Policy Briefing: Is Scotland making the most of renewable energy in the housing sector?

Ben Wray

James Turner, a political activist and mature student at The University of Highlands and Islands studying Sustainable Development, continues his series of policy briefings on housing, looking at the crucial issue of energy policy in the housing sector, which has a major effect on tackling fuel poverty and climate change

IN this policy briefing we review the Scottish Government’s current approach to carbon emissions reduction and how it relates to the housing sector, look at specific examples of effective renewables approaches like district heating schemes, and examine the potential going forward for taking a new, green approach to housing construction and energy production.

Energy policy

The Scottish Government’s current energy policy was recently set out in their draft Energy Strategy for Scotland in which they lay out their vision for the future of energy in Scotland until 2050. The strategy is underpinned by three themes:

  • A whole system view” – Scotland’s energy supply and consumption must be considered as equal priorities and an integrated approach to power, transport and heating must be established.
  • A stable, managed energy transition” – in line with the long term climate change goals, it must be ensured that Scotland has affordable and secure supplies of energy. While there will be continued support for innovation within the oil and gas industries, there is also the aim of utilising renewable technologies as well as the development of more low cost methods of producing, transmitting and storing energy.
  • “A smarter model of local energy provision” – the promotion of local energy, planned with the involvement of communities and offering the ownership of energy generation to Scottish communities.

READ MORE – What is the government doing about homelessness?

The Scottish Government has also set a target of 50% of Scotland’s energy consumption to be met by renewable energy by 2030. In addition, a renewed focus on energy efficiency has also been announced whereby a targeted approach will be used to reduce demand and increase the energy efficiency of the homes and buildings in Scotland through Scotland’s Energy Efficiency Programme (SEEP). The aim of SEEP is to make homes, shops and hospitals warmer, easier to heat and to tackle fuel poverty. One phase of pilots has now been carried out with the aim of refining SEEP, the first in 2016 with £9m allocated to projects designed to assist in the alleviation of fuel poverty in 11 local authority areas across the country. The second phase of pilots began in February of this year with the Scottish Government inviting local authorities to submit proposals for projects to be delivered by the end of February 2019.

The reasons for the focus on energy efficiency and the use of more renewables are twofold. Firstly, there is the issue of fuel poverty. A household in Scotland is considered to be in fuel poverty if it must spend more than 10% of their income (including Housing Benefit or Income Support for Mortgage Interest) on all household fuel use.  The most recent figures available regarding fuel poverty are for 2015, at which time 748,000 (30%) households in Scotland were in fuel poverty while 203,000 (8.3%) were in extreme fuel poverty, a situation that has almost certainly not been helped by the increase of average gas bills by nearly 85% between 2006 and 2015 and the average electricity bill by 56% for the same period. The Scottish Government was required to eradicate fuel poverty from Scotland as far as reasonably practicable by November 2016 by the Housing Act 2001, but missed this target by some way. However, of the three main policy areas affecting fuel poverty, two (household income and energy regulation) are reserved to the UK Government leaving only energy efficiency devolved to Holyrood.

Secondly there is the issue of climate change – cutting anthropogenic carbon emissions such as those resulting from the generation of electricity and the heating of buildings is now essential if the human race is to avoid global catastrophe. Since the industrial revolution began almost two centuries ago, our use of and reliance on fossil fuels has overwhelmed the natural carbon cycle which is responsible for making the Earth habitable to all life as we know it. Among other things this has led to an increase in average global temperatures, increases in the acidity and changes to the salinity of the world’s oceans which have led to changes in global and local climates and the melting of permafrost and polar icecaps which in themselves further affect the Earth’s climate. In essence we are now in very real danger of making the Earth uninhabitable, not just for ourselves but for a great number of other species as well. Fortunately, the Scottish Government already recognises the importance of tackling climate change and already has a number of provisions for combating climate change with the Climate Change (Scotland) Act 2009 aiming for a 42% reduction in carbon emissions by 2020 and an 80% reduction by 2050.

