Agenda item

(1)  Philip Jackson is a Director of two companies. The first of these is Daedalus Environmental Ltd which is a Kent based environmental consultancy firm specialising in, amongst other things, the sustainable design of new build domestic and commercial buildings.  It involves advising both small scale and major developers, including, for example, Barratt Homes, Persimmon Homes and Balfour Beatty, on achieving high standards of sustainable design, and in particular in relation to the use, management and supply of energy.

(2)       The second is Energy and Enterprise and Education (E3) Ltd, a non-profit company which supports local authorities and the public sector (including housing associations) to deliver energy focused community regeneration projects in existing communities. 

(3)       Philip Jackson is also retained by KCC and the Kent and Medway Sustainable Energy Partnership which aims to procure a Framework of Service Providers who are able to provide expert advice and support in relation to energy focused schemes delivered across Kent and Medway.

(4)       Mr Jackson stated that gradual improvements to the standard of new build developments were driven by a combination of regular tightening of the Building Regulations and by planning legislation. These formed the basis of ensuring – as far as possible – that, in principle, new development became more thermally efficient than the existing stock.   Improvements to the Building Regulations were published every three years approximately. These were, however, becoming incrementally smaller. Developers had the ability and had always been able to comply with improved Regulations.

(5)       Mr Jackson stated that the issue of security of energy supply was two sided. It was about both the supply of energy (from a range of sources) but also the level of energy demand.  As such there would be a far lower risk in relation to security of supply if the energy was not needed in the first place. As such, the cheapest form of energy was that which was no longer needed. The focus for addressing energy security therefore should be equally on reducing demand for it in the first place, which was more cost effective than dealing with supply. Given that the existing building stock made up far more of the energy demand than new development each year, the first priority should therefore be to focus on improving the existing building stock.

(6)       Only 1% of the UK’s properties were replaced each year.  This meant that the impact of dealing with new build was minimal in comparison. 

(7)       When asked about retrofitting Sessions House, Mr Jackson outlined a number of issues that would need to be addressed that were typical of buildings of this type, for example the listed status, the complicated existing infrastructure, and the need to examine “low hanging fruit” such as lighting. He stated that buildings of this age presented a number of headaches that meant they were often less fit for purpose than was ideal. Solutions should also focus on building management and behavioural change of those who used it.

(8)       Mr Jackson went on to discuss the Warmer Streets Project, which E3 was delivering in Dartford, Sevenoaks and Dover, which was currently Kent’s largest energy retrofit project focusing on hard-to-treat housing. Theprimary technology used within this scheme – external wall insulation – was well established both in the UK and across the rest of northern Europe.  Crucially, however, the Project also delivered a range of other measures – loft insulation, heating system replacements, cavity wall insulation, and others – which acted to reduce energy demand and reduce reliance and pressure on the gas Grid, thus aiding in ameliorating the security of supply issue.

(9)       Funding for energy retrofit had been available in some form or other for the last 15 years or so, but had been disjointed, short term, confusing and inconsistent, often driven by the political cycle. Currently, we were in the Energy Company Obligation round 2, which ended in March 2017. This obligation required energy suppliers such as British Gas, E-On et al to fund energy efficiency measures to reduce carbon emissions in the domestic sector only. Inevitably, when the control of the funding rested with the utilities, the market for measures was driven to the lowest common funding denominator – i.e. the lowest cost they could “get away with” to achieve the carbon target. This neither addressed those properties most in need, nor the significant proportion of difficult-to-treat households using the most energy per capita.  

(10)    The original intention had been to spend c £1.3 billion on an annual basis nationally through the ECO (Energy Company Obligation).   During the first round, targets and rules were relaxed, meaning that the level of funding fell considerably. Mr Jackson did not have the exact figure but thought that it dropped by over 40% in practice. As a result of this long term inconsistency, from the point of view of the market and residents it was very difficult to present a consistent offer, and it inhibited the ability of the installation sector to invest in a UK labour force - because the industry had no confidence to do so.

(11)     A question was raised as to installation standards and whether these had improved. Mr Jackson stated that as a result of the introduction of ECO, and the now defunct Green Deal, the required installation standards were far higher and targets could no longer be met using “insulation rolls sold through B&Q”, as was previously possible.  The PAS2030 standard – for both installation and equipment – now applied. This was not to say that this had eradicated variations in quality of installation. It had not, but building owners could now have more confidence than previously.

