The landmark report Better Homes, Better Wales, Better World was presented to Welsh ministers in July. Christopher Jofeh, chair of the independent Decarbonisation of Homes in Wales Advisory Group, outlines the need for residential decarbonisation and the principal recommendations.
The need for decarbonisation
In May 2019, the UK Committee on Climate Change (UKCCC) recommended that the UK Parliament legislate, without delay, to reduce domestic greenhouse gas (GHG) emissions to net zero by 2050. The UKCCC assessed the contribution that Wales can make to net zero in the UK under its statutory framework, and for Wales it recommends a 95 per cent reduction in GHG emissions by 2050.
In response to this, in June the Welsh minister for environment, energy and rural affairs declared the ambition ‘to bring forward a target for Wales to achieve net zero emissions no later than 2050’.
In Wales, our 1.4 million homes are responsible for 27 per cent of all energy consumed and over 15 per cent of all demand-side GHG emissions. We therefore need urgently to reduce substantially the emissions from our homes.
Last year Welsh Government commissioned studies by a team at the Welsh School of Architecture (WSA) who:
- Researched how retrofit measures actually perform
- Created a taxonomy of Welsh homes, which showed that 14 different construction types account for 84 per cent of all Welsh homes.
- Modelled the effect of four different ‘bundles’ of retrofit measures on each of the 14 construction types against three different grid decarbonisation scenarios.
The Welsh House Condition Survey 2019 (WHCS) shows Welsh homes have an average SAP rating of almost 61. Social rented dwellings have the highest average Standard Assessment Procedure (SAP) rating of 68. Owner-occupied and the private rented sector (PRS) dwellings both averaged SAP 60. Houses in the PRS have improved the most, by 13 points, over the last 10 years, thanks to investment in energy efficiency measures.
The WSA study concludes that a 90 per cent or higher decarbonisation in the housing sector can only be achieved when the energy grids decarbonise by 60 per cent or better.
The study notes that if the energy supply was to undergo a ‘transformational change’, resulting in more than an 80 per cent clean energy supply, the need to make significant changes to homes themselves would be unnecessary. In a scenario, however, where the energy supply became fully decarbonised but with less capacity than at present, it would still be necessary for homes to reduce their demand so as not to exceed the smaller grid capacity.
The WSA study also points out that if heavy reliance is placed on grid
decarbonisation, with little improvement works done to the homes themselves, and if the costs of producing a cleaner energy supply are passed onto householders: “There could be considerable increases in householder energy costs, and corresponding increases in fuel poverty.” [3] (See Ed Green’s article for more details).
Welsh Government figures published in May 2019 show fuel poverty levels have improved over the last 10 years, but they still remain unacceptably high at 12 per cent.
The geographical spread illustrates that fuel poverty is most prevalent in areas of low incomes and general economic depression. In addition, the prevalence of off gas grid properties in rural areas often results in high fuel costs for LPG, oil or direct electric-based heating.
How residential decarbonisation should happen
The Advisory Group concluded that it was appropriate to set two very ambitious targets for the decarbonisation of Welsh homes:
- By 2050 the entire housing stock should be retrofitted to Energy Performance Certificate (EPC) Band A, recognising that not all homes will be able to achieve this.
- Welsh Government should set a 2030 target of EPC Band A for homes in social ownership and privately-owned homes in fuel poverty.
Currently, Wales has about 300,000 homes in social ownership and privately-owned homes in fuel poverty. The Advisory Group looks to Welsh Government to make the necessary funding available for all these homes to be upgraded by 2030.
Why these homes first? Looking after the poorest and most vulnerable in society is not simply the right thing to do. The Advisory Group also believes it is a pragmatic thing to do. Upgrading 300,000 homes by 2030 will give manufacturers, builders and installers the confidence and the opportunity to invest, to train, to take on apprentices and new staff, to innovate, to improve quality and to drive down costs. It will provide valuable data on how well different aspects work, which will aid continuous improvement.
