‘In 5-10 years the whole picture of energy supply will have changed dramatically’

‘Now that the government has issued its consultation papers, the full horror is before us.” No, this isn’t a quote from an opposition politician on the latest plan to send more troops to Middle Eastern war zones. It is in fact from the decidedly reserved Richard Hodkinson, director of his eponymous sustainability consultancy, and the “horror” he is referring to is to be found in three papers issued last December by the DCLG about zero carbon homes.

Hodkinson is adamant, however, that once his housebuilder clients and everyone else have read the consultation paper Planning and Climate Change – Annexe E to be precise – they will understand what he means (see box: How low can you go?). “Zero carbon homes covers not only things that are within housebuilders’ control – it includes a whole host of things that are outside it,” he says. “Energy is a large part of this, and the question then is how much of this is in housebuilders’ control and how much is down to energy providers?”

Hodkinson’s key concern is the passage that reads “planning authorities should… ensure that a significant proportion of the energy supply of substantial new development is gained on-site and renewably and/or from a decentralised, renewable or low-carbon energy supply”. The DCLG’s definition of a “significant proportion of the energy supply” is 10% and “substantial new development” is anything over 1000m2. According to Hodkinson, this translates into “anything over 10 homes… Should housebuilders be the future generators of electricity? Clearly not. This is the job for energy companies.”

Dave Mitchell, technical director at the Home Builders Federation, agrees. “The issue of energy supply is something we are seriously talking about with our members. If you had a development with a plot of land as part of it for a wind turbine, we wouldn’t want to be building this. We are not in the business of supplying energy so we would want to see if an energy supplier could come in partnership with us to do this.” E E Mitchell is canvassing his members’ views to find out what will prevent them from delivering zero carbon homes by 2016. “This list should be put together by the end of March,” he adds. “We have then got to get down and talk seriously to energy suppliers and ask ‘Do they want to help us with providing renewable energy?’ This is very high up housebuilders’ agenda just now.”

Mitchell will be pleased to find that energy suppliers including Centrica, Scottish and Southern, Powergen and NPower are all keen, they say, to go green. These and several other power companies have joined the newly formed UK Business Council for Sustainable Energy. Megan Wheatley, the BCSE’s policy manager, says the lobby group is already in discussions with the government over setting up a steering group – ideally including housebuilders – to examine how best to power zero carbon homes. “The key areas are infrastructure and integrating systems a bit better such as district heating systems and power supply,” she says. “We need to take a much wider approach to this than has been the case in the past.”

Mark Nicol, strategy and planning manager at NPower, has high hopes for the steering group and hopes to see solutions coming from it by the end of 2007. He also shares Mitchell’s concerns about a potential blurring of responsibilities. “We recognise that we have to find solutions to this. We know that builders alone can’t do it and neither can we… It is possible that we could strike deals where we become a long-term partner with builders to help them meet government requirements.”

A business opportunity

Mass market demand is not there yet. But given the government’s climate change agenda, it soon will be

Mark Nicol, NPower

Nicol and his contemporaries at other power companies spoken to by Regenerate all talk of the drive to zero carbon homes as “an exciting business opportunity”. All are already providing a variety of wind turbines, combined heat and power plants, ground source heat pumps and other green forms of micro power generation to private and business customers. Nicol is first to admit however that the take-up to date has been slow. “The mass market demand is not there yet. But given the government’s interest in the whole climate change agenda, this will definitely come.”

This is a view shared by Dan Epstein, environmental policy manager at English Partnerships. “I think you’ll find that the market will move very quickly now,” he says. “Energy companies and product suppliers are investing very heavily in this.” He cites recent EP-backed research that showed that for every doubling in the size of the market for green energy products, there was an 18% fall in costs. This is helped by companies offering discounts for bulk-buying – up to 60% in the case of ground source heat pumps. “So starting from a very small base we should see a huge fall in the costs of green technologies over the next few years,” Epstein adds. “Large developers are able to get economies of scale by striking strategic partnerships with suppliers. This means they can drive costs down through bulk buying.”

Leaders of the pack

One of the housebuilders that has swiftly sized up the potential of the green agenda is Crest Nicholson. Paul Donnelly, Crest’s group environmental manager, acknowledges that they, Berkeley and Taylor Woodrow are probably “in a leading pack” in this area. He says Crest has been working with Scottish and Southern for a number of years now and that the pair are already trialling potential approaches to meeting the 10% renewable requirement set out in the PPS on planning and climate change. “In 5-10 years the whole picture of energy supply will have changed dramatically,” he says. “We want to be at the forefront of renewables and zero carbon, so there is no point in just complying with the regulations – you have to go beyond. No one’s saying ‘no we can’t do it’. We can see through the energy reports we do for our schemes that a spectrum of renewables can quite readily be used to supply at least 10% of [a home’s] power needs.”

Donnelly adds that developers are already having to meet this 10% level “simply in order to win the bid. We have done these on schemes in Gallions Reach in east London, Milton Keynes and in the South-west. These are schemes ranging from 20 to 2,000 homes and there are a lot of these bubbling under”.

He says that in this fledgling stage of the market there are still many problems to be ironed out, such as the lack of expertise among housebuilders for specifying appropriate green technologies. “Who do we get to supply the pellets to be burned in the CHP units? Micro-generation through wind power – on-site or off-site? Is there enough wind? Do we want to put up a symbolic wind turbine at a development or can we do it in Wales to offset the non-renewable energy used on a site?”

Using green energy sources may present all manner of horrors, but housebuilders are ready to face them.