Inspiring change for peopleand the environment

Green Deal for Real: Key Considerations for projects

Stuart Hay Senior Consultant

We work with public and third sector organisations,

schools, communities and businesses to…

Inspire and enable

action to reduce

CO2, waste and

fuel poverty

Build confidence

and skills to make

sustainable choices

Share our

knowledge and

learn from others to

maximise our impact

Deliver the best

possible service

creatively and

professionally

About Changeworks

…and we focus our expertise on energy, waste and the sustainable use of resources

Consultancy services

• Low-energy retrofit projects– Energy efficiency– Renewables

• Technical support– Hard-to-treat housing

• Energy & financial analysis– EPCs, SAP, NHER– SHQS / EES compliance– Stock modelling

• Feasibility studies

• Tenant guidance

The Green Deal For Real

• Context

• The Carbon Heart Assessment Tool

• Examples exploring issues around the Green Deal in terms of assessing projects

• Some final thoughts on where we are

Why Retrofit

Statutory target

CO2

Comfort

Fuel bills

Finance

Maintain property

Project Drivers

A financial mechanism made possible by the magic of energy efficiency

Its Simple: What could possibly go wrong?

The Green Deal

• Market conditions / competition / uptake / innovation

• Economies of scale (social housing)• Costs of finance (market)• Inflation • Fees and project management• Hidden additional costs• Re-decoration • Decanting / voids• Age and value of existing assets • Contingencies

Capital costs

• Golden Rule subsidy

ECO Carbon Reduction

• Social / fuel poverty subsidy

ECO Affordable Warmth

Carbon Saving Communities

• Carbon price / factor for project

(base price)

Actual costs

• Software Predictions (SAP)• Real world

– Actual user behaviour vs. softwareRebound effectComfort levelOccupancy pattern

– Actual performance of measure vs. softwareInstallation Maintenance Operation

• Fuel price increases• Inflation

Savings

• Home Energy Analysis Retrofit Tool (HEART)

• Calculates:– Capital costs– Energy savings– Carbon savings

– CO2 per £ spent

– SAP and NHER ratings– SHQS compliance– Fuel poverty indicators– Green Deal/ECO finance– Analysis of retrofit scenarios– Investment recommendations

Project assessment tools – Carbon HEART

• Full, detailed analysis of investment options

– For all stock– For each archetype– For each sub-archetype

• Also analyses impact of numerous variables not recognised by other energy software

– Householder heating patterns– Repayment interest rates– Inflation (fuel bill rises)– Rebound effect

Carbon HEART

• Up-to-date databases– Retrofit costs

– CO2 factors

– Fuel costs

• Accurate, ‘real-life’ outputs– Uses actual property data

(drawings, specifications etc.)– Uses actual retrofit costs (agreed

in advance)– Can use any energy data (RdSAP,

SAP, NHER etc.)– Does not rely on generic averages

Carbon HEART

• Well suited to complex property types

– Blocks– Terraces– Tenements

Carbon HEART

• Strategic investment tool for social landlords

– Baseline performance– Impact of different retrofit

scenarios– Indentifies optimal scenario– Best Value For Money

Issue 1: Identifying Cost Effective Solutions

• 3-storey No Fines block– Double glazing– Non-condensing gas combi boiler– Concrete walls, no insulation

• Modelled 3 improvement scenarios

1. External wall insulation

2. As above, plus• Loft top-up• Condensing boilers• Lighting• Improved double glazing

3. As above, plus• Floor insulation• PV

Carbon HEART –Targets

• All 3 retrofit scenarios will meet 2020 CO2 target

• Meeting 2050 target will be much more challenging

• Limited additional savings achieved for higher-cost retrofit scenarios

• Scenario 2 & 3 waste resources

No Eco support

Carbon HEART – Scenarios

Limited additional benefit from investment

Carbon HEART – Scenarios

Golden Rule Able?

Level of ECO available?