Renewable energy sources already account for the generation of more electricity in Scotland than fossil fuels and nuclear which are responsible for the production of 28% and 33% of Scotland’s electricity respectively. The largest sources of renewable energy are wind turbines and hydro. A 2013 survey by Brodies LLP in conjunction with Aberdeen Renewable Energy Group canvassed individuals across the renewables sector and found that the biggest barriers to new renewable energy projects were planning and consent issues (53% of respondents), availability of finance (29% of respondents) in addition to highlighting that the objector lobby and grid connection charges were also an issue. With regards to the objector lobby, according to Martin J. Pasqualetti the most common threads in public reservations about renewable energy generation seem to be changes to the landscape and the disruption such changes may have to the established ways of life for those nearby.

District Heating Schemes

One of the ways in which fuel poverty is being addressed in Scotland is what are known as district or community heating schemes. Rather than each household heating itself, whole communities share heating systems. There are many already in operation across Scotland such as:

  • Slateford Green, which is a development in the heart of Edinburgh that consists of 120 flats. Developed by Dunedin Canmore Housing Association, Slateford Green was opened in 2000 and mainly funded by the housing association themselves with the aim of testing new approaches to heating which could be utilised to improve the sustainability of Scottish Housing. The heating system consists of two large gas boilers which supply heat and hot water to all 120 flats after a more ambitious plan to use waste heat from the nearby Caledonian Brewery proved to be unfeasible.
  • Lasswade Road is located in southern Edinburgh and is another Dunedin Canmore Housing Association development which consists of 20 flats and 11 houses and was completed in 2009. Lasswade Road utilises a communal biomass heating system to provide hot water and heat. The biomass is sourced from Balcas in Northern Ireland in the form of wooden pellets. The project cost £549,000 to install, with £50,000 coming from the Scottish Community and Householder Renewable Incentive (SCHRI), £50,000 from the Energy Saving Trust with the remainder coming from the housing association’s housing budget. It was predicted that the biomass heating system would save 120 tonnes of CO2 per annum compared to an oil fired boiler, however no formal calculations of system returns have been carried out since the system began operating.
  • Walter Cameron Way was developed by Hanover Housing near Fort William and is a sheltered housing community consisting of 16 flats, 8 cottages and a house for the manager. Hot water and heating was originally provided by oil fired boilers but the increasing volatility of oil prices coupled with the expense and inefficiency of the system prompted Hanover Housing’s decision to install a biomass system. The installation cost £122,885 with £33,856.50 of the funding being provided by the Scottish Government’s Community and Renewable Energy Scheme (CARES) and the rest coming from Hanover Housing’s own funds. It has been estimated that the system saves residents approximately £10,199 per annum on heating and hot water along with around 134 tonnes of CO2.
  • West Whitlawburn Housing Co-Operative in South Lanarkshire consists of 543 homes which were connected to a biomass heating system in August 2014 and predicted to save 1,620 tonnes of CO2 a year in addition to saving tenants around 20% a year on the cost of heating and hot water. Funding for West Whitlawburn came from Energy Company Obligation, Scottish Government Warm Homes Fund loans and a European Regional Development grant.

READ MORE – Ben Wray: The 10 actions we can take to fix housing in Scotland

As can be seen from these examples there are several sources of funding available for the development of district heating schemes including but not limited to the District Heating Loan Fund, Community and Renewable Energy Scheme (CARES), Energy Company Obligation (ECO), the Warmer Homes Fund and (albeit possibly not for much longer) the European Regional Development Fund (ERDF). 

Housing Construction and Refurbishment

Gordon Brown introduced a Zero-Carbon Homes Policy in 2006 but it was scrapped by the Conservative government in 2015 on the basis that it had been determined that it was impossible to build a cost effective carbon neutral home. Undeterred by this claim, the Welsh School of Architecture at Cardiff University embarked upon a project known as The Solcer House which has demonstrated that it is possible to build a carbon-neutral home for an affordable price using existing ‘off the shelf’ technologies. Over an annual period, the Solcer house generates 1.75 times more energy than it uses through its photovoltaic panelled roof. The house cost £1200/m2 to build and is projected to have energy bills of around £200 per annum which would make it affordable to build for social housing and more affordable to live in for owners or tenants. Also found in Wales is Pentre Solar, a hamlet in the west of the country composed of six houses. Rather than focussing on technology, Pentre Solar concentrates on the reduction of energy demands. The houses here use photovoltaic panels as a source of renewable energy and the thermal efficiency of the building materials along with passive solar heating to generate and retain heat. Including the photovoltaics, the houses at Pentre Solar cost between £1000 and £1200/m2 to build and have running costs below £300 per annum as well as generating enough energy to enable the household to run an electric car.

