Budget 2008 - The Smaller Print

Beyond the headlines, this year's Budget addressed a variety of sustainability issues from carbon capture to sustainable procurement. There was the usual announcements of consultations to come as well as something I’ve never seen before – a promise to make a decision on a definition – but there was also a sprinkling of money promised, viz. £400m to be invested in getting renewable energy generation technologies and £26m to market and expansion of the Green Homes Concierge Service, perhaps Brown’s answer to the Cones Hotline …

We look at some of the lesser known budgetary proclamations and hazard some light Monday afternoon analysis.

The Government will set out a definition for zero-carbon homes by the end of 2008

It has long been noted that the Government has two differing definitions of what constitutes a zero-carbon home, based on whether or not a building does or does not have a gas supply. If it does, as far as the Treasury is concerned, it isn’t. Since it has agreed to waive stamp duty on zero-carbon homes below half a million pounds, the definition is important. Many in the industry will be pleased that this is on its way and it will help house builders plans for the not-too-distant future of 2016 but question why it took – or is taking – so long. The answer is, of course, related to the number of houses funded – and, therefore, the amount of money the Treasury is prepared to invest in sustainable buildings. The Government has effectively delayed that decision to 2009 when it has a clearer picture of where the nation’s economy is headed.

Additionally,

the Government will extend Stamp Duty exemption to new flats retrospectively from 1 October 2007

. Just as well given the requirement that zero-carbon homes are off the National Grid; larger residential complexes are better placed to benefit from biomass CHP and other expensive technologies.

The Government will provide pump prime funding for a delivery unit to guide, monitor and co-ordinate the zero-carbon programme

This is believed to be a reference to the work that the UKGBC has been doing for the Government. Providing funding for the ongoing work of the UKGBC is a new wrinkle, however.

Energy suppliers must supply medium and large businesses with smart meters within the next five years

Smart meters are the next big maybe in Government. But is it really big business that needs this? Surely their accountants have at least some clue as to energy usage already?

Environment minister, Phil Woolas recently revealed that after he mentioned his thoughts about introduction of smart meters to the Chinese trade minister the latter said he could get 20 million knocked up by next week. Woolas thought the ability of the Chinese Government to get things done quickly was worth a laugh. Less amusing are reports from the Energy Savings Trust that eight out of ten people don’t know how much money they spend on gas and electricity or what plan they are on. If they (we) don’t know how much they use, how will they know how to cut down?

All new homes built on central government land released through the surplus public sector land programme from April 2008 will reach a minimum of Level 3 of the Code for Sustainable Homes

The Government is hoping to be able to put 200,000 affordable homes on ‘surplus public land’ by 2016. If these are not built by housing associations – which are already subject to CSH rules – then they will at least be moving in the right direction in terms of technological development. Some engineers see the staging posts of CSH three through to six as counter productive; builders are building to this year’s Code requirements rather than the long term and there’s no clear upgrade path for houses.

The Government is to review feed-in tariffs for renewables and will examine how to support microgeneration through planning

Feed in tariffs which guarantee prices for renewable energy for a certain period thus giving investors a clear return on their exertions have catapulted Spain, Portugal and Germany to the top of the renewables league. The Government have hitherto preferred to rely on Renewables Obligations Commitments (ROCS) but there will be cheer from the renewables industry that they are at least considering a financial framework that makes a difference.

Planning and microgeneration (indeed, with over 200 turbine schemes in planning, 5% of the UK’s electricity generation in planning, planning and renewables in sum) haven’t mixed very well. The Government is to examine how to allow people to add solar panels and other ‘small extensions’ that save carbon can be added without going through time-consuming procedures.

The Government will allocate £26m to a Green Homes Concierge Service in 2008-2009

This Carbon Savings Trust helpline and web site, rolled out in London and announced in November, is intended to help people live their lives ‘more greenly.’ Presumably they will be told to insulate their properties and turn their heating down a degree and investigate other measures which will prove to be too expensive. There’s a paid for service to give tailored advice. Moderately cost-effective base covering (to put it politely) But why not just invest more money in the Warm Front scheme and insulate some more homes instead?

Additional measures

• The Government is getting interested in Carbon Capture and Storage or filling up old coal and gas fields with carbon (CCS) and has launched a competition to demonstrate the viability of the technology. With the first new coal station in years being built – at Kingsnorth in Kent – the Government needs to get this online to avoid a PR disaster. Industry bods suggest one competition will not be enough. It’s looking at whether CCS should be mandatory for new coal stations. Might be nice.
• The Government is to publish a new public sector sustainable procurement framework including guidance. Personally, I thought the Government had committed to purchase sustainably since it introduced its ‘Quick Wins’ policy in 2003 that promised to do just that. But since a Commons Committee found that take up of this was ‘extremely limited’ earlier this year, perhaps it fancied another go.
• Under the domestic Environmental Transformation Fund, the Government will also allocate £400m to various renewables projects including wind farms, solar and ‘sustainable bioenergy’ (there’s a new term for you) There’s £45m for trials and loans in the public sector and £90m for new technologies. The details are vague; the Government will announce a ‘low carbon energy strategy’ to ‘show how the co-ordination of existing and new schemes can maximise the UK’s efforts in developing the right technologies to tackle global climate change.’ Should be interesting reading and a busy spring for the Government.