Street by street, house by house, area based retrofit for low carbon homes Best approaches for Scotland David Adams Head of External Affairs

But it’s ok? “1.1 Scotland is an energy-rich nation, internationally recognised as having vast resources in renewable energy, oil and gas.” Peak oil? Or, viewed from afar: Peak Oil – Viewed from a distance

What will energy cost in 2050? Fuel poverty

Progress to date…

Progress to date… Future

Heat and Energy Saving Strategy Homes

Your targets… 80% CO2 emissions reduction by % CO2 emissions reduction by 2020

Scottish Final Energy Consumption

Victorian 3 bed semi* Appliances 1.2TCO 2 pa Lighting and pumps0.5TCO 2 pa Water heating1.0TCO 2 pa Space heating4.5TCO 2 pa Total7TCO 2 pa *Includes some upgrades – 30% Low energy lighting, 50mm Loft insulation, basic double glazing

Retrofitting “Standard” package: Cavity wall insulation Loft insulation Condensing Gas Boiler Heating controls Low energy lighting Draft proofing Floor insulation …. Circa £3,000 to £4,000

Retrofitting “Expensive to treat” package: Solid wall insulation Loft insulation Condensing Gas Boiler / Biomass boiler /GSHP Heating controls Low energy lighting Draft proofing Floor insulation …. Circa £12,000 to £20,000

The challenges 42% reduction in energy 2.5 million homes Typical £7,000 each to upgrade £16billion –£1.6B per year £6 M per working day –900 homes completed every day……

The challenges - engagement Requires 900 homes completed every day…… Today? guess = 150K pa or 500 per day Issue - much more needs to be done with each to reach a 42% reduction = Area based refurbishment = single streets = single homes

Area based approach Barriers to energy efficiency Including split incentives, Behavioural inertia Institutional inertia, perceived risks of investment, not ‘top of mind’ issue

The challenges – what, when Whole house all at once is expensive Scary numbers! … will be appropriate on occasions Need to have a whole house ‘plan’ Execute it at appropriate times Need the community - Area based approach Create momentum Demonstrate locally what can be done Reassurance Protection Raise to ‘top of mind’ …. even if single homes are refurbished Behavioural

The challenges - financial Where does £16billion come from? Euqivalent to £640 spent per household per year to 2020 ???? …… “However, due to the significant sums involved, it is assumed that those who are able to pay will invest or borrow to undertake work.” Why?

Remembering… Significantly more would be spent on fuel than on the cost of the energy efficiency measures Energy efficiency makes sense: Climate, energy security, fuel poverty, cost

Financing approaches Required rapidly Need a range of, available to all –Green mortgages –“Pay As You Save”

Financing approaches Required rapidly Need a range of, available to all –Green mortgages –“Pay As You Save” –….. Need to ‘value’ energy efficient homes –Regulation to drive valuation Need financial incentives Remembering: Significantly more would be spent on fuel than on the cost of the energy efficiency measures We are not putting people into debt

Compulsion or incentives? Need to engage Incentives – yes Make it “easier to do” than “not do” Responsibly warn people what is to come –Fuel costs, –climate, –Legislation = withdrawal of incentives.. = unable to sell / rent must give long timescale warning (but effect is more rapid) …and in some circumstances - compulsion

Supply chain… Industry will invest if there is confidence in: – a robust –Quality –long term market Your time scale is very short Need to serious delivery plan They would be mad not too

Remembering… Significantly more would be spent on fuel than on the cost of the energy efficiency measures Energy efficiency makes sense: Climate, energy security, fuel poverty, Job creation Comfort Costs less! It actually doesn’t get any better than this! Just need to work out how….!

Thank you David Adams, Knauf Insulation