UK homes are emitting more carbon dioxide than all the UK’s power stations combined
David Kemp of Procure Plus tells us what is being done to fix this
On 9 September, RSK will hold the next webinar in its ‘Green Dialogues’ series – ‘Boiler ban’. We will invite a panel of experts from across the sustainable built environment space to examine some of the challenges facing the sector as it transitions to low-emissions heat.
It is estimated that about 25 million homes in the UK are heated by gas, contributing a staggering 40% to the country’s total emissions. To turn the tide and shift towards its net-zero target, the government is getting ready to push the public to replace their gas boilers with heat-pump systems or other low-carbon alternatives. The plan is to ban gas-fired boilers in new homes from 2025 and in existing houses by the mid-2030s. To succeed, mass public support is critical.
To determine how close we are to a successful shift, RSK surveyed more than 2000 people across the UK in what is believed to be the first major public survey on the upcoming gas boiler ban. The survey discovered that the vast majority of people would only replace their boiler with a low carbon heat pump system if they received substantial financial support from the government.
The survey found that 8 in 10 people are willing, in principle, to change the way their home is heated to support tackling the climate crisis, and 77% of people said that, in principle, they would consider buying one of the alternatives, such as a heat pump. However, as 47% of respondents have already replaced one gas boiler with another in the last five years, the task of persuading and enabling the British public will be no small feat.
In this question and answer session, we asked our ‘Boiler ban’ panellist David Kemp, Sustainability Manager at Procure Plus to dive deeper into the challenges and opportunities in the critical transition to low-emissions heating.
- Procure Plus has secured major funding to roll out low-carbon technologies across its portfolio. Can you explain how procurement can enable the shift towards low-emissions heating solutions?
Procure Plus was delighted to be awarded over £5 million in EU funding to deliver a groundbreaking energy project in Greater Manchester. Homes as Energy Systems (HaES) brings two of the region’s social landlords, institutions and businesses together to tackle the ‘trilemma’ of growing electricity demand, increased intermittent renewable energy generation and an already stressed local energy network. Our status as an independent procurement specialist meant that we could bring these agents and their expertise in discrete projects together to form a single, successful bid.
When it comes to procurement driving the shift towards sustainable heating solutions, it is the detailed specification and upfront planning that are key. It is critical to keep both at the front of your mind to ensure the correct procurement decisions are made. Many of our customers are social housing providers and we support them in considering what their requirements actually are, for example, whether they are buying an outcome or a technical solution. If they are procuring equipment, we encourage them to fully study and understand the likely costs at both the initial stages and over the entire operational life of the asset. We use our detailed technical and project knowledge to highlight potential issues so that the procurer and specifier can appreciate the full value of what they are procuring for. A good example of this is a client of ours that was looking to replace gas boilers across their portfolio (about 6000 units across a small geographical area). Although a like-for-like replacement offered the lowest CAPEX option, further analysis showed that there were large legal costs associated with gaining access to properties for ongoing gas safety certification. This amounted to an average of £40,000 per annum in legal costs alone. When this and other lifetime operational costs were factored into the CAPEX cost, it became apparent that an alternative, low-carbon heating solution might actually provide a better value proposition.
For procurement to drive sustainable solutions, it is important that procurers take into consideration all operational, financial and legal aspects of the equation. Building an accurate and holistic procurement approach in this way is critical when making this shift and contributing towards the net-zero ambition.
- What have been the main challenges in rolling out low-carbon heating solutions across the public sector to date?
One of the greatest challenges is that social housing landlords tend to operate in silos that have very different drivers, interrelations among functions and departments, budget structures and organisational hierarchies. For example, the development team working on a new-build project will generally focus on the financial viability of the construction stage rather than the longer-term financial circumstances. Because of the difficulties of factoring in potential revenue generation from renewable heating systems in development viability toolkits, they are less likely to take a holistic view on what heating system to install. There are also divergent themes for investment decisions, particularly in relation to capital expenditure, for which the initial outlay is not always considered against the wider organisational benefits over the lifetime of the asset. Many organisations are unwilling to look at these investment decisions in the round because of the separation between capital budgets and maintenance and operational expenditure.
In our experience, one of the ways of breaking down some of these silos and encouraging the adoption of low-carbon heating solutions is by working with board members who are passionate about, or at least have responsibility for, driving decarbonisation. The increasing emphasis on environmental and social governance expected by the social housing regulator is also playing a role in raising the importance of having a credible approach to tackling carbon emissions. But all decarbonisation measures will take time and financial investment. All carbon-reduction deadlines have been set with a carbon budget in mind. As we work to achieve net zero , we must be mindful that we are still constantly adding to our emissions. For each year that carbon emissions are not reduced to match a linear reduction, we will need to work harder and probably spend more in a shorter space of time to achieve these targets.
