Sustainability Committee
Written Response to 'Residential Carbon Reduction in Wales - 1st report of the Sustainability Committee’s Inquiry into Carbon Reduction in Wales March 2008’
Executive Summary
It is estimated that around 25% of our carbon dioxide emissions come from the way we heat, light and run our homes. The residential sector must therefore play an integral part in any emissions reduction strategy.
The Assembly Government is committed to tackling climate change and we aim to achieve annual carbon reduction equivalent emissions reductions of 3% per year by 2011 in areas of devolved competence, as set out in One Wales,
and through investigating areas of further devolution such as Building Regulations. We are also committed through 'One Wales’ to developing a National Energy Efficiency and Saving Plan. The residential sector will play an integral part in contributing to the 3% target and will feature strongly in the plan.
We recognise that real progress on tackling climate change is dependent on the engagement and active participation of the rest of the public sector, businesses, the voluntary sector, NGOs, communities and individuals; and have established the Climate Change Commission to provide a mechanism to secure this engagement and to build a consensus on the action required to tackle climate change. The Commission has representation from all four main political parties, business, local government, trade unions and expert organisations; and is the main driver for action providing strategic leadership, direction and a cross-Wales consensus.
The Commission is supported by thematic sub groups, including an emissions reduction subgroup, which is looking at the actions needed in specific areas.
I have also asked the Sustainable Development Commission Wales to help identify the key policy interventions that will enable the built environment to contribute to our 3% target, and to take forward our 2011 zero carbon aspiration for new buildings. The Commission is engaging with key stakeholders, including industry representatives, and the first report with recommendations is scheduled for the Wales Climate Change Commission meeting in September.
I welcome the Sustainability Committee’s report; its findings will add to the work already being taken forward by the Assembly Government and its partners.
I have set out below my response to the report’s individual recommendations.
Responses to individual recommendations
Headline Recommendation 1:
The Committee recommends that, through a Ministerial Interim Planning Policy Statement (MIPPS), the Welsh Assembly Government require developments of over 5 dwellings and all commercial developments to produce at least 10 per cent of their energy requirements through on site renewable energy or local decentralised sources;
and
Headline Recommendation 2:
The Committee recommends that, through a Ministerial Interim Planning Policy Statement (MIPPS), the Welsh Assembly Government require developments of less than 5 dwellings to reduce their predicted CO2 emissions by at least 25 per cent based on current building regulations through improvements to the energy performance of buildings, and/or the efficient supply of heat, cooling and power.
Response : Accept in principle subject to a thorough analysis of the costs and benefits.
The review of the planning policy and guidance following our consultation exercise on planning for climate change is ongoing. This includes the consideration of whether we should require a minimum production of renewable energy (including low carbon energy sources) and/or a minimum reduction in carbon emissions for new buildings/developments via the planning system.
I can assure the Committee that the arguments for supporting at least a 'Merton type Rule’ in Wales, and aspiring to something even more effective than Merton by, for example, requiring a minimum reduction in carbon emissions or improvement in energy efficiency performance, are being considered. These recommendations and the wider report findings will be taken into account in reaching a decision.
I would however ask the Committee to consider whether there may not a conflict between Recommendations 1 & 2. Recommendation 2 could represent more in the way of emissions reduction potential than Recommendation 1, as requiring at least 10% renewable energy may not automatically result in at least a 25 per cent reduction in emissions. We need to encourage a staged approach to the energy hierarchy, where the incorporation of renewable energy technologies should only follow after a concerted approach to reduce energy demand and increase energy efficiency.
I would also ask the Committee to note that, under the Code for Sustainable Homes, the energy efficiency element is measured in terms of percentage improvements to energy efficiency against Part L of the Building Regulations, and that a 25% improvement corresponds with level 3 of the Code. Points are also available within the Code for the incorporation of low or zero carbon energy technologies.
Financial Implications:
There could be additional costs for developers and planners if these recommendations were accepted and implemented through the planning system, and they will need to be taken into account before reaching a decision.
Headline Recommendation 3:
The Committee recommends that Building Regulations are devolved to the Welsh Assembly Government as a matter of urgency.
Response : Accept
I accept this recommendation. The Welsh Assembly Government has committed in 'One Wales’ to pursue devolution and is hopeful that current discussions with UK Government can be brought to a satisfactory conclusion in the near future.
Financial Implications:
The additional departmental costs in pursuing devolution and establishing the skills and capacity to administer devolved Building Regulations are and will be drawn from existing budgets.
