Inspiring change for people and the environment Green Deal for Real: Key Considerations for projects Stuart Hay Senior Consultant
Mar 31, 2015
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