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Making the shift

Climate change minister Julie James tells Jules Birch about her plans to reach net zero and why housing will be a crucial element in them.

With just weeks to go until COP26 in Glasgow and Welsh Government about to publish its new net zero plan, the minister in charge of the battle against climate change in Wales is full of plans but only too aware of looming targets. Julie James tells WHQ where she thinks Wales is on the journey to net zero.

‘What that’s showing us so far is that we’ve got quite a task ahead of us, she says. ‘We’ve got to do twice as much in the next 10 years as we did in the last 30. I’m pleased to say that the current plan shows that we’re on track for the 2030 targets but we need to really up our ambition to get to the 2050 net zero target.’

The plan will set out how to get to the 2050 target across all sectors and she says that ‘housing is absolutely central for that’. Her plans start with social housing but all homes must follow. On new homes, New Design Quality Requirements for new homes banned fossil fuel heating in new social housing from the start of October, with the ambition that new private homes will follow by 2025. On existing homes, work continues on both the Optimised Retrofit Programme that is testing different approaches to different sort of housing across Wales and preparations for a new Welsh Housing Quality Standard (WHQS).

The first round of WHQS brought social homes up to Energy Performance Certificate (EPC) level D but she says that: ‘The next iteration of that which we’re just in the process of planning out will be how we get up the EPC scale, possibly to A, maybe slightly lower than A as a second step. Because these things are iterative, we won’t go from where we are now to net zero in one jump, there’ll be phases along the way. And the Welsh Housing Quality Standard is a very good example of how you phase it in.’

The same process is at the heart of the Optimised Retrofit Programme, in which social landlords across Wales are testing different technological and other solutions and how they work on different properties in line with the recommendations of the independent advisory group on decarbonisation. ‘We’re a year into that now and the idea is to just find the best, the most optimised, way of getting those houses up to the best they can be. That’s both the tech but also the skills for the workforces necessary to do that, and the supply chains and all the rest of it that go with that, trying to maximise the number of jobs coming out of that for the Welsh economy as well.’

This is the first mention of a recurring theme in the interview: that decarbonisation is about far more than improving the physical fabric of homes and their heating systems. The minister returns again and again to the link with jobs and the wider Welsh economy, skills and the supply chain. ‘Just on a personal level, I know that trying to find people who can retrofit Your house is quite difficult, even if you’re quite determined to do it. So it can be quite hard slog trying to find people with the right skills to advise you never mind to actually do it. So that’s why we’re very keen to build that industry across Wales, because these are the green jobs of the future as well, aren’t they, this is a big deal. And then, very importantly, what skills will be necessary for the fitters of the future? So our FE colleges are still producing gasfitters who can retrofit your boiler for a much more efficient one. Well, those people need to be skilled to put in air source and ground source heat pumps and electric boilers and all kinds of other systems as well. So we’ve been working across the government to make sure that the economics of the supply chain, the skills system, and the tech all run together.’

That in turn feeds into the fit between decarbonisation and the foundational and circular economies. ‘We have gone from one of the worst in the world to the third best in the world on recycling and are hoping to climb up above third. The next thing is how can we use that recyclate most optimally in our economy, so we don’t use virgin products. Housing and transport are two very good sectors for doing that in, so how can we replace concrete, cement, plaster, insulation panels, and so on with either reprocessed recyclate, or naturally occurring renewable materials, or a combination of both of those things.’

A similar process is going on with new homes, where the Innovative Housing Programme has been testing out different approaches. ‘We’ve now got a large range of properties across Wales, built into that programme, that are putting out data about whether they actually do what they claim to do,’ she says. ‘Are the bills lower? Is the heat transmission from the building much lower? Are they actually low carbon, carbon neutral, passive carbon? There’s lots of different standards as well. And of course that translates across into the retrofit programme as well as we learn whether this particular type of tech really does reduce your bills right down, is mechanical ventilation better than natural ventilation, all sorts of stuff.’

Welsh Government is also keen to see the development of housing factories that can produce homes through modern methods of construction. ‘We’ve been encouraging those factories across Wales, rather than big super factories, small local factories, able to use small local supply chains of renewables and reprocessing and so on, and working with our universities on some of the tech that goes with that. I’ve done some great visits to some of those factories where they really are quite impressive in what they’re able to achieve in terms of insulation standards, high spec and fast build, a really good combination of the three.’