Headline Recommendation 4:
The Committee recommends that the Welsh Assembly Government adopts the Code for Sustainable Homes with immediate effect. We also recommend that, when Building Regulations are devolved, those which would enable the highest level of the Code for Sustainable Homes to be enforced should be revised first.
Response: Accept in principle (subject to cabinet agreement)
I have already announced the adoption of the Code in place of BREEAM EcoHomes and to apply the Code to all housing funded by or built on land disposed of by the Assembly Government.
I have also recently confirmed that, for social housing, the Assembly Government will require a minimum of Code Level 3, moving to higher levels as quickly as possible. The Deputy Minister for Housing is consulting on plans to progressively strengthen development standards and mainstream innovation over the next Social Housing Grant period and is looking to earmark a proportion of the programme to low carbon building funding.
In moving forward, we will give careful consideration to the report of the Affordable Housing Review Group, which is due the end of May/beginning of June.
The devolution of Building Regulations is being sought to raise standards of energy efficiency to achieve zero carbon. Other aspects of the Code, their relationship to our wider sustainability objectives and their implications for Building Regulations will be considered as part of a programme of further work to be developed over this Assembly term.
Financial Implications -
None as a result of the adoption of the Code in place of previous policy for the sustainability rating of new homes i.e. BREEAM EcoHomes funded by or built on land disposed of by the Assembly Government. The impact of setting Code levels which exceed prevailing legal requirements and current Assembly Government policy may have an impact on the value of land disposals which will have to be considered as part of the business planning and budgeting process. Costs to industry and consumers of higher standards for Building Regulations will be considered as part of the appraisal process of proposed changes.
Headline Recommendation 5:
The Committee recommends that the Welsh Assembly Government should fund a programme of retrofitting of all existing hard to heat homes so that they meet one of the agreed levels in the Code for Sustainable Homes.
Response: Reject.
I support the underlying aim of the recommendation to promote improvements in the energy efficiency performance of existing stock, and particularly hard to heat homes.
However there is a balance to be made between helping householders who are able to pay and those that are effectively in fuel poverty. We must also acknowledge that alleviating fuel poverty is a shared responsibility between the UK Government, the Assembly Government and energy suppliers.
In addition, as the Code has not been designed as a standard for existing homes, it is difficult to read across directly.
There are two significant programmes in Wales which provide funding specifically for the retrofitting of existing properties with energy efficiency measures. The Assembly Government’s Home Energy Efficiency Scheme (HEES) provides heating and insulation measures to qualifying households. Under the Carbon Emissions Reduction Target (previously Energy Efficiency Commitment) energy suppliers provide free or discounted carbon saving measures to their customers.
Energy efficiency measures are also carried out in meeting the Assembly Government’s Welsh Quality Housing Standard (WQHS), under renewal area schemes and other programmes aimed at building refurbishments.
The Assembly Government is committed under 'One Wales’ to developing a National Energy Efficiency and Saving Plan. The plan will examine our Fuel Poverty Strategy, the role of HEES and potential partnerships with energy suppliers to deliver energy efficiency improvements in a integrated way. In terms of existing housing, the plan will be informed by the work that i have asked the sustainable development commission to take forward on how the built environment should contribute to the assembly government’s 3% annual emissions reduction target.
Financial Implications -
Significant. if this recommendation were to be accepted and implemented, there would be more financial implications for the Assembly Government which could not be met from existing departmental budgets.
Headline Recommendation 6:
The Committee recommends that the Welsh Assembly Government actively promotes the Low Carbon Building programme in Wales and provides additional grants for microgeneration schemes in existing housing.
Response: Accept in part.
The Assembly Government already promotes the Low Carbon Building Programme, through our own information and advice vehicles, by funding the Energy Saving Wales portal website which signposts to the programme, and by supporting the Energy Saving Trust which provides information and advice on domestic microgeneration technologies and links to the programme.
We intend to fully utilise the new Convergence Funding to help tackle climate change and help develop the microgeneration industry in Wales.
In terms of the Assembly Government providing additional grants for microgeneration schemes in existing housing, the first priority of Assembly Government grant funding must be to improve the energy efficiency of existing stock. I am however exploring the possibility of additional incentives for microgeneration in properties with low incomes which have reached their energy efficiency potential.
Financial Implications:
There would be financial implications for the Assembly Government if we were to offer additional grants, which could not be met from existing departmental budgets.
