AUE Conference 2008 The Future of Energy Legislation 12 th September 2008

1. AUE Conference 2008The Future of Energy Legislation12th September 2008 David Bleicher

2. What I’m going to talk about… I can’t talk about every bit of energy legislation, so I will focus on: • Part L of the Building Regulations • Energy Performance of Buildings Directive (and a couple of other European Directives) • Carbon Reduction Commitment • Carbon Rationing / Carbon Taxation • Market Forces

3. History of Building Regulations “Should a man construct a building which falls down and kills another then this man should be slain.” King Herod (73-4 BCE)

4. Energy Efficiency in Building Regulations Thermal Insulation (Industrial Buildings) Act 1957: • Roof U-value 0.3BTU/h.ft2°F (1.7W/m2K) • No requirements for walls • No requirements of other types of buildings Air pollution Energy Crisis Peak Oil Condensation Climate Change 1950’s 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s

5. Energy Efficiency in Building Regulations Building Regulations Part F 1981: • Roof U-value 0.35W/m2K (dwellings only) Building Regulations Part L 2002: • Sloped roof U-value 0.20W/m2K (all buildings) • Other elemental standards including boiler efficiency

6. Step Changes Time Technology Maximum U-value

8. The link between atmospheric CO2 and global temperature

10. Building Regulations Part L 2006 • Revised in response to EU EPBD + UK EWP • Compliance is now “holistic” – it is based on CO2 emissions from building services • CO2 targets 20-28% lower than a 2002 building • “Worst allowable standards” still apply to U-values, boiler efficiency etc. but you generally need to improve on these to meet the CO2 targets

11. Building Regulations Part L 2006 • As-built performance (in the form of the airtightness test result) has an impact on meeting the CO2 target

12. Building Regulations Part L 2010 Possible changes: • Step change in CO2 targets – perhaps –25% • Similar step changes in “worst allowable standards” – lower U-values, air leakage etc. • Standards for escape lighting, vertical transport and door curtains etc. • Extension of airtightness testing to cover more dwellings on a site

13. Thermography in Part L 2010?

14. European Directives • Energy Performance of Buildings Directive (EPBD) • Energy End-Use Efficiency and Energy Services Directive (ESD) • Ecodesign Requirements for Energy-using Products Directive (EuP) • Each EU country must implement these directives in its own way

15. Energy Performance of Buildings Directive Articles of the directive already implemented in the UK: • Energy performance calculation methodology (SAP for dwellings, SBEM/DSMs for non-dwellings) • Minimum standards for energy performance of new buildings (2006 Approved Documents L1A & L2A) • Consideration of low and zero carbon options (wording in 2006 Approved Documents) • Energy efficiency improvements when large buildings undergo major renovation (Consequential Improvements in 2006 Approved Document L2B)

16. Energy Performance of Buildings Directive Articles of the directive not fully implemented in the UK: • Energy performance certificates on construction, sale or rent of buildings (October 2008) • Display Energy Certificates for public buildings (October 2008) • Require regular inspection of air conditioning systems (January 2011)

18. EPBD II (2009?) The public consultation on recasting the EPBD closed in June 2008. The recast may include: • Removal of 1000m2 threshold for consequential improvements (might also include dwellings) • Specifications and objectives for inspections • Benchmarking of states’ energy performance requirements against one another • Step changes in CO2 targets • Leading role of the public sector • Wider definition of “public buildings”

19. Energy Efficiency Action Plan This action plan outlines how the UK intends to implement the ESD & EuP mixed together. There is a large number of measures including: • Adopting minimum energy performance requirements for products • Smart metering • New rules for public sector procurement Download from http://www.defra.gov.uk/environment/climatechange/uk/energy/pdf/action-plan-2007.pdf

20. What about Existing Buildings? • New buildings are a quick win – it’s easier to legislate and savings per building are potentially higher • But only about 1% of the building stock is replaced in any given year • Some of the EPBD measures apply to existing buildings, but these incentivise energy saving rather than mandating it • We are unlikely to see legislation mandating improvements to buildings that aren’t being refurbished anyway • Plus, bigger savings may be possible through energy management – even more difficult to legislate

21. Carbon Reduction Commitment (CRC) • A proposed mandatory cap-and-trade scheme • Introductory phase starts April 2010 • Cap-and-trade won’t start until April 2013 • It will apply to organisations with half-hourly metered electricity consumption >6,000MWh/y • Won’t apply to organisations already in the EU Energy Trading Scheme or Climate Change Agreements • Each participant will have an allowance, which can be auctioned • Would apply to use of fossil fuels and electricity (but not transport fuels)

22. The More Distant Future Personal Carbon Capping-and-Trading / Carbon Taxation • The principle is that people need financial incentives to reduce their carbon footprint • The tax (or price of credits) could be set to reflect the social costs of carbon emissions • Both could apply to other climate-changing activities e.g. cattle farming • Carbon embedded in goods and services could be taken into account, in addition to personal fuel use

23. Personal Carbon Capping-and-Trading • Rations would be allocated to individuals – retailers and service providers would have an incentive to reduce their carbon footprint • The ration would need to be small enough, and the price of credits high enough, to encourage reductions and meet overall targets • It is very difficult to track carbon right through the supply chain

24. Carbon Taxation • Would be paid by the polluter – costs would be passed on to the consumer • There would be no need to track carbon right through the supply chain • How would imports and exports be dealt with? • Could be offset by reductions in other taxes, or used exclusively for carbon-reducing projects • Tax would need to be high enough to encourage reductions and meet overall targets • Government would have no incentive to encourage energy efficiency

25. Fossil Fuel Depletion (Peak Oil)

26. Fossil Fuel Depletion (Peak Oil) • Fossil Fuels are becoming scarce: • Known reserves of oil will last 45 years at today’s consumption, 72 years for gas, 252 years for coal, 80 years for Uranium • It is believed that world oil production will peak soon (if it already hasn’t) • More oil fields will be developed, but only if the oil can be extracted using less energy than the oil can provide • Oil prices will continue to rise as it becomes more scarce • The UK is now a net importer of oil and gas • Remaining non-renewable resources will become concentrated in a few countries

28. Market Forces • The general trend in the price of all energy sources will be upwards • This may have a bigger impact on energy use than legislation and incentives ever could • But not necessarily big enough and soon enough to avert catastrophic climate change • Legislation and incentives are still needed – to prepare us for depletion of non-renewables, and to mitigate against the peaks and troughs in energy prices

29. Conclusion • Energy legislation will undoubtedly become more complex and more stringent • Existing buildings will remain largely untouched • Incentives and targets (especially for public sector) will play an increasing role in achieving energy savings • Eventually, carbon will be rationed or heavily taxed • As energy becomes more scarce, market forces will drive energy efficiency Thanks for listening! Feel free to contact me: david.bleicher@bsria.co.uk 01344 465 589