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Energy Efficiency (S&T Report)

My Lords, as a member of the committee, I thank the noble Baroness, Lady Perry of Southwark, for her excellent chairmanship of the committee. It was a pleasure to be chaired by a professional. I also take this opportunity to thank our support staff. As has been stated, the concerns with the problems of energy efficiency are related to the difficulties associated with carbon dioxide emissions and the potential for global warming. As the noble Baroness, Lady Sharp, indicated, the coverage of the report is extremely broad and I will concentrate on two aspects of it: the construction of new houses and the supply of heat to communities. I know that previous speakers have already touched on those points. A major programme is being mounted for the construction of housing, mainly in the south-east of the country. That gives a great impetus for the inclusion in those houses of modern developments that have occurred in house design, with particular reference to energy-saving procedures. It is important to recognise that buildings contribute 46 per cent of greenhouse emissions and thus provide an important target for reductions in emissions. The Government propose to build one million new houses by 2010, and we were concerned by some of the comments we received on the effectiveness of the present building regulations and their implementation by the building industry. The new variations in part L of the building regulations that have been introduced since the publication of our report are clearly a move in the right direction. They have the potential to improve energy standards by up to 40 per cent, but I echo the plea of the committee that the standard still falls far short of best building-energy standards in Europe. I welcome the Government’s plan to introduce a new code for sustainable housing, utilising the EcoHomes standards and rating homes on a scale of zero to five in relation to their energy efficiency and carbon emissions—the five rating essentially corresponding to a carbon-neutral situation. We were told that that building condition has been illustrated by the BRE. It is pleasing to note that the new code will also include water efficiency standards, an area that has been neglected in previous regulations and is particularly important in water conservation. That subject is under particular pressure at the moment and is of major concern, particularly in the part of the country that is being proposed for the development of new buildings in the Government’s plans. However, I have worries about the implementation of these plans as they are based on a voluntary scheme, and there seems to be little fiscal incentive to participate in it. The enforcement of the present building regulations was criticised by a number of the groups that we interviewed, as was noted by previous speakers. Although local authorities check plans for agreement with the building regulations as a prerequisite for planning permission, the checking and inspection of the final buildings for compliance is less effective. That position is further compounded by the fact that it is now possible to use approved inspectors who are not under the control of local authorities to give what is termed ““self-certification””. Professor Strong of the BRE told us that that procedure is believed to be driving down the quality of enforcement. He gave us a number of examples of non-compliance. I shall site two, although I know that one has been mentioned. In a survey conducted by the Building Research Establishment, two-thirds of domestic buildings failed to attain the 2005 standard for air permeability and, as the noble Baroness, Lady Sharp, pointed out, that regulation is three times less stringent than the German standard. In addition, houses which met government standards by including condensing boilers in their design often had them replaced by conventional boilers, thus reducing the cost and the energy efficiency very considerably. Interestingly, the position of houses that fail to comply with building regulations is not clear. We were informed,"““that there is no final sanction for buildings that fail to comply””." I do not find the Government’s comment in their response to the report on this position very consoling. They said:"““One of the findings of the Energy Efficiency Innovation Review was that while levels of non-compliance may be high, the impact on carbon savings appears to be comparatively low””." An admission that non-compliance is high seems to me to be a rather remarkable statement to be making, and I would certainly appreciate the Minister’s views on it. This also raises the position of inspectors and inspections. The inspection will place a great load on the inspectorate as a whole. It has been pointed out by BRE that at the moment no arrangements appear to have been made for the training of this cohort. There is a corresponding potential problem with the supply of trained members of the construction industry. That point is touched on in the Government’s reply, but there appears still to be a significant problem. That point was further emphasised by the noble Lord, Lord Harrison, in a Starred Question in the House last Thursday. He raised the problem of the recruitment of the skilled workers who will be required for the construction of the buildings associated with the Olympic Games in 2012. He stated that the construction industry estimates a requirement of 88,000 new entries per year, while the national skills agency for construction proposes only 20,000. There is a significant gap in those figures. In addition to the quantity of workers, there is also a quality problem. As we note in our report:"““Skills shortages are compounded by a widespread culture of sloppy workmanship and cost cutting by builders. This must change and in tandem with improved enforcement of building standards we recommend that the Government strengthens the legal rights of purchasers who acquire poorly built properties””." The Government do not discuss that point in their reply. Perhaps the Minister will comment. As pointed out by the Royal Institution of Chartered Surveyors, in addition to how we use power, we have to consider how we generate the power. Perhaps I may just consider that. It is pleasing to note that in the proposed new code for sustainable homes, credit will be given for the inclusion of micro-renewables such as wind turbines and solar panels in buildings. In our visit to Leicester City Council, we were told that it had developed a ““solar rental”” project, where residents are able to rent solar panels to provide hot water; the rental cost being offset against savings in gas and electricity. Leicester also has a well developed district heating system providing heat for 4,000 dwellings. At the moment this is gas-fired CHP plant, but there are plans to utilise a biomass generator. The position of district heating was also illustrated in the visit to Sweden and Germany where a variety of heat sources were employed, including incineration of waste. The Government’s energy policy has overlooked heat as an energy source, as pointed out by my noble friend Lord Patel, and has concentrated mainly on electricity, industrial processes and transport. In the production of energy from a power station, approximately one-third of the energy is transposed to electricity and two-thirds is dissipated as heat lost into the atmosphere. That is a remarkable statistic. In addition to the potential utilisation of this form of heat loss, there are other carbon-neutral sources such as biomass, energy from agricultural, forestry crops and waste, as well as solid waste. As pointed out by the Royal Commission on Environmental Pollution, the lack of markets for heat was one of the reasons why bio-energy has not developed in the way that it has in Europe. In the 1950-1970 period, criticism was levelled at community heating schemes that had a poor record in this country on the basis of heat loss during distribution. In the visits to Sweden and Germany we inquired about the distribution losses. We were told that they were of the order of 7 to 8 per cent. That is significantly lower, or at least comparable, to the losses in distribution of electricity via the grid system. The incinerator recently built in Sheffield is, among many things, contributing to the heating of homes, the University of Sheffield, the University of Hallam, swimming pools, hotels, public amenities such as city hall, libraries, museums and schools, as well as local hospitals. That in itself is an impressive display of what can happen if we plan on a reasonably large scale. In marked contrast to that, SELCHP, the London incinerator at Lewisham, which has been in operation for a number of years, has the potential to heat homes, but none of that heat is being utilised for home heating. There is clearly great potential for the use of incinerators of waste products to produce energy. That must apply to many new developments being constructed. That is especially important with the redefinition of the use of incineration of waste in the waste framework directive. It is now possible with high-efficiency incinerators to redefine waste as recovery rather than disposal. That has important implications. As well as reducing CO2 emissions, the gas emissions from an incinerator at a point source may give the opportunity for sequestration of carbon dioxide emissions. I appreciate that the Government have provided about £40 million to boost local heating schemes, but how many schemes that include combined heat and power or incinerator programmes are being considered for the provision of heat to buildings in the new building programmes; and how many of the present incinerators using waste will be classified as recovery of waste rather than involving waste?