London Environment Strategy

Transcription

1 CAN Mezzanine, East Road, London, N1 6AH London Environment Strategy Consultation response from the Association for the Conservation of Energy 1 Overview This response is from the Association for the Conservation of Energy (ACE). ACE represents the energy efficiency sector in the UK. It works to enable the UK to become energy efficient, driving productivity and business competitiveness, providing warm and healthy homes, delivering a secure energy future and a vibrant low carbon economy. Working with its members and like-minded organisations, ACE delivers compelling research, policy thought leadership and effective campaigning in Westminster and devolved national and local administrations. The views in this response are those of the ACE staff team. They have been informed by the expertise and experience of the organisations that support our work 1, but they do not necessarily represent the views of those organisations. 2 Chapter 2: Transforming London s environment CONSULTATION QUESTION: Do you agree with the overall vision and principles of this draft London Environment Strategy? ACE welcomes the vision and principles of the draft London Environment Strategy and the ambition for London to be a zero-carbon city by We agree that the city s most pressing environmental challenges are harming Londoners health and the city s economy, and that the current pace of change is too slow. The Mayor highlights that big problems need ambitious responses. Therefore, we would like to see the Mayor s activity and focus on air quality 1 A list of our members and organisations that have supported our recent work can be found here: Association for the Conservation of Energy Consultation response 1

2 continue, but also expanded in relation to improving the energy efficiency of buildings, improving the lives and reducing health inequalities of those households that are in fuel poverty, whilst supporting economic growth in the environmental goods and services sector. As highlighted in the draft Fuel Poverty Action Plan, there were an estimated 335,201 households living in fuel poverty in London in There is increasing evidence that living in a cold home is associated with poor health, including an increased risk of disease and death for all age groups. Health impacts include mental health issues, as well as respiratory and circulatory problems. Children living in cold, damp and mouldy homes are almost three times more likely than those living in warm homes to suffer from respiratory illnesses, and this can have a negative impact on educational attainment. It is estimated that there were between 1,300 and 4,000 deaths across London between 2011 and 2016 where the inability to heat homes adequately may have been a contributory factor. CONSULTATION QUESTION: To achieve the policies and proposals in this strategy, which organisations should the Mayor call upon to do more (for example central and local government and business) and what should the priorities be? Central Government To implement the policies set out in the Clean Growth Strategy and resulting policies developed following consultations. To support the environmental services and goods sector in implementing the Each Home Counts Review, to ensure that London s households benefit from high quality energy efficiency refurbishment work. London Mayor London Plan / Housing Strategy requiring London Boroughs to develop and implement SPGs to improve the energy efficiency of domestic and non-domestic properties undergoing extensions (lofts, basements) and zero carbon new build properties. Continue to demonstrate leadership in improving the energy performance of public buildings, and enabling the commercial sector to do likewise. Local Government Enforcement of minimum energy standards in private rented domestic properties (HHSRS and MEES) (and other tenures of housing social and owner occupied). Enforcement of minimum energy standards in the non-domestic sector (MEES) To support the environmental services and goods sector in the implementation of the Each Home Counts Review. Implementation of Supplementary Planning Guidance (SPG) to improve the energy efficiency of properties undergoing extensions (lofts, basements) Adopting their own targets for improved energy efficiency / reduced carbon emissions, as many did under the National Indicators regime in Businesses Commit to their own carbon emissions reduction targets, perhaps encouraged by the Mayor through a London-wide Partnership. Islington Council previously administered a local business Climate Change Partnership and currently as a Sustainable Energy Partnership ( that could be used as a model for this type of activity. Association for the Conservation of Energy Consultation response 2

