Article - Issue 31, June 2007

Decarbonising Buildings

Roger Hitchin

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In March 2007, the British government set legally binding targets for carbon emissions reduction. They directed that by 2050, UK total emissions should be reduced by 60% from 1990 levels – from three tonnes of carbon per person per year, to around one tonne. Roger Hitchin from the Building Research Establishment (BRE) defines the scale of the task and the challenges involved in making this happen.

Kingspan’s ‘Lighthouse’ is a two storey plus upper mezzanine, 2-bedroom home, which is aiming to achieve the maximum Level 6 rating under the new Code for Sustainable Homes. It is one of seven houses and several school buildings that have been built at BRE Watford and can be seen at OFFSITE2007 from 11-14 June 2007. See www.offsite2007.com

Kingspan’s ‘Lighthouse’ is a two storey plus upper mezzanine, 2-bedroom home, which is aiming to achieve the maximum Level 6 rating under the new Code for Sustainable Homes. It is one of seven houses and several school buildings that have been built at BRE Watford and can be seen at OFFSITE2007 from 11-14 June 2007. See www.offsite2007.com

The Stewart Milne building is four storeys high, comprising a pair of semi-detached homes, fitted with three wind turbines and a large photovoltaic array, along with evacuated tube solar water heating systems. It has been designed to demonstrate compliance with levels 5 and 6 Code for Sustainable Homes. It is viewable at BRE Watford, see www.bre.co.uk/newsdetails.jsp?id=441

Defining the problem

In the UK, as in most developed economies, about 40% of all emissions of greenhouse gases are associated with energy use in buildings. Typically, about 80% of emissions arise from the use of a building and 20% from its construction and demolition.

Commercial buildings, per unit of floor area, have relatively high emissions, but the greater total floor area of dwellings means that, overall, housing generates more emissions. In the UK about 60% of emissions are from housing – largely for heating – while the remainder come from other buildings.

If the UK is to hit the Government’s 60% reduction target, tackling building-related emissions is paramount. This implies some combination of reducing demand, more efficient delivery and conversion of energy, and lower-carbon energy supply.

Newbuild requirements

New buildings must meet minimum energy performance standards to comply with building regulations. These have become progressively tighter over the past thirty years. The energy consumed each year by a house built to today’s standards is around one-third that of an equivalent house in 1965. Since 2006, the regulations have been expressed in terms of calculated annual carbon dioxide emissions.

Building regulations exist to impose minimum acceptable standards, mainly in the areas of health and safety. Minimum energy performance levels are set by government to reflect a balance between benefits and costs. This balance includes the effect of carbon emissions on society through a ‘social cost of carbon’. Better performance than these minima can be good value for individual buildings, but improvement is voluntary and rarely adds market value.

This may change soon, as every new building will require an “Energy Performance Certificate” (an energy label), with many dwellings covered from June 2007 and other newbuilds from 2008.

Levels of sustainability

In late 2006, the Department for Communities and Local Government (CLG) launched a Code for Sustainable Homes that assigns sustainability points based on several criteria, one of which is carbon emissions. Several of the six code levels are proposed performance levels for future Building Regulations (see Figure 2).

The two most demanding levels represent different definitions of “zero carbon”. Level 5 requires that, over a year, the energy used for services such as heating, lighting and hot water has zero carbon emissions; while level 6 extends this to include energy used by appliances. The 2006 pre-budget report stated “an ambition for all new homes to be zero carbon within a decade”.

“Zero carbon” in this context does not mean isolated from energy supply grids. The house must have some means of generating electricity locally to ensure annual energy exports and imports balance in carbon terms. One important consequence is that if the carbon intensity of electricity supply from the grid declines, the carbon value of local exports falls – so the building may no longer be carbon-neutral.

Financial costs

What does this mean in practice? The technical requirements to reach level 3 are fairly straightforward and impose an extra cost of around 5%. Level 4 is more demanding but is feasible; it is broadly equivalent to the voluntary “PassivHaus” standard. Passivhaus is a voluntary but rigorous standard for energy use in buildings. The first PassivHaus buildings were constructed in Germany in 1990, since when over 6000 have been built in various countries. It is supported in the UK by PassivHaus UK. Initial indications show that these houses are about 10% more expensive than those meeting local building regulations.