There are also more practical and logistical challenges. When upgrading heating systems as part of HaES, one of the delivery partners had to navigate planning rules when installing heat pumps for new flats. Heat pumps on such developments are not covered under permitted development rules, although they can be for houses. A full planning application called for the heat pumps to achieve certain noise levels, however, the level of noise required by this particular local authority is far below what is feasible with current heat-pump technologies. As a result, planning applications have been rejected on noise grounds, even though the gas boilers being replaced had flues that did not meet the same noise requirements. But, as the boilers did not require planning permission, this was not an issue. These idiosyncrasies within the planning process can prevent zero-carbon technologies being successfully implemented and need to be addressed through a hierarchy of policy implementation that prioritises carbon-reducing measures.
- How can the sector better respond to these challenges?
The sector needs to inform itself of the scale of the challenge and consider the impact of low-carbon solutions on the tenant – particularly the potential for increased fuel bills and resulting energy poverty concerns. More education is required on how technologies perform and how this relates to the energy performance of properties. From a social housing provider’s perspective, there is a clear need to understand the stock and the assumptions that are being used to model energy performance. In Greater Manchester, the landlord-led is working to understand the differences in assumptions made by consultancies when they have modelled the route to and impact of net zero on the region’s landlords’ stock. The Decarbonisation Taskforce has secured senior organisational buy-in on monitoring progress towards net zero and there is some healthy competition developing between landlords within the sector. Encouraging a race to net zero can drive change, but only if the objectives are deliverable and the monitoring is consistent.
- Are the current government support initiatives sufficient to bring about the shift towards low carbon that is needed?
Something of a buzzword that is mentioned when discussing low-carbon heating in the social housing sector is the ‘spark gap’. In the UK, the price of electricity is increased by a high proportion of taxes and levies, whereas those placed on gas are much lower. This makes it harder for lower-carbon, electrified heating systems to deliver affordable heating bills. A holistic approach is needed to minimise fuel poverty as the shift to low-emissions technologies accelerates.
There also needs to be more clarity on the role of hydrogen in the decarbonisation of domestic heating. The government’s Energy White Paper does not provide a clear direction on the immediate requirement for hydrogen and there are many unresolved questions. For example, a hydrogen-ready boiler does not save any carbon unless it uses ‘green hydrogen’ from renewable sources, and we know that this is not likely to be achievable at scale until the mid-2030s. The danger is that carbon-reduction opportunities will be missed while this technology and its infrastructure are being developed. To ensure the required investment in the production, distribution and storage of hydrogen there needs to be a much clearer steer to the public sector, stock holders and public-housing providers about the next steps they can take.
It is also likely that newer financial incentives such as the Clean Heat Grant will have more impact than the previous iterations. Upfront capital grants are useful to support decision-making and enable low-carbon heating solutions to be implemented when landlords do not have the means to pay upfront. The sector requires a long-term, sustainable and clear direction of travel with regard to domestic heat to ensure supply chains can invest in low-emissions options.
- How can the social housing sector use its procurement to boost skills development in the low-carbon heating sector?
The business model of Procure Plus uses procurement to invest in social outputs. The ‘Plus’ element is the regeneration aspect of the business and our particular focus is on training and skills development. Last year alone we supported 769 people entering into employment as a result of our procurement activity, and the focus is increasingly on training and employment within the green and low emissions solutions sector. Our primary focus is on getting people who are out of the labour market re-engaged, enabling them to develop their skills in this critical and emerging sector, and driving our social value as a business.
Despite that, new technologies associated with low-carbon heat can require significant upskilling of trained operatives. This can also present initial opportunities at entry level and create movement within the labour market. Long-term sustainable and forecastable demand for these skills is necessary to help supply chains to invest in people and get up to speed with tackling the climate crisis. The long-term contracts typically found in the social housing sector can act as a catalyst to offer these skills to the labour market. These skills can then be more proactively offered to private-sector customers, thereby enabling greater deployment of low-carbon heating across the owner-occupied and commercial sectors. Careful procurement for consistent and forecastable contract values is a better way of boosting long-term skills development than pilot schemes as these can often fail to inspire investment confidence in supply chains.
Overall, the sector needs to use upskilling and informing to shift decisions towards low-carbon heat in the domestic sector. We need to be looking at the whole picture and understanding that, across a social housing portfolio, there will be different ‘flavours’ of decarbonisation in the mix and properties with different footprints. There will be a mix of technologies and solutions, incentives and penalties to get us there, but the end result, at the portfolio level, has to be net zero.
In the run-up to COP26, the RSK ‘Green Dialogues’ webinars are bringing together industry experts to discuss key sustainability issues. We have already focused on changes to transport in our ‘Ditch the car’ webinar, in which our expert panel debated the future of sustainable transport and whether to ‘ditch the car’ in efforts to achieve a net-zero future.
We will explore further key issues relating to tackling climate change in our upcoming RSK Green Dialogue webinar ‘Can we rewild land in our inner cities?’ (7 October 2021). This webinar will feature leaders in the rewilding movement as they discuss the challenges and benefits of rewilding high-density cities.
We are solutions-focused, and we want to continue driving the conversations and ideas that will enable industry to play its part in tackling the climate crisis. To keep up with our activities and sign up for our future #GreenDialogues events, including the ‘Boiler ban’ webinar, please visit our website here.