3 The City/Finance sector in developing low interest finance propositions in the to support energy efficiency sector. Development of innovative solutions to improve the energy performance of London s hard to treat solid walled buildings. CONSULTATION QUESTION: Do you agree that this draft London Environment Strategy covers all the major environmental issues facing London? Yes, ACE agrees that the draft Environment Strategy covers all of the major environmental issues facing London. CONSULTATION QUESTION: There are a number of targets and milestones in this draft London Environment Strategy, what do you think are the main key performance indicators that would demonstrate progress against this integrated strategy? Rate of improvement in EPCs of homes and non-domestic buildings. Rate of improvement in DEAs in public sector buildings. Focus also on rate of improvement in PRS and in fuel poor homes, as these are priority areas for progress. CONSULTATION QUESTION: What are the most important changes Londoners may need to make to achieve the outcomes and ambition for this strategy? What are the best ways to support them to do this? Households, businesses and the public sector need to start taking action in terms of improving the energy efficiency of their properties/estates. While central Government have a role in driving demand in the energy efficiency sector, the Mayor has a key role in ensuring that these are implemented across London since buildings across London need to dramatically improve their energy performance in order to meet the 2050 target of London as a zero carbon city. Our thoughts on the best ways to achieve this are set out in our responses to consultation questions in Chapter 6. 3 Chapter 4: Air Quality CONSULTATION QUESTION: Do you agree with the Mayor s policies and proposals to raise Londoners awareness of the impacts of poor air quality? We commend the Mayor in raising the profile of air quality issues across the capital. We would like to see a similar focussed approach on improving the energy efficiency of London s buildings and more specifically to tackling and eradicating fuel poverty. CONSULTATION QUESTION: Do you agree with the proposed approach to reducing emissions from non-transport sources (including new buildings, construction equipment, rail and river vehicles and solid fuel burning)? Proposal 4.2.3c: The mayor aims to improve London s air quality by reducing emissions from homes and workplaces, including through energy efficiency programmes. Association for the Conservation of Energy Consultation response 3

4 ACE supports proposal 4.3.2c to improve air quality through the deployment of energy efficiency measures to reduce the energy required for space and water heating. This should include insulation to reduce heating demand, as well as highly efficient boilers and renewable heating technologies. Deployment of such technologies could be supported through the Mayor s Energy for Londoners programme, as well as the London Boiler Cashback Scheme (domestic and non-domestic). Proposal 4.2.3d The Mayor will work with government to seek reductions in emissions from large scale generators producing power for commercial buildings in London ACE supports proposal 4.3.2c to reduce emissions from generators producing power for commercial buildings in London. It is important that companies supplying power to commercial buildings are encouraged to minimise the resultant emissions through a mix of demand reduction, demand flexibility, and low emissions supply. Any policies that seek to reduce these emissions should therefore encourage all these actions to be considered equally and the most cost-effective options chosen. Proposal 4.2.4b The Mayor will work with the government to achieve full legal compliance with UK and EU limits as soon as possible ACE also supports proposal 4.2.4b to work with government to achieve full legal compliance with UK and EU limits, and the Mayor calling on government to take forward actions to improve air quality, including: Allowing London planning policy to take precedence over national planning policy. Delivering a national boiler scrappage scheme for low income households (to tackle fuel poverty) and SMEs (to improve productivity and reduce operational costs). CONSULTATION QUESTION: Please provide any further comments on the policies and programmes mentioned in this chapter. ACE agrees that the Mayor should focus on increasing energy efficiency of buildings in order to support efforts to reducing air quality, and also to mitigate and adapt to climate change and eradicate fuel poverty. 4 Chapter 5: Green infrastructure CONSULTATION QUESTION: Please provide any further comments on the policies and programmes mentioned in this chapter. ACE is supportive of the policies set out in this chapter, particularly in relation to the benefits of reducing urban heat island (UHI) effects, thus reducing the need for increased energy demand for cooling. Association for the Conservation of Energy Consultation response 4

