A little bit of politics

While Labour's first term certainly contained more consultation than action, the tone and direction of energy issues in the building sector has moved towards sustainability. A range of targets have now been introduced, new Building Regulations finally agreed, and emissions trading has entered the frame. BSJ talks to David Green, director of the Combined Heat and Power Association; Max Fordham, President of CIBSE and head of Max Fordham Associates; Halsey Cook, managing director of Toshiba Carrier UK; Andrew Warren, director of the Association for the Conservation of Energy and David Walker, senior partner at Hoare Lee for their reactions and proposals. Many of those in the building services industry have noted the relentless flow of consultation papers during Labour's first term. The Utilities Act – has been passed, while a draft EU directive on building efficiency, and a draft Building Regulations upgrade have been proposed. The Utilities Act substantially increased spending on energy efficiency in the domestic sector to more than £100 million per year.

David Walker feels that: "Consultation has been excessive. Initiatives often lack substance and contain a great deal of froth. I would say that the public and building services community are getting a little impatient now for some real action". Max Fordham, President of CIBSE, feels that Labour: "Has made a useful start and put in place a lot of the infrastructure to do the job, but there has been no real implementation yet". David Green, a member of the Government's Energy Policy Advisory Panel, has detected what seems like: "One step forward and one backwards on sustainable energy policy during the first term, with measures such as the Climate Change Levy exemption for renewables and combined heat and power (chp), plus capital allowances for energy efficiency equipment, being undermined by the negative impacts of New Electricity Trading Arrangements (NETA)".

The official Government energy policy goal is, according to Labour's Energy Minister, Peter Hain: "A secure, diverse and sustainable supply of energy at competitive prices." Hain asserts that Labour has "brought full competition to the gas and electricity markets." The reality is that since the advent of NETA and distortions in the gas trading market, gas prices have increased dramatically, electricity prices have fallen, while NETA is currently hammering the chp and future renewable energy markets.

Green is blunt: "NETA unfavourably discriminates against chp and renewables, which are often more intermittent than a standard gas plant, though both are much greener with lower emissions". Peter Hain is aware of the problem and has made a "commitment to an early review of the impacts of NETA on small chp and renewable generators". Without such action, Green feels that the Government has: "No chance of meeting its target to double chp capacity in the UK".

  A big challenge right now is how the UK should react to US President George Bush effectively turning his back on the Kyoto Protocol. Max Fordham suggests that: "With the USA delays on real action to save the climate system are inevitable, and the UK and EU have to push on now and ratify. They must take the lead if we are to keep the momentum going".

Labour has noted that: "The Royal Commission on Environmental Pollution (RCEP) has said the UK will need to cut CO₂ production by 60% by 2050, so we should press ahead with a radical agenda for the development of low carbon economic growth embodied in our £700 million commitment to renewable energy." David Walker states that: "We are nowhere near to making sustained carbon reductions in order to meet the RCEP targets".

Halsey Cook, managing director of Toshiba Carrier UK says that while air conditioning does add to the carbon burden, the main problem is with power generation.

I would like to have seen more punch in the Enhanced Capital Allowances scheme

Halsey Cook, managing director of Toshiba Carrier UK

Peter Hain has noted that: "We are putting an obligation on electricity companies to deliver 10% of the UK's electricity from renewable sources by 2010, with a doubling of chp." The reality is that no one BSJ spoke to believes the UK is on target to meet ether the chp or renewables targets.

On renewables, the Government has said that "We will consider setting further targets for renewables, with particular focus on offshore wind, solar and biomass technologies, supported by a £100 million fund." Labour has also put around £13 million on the table so far for subsidising solar photovoltaic systems. This would allow around 2000 pv roof systems for the domestic sector, a long way from the German 100 000 roofs scheme and Japan's 70 000 roofs programme.

David Green is sceptical again that renewable energy targets can be met. With only 2·8% of renewables on the system: "The interim target of 5% by 2003 is unlikely to be met, due to planning delays, NETA uncertainties and delays in getting the new Renewables Obligation Certificate (ROC) scheme up and running".

On energy efficiency, Peter Hain argues that: "We will back-up the Climate Change Levy, which includes agreements to improve efficiency in energy-intensive sectors, and the new Carbon Trust, which will recycle £100 million to accelerate the take-up of cost-effective, low-carbon technologies."

But some believe that the Enhanced Capital Allowances, designed to encourage use of energy efficient products with tax incentives, could have been used more effectively. "I would like to have seen more punch in that policy," says Halsey Cook.

The reality, according to David Walker, is that: "The Climate Levy has barely kept prices up compared to the fall in electricity prices." There is also doubt over the impact of the industrial sector's Negotiated Agreements (NA's) on energy efficiency. These were the Government's price for allowing 80% Climate Levy exemptions for industry. David Walker thinks: "The agreements are not much better than a 'business-as-usual' situation".

The Government has of course consulted widely on new Building Regulations. The Minister responsible for these, Nick Raynsford, has generally done a decent job overall, though Andrew Warren, Director of the Association for the Conservation of Energy (ACE), feels that: "In line with other industry sponsoring departments anxious to prove they are business friendly, sided with the construction industry on several major issues".

With the USA, delays on real action to save the climate system are inevitable

Max Fordham, President of CIBSE and head of Max Fordham Associates

Warren believes that: "We are long overdue for a departmental reorganisation that reflects the need to put the energy demand-side into energy policy".

One of the big questions around energy efficiency in buildings is what to do with older buildings. Max Fordham told BSJ: "To achieve 75% reduction in carbon emissions in UK buildings would require around £20 000 per house, a huge amount with low returns under current energy prices".

He feels that there needs to be an initiative to incentivise higher efficiency upgrade whenever buildings are refurbished. Walker believes that "the key need for the rehabilitation of buildings is to link lowered vat levels to substantial energy efficiency upgrades".

Cook adds: "The biggest driver is efficiency. Engineers need to be encouraged to design more efficiently. This would help cut long-term costs and emissions."

Less polemic and more action sums up the feeling from our cross section of building services.

On energy efficiency overall, Andrew Warren believes that "While the infrastructure for energy efficiency has now been put in place over the past four years, the targets need to be seriously tightened to make them work".

Given the scale of the climate challenge, Max Fordham believes they "Need to do more radical things now in order to meet the tougher carbon targets later".