Recommendation 7:
The Committee recommends that the Welsh Assembly Government revises Planning Policy Wales and the associated guidance to strengthen the requirements for local authorities to include policies aimed specifically at carbon reduction in their Local Development Plans.
Response: Accept
We have already consulted on revisions to Planning Policy Wales in the context of climate change. These proposed changes also reinforced the role of local development plans in helping to reduce carbon emissions. This is being reviewed on how to best facilitate the move towards zero carbon developments in the interim period until Building Regulations are devolved and amended.
Financial Implications:
Any financial implications are being looked at as part of the review.
Recommendation 8:
The Committee recommends that the Welsh Assembly Government reviews the application process for the installation and use of low carbon technologies in residential buildings with a view to simplifying and accelerating the process.
Response: Accept
We have already consulted on extending permitted development rights to domestic micro-generation technologies to help residents take-up individual sources of renewable energy in Wales. We are exploring whether we can link the necessary amendments to the General Permitted Development Order to the UK based Microgeneration Certification Scheme. We will be implementing the changes later this year.
Financial Implications:
Financial implications were considered as part of the Regulatory Impact Assessment into the proposed changes. The impact of extending permitted development rights will reduce planning application costs and reduce fuel bills for householders.
Recommendation 9:
The Committee recommends that the Welsh Assembly Government works with the Royal Town Planning Institute to develop and promote training, advice and guidance for planners in the areas of low carbon design and the use of microgeneration energy sources.
Response: Accept
The Welsh Assembly Government recognises that this is a fast evolving area of local policy, and further training, advice and guidance will be needed to implement the national planning policy approach on reducing carbon emissions in new developments.
The Welsh Assembly Government has supported the RTPI in making climate change a key feature of the first Annual RTPI Cymru Conference in July 2008. We are also commissioning work to research the local authority barriers to delivering zero carbon developments. This will be followed by a number of training events and supported guidance for local planning authorities.
Financial Implications:
The costs of research and training are already committed in existing budgets. Any further work with the RTPI will be will be considered as part of the business planning and budgeting process.
Recommendation 10:
The Committee recommends that the Welsh Assembly Government works with the Construction Industry Training Board (CITB) and the Sector Skills Council for Construction to develop and promote training, advice and support for the construction industry in the area of low carbon building.
and
Recommendation 11:
The Committee recommends that the Welsh Assembly Government works with the Construction Industry Training Board (CITB) and the Sector Skills Council for Construction to develop and promote training, advice and support for the construction industry in the installation and the use of microgeneration energy sources.
Response: Accept Recommendations 10 and 11.
We have already made a commitment to work with Industry on delivering the skills needed for low/zero carbon building. In relation to microgeneration specifically, this is being explored in taking forward our Microgeneration Action Plan. This work is being coordinated with our strategy for construction skills - 'Building Companies / Building Skills’ .
Financial Implications:
Any financial implications will be looked at within the context of this ongoing work.
Recommendation 12:
The Committee recommends that the Welsh Assembly Government explore mechanisms for creating a market for surplus energy generated by individual microgeneration plants such as the creation of local energy supply companies with agreed feed-in tariffs.
Response: Accept in principle
We are already exploring the creation of local energy supply companies, in particular as part of our plans to use Assembly Government owned land to drive forward pathfinder projects for low/zero carbon development. We will also work with the UK Government on the issue of feed-in tariffs, which are a reserved matter. I welcomed the announcement in the Budget that the UK Government will investigate a possible feed-in tariff for renewables and microgeneration in the context of a consultation on the most appropriate support mechanism for microgeneration at individual and community level. The UK Government also announced that it will consider how to address barriers such as planning and grid access.
Financial Implications:
Any financial implications will be identified as part of this ongoing work.
Recommendation 13:
The Committee recommends that the Welsh Assembly Government should engage with developers as soon as possible to identify the benefits to them of pioneering zero carbon house building techniques in Wales
and
Recommendation 14:
The Committee recommends that the Welsh Assembly Government should identify good practice in the social housing sector and set up a knowledge exchange with private sector developers and builders.
Response : Accept Recommendations 13 and 14
I have commissioned the Sustainable Development Commission in Wales (SDC) to identify the key policy interventions that are needed to support the Assembly Government’s aspiration that all new buildings are zero carbon by 2011, and the contribution that the built environment can make to our One Wales
3% annual emissions reduction target.