5 5 Chapter 6: Climate change mitigation and energy CONSULTATION QUESTION: Do you agree that the policies and proposals outlined will meet the Mayor s ambition to make London a zero carbon city by 2050? Is the proposed approach and pace realistic and achievable? ACE supports the Mayor s policies and proposals outlined within the draft Environment Strategy and believe that they will support the ambition to making London a zero carbon city by ACE supports minimum energy efficiency standards in both domestic and non-domestic buildings. Initial targets should be developed to tackle the most inefficient properties first and the trajectory of future standards should also be published. This will enable supply chain to develop for the increased standards, and encourage households and businesses to take early action. We believe that the key to the successful implementation of improving the energy efficiency of buildings across London will be in setting achievable milestones. ACE would recommend that when setting the trajectory for milestones, the level of ambition should gradually be increased over time. This will enable planned growth in the supply chain and hence help to ensure that both sustained, quality employment for local tradespeople and quality installations for consumers are successfully delivered as a result of the Mayor s activities. ACE recommends that the Mayor publish details of the long-term commitments in terms of energy efficiency and heat decarbonisation policies and delivery programmes to signal to private investors that London is a sound place to invest. A published plan for the future could be particularly effective in stimulating action. CONSULTATION QUESTION: To achieve the Mayor s zero carbon ambition we estimate (between now and 2050), up to 100,000 homes will need to be retrofitted every year with energy efficiency measures. Do you agree with the Mayor s policies and proposals to achieve his contribution to this? What more can central government and others do to achieve this? Figure 33 from the draft strategy details the milestones required to put London on track to zero carbon by This includes zero carbon new build homes (2016), minimum energy efficiency standards in the private rented sector (2018) and the insulation of remaining lofts and cavities and replacing low efficiency gas boilers (2020s). However no further detail in terms of interim targets and milestones is provided. ACE would recommend that interim milestones should be used to set out a clear direction of travel and detail how to measure progress against such targets, and that these should be based on energy performance of buildings (Energy Performance Certificates - EPCs). For example, the Mayor could consider adopting the aspirations and commitments set out in the UK Government s Clean Growth Strategy targets around building energy performance: Fuel poor homes to EPC band C by 2030 Private Rented Sector (PRS) homes to EPC band C by 2030 Social rented homes to EPC band C by 2030 All remaining properties to EPC band C by These would be interim targets, with a further push to get homes to zero carbon by Further analysis of the London housing stock, to determine what feasible mix of energy efficiency improvement and low carbon supply will deliver zero carbon at minimum cost may demonstrate that some London Association for the Conservation of Energy Consultation response 5

6 properties could go further and faster than these targets suggest. Where this is the case, the policies set out below could be designed to encourage deeper retrofits. Policy Improve the energy efficiency of London s homes and support the transition to low carbon heating and power through Energy for Londoners Proposal 6.1.1a Contribute to helping Londoners improve the energy efficiency of their homes, where appropriate, by providing technical assistance, support and funding Proposal 6.1.1b Pilot state of the art methods to implement the stronger energy retrofitting needed Proposal 6.1.1c Make the case to government to introduce the long-term regulatory and financial framework to support and speed up the rate of energy efficiency ACE welcomes proposals 6.1.1a, 6.1.1b and 6.1.1c to support London households to retrofit their properties and to build a strong and expanding market in deeper retrofit activities. We are encouraged that the Mayor plans to use both Energy for Londoners and the Energy Leap Project to take forward this activity across all tenures of housing. The draft Fuel poverty Action Plan for London, which accompanies the draft Environment Strategy has a strong focus on tackling fuel poverty in the Private Rented Sector (PRS). The key to delivering improvements in this sector will be ensuring that London Boroughs are well resourced to work with landlords and tenants to ensure minimum standards through the Housing Health and Safety Rating System (HHSRS) and Minimum Energy Efficiency Standards (MEES) are being met, and if they are not then the boroughs should be able to enforce these minimum standards. While all London Boroughs should work with landlords to meet these standards, landlords should be charged for any enforcement action that is necessary, and that these fines should be ring fenced within Trading Standards and Environmental Health departments to ensure that further proactive activity is well resourced. It is essential that the current minimum standards are effectively implemented so that this activity can be replicated as the energy performance standards are increased over time, and so the market can expand and move into other housing tenures. As outlined in our response to the draft Fuel Poverty Action Plan, ACE, in partnership with CAG Consultants, is working on a project the Warm Arm of the Law - looking at how MEES and HHSRS can be proactively and strategically implemented and enforced to support the eradication of fuel poverty. We have already had initial discussions with Rhona Brown, Private Rented Sector Programme Manager, and would welcome involvement from the GLA Environment team to ensure that the project s findings can be useful to London. To further support activities across other tenures (e.g. owner occupied and social), the Mayor should ensure that all London Boroughs should be adequately resourced to work on energy efficiency retrofit in homes. As detailed on page 224 of this draft strategy, local government resources are limited across the capital. All activity with households should include the provision of detailed and bespoke advice for households, preferably face to face, outlining what they can do to their properties. ACE supports the use of trigger points for buildings to meet minimum energy efficiency standards, both in terms of the point of sale and rental of domestic and non-domestic buildings. However, the Mayor should also give consideration to those properties that are not sold or rented, and therefore ACE would recommend that energy efficiency improvements should also be enforced during significant Association for the Conservation of Energy Consultation response 6