The zero carbon levels 5 and 6 sit at, or beyond, the edge of the UK house-building industry’s current understanding of low-energy design and construction. Very little research has been undertaken on the costs of reaching these performance levels. However, demonstration houses aiming for both level 5 and level 6 performance are being built on the BRE Innovation Park, while English Partnerships has announced a Carbon Challenge that will require level 5 on specified sites, with first completions due in 2009.

A level 5 house could be achieved with high levels of thermal insulation, good air-tightness, mechanical ventilation with heat recovery and combinations of, for example:

  • highly efficient gas heating and around 25m2 of photovoltaic cells.

  • biomass community heating and 9m2 of photovoltaic cells.

  • biomass combined heat and power (CHP) and 3m2 of photovoltaic cells.

Ensuring a southerly orientation for photovoltaic cells on all houses in a high-density development may be difficult in which case, a site-scale wind turbine serving several houses could prove viable.

Attaining zero carbon levels

Level 6 will be very tough indeed. The scope for biomass CHP will be limited by the very low heat demands. It will be difficult to find locations for large areas of photovoltaics without a major breakthrough in their efficiency. Furthermore, space for dedicated wind farms is likely to be limited. Reaching this level might require some form of carbon offsetting through, for example, the use of dedicated off-site wind farms or emissions trading. ‘Green electricity tariffs’ in their current form are unlikely to prove acceptable because they can be cancelled too easily.

The Code for Sustainable Homes deals only with housing. Less work has been done on codes for very low emission commercial buildings – though general environmental rating systems, such as the BRE Environmental Assessment Method, are widely used for these buildings. Carbon-neutral commercial buildings have been constructed overseas and the Welsh Assembly plans to impose zero carbon requirements on all buildings erected in Wales from 2016. In this type of building a greater proportion of the potential for energy-efficiency is in the design of lighting and other service systems.

Existing buildings

Most of the buildings we will be using in 2050 already exist today. Annual new construction is equivalent to 1% or 2% of the existing stock and demolitions are even fewer. So we will need to focus on existing buildings to reduce emissions significantly, even if we commit to constructing only zero-carbon new buildings.

Fortunately we know how to reduce emissions by nearly 50% using existing technology. About two-thirds of this is clearly cost-effective to users at today’s prices. Other measures are rarely or marginally cost-effective, depending on the price and benefit in specific uses.

Buyers’ perceptions

The UK is already embracing energy-saving measures, if not as rapidly as some economists might have hoped. In practice, market acceptance relies not simply on the economics of saving energy, especially when householders and not companies make the decisions. Perceived benefits and risks are also important. Cavity wall insulation is clearly more cost-effective than double glazing, but as the Figure 4 chart shows, the latter has sold better.

The chart also shows the expected penetration rate of condensing boilers, now that they are mandatory for most uses. Energy-using products like boilers have lives of 10 to 15 years, so penetration will take a decade. The lower curve projects the likely penetration if driven purely by market forces.

The addition of an invisible energy-saving measure often has no noticeable impact on the value of a building. This may change with the arrival of Energy Performance Certificates, because the seller will need to make the information clear to the buyer.

Until now, the growth of central heating has negated most of the benefits of improved thermal insulation. With central heating now reaching market saturation, additional insulation should cause energy consumption to fall. On the other hand, we are owning more and more electrical appliances and air-conditioning.

The bigger picture

By 2050,we are likely to have implemented all the measures that are currently cost-effective in existing buildings. We can expect prices to increase as fossil resources become scarcer and costlier to extract. Carbon taxation (or wider emissions trading) will probably arrive to reflect the social costs of emitting carbon. Higher prices should shift some currently uneconomic technologies into the market. They should also drive the development of new products and reduce the costs of existing ones through economies of scale and the efficiency gains of “learning by doing”.

Which course of action?

So should we focus so much on the buildings themselves? Buildings are only a link in the long energy supply chain that results in emissions. Shouldn’t we be asking ourselves whether we would get a better carbon-saving return from investments further upstream?

This would require the assessment of options across the range of ‘big engineering’ and small-scale product development. Big engineering includes centralised wind generation, nuclear power, carbon sequestration – and perhaps less familiar concepts such as concentrated solar power generation in sunny climates.