In conjunction with the Design Commission for Wales, the SDC is establishing an expert panel comprising key bodies involved in the energy efficiency, renewables and construction fields. The purpose is to establish a 'coalition of the willing’ on the issue of zero carbon new buildings, to share ideas and good practice, and set out a timetable for development and the further aspiration of 3% emission reductions by 2011..
Key to that process will be engagement with the house building sector to develop understanding of the implications of building to zero carbon. The major pathfinder development projects at Ely Bridge, Ebbw Vale and elsewhere, which will require higher levels of the Code for Sustainable Homes, and the Registered Social Landlord (RSL) housing programme will provide the Assembly Government, RSLs and the house building sector with the opportunity to gain experience of what moving towards zero carbon means.
Financial Implications -
None at this stage. Any expenditure that may be considered necessary in the future will be met from existing departmental budgets.
Recommendation 15:
The Committee recommends that where land in the ownership of the Welsh Assembly Government is to be released for residential development, it should be done so at a discounted rate for the construction of zero carbon housing.
Response : Accept in principle
The Assembly Government’s land disposal protocol already provides for environmental sustainability standards to be required. Currently these are BREEAM EcoHomes 'Excellent’ (but see my response to recommendation 4). Future policy on land disposals will be informed by and intended to support the work of the Sustainable Development Commission and the aspiration for 2011 (see my response to recommendations 13 & 14). The impact of setting higher requirements may impact on the market value of land for disposal, depending on the commercial view taken by prospective developers. The need to consider any further discounting would have to be taken against prevailing market conditions and compliance with Assembly Government financial regulations.
Financial Implications:
The impact of setting higher energy efficiency requirements which exceed prevailing legal requirements may have an impact on the value of land disposals which will have to be considered as part of the business planning and budgeting process.
Recommendation 16:
Where land in the ownership of the Welsh local authorities is to be released for residential development, the Welsh Assembly Government should encourage and support local authorities to do so at a discounted rate for the construction of zero carbon housing.
Response : Accept in principle
The Assembly Government would encourage and support action by local authorities to use their land holdings to promote higher levels of sustainability in development; and this is a matter I will want to consider further and pursue initially through the WLGA.
Financial Implications:
The impact of local authorities setting higher energy efficiency requirements which exceed prevailing legal requirements may have an impact on the value of their land disposals. The costs and benefits would need to be analysed and considered within the context of individual local authority policies, priorities, financial regulations and statutory obligations.
Recommendation 17:
The Committee therefore recommends that the Welsh Assembly Government consults with Welsh local authorities on the most effective way of measuring CO2 emissions from residential properties in their area to establish a true baseline against which each local authority can measure improvement;
Recommendation 18:
The Committee therefore recommends that the performance indicators should contain targets with milestones for improvement, a clear indication of what is being measured (e.g. CO2 reduction, average energy efficiency of housing stock, number of homes given advice/grants, reduction in the percentage of hard to heat homes). The targets should also reflect the current state of the housing stock within the local authorities’ areas and should be tailored accordingly;
and
Recommendation 19:
The Committee also recommends that the Welsh Assembly Government issues guidance to local authorities on methods of achieving their targets e.g. full time dedicated staff to implement household carbon reduction policies, how reductions can be made in private properties, sharing of good practice.
Response: Accept in principle Recommendations 17, 18 and 19, subject to the outcome of the work on a national energy efficiency and saving plan and the 3% annual emissions reduction target
I appreciate that these recommendations emanate from the 2007 Wales Audit Office (WAO) report on the implementation of the Home Energy Conservation Act (HECA) by local authorities in Wales.
I have previously advised the Committee that I am considering the repeal of HECA insofar as it applies in Wales. However, irrespective of whether HECA is repealed or not, I will take take into account the WAO’s recommendations as part of the specific One Wales
commitment to developing a national energy efficiency and saving plan, and the wider One Wales
commitment to an annual 3% emissions reduction.
In terms of the guidance recommended, under the Climate Change Bill we are transferring responsibility for producing the Energy Measures Report (now renamed the Climate Change Measures Report), which provides such guidance, to the Welsh Ministers.
Financial Implications:
None at this stage. Any which may be identified in the future will have to be considered in the context of individual local authority policies and priorities. Any Assembly Government proposals on household energy efficiency and carbon emissions reduction that affect local authorities will be subject to consultation.
Recommendation 20:
The Committee recommends that the Welsh Assembly Government produces a sustained and widespread marketing campaign aimed at encouraging and informing people about the benefits of reducing their energy consumption.