7 refurbishment activity. The Mayor should be encouraging homeowners to retrofit their properties when they are extending their homes e.g. loft and basement extensions. Households should be encouraged to undertake deep energy efficiency retrofit activities during their property s extension to avoid further disruption at a later date. While the UK Government s Clean Growth Strategy rules out consequential improvements through the Building Regulations, the Mayor should consider whether all London Boroughs could implement Supplementary Planning Guidance (SPG) on this issue. ACE is currently working on a range of ideas on how to integrate energy efficiency into refurbishment work and will be happy to share the results with the GLA once available. The Mayor highlights in Chapter 4 that central government controls some of the most powerful policy levers to influence air quality, including fiscal incentives and the same can be said of energy efficiency, with fiscal incentives around driving the market for energy efficiency improvements such as stamp duty rebate and VAT reductions. ACE is currently undertaking a sector survey to look at the potential for home-owner incentives. This follows on from our member round-table earlier in the year and is intended to collect evidence that we can all use to inform our work with government and in particular our responses to the call for evidence on building a market for energy efficiency, which was published alongside the Clean Growth Strategy. ACE would be happy to provide the GLA with the results of this survey. We believe that using financial and fiscal incentives to support energy efficiency in domestic and nondomestic buildings can encourage individuals and organisations to act before standards are applied, which in turn can smooth the development of market and the supply chain and increase public acceptance of the standards. ACE recommends that grants rather than loans are made available for low income households, where savings are often taken in comfort rather than in bill savings. We would also recommend that partial public funding is made available to help grow the market and reduce costs for new technologies or those with longer paybacks (for example, solid wall insulation). ACE believes that, other than the two exceptions above, it is reasonable to expect consumers to pay for energy efficiency and heat decarbonisation technologies themselves, providing that attractive finance options are available. Therefore, we believe that the Mayor has a key role in providing grant funding for low income homes, working with the City and the wider finance sector in London to raise finance to implement 0% or low interest loans for retrofit works in the able to pay sector, and working with central Government to develop fiscal incentives to promote energy efficiency retrofit. We would recommend that the Mayor explore the following examples of where incentives have been used to good effect: Retrofit roadmaps: ACE s Delivering the best deal for energy consumers 2 publication outlines the need for individual home retrofit roadmaps to set out what improvements a home needs. These describe the way in which individual home improvements can be made without locking the home in to inadequate performance or unnecessarily increasing the cost of later required improvements, and importantly they make the link between energy efficiency improvement opportunities and wider home repair, maintenance and improvement activity. This publication highlights the use of retrofit roadmaps in both Germany and France, including the German state of Baden-Wuerttemberg. 2 Delivering the best deal for energy consumers, ACE, 2015: Options-for-the-next-supplier-commitment.pdf Association for the Conservation of Energy Consultation response 7

8 KfW: ACE s Financing energy efficiency in buildings: an international review of best practice and innovation 3 publication highlights that even with high and volatile energy prices, energy security issues and awareness of climate change policy drivers, there is a mixed picture of actual demand for energy efficiency from both private and public-sector clients. Despite the proven cost-effective opportunity to reduce energy consumption, a significant proportion of the energy efficiency improvement potential is not being realised, and that this is in part due to lack of attractive finance for energy efficiency. This report highlights Germany s KfW programme which provides preferential loans to efficiency projects in the domestic, commercial and public sectors. KfW is referenced throughout the report and a comprehensive case study is included within the appendices (page 74). Energy efficient mortgage loan insurance: The above report also provides details of an energy efficient mortgage loan insurance incentive from Canada. Information can be found within Appendix II of that report (page 97). ACE has reviewed a number of other low interest loans schemes and these are described briefly here. Eco- Prêt loans scheme: In France, the government subsidised 0% interest Eco- Prêt loans scheme addresses some of the hassle factor linked to the potential for disruption during wholehouse retrofits by allowing two years for completion of all works funded by the loan. The loans may also cover the cost of project management. Covering costs other than the energy efficiency investment itself can be a source of hassle if these are not included within a financing mechanism. A number of other schemes have tackled this barrier, including KfW, Clean Energy Works and A-Profitto. A-Profitto low interest loans scheme: The region of Milan s A-Profitto low interest loans scheme built in numerous considerations to minimise hassle. The regional energy agency helped prepare loan applications, and loans were allowed to cover costs beyond the energy improvements themselves, such as scaffolding and making good costs. Clean Energy Works Oregon (CEWO): allows any additional works directly associated with the energy efficiency improvements to be financed at the same (often subsidised) rate as the measures themselves. ACE has also reviewed various incentive schemes, in the UK and elsewhere, including: Reduced rates of VAT: In the UK, a reduced rate of VAT (five per cent) on the professionally installed cost of a range of energy improvements has been in force since The list of eligible measures has gradually expanded, with the only major improvements not included being efficient boilers and windows. In France and the Netherlands, a reduced rate of VAT applies to all refurbishment, but only under the proviso that a set share of the costs of a refurbishment project are for energy improvements. These thresholds are set at one third and one half of the total project costs respectively. Tax credits: In Britain, the Landlords Energy Saving Allowance (LESA) offered up to 1,500 reduction the amount of income taxed against private landlords expenditure on the installation of insulation measures (per dwelling) each year. Take-up of the incentive has been extremely low, which is likely to have stemmed from a low level of awareness. The scheme was discontinued in April 2015, in advance of the mandatory minimum standards for the private-rented sector gradually entering into force from 2016 in England and Wales. 3 Financing energy efficiency in buildings: an international review of best practice and innovation, ACE, 2013: Association for the Conservation of Energy Consultation response 8

