COSY isn’t it?” says Amanda James. We are in the kitchen of a modest terraced house in Sheffield, in the north of England, and James is part of a city council team overseeing the regeneration of this down-at-heel neighbourhood. Apart from looking a little smarter than the other houses on the street, there is not much to distinguish it from its neighbours. The difference will only start to show when the heating bills come in: though gas and electricity prices have soared, this is one property that will still be cheap to keep warm.
The achievement is particularly striking as this is the kind of house that used to be considered beyond help. There are millions like it up and down the UK, many dating from the late 19th century. The walls are solid, just one brick thick, so there is no cavity to fill with heat-insulating foam. The roof space is part of the living area, so there is no simple loft insulation to be done. Even so, by the time the builders had finished insulating the walls and roof, and cutting out draughts, this humble abode had been transformed into an A-rated energy-efficient success story, dubbed the Eco-terrace.
If everyone lived and worked in such well-insulated spaces, we would be well on the way to a low-carbon world. The European Union alone uses the equivalent of 6 million barrels of oil a day just to heat its buildings, a figure that could be halved by insulating them properly, according to a 2006 report by Dutch energy consultant Ecofys. The report estimated that this would cut €270 billion a year from the EU’s energy bills, and 460 million tonnes from its annual CO2 emissions, meeting its Kyoto commitments at a stroke. It would also create 500,000 jobs.
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“€270bn The annual savings the EU could make by insulating its buildings”
Until now, most of the effort to make housing more energy efficient has focused on newbuilds. In 2007, the UK government pledged to make all new houses carbon neutral from 2016. In Germany, where regulations are tight already, the pace is being set by even more ambitious standards set out by the Institute in Darmstadt. PassivHaus buildings should use just 10 per cent of energy consumed today by a typical house. Fitted with small-scale solar and wind generators, high-tech homes like these should be able to produce more energy than they consume.
Unfortunately, most people aren’t in a position to move to expensive state-of-the-art new homes. Of the UK’s 26 million homes, more date from before 1919 than have been built since 1980. At current building rates, 85 per cent of existing housing will still be in use in 2050.
So how much does it cost to achieve a house with a climate-friendly carbon footprint? Not as much as many people may think. Take the “Banana Farm”, the house of energy-efficiency advocate . In 1983, prompted by the oil shock of the previous decade, Lovins built a radically designed house in Snowmass, Colorado, that used only 10 per cent as much electricity and 1 per cent as much energy for heating as a typical American home of the time. The energy-efficiency elements to achieve that contributed a mere $6000 to the overall $500,000 cost of the house. Energy savings meant that extra investment was recouped in just 10 months.
Last year, Lovins completed a major refit of his property. An energy-management system that uses data collected from 200 monitoring points around the house fine-tunes heating and lighting. A new bank of photovoltaic panels has brought the Banana Farm’s peak electricity-generation capacity to 9.7 kilowatts, more than enough to run the sort of low-energy appliances found in a modern home.
Lovins views Banana Farm 2.0 as a laboratory for the future rather than a solution for today’s homes. It’s the original, low-cost energy savings we should focus on, he says. “Whatever your income, a 10-month payback is about the highest riskless return in the whole economy. Today, the economics would be even better.”
Lovins’s house was built to be energy-efficient. Old buildings like the Sheffield terrace were not. Tests on the building before work started showed how appallingly draughty it was. Air permeability is measured in cubic metres of air lost per hour per square metre of the house’s external area when it is pressurised to 50 pascals. In Germany, building regulations demand an air permeability value no greater than 3.8, and the PassivHaus standard is less than 1. The unimproved Sheffield Eco-terrace scored a carbon-guzzling and uncomfortable 22, but after the refit it scores 6, well within the current UK limit of 10 for newbuild homes.