Response: Accept
I fully recognise the importance of effective public information and communication on climate change issues, including reducing energy consumption. The Assembly Government carried out an initial, focused communications campaign on climate change early in 2007, with an emphasis on communicating to local communities through local press and radio. We are now building towards the launch of a major communications campaign later this year.
The Climate Change Commission Sub Group on Communications will help inform the development of this campaign and ensure that we maximise the links with other organisations who are communicating on this subject. These include the Energy Saving Trust (EST).
As well as providing ongoing advice and information to householders, communities and micro-businesses in Wales, EST runs a UK-wide year-round marketing campaign, including an annual Energy Saving Week, to inform people how to reduce their energy consumption; and will be launching a new campaign shortly.
The EST’s Energy Advice Centre (ESTac) - formerly known as the Sustainable Energy Network - provides a mechanism for delivering these messages to customers in Wales, and provides practical advice on what actions households can take to reduce their energy consumption. The Assembly Government has provided funding for the setting up of the enhanced ESTac service in Wales.
Financial Implications:
The costs of the Assembly Government campaign will be met from existing departmental budgets.
Recommendation 21:
The Committee therefore recommends that, the Welsh Assembly Government should continue to fund the Sustainable Energy Network. The network should be expanded and enhanced however to encompass all those organisations providing advice (including the Carbon Trust) into a truly One Stop Shop for all carbon reduction help and advice with additional funding from the Welsh Assembly Government.
Response : Reject
The majority of funding for the ESTac comes from the UK Government.
The ESTac is specifically designed to offer advice to households, communities and micro-businesses. The model may not be appropriate for all audiences, some of which (for example larger businesses) have very different requirements and are served through other mechanisms such as the Carbon Trust. The ESTac already co-ordinates with other advice services, such as the Carbon Trust,and vice-versa, to ensure enquiries are directed to the appropriate source. The emphasis needs to be on a shared partnership approach.
Financial Implications:
We will consider supporting enhanced or additional services where appropriate and additional costs will need to be considered as part of the business planning and budgeting process.
Recommendation 22:
The Committee recommends that the Welsh Assembly Government makes additional funds available for community based carbon reduction projects.
Response: Accept.
We intend to fully utilise the new Convergence Funding and Environment Wales to help tackle climate change, including helping communities take forward carbon reduction projects and particularly community renewables programmes.
Financial Implications:
Additional costs will need to be considered as part of the business planning and budgeting process.
Recommendation 23:
The Committee recommends that the Welsh Assembly Government, subject to the outcomes of current trials, supports the UK Government in their efforts to encourage the utility companies to fund the installation of Smart Meters or their equivalent in all households across Wales.
Response: Accept
I have already confirmed the Assembly Government’s support for the roll-out of smart meters in Wales.
I am pleased to say that the Department for Business and Regulatory Reform (DBERR) has decided that the roll-out of smart meters requires a mandate and the UK Government is seeking the power to mandate via an amendment to the Energy Bill. DBERR is continuing its work on an economic analysis of the rollout of smart meters
DBERR has commissioned trials of smart meters in the domestic sector which are being managed by the energy regulator, Ofgem. Scottish & Southern Energy is piloting smart meters in Newport, South Wales and also through a community project in St Athan. We welcome these trials and await their results with interest.
Financial Implications:
None are expected for the Assembly Government.
Recommendation 24:
The Committee recommends that the Welsh Assembly Government produce detailed action plans outlining how they intend each of the targets they have set to be met.
Response: Accept in principle
Our proposed programme of action to deliver the One Wales
3% reduction target will be developed this year for consultation. It will be supported by the National Energy Efficiency and Saving Plan.
Financial Implications:
None at this stage.
Recommendation 25:
The Committee recommends that the Welsh Assembly Government reports progress on achieving the targets every six months to the Assembly in plenary and to the Sustainability Committee or its equivalent;
and
Recommendation 26:
The Committee recommends that, in addition to recommendation 25, the Welsh Assembly Government reports to the Committee every six months on its progress in implementing the recommendations from this report that it has accepted.
Response: Accept in part.
I already report to Plenary on the work of the Climate Change Commission and other climate change developments on a quarterly basis. The Climate Change Bill includes clauses requiring the Assembly Government to report on objectives, actions and progress in relation to climate change.
I will however consider the need for further reporting machansims and advise the Committee accordingly.
Financial Implications:
None at this stage. Any additional costs that may be identified will be met from within existing Departmental budgets.
Jane Davidson AM May 2008
Minister for Environment, Sustainability and Housing