9 There are a number of examples of schemes from other countries where the tax rebates apply to all property owners, not just landlords: France has used a relatively intricate tax credits system with a number of innovative features. Between 10 and 32% of individual energy improvements installed cost (depending on the measure) could be deducted from taxable income. These percentages were applied up to a cost limit which varies according to the household set-up (e.g. a limit of 8,000 for a single person; 16,000 for a childless couple). Moreover, only households earning less than 30,000 could claim it. Taken together, this introduces equity considerations to the incentive. Furthermore, the tax credit increased by eight per cent when measures were installed in a package, and depending on the local authority, 50 to 100% property tax exemption can be granted for up to five years for those who claim the credits. Finally, the tax credit was explicitly intended to be combined with the zero interest Eco-Prêt, as noted above. Italy offered tax credits of 55% of the installed cost of efficient or renewable heating, insulation measures and efficient replacement windows. The scheme was thought to be the largest of its kind in Europe at the time we reviewed it, having foregone 4.4 billion of revenue from 2007 to 2009, but having triggered 8 billion of investment in 600,000 measures. In contrast to the French example above, the Italian government decided in 2010 that its tax credit could not be combined with other forms of public subsidy. Tax credits were used in Hawaii under the Hot Water, Cool Rates programme to deliver Solar Hot Water systems across the state. This particular scheme offered 65% reduction in the costs via tax credits: 35% via Federal taxes, 30% via the State tax. In this case it was tied to a financing scheme which offers loans at subsidised interest rates (many at 0%) over five or more years. ACE would recommend that the Mayor works with central government to take forward the policies and programmes within the Clean Growth Plan and the Building a market for energy efficiency consultation, but that action could be accelerated in London to meet the ambition for a zero carbon city by Proposal 6.1.1d Improve the way energy is managed in London including through supporting the roll out of smart meters and advocating time of day tariffs ACE welcomes proposal 6.1.1d to support the roll out of smart meters across London. However, ACE would welcome the introduction of advice on energy efficiency measures and the Mayor s proposals to support increasing energy performance standards when meters are installed. At present, the advice given to householders is lacking and only covers basic advice on the activities that can be undertaken. Citizen s Advice had proposed changes to the Smart Meter Installation Code of Practice (SMICOP) 4, however this was declined. Policy Tackle fuel poverty in London and protect the most vulnerable through the Mayor s Fuel Poverty Action Plan Proposal 6.1.2a The Mayor will work with partners to help alleviate fuel poverty in London through implementing the recommendations of the Fuel Poverty Action Plan Please see ACE s response to the Draft Fuel Poverty Action Plan for London. 4 Association for the Conservation of Energy Consultation response 9

