NEUTRAL IS POSITIVE – CARBON NEUTRAL, BACK ON THE AGENDA By Darren Evans, Managing Director, Darren Evans Assessments

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Earlier this year the government scrapped its zero carbon homes plan – again. Were the plans too ambitious or were they just simply not required or valued by the industry? Many believe it was the wrong decision. But the question remains, are zero carbon or carbon neutral buildings financially achievable in the current climate and does the desire still exist to strive to create them?

In May of this year the government overruled the House of Lords and scrapped the zero-carbon homes policy – a policy it had scrapped in July 2015. The House of Lords had attempted to reinstate the standard for all new homes through an amendment to the Housing and Planning Bill but the proposals were thrown out. Instead, the government committed to a review of energy standards in current Building Regulations. To many, including the UK Green Building Council (UKGBC), this is seen as a very ‘weak clause’.

The abandoned zero-carbon rules, which were due to come into force this year, would have required new housing developments to generate energy through renewable sources such as solar panels or ground-source heat pumps. So why the u-turn and where does that leave our drive for lower energy homes?

One reason given for the scrapping of the regulations was to boost housebuilding. This seems a contraction given the fact that in July, two months after scrapping zero carbon homes, Housing minister, Gavin Barwell, said that the Government remains committed to building 1 million new homes.

So whilst we are getting mixed messages from Government and a lack of legislation to drive the carbon neutral agenda, how does the market view our position? Is there a place for zero carbon homes?

Sustainability is now considered a norm. However all too often motives for sustainability, especially in the commercial sector, are short term and driven by motives such as quick financial gain. For example, carbon reduction with the driving force being reducing immediate energy costs rather than long term resource efficiency. In the housing sector, whilst there is no doubt that housebuilders are ‘making hay whilst the sun shines’, there are more discerning clients, especially housing associations, looking at the future and realising that the great gains are made by playing the long game.

You only have to look at the growth of BREEAM the internationally recognised measure of sustainability for buildings and communities. More than 530,000 certificates have been issued under BREEAM on more than 24,000 projects in over 70 countries and over 2.2 million buildings and communities are registered for certification. This has to be the largest, global, indicator that developers, tenants and clients see the value in sustainability.

Whilst achieving zero carbon isn’t easy and it can come at a cost, many are now understanding the long term gains. It is estimated that a mixed-use development built to BREEAM Outstanding will add around 4.8% to the overall capital costs. However the payback in terms of lower running costs can be less than 10 years. Long game? 10 years isn’t that long!

The growth in the application of passive techniques in the UK and the reduction in cost of renewables are now making zero carbon a commercial viability. Yes there is still work to do to educate homeowners what living in a zero carbon homes means and the lifestyle changes required. However at a time when consumers are looking at how they can save themselves money, present someone with an opportunity for low or even zero utilities bills and they will bite your arm off.

I am pleased to see more clients looking forwards and talking about how they can achieve carbon neutral developments. We need to make sure that zero carbon is seen as a long term positive and like sustainability, becomes a norm rather than a aspiration.

UPDATED: ZERO CARBON HOMES – CHANGES TO THE LONDON PLAN REQUIREMENTS by Graham Suttill, Sustainable Buildings Assessor, Darren Evans Assessments

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What is the London Plan?

The London Plan is the statutory spatial development strategy outlining six core objectives for the Greater London area. First published in 2004, the Plan has been amended and added to. Most relevant to the construction industry is Chapter 5, London’s response to Climate Change, which includes requirements for sustainable development within the Greater London area

What’s happening to it?

As of October 1 2016, the London Plan requirements for energy statements are changing, with a significant revision to section 5.2 “minimising carbon dioxide emissions”. The adjustment to the policy requires all major developments will be required to be ‘zero carbon’ however if this cannot be achieved then a cash in lieu contribution will be sought. In addition to the ‘zero carbon’ targets, further emphasis is to be placed on district heating networks and a new requirement to follow the cooling hierarchy, which includes an in depth overheating risk analysis, will be introduced. This blog will focus on the ‘zero carbon’ element of the GLA guidance1 on preparing energy statements.