(12)     Smart metering did have a role to play in energy conservation, and with half hourly billing and associated variations in tariff, many people could be better off. For example, it could be beneficial for the elderly who potentially used energy during off peak periods during the day and could pay less as a result. Ensuring that smart meters could help reduce energy demand should be a key priority moving forwards. 

(13)     Mr Jackson was also involved in a range of District Heating projects in London and the south east (a system for distributing heat generated in a centralized location for residential and commercial heating requirements).  The viability of this system varied considerably depending on the location and type of development it was due to serve. District heating was most effective in high density, new build development, with a range of different uses connected to it. It was, however, extremely difficult to retrofit existing buildings where costs and technical complications abounded. 

(14)     As above, Mr Jackson disagreed that energy security could not be primarily about demand reduction. It was a fundamental fact that if you wished to ensure energy security then you had to reduce the demand for it. Any solution could not just focus on the supply side. The new nuclear power station in Somerset was estimated to cost £23 billion.  A fraction of this sum ( if spent on energy demand reduction instead) would enable demand to be reduced by a greater amount than the new power plant would be expected to generate.  It would also create a far greater number of jobs and economic benefit without recourse to underwriting Chinese investment or guaranteeing an energy price for 35 years ultimately to the benefit of the French government (which was a majority owner of EDF, the company planning to build the station). In contrast, Germany would have decommissioned all its nuclear power by 2022 in favour of energy efficiency and renewables. Moreover, 70% of traditionally generated energy at large scale power stations was lost through the generation and transmission process before it was used by consumers.  A fundamental rethink of the UK approach to this issue was therefore needed.  

(15)       There were many ways of reducing impact on the Grid through the use of renewables.  The cost of solar energy had been significantly reduced as a result of the development of the technology, the scale of economies in the supply chain and the increased demand for panels, driven by the Feed in Tariff.  

(16)     The Kent and Medway Sustainable Energy Partnership was doing all it could in promoting energy efficiency within the county in an environment where funding was limited. There was a potentially huge role for Local Authorities and Housing Associations to play in the future. Funding for ECO should be delivered through Local Government, where it could be better targeted, more consistently delivered, and support wider added value activity. The Partnership was therefore ideally placed. Involving local authorities was critical in creating trust in schemes and ensuring proper oversight and quality of work.

(17)     New and innovative financial mechanisms were needed iIn addition to ECO type funding. Mr Jackson spoke about the opportunities to link energy efficiency with healthcare, for example. The costs of a hospital admission (potentially resulting from poor quality and cold housing) was over £2,000, and the nightly cost was around £1,000. By contrast, just £7000 to £10.000 could make a hard-to-treat home warmer and healthier; a figure which would be much less for easy-to-treat properties. Such investment would therefore avoid both the medical and social costs associated with cold homes.   Arguably, therefore, joint investment by the NHS/Department of Health would make common sense, and a financial solution facilitated. 

(18)     Nottinghamshire County Council was becoming an energy supplier to its residents, functioning as a not for profit scheme. Local Authorities in Kent might also wish to consider undertaking the same function in order to make the supply cheaper, whilst generating wider social and economic benefits and creating income streams for the community. 

(19)     It was vital to involve people in energy efficiency projects. Active engagement with communities was essential if projects were to be successful.  Support from Local Authorities in doing so, creating the trust required, was necessary.

(20)     There were other key opportunities for the future, to further mitigate the security of energy supply issue. These were related to energy storage.   If you could store the energy that was derived from solar panels, rather than exporting it to the Grid, the business case for installing the panels became far more attractive because building owners would benefit from a higher cost saving. There were currently EU restrictions on the importation of Chinese PV panels, the removal of which would further reduce costs - although clearly there would be an impact on EU manufacturers. At the same time, battery storage had significantly reduced in cost and the technology greatly improved. Mr Jackson also encouraged the Panel Members to consider more innovative opportunities arising in the county to generate economic, social and environmental benefits – for example, could the newly decommissioned Littlebrook Power Station adjacent to Dartford Bridge be employed in this sector as a centre for battery storage and technology, linked to the on and offshore wind industry? .

(21)     Mr Jackson concluded his presentation by saying that KCC should make the case to secure delivery of energy efficiency projects – and associated (obligation) funding locally, because of the far greater benefits that would arise, whilst addressing energy security in a very proactive way.