10 Proposal 6.1.2b Tender for the delivery of an energy supply company, aiming to offer fairer energy bills to Londoners and encourage Londoners to switch and move away from pre-payment meters ACE welcomes the Mayor s proposal to develop an energy supply company for Londoners and we understand the reasons behind the decision to initially work with an existing supplier. We believe that the Mayor should keep open the option to move to a fully licensed supply company so that properties in London could benefit from energy efficiency propositions as part of an Energy Services Company (ESCO) model, thus integrating demand side actions into the supply company. CONSULTATION QUESTION: Which policies or programmes would most motivate businesses to reduce energy use and carbon emissions? Policy Improve the energy efficiency of London s workplaces and support the transition to low carbon heating and power Proposal 6.1.3b Supporting reducing emissions and energy within the commercial sector including through improved building management, energy efficiency and reporting ACE welcomes proposal 6.1.3b to support London based private, public and third sector organisations to become more efficient and low carbon. Supporting the commercial sector to identify opportunities to improve building energy performance can boost productivity and make organisations more competitive. Increased efficiency can also make it easier and cheaper to maintain a workplace at a comfortable temperature, and there is good evidence to show that this leads to increased worker productivity and hence financial benefits to employers 5. Crucially, thermal comfort, good ventilation and lighting quality in the work environment is now well-established as a real boon to workers health, wellbeing and productivity 6. We are particularly encouraged that the Mayor plans to expand the RE:FIT programme to commercial businesses and the introduction of a commercial boiler scrappage scheme. We also welcome the Mayor s plans to investigate what additional technical support can be provided to businesses. Encouraging businesses to come together in partnership to tackle carbon emissions is a good way to share good practice and potentially to introduce an element of friendly competition that helps to maintain motivation. As previously mentioned, Islington Council has experience of this type of initiative, and this is something that could potentially be expanded across London. CONSULTATION QUESTION: Please provide any further comments on the policies and programmes mentioned in this chapter, including those in the draft solar action plan and draft fuel poverty action plan that accompany this strategy. Activity to improve energy efficiency has multiple benefits. Amongst other things, it can help to: Mitigate climate change, and support activity to adapt to climate change. Improve air quality. 5 LBNL Indoor Environment Group Cost Effectiveness of Improving Indoor Environments to Increase Productivity - Indoor Air Quality (IAQ) Scientific Findings Resource Bank (IAQ-SFRB). Lawrence Berkeley National Laboratory: 6 World Green Building Council, 2016, Health, Wellbeing and Productivity in Offices: The Next Chapter for Green Building : Association for the Conservation of Energy Consultation response 10

11 Eliminate poor energy performance of domestic buildings as a cause of fuel poverty and enable measurable health and early years improvements. Increase productivity, and therefore the competitiveness of the London economy, through the improvement of energy performance of non-domestic buildings. Create a substantial London market and supply chain for energy efficiency and heat decarbonisation technologies, delivering local jobs across the capital. Regenerate communities through upgraded building stock. Our report Buildings and the 5th Carbon Budget 7 details the benefits of meeting the UK s 5th Carbon Budget in buildings and highlights how this can justify considerable public and private investment to deliver on targets. ACE welcomes that the draft strategy promotes energy efficiency as the first and best fuel, and we are pleased to see energy efficiency at the heart of the chapters on climate change mitigation and energy (chapter 6) as well as air quality (chapter 4) and adapting to climate change (chapter 8). The strategy highlights that there are already severe pressures on the capital s electricity infrastructure in that one in ten electricity substations are approaching full capacity and the redevelopment of large parts of the city will increase demand for energy and the infrastructure required to distribute it. Therefore, we are pleased to see that the Mayor places value on demand management activities as an alternative to investment in energy distribution infrastructure. We have specific comments on two elements of the approach to zero carbon new build, detailed below. For comments on policies to tackle fuel poverty, please also see ACE s response to the draft Fuel Poverty Action Plan for London. Policy Ensure that new developments are zero carbon Proposal 6.1.4a Through the London Plan the Mayor will consider policies to support the delivery of zero carbon development ACE welcomes proposal 6.1.4a to consider policies to support the delivery of zero carbon development, both in the domestic and non-domestic sectors. We are particularly pleased that London continues to be a leader in this area with existing ambitious zero carbon targets for constructing new housing developments, and the use of carbon offset funds where standards cannot be met on site. We would like to see greater use of these carbon offset funds in the retrofit of existing buildings. Many London Boroughs are already taking forward action with carbon offset funds and we would like to see this activity expanded across the capital to support activity to reduce fuel poverty in particular. Proposal 6.1.4b Support the design of effective methods to ensure the energy and carbon performance of new developments meet their agreed designed standards This is a crucial area for action: the performance gap between design and implementation in the new build sector causes unnecessary emissions and additional cost to householders and businesses. We encourage the Mayor to work with partners to ensure robust enforcement of standards and improved skills development within the industry so that this gap can be closed. We would recommend that the GLA reviews the activity of the Fabric First Institute, which is delivering training to contractors and subcontractors on the practical fundamentals of building a low energy 7 In late 2016, ACE Research, working in partnership with the Regulatory Assistance Project (RAP) and funded by the European Climate Foundation, produced Buildings and the 5th Carbon Budget. Association for the Conservation of Energy Consultation response 11

