United Kingdom (UK) Green Build Markets

Transcription

1 United Kingdom (UK) Green Build Markets November 2012 Contents 1. Introduction to the UK Green Build Market Key Drivers and Influencers Zero Carbon Homes Standard (ZCH) Code for Sustainable Homes (CSH) BRE Environmental Assessment Method (BREEAM) Fabric Energy Efficiency Stadard (FEES) Green Deal High-density and High-rise Regional Variations Scotland Wales Northern Ireland Market Conditions New Build Residential New Build Commercial New Build Institutional Events Ecobuild Introduction to the UK Green Build Market Green building or sustainability is a central theme in the United Kingdom s construction industry. Government objectives to reduce carbon emissions from UK building stock is driving change and creating new opportunities for product innovation across many sectors. Ultimately this is affecting the choice of materials and technologies by specifiers and end-users. Canadian companies. The catalyst for this change falls to the UK government. Approximately 42% of all carbon emissions in the UK come from buildings 26% from homes and 17% from non-domestic buildings. Since the early 2000s, it has been the objective of successive governments to drive emission reduction through the construction sector.

2 Page 2 In December 2006, the UK government promised that all new homes would be built to a zero carbon standard by This was a ground breaking announcement, and had a galvanising effect on the housebuilding industry and supply chain. An incredible amount of innovation has taken place which has seen new homes being built to increasingly high environmental standards on the road to Originally, the definition of zero carbon was intended to include all the emissions that a home was responsible for, both regulated and unregulated energy. Under the Coalition Government, in 2011, the level of ambition was scaled back to exclude non-regulated energy use such as appliances and cooking. However, it remains an ambitious target. Beyond housing, non-domestic buildings (both public and private) account for 17% of the nation s carbon emissions. The UK government has also committed that all new buildings will conform to a zero carbon standard by But already sustainability is considered to add value to the building, as much as 28%. All non-domestic buildings must now have an Energy Performance Certificate (EPC) and the UK government requires a minimum BREEAM (see below) rating of Excellent for new builds. But sustainability is not the exclusive domain of new construction. There are 26 million homes and about 1.8 million non-domestic buildings in the UK, the majority of which will still be standing in While much of UK government programs have been focussed on the new build sector, the need to green or improve existing stock has been largely ignored. Moving forward this has become the next priority of the UK government, through the Green Deal (see below) and the repair, maintenance and improvement sector will likely be the driving force of the future. So, green building is not an option but an obligation which all in the construction industry must follow. This obligation, an international first, is creating a strong demand for green building products and services. 2. Key Drivers and Influencers 2.1 Zero Carbon Homes Standard (ZCH) The ZCH Standard is in development by the UK government to establish a benchmark by which all new homes will be built from Originally planned to be Level 6 for the Code for Sustainable Homes (see below), the government is now taking a more flexible approach which will be more technically feasible and cost-effective for housebuilders. ZCH will be reliant on in-built energy efficiency and on-site renewable energy generation. This will be supplemented by a range of mostly offsite Allowable Solutions available to developers as a way to meet the ZCH. Solutions currently under consideration include investment in district heating, renewable energy projects and green retrofit schemes. 2.2 Code for Sustainable Homes (CSH) Launched in 2007, the CSH is a sustainability measurement based on a six star system with Level 6 (L6) achieving a zero carbon standard. The CSH is not used in Scotland. In the private sector the code is entirely voluntary, though the Building Regulations require a minimum L3 for new homes. Local authorities may require a higher code level based on local planning rules. In the public sector all new homes have been built to an L3 standard since 2008 which will rise to L4 by Many housebuilders will apply the Code as a way to comply with the ZCH.

3 Page 3 Canada has tremendous experience in energy efficient housing through a variety of exemplary programs including R-2000, EQuilibrium, and Super-E. R-2000 and Super-E are often considered to be Code L3 out of the box. 2.3 BRE Environmental Assessment Method (BREEAM) BREEAM was established in 1990 by the Building Research Establishment (BRE) as a sustainability rating system for non-domestic buildings. BREEAM sets a standard for sustainable building design, construction and operation. With over 200,000 buildings certified, it has become one of the most comprehensive and widely accepted measures of a building's environmental performance in the UK and around the world. Besides new construction, other BREEAM schemes includerefurbishment, Communities and In-Use. The LEED Leadership in Energy and Environmental Design program was based upon BREEAM. With many similarities between BREEAM and LEED, Canadian LEED practitioners are in a good position to work in the UK with some basic retraining. 2.4 Fabric Energy Efficiency Standard (FEES) The first step towards ZCH will be tough standards for fabric energy efficiency including insulation and glazing. FEES is a flexible performance-based standard which sets a maximum limit on the amount of energy that would normally be needed to maintain comfortable internal temperatures in the home. The Canadian housing system exemplifies this through airtight and well-ventilated construction and with superior insulation, window and door systems commonly in use. 2.5 Green Deal Launched in October 2012, the Green Deal is the UK government s flagship retrofit initiative. It is aimed at driving energy efficiency improvement in millions of homes and businesses at no upfront cost to the customer. The scheme is designed to let the customer pay for some or all of the improvements over time through energy bills. Repayments will be no more than what a typical household or business should save in energy costs. The Green Deal has the capacity to increase the market for green building products ten-fold. It is anticipated the scheme could catalyze billions of pounds in retrofit investment annually and is considered to be one of the most ambitious government schemes in support of the sustainability agenda to date. The scheme will balloon demand for energy saving measures such as double/triple glazed windows, interior/exterior solid wall insulation and micro-renewables, and will be on a scale attractive to many Canadian companies. 2.6 High-density and High-rise In the last few years, a number of factors have led to a significant increase in high-rise developments. Land in British cities is scarce and expensive. Land values in London alone have increased 20.3% in the