FITs level?

Carbon HEART – Example

Issue 2: Hard to Treat Measures

• Historic Scotland Technical Paper 16

• Financial modelling of traditional property types

– Detached cottage– Tenement flat

• Identified qualifying measures

• Tested variables to assess impact on eligibility

Hard to Treat Properties

• Detached cottage– 600mm sandstone walls– Solid & timber floors– Single glazing– No loft insulation– Coal & electric heating

• Tenement flat– Mid-floor– 600mm sandstone walls– Single glazing (extensive)– ‘G’ rated gas boiler

Variables

• Energy rating software

• Interest rates

• Inflation (fuel costs)

• Rebound effect

• Heating patterns / behaviour

• Installation costs– (Used actual £ data provided

by Historic Scotland)

Improvement measures

• Walls (internal only)– Blown beads– Slimline ‘blanket’– Thicker (100mm) fibre board

• Windows– Double glazing x 2– Secondary glazing x 2– Shutters– Draughtproofing

• Floors– Timber floor hemp board– Solid floor board

Improvement measures

• Roofs– Sheep wool

• Doors– New insulated front door– Insulate existing door

• Heating– Gas boiler & full controls– Electric storage heaters– Biomass boiler– HWC & pipe insulation– HWC thermostat

• (Also packaged measures)

Results – detached house

Solid floor insulation

Wall insulation (Blown beads)

Secondary glazing

HWC insulation

Loft insulation

Timber floor insulation

Wall insulation (blanket)

Double glazing

Door upgrade

Draught proofing

New door

Biomass boiler

Not recognised by RdSAP

Eligible?

Eligible?

Eligible AW only

Eligible AW only

Results – tenement flat

Wall insulation (blown beads)

Secondary glazing

Gas boiler

HWC insulation

HWC thermostat

Wall insulation (blanket)

Wall insulation (fibre board)

Double glazing

Secondary glazing

Draught proofing

Slim double glazing

Shutters Door Door

Electric heating

Not recognised by RdSAP

Eligible?

Issue 3: Software Limitations

• Theoretical average

• High assumed heating use + poor assumed U-values = over-estimated savings

• Only as good as the assessor collecting and entering the data

• Time and cost penalty for going beyond default values

• Performance factor catered for– ‘In-use’ factors– Will reduce available finance– Will exclude some measures– Will be updated over time &

account for in situ results

“The in-use factor is not intended to protect against occupants changing their behaviour, for example, comfort taking to achieve a warmer home. We recognise that such comfort taking can be a major reason for the apparent underperformance.” DECC

In use factors

• Green Deal Loan (7.5% over 20 years)• Savings (1% interest) or Mortgage (4.25% -

20 years) (Public Sector 2.86%)

• Energy Company Obligation ECO – Rate of deployment and timing– Development of the carbon market / brokerage– Energy company priorities (PR)– Ofgem and government tinkering

Issue 4: Funding for measures

Changes to loan details

Effect on ECO

Green Deal Loan Analysis

The Market Place for ECO

£ CO2

• Ideal ECO scenario

– Avoid expensive hard to treat properties

– Find tenants that qualify for affordable warmth stream

– Similar properties / economies of scale (social housing)

– Basic measures in poor (low SIMD) areas

• Maximise £-per-tonne-CO2

– Off gas properties (rural?)– Terraces with external wall

insulation

• Timing and cost of technology – penalties for early adopters (e.g. solar PV)

• Future proofing vs. short-term targets

• Full lifecycle costing / retrofit vs. replacement

• Issues beyond energy efficiency e.g. housing management or property conservation

• Wider project benefits e.g. health, energy security economic spin offs

Other Considerations

• Lots of variables

• Lots of uncertainties – Technical– Human – Financial

Fingers crossed!

How the Green Deal is going to work is still a puzzle

Inspiring change for peopleand the environment

Thank you for listening

shay@changeworks.org.uk