12 building, including among other topics: how to include insulation best practices, the importance of airtightness and how this can be achieved and aspects of thermal bridging. Further information on the Institute can be found in ACE s Norwich South Local Story 8. 6 Chapter 8: Adapting to climate change CONSULTATION QUESTION: Please provide any further comments on the policies and programmes mentioned in this chapter. ACE is supportive of the policies set out in this chapter (and Chapter 5: Green Infrastructure), particularly in relation to the benefits of reducing urban heat island (UHI) effects, thus reducing the need for increased energy demand for cooling, and energy efficient design standards in new and existing buildings to minimise the risk of overheating (proposal 8.4.3a). 7 Chapter 10: Transition to a low carbon circular economy ACE welcomes the policies and proposals set out in this chapter to expand the capital s existing low carbon and environmental goods services sector. We agree that the Mayor has a comprehensive role in creating, enabling and benefiting from the transition to the low carbon economy, particularly in relation to creating market demand for energy efficiency products and services. This should include creating market demand across all domestic tenures (owner occupied, private rented and social properties) and non-domestic buildings (commercial, industrial and public buildings). Research by CAG, ACE, SE2 and CSE for the GLA 9 looked at the cost of meeting the first Minimum Energy Efficiency Standards (MEES) milestone (improvement of all properties to a minimum EPC band C). Building on this research, ACE considers that in London, 1.6billion investment in energy efficiency would be required to meet these targets 10. Whilst details of these future targets have yet to be determined by BEIS, this analysis provides an indication of the level of investment that would be required. This investment could lead to the installation of 1.47 million measures in London private rented sector homes and could include, for example: 168,900 new wet central heating systems being installed. 52,400 homes having solid wall insulation. 91,700 homes having cavity wall insulation. 242,100 having loft insulation. 438,200 LED lights being installed. ACE conservatively estimates that this investment in energy efficiency could lead to the creation of at least 2,500 jobs in the sector across London, and an additional 1,700 jobs in the longer term Energy efficiency in Norwich South: How energy efficiency benefits residents and businesses in the Norwich South constituency. 9 Fuel poverty in London: Research and Policy Report, CAG, ACE, SE2 and CSE, Based on no more than 5,000 being spent per property. 11 Analysis of Building the Future: The economic and fiscal impacts of making homes energy efficient, Verco and Cambridge Econometrics, 2014: Assumptions include a similar profile of delivery and a similar profile of both public and private investment. Association for the Conservation of Energy Consultation response 12

13 As noted in other areas of ACE s response to the draft Environment Strategy, ACE would welcome the Mayor working with stakeholders from across the financial and environmental sectors to develop financial mechanisms to support activity (proposal e). ACE also agrees that the Mayor should work with the GLA and the wider public sector organisations to maximise the use of sustainable procurement approaches to drive demand for low carbon and environmental goods, services and solutions (proposal d). ACE would like to highlight that the Local Government Association (LGA) have recently published Energising Procurement 12, the LGA s national energy procurement category strategy. Developed by ACE and CAG Consultants, the strategy is designed to provide an overview of energy-related actions, including energy efficiency, generation, procurement and supply. It provides ideas for how councils can minimise their costs and maximise the benefits for their local communities through their energy procurement actions. 8 Chapter 11: GLA group operations leading by example Policy Improve the energy efficiency of London s workplaces and support the transition to low carbon heating and power Proposal 6.1.3a Provide direct technical support and assistance to help reduce CO 2 emissions and energy within the public sector, including leading by example in the GLA group estate ACE welcomes proposal 6.1.3a to support the public sector to become more efficient and low carbon. We are encouraged that the Mayor plans to use both Energy for Londoners and the RE:FIT programme to take forward this activity, and that there is a commitment to prioritise the GLA s own estate and activities Association for the Conservation of Energy Consultation response 13