How will this affect developers?

All major developments within the Greater London Authority (GLA) currently have to submit an energy strategy to comply with policies 5.2 to 5.9 of the London Plan. These policies cover a range of topics including but not exclusive to: sustainable design and construction, decentralised energy networks and renewable energy.

The area most developers are aware of is Policy 5.2 Minimising Carbon Dioxide Emissions, which involves following the energy hierarchy: Be Lean, Be Clean and Be Green. The Be Lean stage requires major developments to meet or exceed Part L of the building regulations through energy demand reduction methods alone. Be Clean requires the viability of district heating and combined heat and power (CHP) systems to be assessed.

The final stage, Be Green, requires a feasibility study for renewable or low/zero carbon technologies to be undertaken with a commitment to reduce CO2 emissions through onsite generation. The current level of this commitment is to demonstrate a minimum 35% improvement over Part L of the 2013 Building Regulations.

Although the Government announced in July 2015 that it does not intend to pursue the zero carbon homes target at present, it remains in place within the London Plan and will be applied to all major residential developments received on or after October 1 2016. The “zero carbon” target requires the new developments to follow the energy hierarchy as outlined above (still meeting the 35% reduction in CO2 at the Be Green stage) but with the remaining emissions to be off-set through a cash in lieu contribution to the relevant borough.

These funds will then be ring-fenced to secure carbon dioxide savings elsewhere. The cash in lieu payment is to be £60 per tonne of carbon dioxide for a period of 30 years based upon The Mayor’s Housing Standard’s Viability Assessment, although this figure can be decided at a borough level.

What will the developers make of this?

First and foremost it is likely to come as a surprise to a majority of developers as there has been very little so far in the way of announcing the ‘zero carbon’ targets. The target was included in the updated guidance on preparing energy assessments (March 2016) and has stayed largely unreported.

With developers unaware problems could be caused with planning applications being rejected for not including a strategy on how the target will be met or a calculation demonstrating the cash in lieu contribution. Although the target will lead to increased costs it is unlikely this will lead to development stalling as was one of the major concerns with the governments zero carbon homes target which were scrapped earlier in the year.

This is partly being attributable to the buoyancy of the London property market which isn’t seen elsewhere.

Can you give a cash in lieu example?

A carbon offset payment has been calculated for a previously completed project which comprised of 14 residential flats with a combined floor area of 993.50 m2. The flats were designed to exceed Part L requirements using individual gas boilers for heating and hot water. Then a 15 kWp solar PV system was installed to achieve a 42% improvement over the Building Regulations standard.

After the PV at the Be Green stage, the site wide emissions stood at 10.664 tonnes CO2/year. Assuming the offset price of £60 per tonne, this works out at £640 per year and multiplying the figure to cover the 30 years gives a total of £19,200 to be paid to the Carbon Offset Fund.

What do you make of the changes?

It is pleasing to see the Greater London Authority adhering to previous commitments on carbon dioxide reduction, with viability assessments indicating the “zero carbon” targets will not compromise future housing development. The target is seen as essential to ensure London is ready for the Energy Performance of Buildings Directive introduction of zero energy buildings by 2020.

ZERO CARBON HOMES – CHANGES TO THE LONDON PLAN REQUIREMENTS Graham Suttill, Sustainable Buildings Assessor, Darren Evans Assessments

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As of October 1 2016, the London Plan requirements for energy statements are changing. All major developments will be required to be ‘zero carbon’ however if this cannot be achieved then a cash in lieu contribution will be sought. In addition to the ‘zero carbon’ targets, further emphasis is to be placed on district heating networks and a new requirement to follow the cooling hierarchy, which includes an in depth overheating risk analysis, will be introduced. This blog will focus on the ‘zero carbon’ element of the GLA guidance on preparing energy statements.

All major developments within the Greater London Authority (GLA) currently have to submit an energy strategy to comply with policies 5.2 to 5.9 of the London Plan. These policies cover a range of topics including but not exclusive to: sustainable design and construction, decentralised energy networks and renewable energy.