The goal is that by the mid-2020s the retrofit ‘offer’ will be increasingly attractive to owner-occupiers and private landlords, provided that action is taken to ensure that these people have the capability and opportunity as well as the motivation to improve their homes. The challenge will be to make decarbonising a home as easy, as desirable and as socially normal as having a new kitchen or bathroom.
For owner-occupiers and private landlords to change their behaviours, it will be
necessary for energy advisers, manufacturers, builders, builders’ merchants,
financial institutions, local authorities and others to change theirs as well.
The Advisory Group engaged a team from the University College London Centre for Behaviour Change to help identify:
- the key actors in residential energy efficiency and their desired behaviours
- what must happen to ensure that these actors have the capability, opportunity and motivation to act in ways that facilitate the decarbonisation of the Welsh housing stock.
The Advisory Group began the work of creating residential retrofit ‘system maps’ for owner-occupiers and for private landlords. One of the immediate next steps required will be to complete this work and to act on its findings.
Immediate next steps
The immediate next steps must concentrate on what needs to be done by the start of the 2021 Assembly session so that social landlords have the capability, the opportunity and the motivation to upgrade their homes, and privately-owned homes in fuel poverty, to EPC A. In parallel with this there are things to be done to stimulate and facilitate uptake by able-to-pay owner-occupiers and private landlords.
Work has begun to identify these and to design a programme of work that ensures these are undertaken with the necessary urgency.
The creation of an appropriate quality system is another example of an immediate next step. It must work for everyone involved, for single homeowners as well as for landlords, for SMEs and their suppliers, for funders and investors, and for both the public and private sectors.
Costs and benefits
There will be those who say that all this is too expensive. There are a number of answers to that.
First, Nicholas Stern [4] has shown that inaction or inadequate action will ultimately be much more expensive, and that we will be signing a bill that our children and grandchildren have to pay.
Second, the residential repair, maintenance and improvement market in Wales is worth over a billion pounds per year. That is more than will be needed to upgrade all privately-owned homes.
Third, I have no doubt that there were people at the end of the 19th century who told the Welsh miners that building Miners’ Institutes would be too expensive, but they went ahead anyway, and succeeding generations have been grateful to them.
Fourth, to focus only on costs is to ignore the benefits to Wales that will follow. These benefits will significantly outweigh the costs, and will include:
- improved energy security, with a more resilient economy that relies less on imported gas
- less investment will be needed to generate, store and transmit decarbonised energy
- an enhanced skills base
- the creation of a substantial market for Welsh firms supplying energy efficiency products and services, both in Wales and over the border
- higher employment and higher incomes; tens of thousands of permanent new jobs will be created; and higher employment means fewer people on benefits
- increased economic activity generating increased tax revenues to pay for better public services
- lower rent arrears
- improved air quality
- improved learning, because children learn better in warm homes
- work on homes will provide opportunities to protect them against overheating
- warmer homes in winter will lead to physical and mental health benefits (particularly for children, the disabled and the elderly), which will reduce demand on the NHS and social care
- improving all our homes will bring about the regeneration of public housing estates and widespread neighbourhood improvement.
Conclusion
By 1850, there were more people employed in industry in Wales than in agriculture, which made Wales the world’s first industrial nation. As a result, the UK’s economy and society were transformed, and the UK became one of the largest historical contributors to climate change. That makes taking a lead in tackling climate change a moral responsibility for Wales. Tackling climate change offers the prospect of real benefits to all our citizens: cleaner air, improved health and new economic opportunities from clean growth.
Christopher Jofeh is chair of the Decarbonisation of Homes in Wales Advisory Group
[1] Green, E., Lannon, S., Patterson, J. and Variale, F., (2018). Homes of Today for Tomorrow:
Decarbonising Welsh Housing between 2020 and 2050. Cardiff: Cardiff University, p.33.
[2] Green, E., Lannon, S., Patterson, J. and Variale, F., (2019). Presentation to Decarbonisation of
Homes in Wales Advisory Group, 05/03/2019, Slide 4.
[3] Green, E. et al., Homes of Today for Tomorrow: STAGE 2, p 13.
[4] STERN, N. H. (2007). The economics of climate change: the Stern review. Cambridge, UK, Cambridge University Press.