite renewables were passed on as price premiums, the market would need to be a great deal stronger before the volume builders could afford to put up many top-spec new houses. Come 2016, of course, they couldn’t build anything else. But they’d have no business building what they couldn’t sell.

That’s clearly not what the government wants. The government wants 300,000 new homes a year. It also has stretch targets for increasing renewable energy. By increasing the proportion of houses generating their own power, the zero-carbon homes legislation can help drive that – but it won’t if it is crippled by unaffordability.

“The Code must be flexible on onsite renewables, not a clumsy blunt instrument”

Onsite or out of sight?

So a big part of the answer lies in ensuring that the renewables element in the Code is a sufficiently flexible tool, rather than a clumsily blunt instrument. That means, for starters, not putting excessive emphasis on individual houses supporting their own microgeneration technologies. Solar PV, while technically effective, is still very hard to justify in terms of payback time – though there’s always the hope that a technological breakthrough could change that quite quickly. The one-off prototypes at BRE had no option but to do their microgen ‘on-house’ – but the Lighthouse, with its 46-square-metre carpet of PV, cost 40% more to build as a result.

Roof-mounted wind turbines generally just aren’t good, or powerful, enough. As Mark Swan, director of Swan Country Homes and part of the Good Homes Alliance, says: “the embodied energy of manufacturing a small-scale windmill to stick on the roof far exceeds its [carbon] contribution”. But a community wind turbine linked to hundreds of homes – a possibility being considered for the Brodsworth site – may well make technical, economic and environmental sense.

Combined heat and power (CHP) schemes fired by biomass can also be much more cost-efficient at a community level. Hanham Hall is expected to take the biomass CHP route, while pPod’s development in Peterborough could use an anaerobic digester to fuel its own CHP solution. But Hanham Hall is at the lower end of the scale at which CHP systems work best, and most housing developments in Britain are nowhere near that big. Half of all new homes are in developments of fewer than 50. One in three, indeed, are in clusters of fewer than ten – where the renewables needed for Code level 6 would cost twice as much per home as in larger schemes, according to the government’s Renewables Advisory Board.

Absolute zero?

All of which raises questions as to whether the government has set an impossible goal. At the Home Builders Federation, spokesman Steve Turner insists the 2016 target is “by no means unachievable” – and that nobody is saying it should be scrapped. It does not sound quite so unequivocal, however, when he says: “We are committed, but it needs to be balanced against other objectives” – such as affordable homes, and three million new homes by 2020. The precise government definition of ‘zero-carbon’ for Code levels 5 and 6 is critical, says Turner.

This is currently under review, and insiders report signs that the government is indeed showing signs of flexibility. This would mark a shift from its rigid view of a year ago, when the then housing minister, Yvette Cooper, insisted: “Offsite renewable energy sources… will not be eligible unless directly connected to the development concerned.” A ‘near-site’ generator such as a community wind turbine, in other words, would have to feed the site by ‘private wire’ rather than via the grid – and there would be no wriggle room for offsetting, or bringing in green energy from further afield.

Purist this might have been, but was it workable? No, said the UK Green Building Council (UKGBC) task force. Its May 2008 report, The Definition of Zero Carbon, concludes bluntly that it is “not achievable on up to 80% of new homes”. If we want three million new homes by 2020 without watering down the level of carbon savings, it says, the definition of zero-carbon must change.

This, says Paul King, means recognising that “offsite renewables could play a part, [along with] community-scale technologies” [such as wind and CHP]. This would have the added benefit of achieving much-needed carbon reductions in the existing housing stock, “by enabling the distribution of low- or zero-carbon heat through district networks.”

The Council suggests setting a minimum target for renewable generation onsite (or ‘near-site’ with a dedicated connection). Thereafter, however, it should be OK to match it against power delivered into the grid from a genuinely additional green source built somewhere else. Alternatively – in what would amount to a kind of offset scheme – a developer could pay into a ‘community energy fund’ to promote enough new renewable generation to deliver at least equal (and ideally greater) net carbon savings.

Simon McWhirter, manager of WWF-UK’s One Planet Homes campaign and a member of the UKGBC task force, believes that this is “a definition which is robust in an environmental sense, workable, and has broad support”. If the government consultation follows similar lines, he is optimistic about what will emerge early next year.

“We have to upskill everyone, all the way from the design stage to handing the homes over to occupants”

Bridging the skills gap

It isn’t just energy which needs renewing, but skills, too. Stewart Dalgarno, head of product development at Stewart Milne Timber Systems, is confident about getting the mass production technology right to churn out airtight building shells, but he’s only too aware how easy it is for unwary plumbers to knock holes in them. “We have to upskill everyone, all the way from the design stage to handing the homes over [to occupants],” he says. Drawing on its experience with the Sigma House prototype, the company has produced a staff manual on low- and zero-carbon building – and it wants to go further still and establish a skills academy.

The Academy for Sustainable Communities has flagged up this same issue, warning of a serious and growing skills gap. Can the industry produce enough trained people in time to build to zero-carbon standards? According to a recent review of how the UK’s top 20 home builders are doing on sustainability, good intentions are not yet translating into evidence on the ground. We were already falling behind in 2004, when 60% of new homes in a BRE survey failed to meet energy efficiency targets in the current building regulations, and the learning curve gets steeper as the regulatory standards rise. Paul King at the UKGBC knows this is another area where public policy faces a real challenge. The 2016 zero-carbon deadline is “tough but credible”, he says, but the government must show it is serious about reaching it, by pouring resources into solving the issues of planning, skills, and energy supply that threaten to blow it off course.

“Kick-starting the housing industry on a zero-carbon path has been the government’s most decisive step to address overall emissions”

Whatever the precise target, it’s widely agreed that kick-starting the housing industry on a zero-carbon path has been the most decisive step the government has yet taken to address the need for deep cuts in our overall emissions. The essential 80% reduction in these, insists McWhirter, is less hard to achieve in the housing sector than in areas such as transport and food. Moreover, as he points out, the 2016 target doesn’t mean we need to be building level 6 houses in large quantities before about 2013. What we do need is to put plans in place to do so. “Most or all developers can already build to level 3,” he says. What they need now is clarity about the next big stretch.

8 October 2008

Roger East and Terry Slavin