Good morning everyone.
The SEA is a membership organisation made up of energy suppliers, manufacturers, installers, housing providers, and other organisations with expertise in energy in buildings.
We are committed to achieving our vision, to help create living and working spaces fit for future generations, by ensuring that all buildings are energy-efficient, net zero carbon, warm and healthy.
I was asked to speak to you today to give my views on what overarching, long term policy is required from the Government in anticipation of the eagerly awaited heat and buildings strategy.
Our President, Lord Best, was informed in a parliamentary debate last December that the Government ‘will publish a heat and building strategy in early 2021 that will set out the immediate actions we will take for reducing emissions from buildings, including deploying energy-efficient measures and transitioning to low-carbon heating. This ambitious programme of work will enable the mass transition to low-carbon heat and set us on a path to meet our net-zero 2050 emissions targets.’ Unfortunately, we are yet to see this key strategy be published.
Firstly, I thought it would be helpful to set out the current direction of travel.
The 26th United Nations Climate Change conference is due to be held in Glasgow in November this year. This offers a real opportunity for the UK to showcase leadership and ambition in tackling this global crisis.
Meanwhile climate emergencies are being declared across councils and combined authorities with local strategies and targets being developed in regions across the UK. The Scottish Government has set out their own Strategy which signalled the key measures that will be prioritised for decarbonising buildings up to 2030 – Energy Efficiency, heat pumps for properties on and off the gas grid, and heat networks.
We are now seeing a hold up of policy from the UK Government until the Heat and Building Strategy is published.
The Government has committed funding for decarbonisation of public buildings via the Public Sector Decarbonisation Scheme, social housing via the Social Housing Decarbonisation Fund and for fuel poor homes – the Warm Homes Discount, Energy Company Obligation and Home Upgrade Grant.
Welcome reforms are being made to operational performance metrics through the EPC Action Plan which should improve the accuracy and consistency of EPCs and start the journey towards a building rating that genuinely reflects real energy performance.
Also, we are seeing an increased use of smart technologies via smart metering, connected homes, smart tariffs and Electric Vehicles. It is vital that low carbon heat fits seamlessly alongside these and can respond flexibly to pricing signals from the National Grid, helping to balance supply of intermittent renewables with demand.
So, what needs to be provided via the Heat and Buildings Strategy.
Most importantly, we need a long-term framework that provides the strategic direction of travel and answers key questions like what is happening to the gas grid, how will homes be heated off the gas grid, how are heat pumps going to be made more attractive to consumers, what role is there for decentralised renewable generation, and where are the potential hydrogen clusters? Long-term, joined-up policy is vital for providing confidence for the sector to invest in the necessary innovation, capacity, and skills. This should include key implementation milestones from now up to 2050 that answers questions around phase out dates of high carbon technologies.
We would like to see Government take a whole house, multi-measure approach that joins up the different trades, and minimises long-term running costs whilst avoiding unintended consequences around mould, damp, poor air quality and overheating.
There will be a key role for energy efficiency improvements regardless of heating technology used, so a fabric first approach must be taken.
Homeowners typically don’t take action to improve the energy performance of their properties, so we need drivers and incentives to stimulate action in the able to pay sector, like Council Tax or Stamp Duty linked to energy efficiency, reduced rates of VAT, or consequential improvements. The SEA summarised recommendations in our ‘Addressing the Able to Pay Sector, report, which can be found on the resource section of our website.
Consistency is required across different tenures in setting Minimum Energy Efficiency Standards. The SEA has been campaigning for a number of years for all buildings to be brought up to a minimum EPC Band C by 2035. While we have MEES in place for the private rented sector, we now need to see similar drivers in the social housing and owner occupier sectors. Consistent application and, crucially, enforcement of energy efficiency standards will drive long term market demand and remove uncertainty for consumers.
The SEA recognises that there is no single solution to decarbonising energy in buildings and no one size fits all. Regional differences affect the cost of heating our buildings, the carbon emissions produced and the level and depth of fuel poverty, therefore a local strategy for decarbonisation is needed to address the different challenges faced across the UK. These need to reflect differences in housing stock, climatic conditions, local income levels, etc. Because local authorities are closer to the point of delivery, they have a greater understanding of their particular needs and can play a key role in engaging residents. The Heat and Buildings Strategy should allow for a localised approach within a national framework.
This should include a clear commitment to support underfunded local authorities to implement the transition to net zero, manage area-based schemes and enforce Minimum Energy Efficiency Standards.
There also needs to be a commitment to providing independent consumer advice through a ‘one stop shop’, as this will be crucial to helping homeowners through the transition.
Finally, I will leave you with my top 3 key asks of Government.
Firstly, and most importantly, ensure that long-term certainty is provided through the policy framework.
Secondly, shift away from short term incentives like the Green Homes Grant, to long term drivers like variable council tax and stamp duty linked to energy efficiency performance.
Finally, ensure a whole house, technology agnostic approach is taken that considers broader health and wellbeing aspects, as well as operational carbon.