It’s not hard to see how Welsh Government has the policy levers to drive up the quality of new social homes what can it do to influence the private sector, for example in meeting the ambition to end fossil fuel heating in all homes from 2025?

‘That’s about getting our regulations in place to insist on specifying particular types of product,’ she says. ‘Again, that will be a phased process. So we can’t go from where we are now to say “you can’t have any gas boilers at all next year” because frankly we wouldn’t be able to build houses, the supply chain for the new tech isn’t robust enough for that yet and we’re still collecting information about what works best in what kind of house. We also don’t want to drive people into fuel poverty, and we’ve got a lot of work to do to green the grid, so a lot of the strands of this need to come together. But yes, absolutely, we will get to the point where we’re not building any houses in Wales that have fossil fuel heating.’

Supply chain issues come to the fore here too in work by deputy climate change minister Lee Waters with SME builders in which they could be offered a pipeline of work going forward in return for them building to the same spec that applies to social housing. ‘I very much want to get to the point where all the houses in Wales are built to the social house standard. It would enable our councils and ourselves to buy them off plan apart from anything else, which they sometimes can’t do where the private sector housing is lower standard than the social housing. We also need to have the skilled workforce in place for that, so that’s why we work so closely with our SME colleagues to make sure that they are where we want them to be on that. We’ll be putting new requirements on Help to Buy help for builders, for example, and so on that they build to the standards that we want.’

Existing homes are obviously a much bigger issue to address – most of the homes that will need to be decarbonised have already been built. However, there is a long way to go and both the Future Generations Commissioner and Community Housing Cymru have identified a funding gap. While not all of the investment would have to come from Welsh Government, presumably that is an ongoing issue for her?

‘Yes, it absolutely is. We need to work with a whole range of communities of stakeholders across the piece, not least the insurance and lender communities, to make sure that all of us are asking for the same thing, because what’s going to happen is very rapidly houses with fossil fuel heating systems are going to be not fit for purpose. People are getting increasingly unhappy about the state of the planet, and they’re going to want to shift. And actually, the most recent, massive fluctuation in gas prices shows you how volatile that market is, anyway, it’s predicated on a on a fundamental economic flaw, which is that fossil fuel fuels will stay cheap, when we can see in front of our eyes that’s not necessarily the case.’

Wales has to work hard to tackle its dependence on gas, she says, ‘but we need to do that in a socially just way so that we don’t force people into more extreme versions of fuel poverty, because we’re taking them off what’s currently the cheapest system, although actually it’s somewhat ironic we’re saying that in the middle of this gas price crisis’.

With Universal Credit cuts and the freeze in the Local Housing Allowance and the imminent increase in National Insurance contributions, a winter crisis is looming but that reinforces her commitment to retrofit and energy efficiency. ‘There’s a lot of things that we’ve got to look at with that and obviously, we’re not going to do all of those houses overnight. But what we can do is we can encourage the supply chains that make those prices come down and we can make sure we’ve got the skilled workforces necessary to help people retrofit and for the private rented sector and a social sector, we’ve got the right incentives for the landlords to do that. In the private sector rented sector in particular, we’re very concerned that we don’t drive people out of the market.’

That raises the issue of how to ensure that the costs of decarbonisation don’t fall on existing residents, whether it’s tenants in higher rents or homeowners who have to pay the cost up front, even though the benefits only come in the future.

‘Well, it’s hard, isn’t it, because it’s going to have to be shared to some extent,’ she says. ‘But if you take the owner occupier sector, if you do manage to get your house to come up to EPC A, it doesn’t currently command a premium, which I just find quite extraordinary. Whereas we need to get across to people that if you can manage to get your bills right down and do the right thing for the planet, that house should be worth more. So we may have to look at tax incentives, and so on, to assist people with an incentive to do that and to get a return on their money. There’s a return in planet terms, of course, but a financial return, and then we have to get our lenders to look at that as well.’

Here again though she returns to those links with the wider economy and the changes that need to happen before decarbonisation moves into the mass market. ‘The other thing I would say is the supply chain thing sounds arcane, but it really isn’t, if you want to do the right thing in your house and you are an owner-occupier, you need to be able to go along to well known DIY suppliers in the market and buy the right product and that’s not easy at the moment.’

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