Although the Eco-terrace refit couldn’t run to the expensive gizmos used in Lovins’s new house, some clever solutions were still required. Insulating a house that has been built with solid brick walls used to mean fitting thick, foam-backed wallboard to the inside of external walls. In a small house this eats into an unacceptable amount of floor space, so the builders, advised by the industry and government-backed Energy Saving Trust, used a high-performance insulating wallboard made by the UK company Spacetherm.
The insulating layer on the back of the Spacetherm board is made by drying a silica-based gel at high temperature and pressure. This extracts water, leaving a silica matrix that acts as a highly insulating layer. The board used in Sheffield was just 50 millimetres thick; a conventional panel providing equivalent insulation would have had to be 125 millimetres thick.
James argues that homeowners should look on such retrofits as a financial investment like any other, whose return comes from savings in energy costs. To work out what is worth investing in, consumers need accurate figures on the likely payback. With that in mind, the Department of the Built Environment at the University of Nottingham, UK, is running a three-year study into . Central to the project, which is sponsored by energy company E.On, is a replica of a 1930s semi-detached house that has been built on the Nottingham campus. Three million “semis” like this were built in the UK, and they still form a substantial fraction of the housing stock. “The house provides us with a unique test facility to measure the exact cost-benefit and carbon reduction figures achieved through the various measures,” says Mark Gillott, who is leading the research.
“We have the technologies we need,” says Catalina Spataru, who is also taking part in the Nottingham project. The question is whether people will use them. Most homeowners can’t wait 30 years for their retrofit to pay for itself: people usually move house far more frequently than that, so they have little incentive to invest for the long term.
Finding the right balance of regulation and financial incentive can help solve this problem. In Germany, a combination of cheap finance, tough regulation and market stimulation seems to be doing the trick. German building regulations set energy performance standards for existing buildings as well as new ones: if you want to renovate your house, you have to improve its energy performance. To help homeowners meet those standards, the state-owned development bank KfW offers a programme of grants and cheap loans. The federal government has invested €6.4 billion into the scheme since it started in 2001, with encouraging results. “Since 2006 we have been able to renovate 800,000 homes to a higher energy standard,” Wolfgang Tiefensee, the then building minister, said last year.
“800,000 The number of German homes energy-retrofitted since 2006”
A pioneering project in Berkeley, California, has shown how the financial benefits can be used to persuade Americans to invest in emissions-saving modifications to their homes. In 2007, Berkeley launched itself as a Sustainable Energy Financing District, lending funds to homeowners wanting to install thermal or photovoltaic panels on their roofs. The loan will be repaid through local taxes over 20 years – though this cost should be more than offset by lower energy bills. A crucial feature of the scheme, known as Property Assessed Clean Energy (PACE), is that the debt stays with the house, so if it changes hands the new owner, who reaps the benefit from its energy-saving features, also pays their fair share of the installation cost.
Following in Berkeley’s footsteps, 16 US states have passed legislation that would enable PACE schemes to go ahead, and another dozen are considering it for 2010. “It’s extremely promising,” says Cliff Staton of clean energy consultants Renewable Funding, who are working on PACE schemes with 200 local bodies and the state of California. He reckons 7 out of 10 Californians will be eligible for the programme by the end of this year.
One criticism of these renewable-energy schemes is that investing in energy efficiency would bring better returns. A PACE scheme being introduced in San Francisco will require homeowners to do just that, Staton says, and use PACE bonds to improve energy efficiency before they are eligible for funding to install solar panels.
A report entitled , published last year by the consultancy firm McKinsey, calculated that the US could cut its energy demand in 2020 by 23 per cent, saving $1.2 trillion over the next decade in the process, just by improving efficiency. The economic stimulus package introduced by President Barack Obama in February 2009 in the wake of the banking crisis set aside $5 billion to insulate 500,000 of America’s poorest homes by the end of 2010.