In addition to the building of energy efficient homes, there is also the need to address the inefficiency of existing homes, particularly those that were built during the post-war years when energy conservation was not a factor in construction. Recognising this the European Union launched a project called E2ReBuild with the aim of investigating, promoting and demonstrating cost-effective, energy efficient methods of retrofitting existing housing. Seven demonstration properties were selected across European nations: two in Germany, one in Finland, one in Sweden, one in The Netherlands, one in France and one in the UK. Each was intended to showcase sustainable best practice methods for retrofitting buildings in cold climates to reduce energy use for heating, hot water and ventilation. The solutions that E2ReBuild found were focussed on industrial manufacturing methods which would minimise disruption to residents, reducing production and installation times and thus the overall costs of the projects. While the E2ReBuild project concluded in 2014, there are now numerous companies, including Beattie Passive in the UK who are pursuing offsite retrofitting as a means to reduce energy consumption and carbon emissions.

Barriers to Housing Production

Homes for Scotland state that the two key infrastructure barriers to the delivery of more homes in Scotland are insufficient commitment to delivery by all local partners and insufficient overall funding being committed while Brodies LLP found that the housing sector said that the most significant barrier to building new homes was delays to planning consent. The Scottish Government has also identified barriers to the production of new housing which include:

  • Lack of information about how quickly and realistically some sites identified for housing development can be built on.
  • Lack of availability of good quality private finance options for housing associations and Small and Medium Sized Enterprises (SMEs) for complementing the Affordable Housing Supply Programme subsidy framework.
  • Lack of provision of infrastructure such as schools, roads and water and sewerage management.
  • The planning process impeding the speed at which developments can be progressed.
  • Controversy in identifying effective land supply for housing development.
  • Shrinkage of the housing construction industry and associated supply chains as a result of the economic crisis.

READ MORE – Housekeeping Scotland: A discussion paper outlining a new agenda for housing

The Scottish Government is due to publish a new Planning Bill later in 2017 following the conclusion of a consultation on ‘Places, People and Planning’ which contains proposals to streamline the current planning process in Scotland.

In addition to these barriers stands the possibility that Scotland just might not have the men and women to physically build the homes we need. The 2017 Arcadis Talent Scale Report states that in order to meet the current demand for housing in Scotland, the construction industry will need to recruit more than 30,000 people per year. Offering a different perspective, Skills Development Scotland estimate that between 2016 and 2024 Scotland will need to find 10,945 people for skilled trades occupations, 21,877 people for elementary occupations and 5,282 people for process, plant and machine operations per year, though unfortunately they do not give a specific figure for construction and related industries only.

Further examination of figures from Skills Development Scotland reveals that for the first quarter of 2017 there were 10,859 people enrolled on modern apprenticeships within construction and construction related areas an increase from 9,495 for the same period of 2016. When the 11,195 part-time and 4870 full time students that Skills Development Scotland records show enrolled on other courses and qualifications to do with construction are also taken into account, Scotland is nearly 3100 people short of the needed number of people to meet current housing demand according to the Arcadis report.

Energy Production

In addition to manufacturing and retrofitting homes to be more energy efficient another way that both fuel poverty and carbon emissions can be tackled is through changing the way in which the energy we need to heat and power homes is produced and supplied.

Partially funded by the Scottish Government and Social Investment Scotland, Our Power was founded in 2015 by social housing providers across Scotland with the aim of reducing heating and energy costs by passing the benefits they were able to get from the energy sector on to their customers through finding the most efficient operating methods, generating their own power and reinvesting their profits to benefit their customers and their communities. Alongside social housing providers, Local Authorities are also beginning to venture into energy supply. Robin Hood Energy is run by Nottingham City Council and has no paid directors, no shareholders and is run ‘not-for-profit’. Unfortunately, Robin Hood Energy don’t currently generate any electricity themselves, they buy it from the existing energy market but they are investigating methods that they could use to produce power directly.