4 Page 4 12 months leading up to October Furthermore a population boom and the need to effectively use space has led to a resurgence of the residential tower block. In London, more than 100 high-rises are being built or are planned - 25 of those are at least twenty stories and are already under construction. The UK lacks both the experience and technologies to build sustainable high-rise residential properties. With years of experience of high-rise condo developments in many Canadian cities, Canadian firms are well positioned to benefit from this emerging market. 3. Regional Variations This report is largely focused on England as it accounts for the lion share of new construction and retrofit work. However, green building is also of great importance to the devolved administrations of Scotland, Wales and Northern Ireland, though each country has slightly different policies and therefore different drivers. 3.1 Scotland The 2007 Sullivan Report recommended a phased approach to net zero carbon by 2016/17 if practical. Energy standards were introduced in 2010 to achieve a 30% reduction in carbon emissions. Revisions for 2013 will bring a 60% reduction. In 2011, Scotland introduced a mandatory sustainability labelling system. The CSH is not commonly used in Scotland Wales Responsibility for building regulations was handed over to Wales at the start of Wales is committed to reducing carbon emissions by 55% over the 2006 building regulations. In June, the Wales Low/Zero Carbon Hub was established to define a zero carbon standard and achieve a 3% reduction in carbon emissions year on year Northern Ireland Northern Ireland made CSH L3 mandatory for public housing from Market Conditions 4.1 New Build Residential The new housing market saw a significant downturn in 2008/09 with housing completions dropping to 140,000 in There are now strong signs that the market has stabilised. The UK government has increased demand for new homes through a variety of financing programs, and will increase the supply through incentives to both developers and local authorities (municipalities). Forecasters expect a gradual rise in completions of 6-8% per year to To take a wider perspective, while house prices increased significantly pre-2008, the UK is subsequently one of the only countries to avoid a major crash in the last 4 years. Supply never exceeded demand and house prices have stabilised quickly and have recovered.

5 Page 5 Both before and after 2008, the public sector has remained a major client of the housebuilding industry. In 2007, affordable and social housing accounted for 12.4% of completions. This almost doubled to 23.5% by While invigorating the sector during hard times, public housing has also been important to drive through the sustainability agenda and establish performance targets greater than those required in the private sector. The mix of housing types has also changed. In 2001, houses accounted for 77% of completions while flats (apartments) accounted for 23%. By 2009 this was split evenly 50% between each type. While the ratio has swung somewhat back towards houses, the market for flats and high-rise residential developments is expected to remain high. 4.2 New Build Commercial Like with housing, the commercial sector has also gone through turbulent times. Take up in 2009 was about 30% below average though the financial and business sector has performed relatively well. Throughout the sector, the sustainability agenda is a central issue with many large commercial developers pledging to reduce their impact on the environment by incorporating green technologies. Going forward, the corporate sector is expected to replace the public sector as the major occupier as cuts affect demand for public sector office space. Five key areas of opportunity include grocery retail, private sector care homes, budget hotels, student accommodation and industrial and retail warehousing. 4.3 New Build Institutional Investment in both healthcare and education is a priority for the UK government. Capital spending in the National Health Service (NHS) is targeted at C$7bn per year over four years and between C$5-7bn in the Department of Education (DoE). While both significant, each represents a drop in capital expenditure across social infrastructure in general. 5. Events 5.1 Ecobuild London, ExCel March 5 th 7 th, Ecobuild is the world s largest sustainable building event, attracting the global green design, construction and built environment community. Endorsed by government officials and celebrities alike, Ecobuild 2013 is set to surpass Ecobuild 2012, where almost 60,000 visitors, 1,600 exhibitors, and hundreds of expert speakers came together to do business. For information on the Canada Innovation Pavilion and Showcase please contact the Trade Commissioner Service in London. Jason Kee Trade Commissioner High Commission of Canada Tel: +44 (0) jason.kee@international.gc.ca