The area most developers are aware of is Policy 5.2 Minimising Carbon Dioxide Emissions, which involves following the energy hierarchy: Be Lean, Be Clean and Be Green. The Be Lean stage requires major developments to meet or exceed Part L of the building regulations through energy demand reduction methods alone. Be Clean requires the viability of district heating and combined heat and power (CHP) systems to be assessed.

The final stage, Be Green, requires a feasibility study for renewable or low/zero carbon technologies to be undertaken with a commitment to reduce CO2 emissions through onsite generation. The current level of this commitment is to demonstrate a minimum 35% improvement over Part L of the 2013 Building Regulations.

Although the Government announced in July 2015 that it does not intend to pursue the zero carbon homes target at present, it remains in place within the London Plan and will be applied to all major residential developments received on or after October 1 2016. The “zero carbon” target requires the new developments to follow the energy hierarchy as outlined above (still meeting the 35% reduction in CO2 at the Be Green stage) but with the remaining emissions to be off-set through a cash in lieu contribution to the relevant borough.

These funds will then be ring-fenced to secure carbon dioxide savings elsewhere. The cash in lieu payment is to be £60 per tonne of carbon dioxide for a period of 30 years based upon The Mayor’s Housing Standard’s Viability Assessment, although this figure can be decided at a borough level.

As an example, a carbon offset payment has been calculated for a previously completed project which comprised of 14 residential flats with a combined floor area of 993.50 m2. The flats were designed to exceed Part L requirements using individual gas boilers for heating and hot water. Then a 15 kWp solar PV system was installed to achieve a 42% improvement over the Building Regulations standard.

After the PV at the Be Green stage, the site wide emissions stood at 10.664 tonnes CO2/year. Assuming the offset price of £60 per tonne, this works out at £640 per year and multiplying the figure to cover the 30 years gives a total of £19,200 to be paid to the Carbon Offset Fund

It is pleasing to see the Greater London Authority adhering to previous commitments on carbon dioxide reduction, with viability assessments indicating the “zero carbon” targets will not compromise future housing development. The target is seen as essential to ensure London is ready for the Energy Performance of Buildings Directive introduction of zero energy buildings by 2020.

ZERO CARBON HOMES – BACK AGAIN OR JUST BACK ON THE AGENDA? Graham Suttill, Sustainable Buildings Assessor, Darren Evans Assessments

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Yesterday during the Lords Report Stage of the Housing and Planning Bill, the House of Lords defeated the Government on the zero carbon homes amendment. The defeat – by 48 votes – could see the reintroduction of Zero Carbon Homes, the on-site carbon compliance standard, the Government, rather surprisingly, scrapped last July.

So all good news? Well yes and no. Whilst it is a clear sign that there is still much belief in the Zero Carbon Homes standard, the Bill will now go back to the Commons and could enter months of prolonged to-ing and fro-ing where both Houses of Parliament seek to pass their respective versions of the Bill. But the outcome could see Government ensure all new homes in England built from 1 April 2018 achieve the carbon compliance standard.

It’s fair to say, the scrapping of the policy was met with very little – if any – support.  In the eyes of many it was culled post-election so that housebuilders had one less hurdle to jump through and in doing so would help to kick start housebuilding. However this is a very naive and short term view. Killing Zero Carbon Homes simply reinforced the view that the Government has very little understand of green policies and any idea in terms of a long term strategy to create more sustainable housing.

On the back of last week’s support to the COP21 Paris, which saw over 170 countries sign the agreement, the support for Zero Carbon Homes is understandable. But if Zero Carbon Homes is going to rise phoenix like from the ashes, the question is, is it back for good or just back on the agenda?

The hope is that it is back for good. The industry has not lost faith in it and there is still momentum and desire for zero carbon homes. For example, there is still innovation in products and technology that are striving to make zero carbon homes more easily achievable, regardless of whether it is mandatory or not.

It is welcome news but this is a long way to go. However it does demonstrate there is still Parliamentary support for zero carbon homes and its reinstatement will be met with open arms from across the industry.