Development and performance assessment of these would require substantial investment in time and money – with inevitable risk, but the benefits may also be large in scale. Smaller-scale options (fuel cells, improved photovoltaic systems, smart glazing and light emitting diodes) may require comparable total investments for development, but these would be in smaller tranches with more straightforward risk management. However, deployment on a large scale will certainly take time, so it needs to start as soon as possible.

Making it happen

Can we leave this entirely to market forces? The costs, effectiveness and development times of new technologies are, to varying degrees, uncertain. Investing in the lowest cost option first is not always the best policy; new products can destroy existing markets. For example, the first commercial solar water heaters were sold in North America in the 1870s. Sales grew fairly steadily until the 1920s when they collapsed as natural gas became widely available. There are also interactions between technologies to consider. Low-carbon electricity would undermine the carbon value of some end-use technologies such as on-site generation and improvements to the efficiency of lighting and appliances.

So the risk exists that investment in end-use efficiency might be undermined by future upstream decarbonisation. On the other hand, there is a risk of underinvestment in efficiency measures because of such worries. For markets or governments to make informed decisions, they need to understand these mechanisms and assess the nature, likelihood and consequences of the risks. Perhaps this sounds familiar to engineering ears?

Action needed

Although 2030 or 2050 might seem a long way ahead, time is not on our side. The potentially long lead times for technical development and market deployment mean we need to understand which decisions we must take now and which to defer.

A global perspective also exists. Climate change is a universal issue. If the question is “how do we achieve the highest level of emissions reduction for a given expenditure?” we should be asking whether investment in reductions outside the UK would give a better return.

And there is a macroeconomic question: if energy savings are cost-effective, they put money in our pockets but it doesn’t stay there – so how much of it will we spend on energy-intensive activities?

Where next?

It seems obvious that we should continue to invest in measures that pay for themselves. They can be justified on straightforward economic grounds and deliver carbon savings at no extra cost. Energy-efficiency measures should ideally be evaluated over their complete life, taking due account of risks and uncertainties (though discounting future cash-flows also discounts much of the future risk).

Opinions on the cost of climate change to society range enormously, but it seems prudent for governments to find a way to reflect this in energy prices as well as including the “social cost of carbon” when gauging the value of policy measures.

For the longer term, it is likely that “more of the same” will not be enough. In both new and existing buildings, we will be forced to consider ever more expensive options. Low carbon energy supply seems certain to play a larger role, but the preferred mixture of technologies is unclear. Upstream and downstream technologies both have development and deployment times measured in decades. In the meantime, climate change marches on.

Questions to consider

This area seems to call for some strategic assessment. Which of the competing claims for cost, effect and implementation time are robust? How large are the uncertainties? What can we do to reduce them? What are the interactions between technologies?

Once we have a clearer idea of answers to these questions, governments and investors can start to think sensibly about ‘road maps’ and strategic options. Obviously this issue has no clear optimal solution, but several possible paths are apparent. We will need enough flexibility to cope with the ‘known unknowns’ described above and the ‘unknown unknowns’, the inevitable surprises when peering 20 to 40 years into the future. The preferred routes will differ from one country to another, depending on their energy and environmental policy priorities.

The problem has many dimensions: economic, technical, public acceptability. In many ways it resembles a major engineering project. While the issues are not simply technical, workable solutions can only be built from a skeleton of sound engineering knowledge, in this case drawn from a wide range of different disciplines. Inevitably, decarbonising buildings is far more than just a matter of building design.

Policy options

Policy instruments can be divided into classes according to the economic status of the measures they are trying to influence (and whether this is known). In Figure 6,“costeffective to society” includes the external costs and benefits that are not reflected in the market price. The examples in the table mainly reflect building-related activities, but the principles apply generally. Sometimes a product or technology can straddle classes if it is cost-effective in some circumstances but not in others. Equally, some policy tools such as reduced VAT rates influence more than one area.

Further reference

www.bre.co.uk and www.brebookshop.com

BIOGRAPHY – Roger Hitchin

Roger is Technical Director at the Building Research Establishment, specialising in energy and environmental issues. He previously worked in the natural gas industry, mostly on research and development into energy use in buildings, but with excursions into international market assessment and strategic planning. Prior to that he was a building services design consultant and a university researcher into solar heating.

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