We’ve been patiently waiting for years for Government to more actively support the low carbon agenda across the housing sector and spell out its policy commitments to enabling social landlords (and homeowners) to improve the energy performance of their buildings to address fuel poverty and tackle climate change.
Good things come to those who wait? Perhaps. What we have recently seen is an un-precedented number of announcements and initiatives from Government with, often, unrealistic timescales for bidding and delivery and all, to an extent, outside of a coherent policy framework for how to support low carbon in our domestic dwellings. That said, anything that focuses the mind on the need for and benefits from deploying energy efficiency and low and zero carbon technologies in housing is warmly welcomed. When these announcements come with cash attached, even more so!
Boris Johnson has announced the Government’s ’Ten Point Plan for a Green Industrial Revolution’. Does this further support or confound social housing providers and their supply chains wanting guidance on what the low carbon future might look like? Of the ten points listed I think there are three which impact on or could be influenced by the social housing sector and we’ll address them in turn.
Simply put, by increasing the amount of ‘diverse’ and intermittent renewable energy generation onto our electrical network, the work associated with maintaining and managing both the national and regional electricity networks becomes more challenging and, perhaps, costly. Works will be required to upgrade networks and, more likely, enable flexible storage of excess generation. These costs will ultimately be passed down to all consumers which could exacerbate incidences of fuel poverty. Understandably this high level document does not address or acknowledge this risk. Social landlords can prepare for it though to mitigate and even, perhaps, turn it into an opportunity. Transmission and distribution costs are currently passed down via electricity bills. Reduce the amount of ‘grid supplied’ energy to a home through deployment of PV and battery for example, and you’ve helped to reduce this burden to tenants. Likewise, energy storage within dwellings can help in two further ways.
Time of use tariffs for electricity can be coupled with energy storage to maximise consumption during periods of low cost electricity and equally, landlord portfolios of storage can be used to offer energy network management services and, potentially, generate a revenue stream for owners of energy stores. Projects such as our own ERDF funded Homes as Energy Systems project are currently exploring this very opportunity. A 10 Point Plan is a catchier title than an Eleven Point one, but addressing increased renewable energy generation without considering flexible energy storage is an opportunity missed. Effectively, a drive for offshore wind could also be the catalyst for a renaissance of the domestic PV and energy storage market, creating significant employment opportunities, too.
The UK will require green hydrogen if it is to meet its legally binding carbon reduction targets both as a replacement fuel for natural gas and petrol / diesel but also as means of energy storage, converting excess electricity into a useable energy source instead of switching off the additional 40GW of offshore wind. That is undisputed and the investment and support from Government is required. The issue for housing arises from the continued ambiguity from Government over decarbonisation of domestic heat (and yes, that is despite the final point I will cover) as the challenge for landlords considering heating system replacements is twofold – tenants running costs and carbon emissions. On the face of it, a hydrogen ready boiler works for both these things and the reference to hydrogen estates (300 home trial by 2023 and a ‘town’ by 2030) sort of supports an asset manager’s view that this kit will do the job. However, explore in more detail and it’s not as clear cut. The work undertaken by energy stakeholders in the North West indicates that when it comes to the domestic network there is unlikely to be any meaningful quantity of hydrogen in the pipes before 2035. Industrial clusters are a separate story. This means that landlords may take decisions now in the belief they are saving carbon whilst effectively doing nothing of the sort and, potentially, even replacing boilers before they’ve even had the chance to burn H2. Those with the carbon reduction deadline of 2050 in mind might be relaxed about this however it’s not the date for carbon neutrality that’s actually important, it is the trajectory of de-carbonisation that matters. National and regional carbon targets are based on a carbon emissions budget. Greater Manchester, for example, calculated a carbon budget (the city regions ‘share’ of UK emissions between now and 2050 to hit the 1.5 degree temperature rise) and it has effectively 15M tonnes of carbon to play with. If no effort was made into emissions reduction but net zero was achieved in one big hit on 31 Dec 2049, the 15M tonne budget would have been well and truly spent and a 1.5 degree rise in temperature a distant, wishful memory.
In other words, the area under all carbon reduction graphs is more important than the trajectory of reduction itself. On the running cost perspective, there is little understood about what hydrogen as a fuel will actually cost the consumer. As a manufactured fuel, using either natural gas with carbon capture and storage or from electricity (excess renewable, nuclear or straight renewable) it will not be as cheap as natural gas. Even as blending increases to the 20% mentioned in the Plan, no reference is made to end consumer fuel bills or measures to be explored to minimise negative impacts. Landlords may be tying tenants into a more costly to run system than first thought. This isn’t a call for landlords to do just anything to save carbon, but to explore more actively those domestic heating and renewable energy generation technologies that are ‘no / low regret’ interventions and save carbon now. This does not preclude a switch to hydrogen as a domestic heating fuel in the future when / if it proves to be a commercially viable and truly green alternative to renewable electricity as long as Government has continued to support development of generation and transmission of hydrogen, which it appears to be doing. The lack of clarity from Government over the immediate role for domestic hydrogen is unfortunate.
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