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ANALYSIS: Industry calls for low-carbon specifics

The government’s commitment to ensuring a greener, cleaner UK is beginning to resemble something of a political tightrope.

Days after the coalition was heavily criticised for diluting green measures such as the definition of zero-carbon homes and the feed-in tariff in the Budget, the Department of Energy and Climate Change released figures showing poor progress was being made on reducing emissions.

The provisional 2010 figures showed that greenhouse gas emissions rose from 2009 levels by 2.8 per cent, with carbon emissions projected to be 3.8 per cent higher.

Residential sector carbon emissions soared by 13.4 per cent, mainly attributed to the cold weather, while those in the energy supply sector rose by 3.3 per cent.

There is clearly much work to do to meet the government’s target of reducing carbon emissions by 80 per cent from 1990 to 2050. What ministers do will help and hinder different sectors of construction to varying degrees - but all sides are desperate for certainty about the route forward.

Despite this, the government’s response to the Innovation and Growth Team’s low-carbon report, which made 65 recommendations on the subject, has been delayed until May.

The Energy Bill, designed to create a greener future for the UK - is currently crawling its way through the parliamentary process, with a date for its second reading not yet finalised.

Central to the bill is the Green Deal scheme, which will allow householders to pay for energy-saving improvements to their homes through future electricity savings. How the scheme will work in practice is still unclear.

Prominent industry members have signed up to a Demand a Better Bill campaign (see box), calling for the terms of the proposed Green Deal to be “urgently defined”.

Federation of Master Builders director-general Richard Diment says: “The fact that 42 per cent of the UK’s emissions come from our buildings means the Green Deal has enormous potential to help ensure the UK meets the requirements set out in the Climate Change Act of reducing carbon emissions by 80 per cent by 2050.

“But time is running out if the government is to succeed in its stated aim to upgrade 14 million homes over the next nine years.”
The FMB says the current retrofit completion rate needed to meet carbon emissions targets is 1.5 million homes per year - almost 4,300 homes each day.

The government has confirmed the mass roll-out of smart meters will begin in 2014, to be completed by 2019.

But its controversial decision to define zero carbon only by the parameters set by Building Regulations was called into question last week.


The move to exclude emissions from appliances used in the home saw a furious reaction from groups including the UK Green Building Council. WWF-UK resigned from the Zero Carbon Taskforce in protest, claiming the government could no longer call its homes policy ‘zero carbon’.

Demand for fossil fuels continues to rise as the population grows here and emerging economies such as India and China continue to expand.

The government announced details of a carbon floor tax last month in a bid to reduce emissions from the energy supply sector.

However, progress towards greater use of nuclear power has been halted, with energy secretary Chris Huhne ordering a review in the wake of the disaster in Japan.

There have also been warnings that the floor tax will lead to emissions ‘leakage’, where fossil fuels are simply processed in countries with less strict governments and legislation and then imported.

The government has been firmly supportive of wind farms, with the most recent DECC figures showing the contribution of wind power to the UK’s energy supply grew by 24 per cent in the fourth quarter of 2010 compared with the same period in 2009.

But campaign group Friends of the Earth recently stated that the drop in clean energy investment and a failure to move away from the ‘oil hook’ meant emissions were likely to grow further as the economy moved out of recession.

Executive director Andy Atkins said: “The government has repeatedly promised to build a low-carbon economy to tackle climate change and insulate us all from yo-yoing fuel prices, but the Treasury refuses to lay the foundations or pay for the bricks.

“If the government is going to get serious on climate change it must accept the Climate Change Committee’s advice in full and set tougher targets for cutting UK emissions.”

The Labour party also went on the attack this week. Shadow energy secretary Meg Hillier told Construction News: “The government is trying to deliver behavioural change that is not happening.

“I have not met anyone who knows about the Green Deal and thinks it’s fantastic and is going to deliver. The government needs to put its money where its mouth is but it seems to be rehashing a lot of old statements and may have bitten off more than it can chew.”


The deepening battle over new nuclear power

The government needs to solve the nuclear question if it is to cut emissions and ensure energy security in the UK. The latest figures show that due to technical problems at some nuclear power stations in 2010, there was less power available for electricity generation, and more coal and gas were used - leading to a rise in emissions.

The government approved eight of 11 proposed nuclear plant sites in October, as well as approving reactor designs in principle. But there is much to be done before building can begin.

The government has commissioned a report from chief nuclear inspector Mike Weightman which will be crucial for public confidence, and EDF Energy has ordered a review of its own procedures.

Key dates to look out for this year include Mr Weightman’s interim report in May, with a final report due in September. The Health and Safety Executive and Environment Agency are due to deliver their generic design assessment report on the safety cases for the new nuclear power station designs in June. The government’s nuclear energy policy statement is also due to be completed this year.

A carbon price floor helps the industry’s prospects for development, as does the fact that both the coalition and the Labour party are broadly in favour of nuclear power in some form, though the Liberal Democrats are traditionally opposed.

The question of the Lib Dems’ previous opposition to nuclear is an awkward one, as it is a stick with which opposition groups can continue to bait the government.

Deputy prime minister Nick Clegg’s recent comments that the meltdown at the Fukushima reactor could lead to soaring costs of nuclear power stations in the UK has also drawn criticism, including from party colleagues.

EDF Energy is expected to award its major civils contract for work at Hinkley Point C this year as well as applying to the Infrastructure Planning Commission for consent to develop the site.

However, the Japan crisis will have a definite impact on the nuclear industry in one way or another, with most analysts expecting delays to new-build programmes at the very least, though industry bodies have refuted this.



Calls for ‘better’ bill

When it comes to building new homes and retrofitting old buildings, the government has set ambitious targets through its proposed Green Deal and zero-carbon deadlines.

The government wants new homes to be built to ‘zero-carbon’ standards from 2016, and similar standards for non-domestic properties from 2019.

But the government’s Plan for Growth, published alongside the Budget, revealed zero-carbon homes would not have to be built to cover emissions from outside of the Building Regulations, such as from electrical appliances.

It has made the Green Deal scheme central to the Energy Bill, and is understood to be planning a similar scheme for new homes.

But major energy suppliers, retailers and builders are leading a campaign calling for a better Energy Bill to include a comprehensive stimulus package for the Green Deal.

The campaign is born of frustration at uncertainty over financing methods, questions over whether the public will take up the deal and a lack of certainty as to how it can be carried out.

The second reading of the Energy Bill in the Commons looks likely to be delayed until May at the earliest. With the Green Deal one of its core issues, industry is now looking to the bill as a catalyst for green growth, having been disappointed by the lack of incentives in the Budget.

Companies such as B&Q, M&S and Asda have joined the Demand a Better Bill campaign, which is supported by the Federation of Master Builders as well as leading green activists. It is calling for it to be tightened so that the government has to commit to deliver policies that cut carbon by at least 42 per cent by 2020.

It is universally hailed as a positive step for reducing carbon emissions and ensuring economic growth; however, the industry now wants to see certainty provided by government so it can assess the economic benefits of the scheme and help the government to deliver on carbon emissions reduction targets.


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