Community energy generation presents another alternative to the current way that energy is supplied in Scotland. Eigg Electric is a power company owned entirely by the people who live on the island of Eigg. The island is not connected to the mainland electrical grid so until 2008 they utilised expensive and inefficient diesel generators to provide their power. Now a combination of three hydroelectric generators, four wind turbines and a photovoltaic array produce around 184kW of electricity for the islanders. To ensure that there is enough power to go around, homes on the island are limited to using 5kW of electricity at a time while business are limited to 10kW. Usage is monitored through OWL energy monitors so that anyone can see how much energy they’re using at any time. The system is repaired and serviced by a team of islanders trained to maintain it making it entirely self-sufficient. Community Power Scotland’s reports published in 2014 and 2017 list other examples of community energy schemes in Scotland including: Edinburgh Community Solar Co-Operative, Harlow Hydro, Dingwall Wind Co-Op, Bluemull Tidal Energy Ltd, Kinguissie Hydro, Donich Hydro, The Small Wind Co-Op and Spurness Wind Farm. Many of these projects are the result of partnerships between communities and other entities such as commercial developers. Indeed, Community Power Scotland aim to use case studies of such projects to help enable the development of more community energy projects across the country.

Another option for Scotland could be for the Scottish Government to create a national energy provider that generates and supplies energy for the whole country. This is not a new idea, indeed as far back as 2013 The Jimmy Reid Foundation proposed the creation of a national energy provider in a report entitled “Repossessing the Future”, recommending that in order to reach full potential a “much greater level of state intervention and public participation” would be required in order to both develop Scotland’s energy resources and to achieve the 2050 climate change targets. The foundation further argue that Scotland should seek to emulate what they call the ‘Nordic model’ of energy production that can be seen in Germany and Denmark where policies are aimed at benefiting the whole of society rather than private interests. This would be achieved through the utilisation of decentralised and hybrid forms of nationalisation where citizen participation and local democracy play pivotal roles in the decision making regarding energy issues and that this approach would be critical to the creation of a national energy supplier that would work for the people and country of Scotland. While it could be argued that the Scottish Government appears to recognise at least part of this with the ‘smarter model of local energy provision’ aspect of their current energy policy, the possibility of a national energy provider for Scotland remains unrealised at this time. 

Where do we go from here?

There are clearly a variety of solutions to the issues of fuel poverty and carbon emissions available to Scotland and these solutions are available to everyone from individual households to communities, businesses, housing associations, local authorities and the Scottish Government because they are already being carried out by these entities to varying degrees. Equally clear is the very real and immediate demand that Scotland has for more housing. The Government does appear to be attempting to remedy this through their reform of planning legislation and this is a start but it is imperative that we also take steps to ensure that we are training enough people so that the construction industry can meet the country’s housing demands because better planning legislation is all well and good but it will benefit no one if we haven’t the men and women to utilise it. We must also accept that energy efficient housing is affordable so there really is no excuse not to begin realising projects like the Solcer house and Pentre Solar here in Scotland, not only for residential use but for all buildings. We must also continue to retrofit and improve existing housing so that no household is left in fuel poverty.

None of the barriers to developing better housing and energy solutions are insurmountable, indeed as has been shown, many have already been overcome on small scales and simply require more widespread adoption. We can speed this adoption through the recognition and promotion of these successes and the organisations and individuals who have made them possible. Equally important is the promotion of the fact that many of the solutions which can alleviate fuel poverty and decrease carbon emissions, along with funding to help achieve them are available right now and this can be done through combining the expertise of the organisations who have been championing these solutions such as the Energy Saving Trust, District Heating Scotland and Community Power Scotland to create a ‘one-stop-shop’ organisation to provide anyone and everyone with clear and simple information about renewable energy options, the successes that are already being enjoyed with them and the sources of funding that can be used for them.