“$1.2trillion The potential savings in the US by 2020 if energy efficiency is improved”
In the UK, it is local government that has been taking the lead. For example, the borough of Kirklees in West Yorkshire launched a £20 million programme in 2007 called that offers free loft and cavity-wall insulation to every household in the borough. The aim is to retrofit half of the area’s 172,000 homes, cutting its total carbon footprint by 2 per cent, or 55,000 tonnes of carbon dioxide per year, which is equivalent to taking 18,000 cars off the road. Around 70,000 homes will have been insulated by the end of 2010, the council says. Kirklees also offers interest-free loans for householders who want to install domestic renewable energy systems.
The national government in the UK is slowly catching up, and this month it announced a scheme of long-term loans for energy retrofits. As with PACE bonds, the debt stays with the house, and loan repayments should be more than offset by reduced energy bills.
Even in developing economies, which use far less energy per head than industrialised nations, there is a growing appetite for using energy more efficiently. China’s Development Research Centre estimates energy efficiency measures implemented by state-owned heavy industry could cut China’s predicted 2020 power needs by a quarter. The country is also beginning to look at energy use of buildings and has tightened its building codes. There are economic benefits as well as environmental ones: the Asia Business Council calculates that the work needed to save a megawatt of power by making buildings more energy efficient costs less than a quarter as much as installing a megawatt of new generating capacity.
As with most things to do with energy efficiency, it’s combining good intentions with economic payback that drives real change. For old houses, the future looks cosy.
“105,000 tonnes of CO2 will be saved over 15 years by retrofitting the Empire State building”
“97,000 tonnes. The CO2 Vienna’s energy-efficient public housing saves annually”
Tales from Vienna
Compared with homeowners, governments are well placed to invest in energy efficiency measures for their long-term payback. Most of the world’s big cities are thinking about ways of cutting the amount of energy their dwellings use, and one of the front-runners in this respect is Austria’s capital, Vienna.
A large proportion of Vienna’s housing is publicly owned, and the city has shown the political will to make rapid progress. Perhaps most eye-catching is its 1700-apartment project at Aspanggründe, the world’s largest eco home scheme, due for completion in 2016.
Less spectacular, but arguably far more significant, is a programme that is refurbishing 10,000 of Vienna’s publicly owned dwellings each year. The aim is to slash their consumption of energy for heating from as much as 250 kilowatt-hours per square metre per year to around 50 kWh/m2/yr. Two-thirds of the refurbishment costs will be recouped by the city by a gradual rent increase, but savings from reduced energy bills will mean that tenants will be better off despite the higher rents. As well as improving building insulation, the refit includes measures such as solar water heating.
So far, the city has refurbished 80,000 of the 220,000 apartments it owns. The resulting reduction in annual CO2 emissions is 97,000 tonnes, equivalent to taking 60,000 cars off the road.
It’s the payback that counts
Commercial property exists to make money for its owners, making financial return the crux of any investment in energy efficiency. In New York City, a high-profile $500 million refurbishment of the Empire State building, due for completion in 2013, was an obvious opportunity to assess just what could be achieved.
The design and construction team hired by the building’s owners, the company Wien & Malkin, includes energy-efficiency specialists from the non-profit (CCI) and the . They settled on eight projects, including fitting an insulating film into the building’s double glazing and insulating behind the radiators. Air-conditioning units are being rebuilt and electronic control systems installed to allow tenants more control over their energy use.
The extra work is adding $13 million to the refurbishment cost, but with a saving in energy usage estimated at 38 per cent, worth $4.4 million a year, that investment will be recouped in around three years. “People associate greening with expense and compromise,” says Anthony Malkin, president of Wien & Malkin. “We’re trying to prove: no compromise.” With the building emitting 25,000 tonnes of CO2 each year, the retrofit will make a net saving of 105,000 tonnes of CO2 over a 15-year period.
CCI says experience gained on the Empire State retrofit will be applied to other large-scale commercial refits. It is already working on several similar projects around the world, including the 33,500-square-metre Inorbit mall in Mumbai, India, where electricity costs are being cut by more than a third.
