Opinion: Accelerating local authority investment in low carbon

Independent consultant on climate change, low carbon and renewable energy, Stephen Cirell explores how the Public Sector Decarbonisation Fund could spur local authority investment in low carbon projects. 

The Government awaits the latest progress report on its journey towards a position of net zero carbon from the Committee on Climate Change, which is due shortly. Progress is being made, but the general consensus seems to be that it is not going fast enough to reach a target that is truly challenging.  

One area where the Government is sadly lacking is energy efficiency. Whilst a huge effort has been made to decarbonise the electricity supply – with some considerable success – and good progress is being made on transport, there has been a much lower focus on energy efficiency of buildings. This is now starting to stand out as one of the key areas that has to be urgently addressed.  

The problem in the UK is decades of poor building practices, which have resulted in virtually no building stock that will comply with the Climate Change Act 2008 targets. But the area providing more political headaches is housing. There are around 30 million houses in the UK and the general standard of them is not even close to what it needs to be.  

Perhaps this didn’t matter too much in the past, but in the light of the Russian invasion of Ukraine and the spiralling wholesale gas prices, it certainly matters now.  The cost of fuel is a major concern, with many households simply not able to raise the large extra expense now being demanded by energy suppliers and therefore being forced into fuel poverty for the first time. Moves by the Chancellor to ameliorate this situation are merely a sticking plaster over a wound that needs proper surgery.  

The problem is not just the cost of fuel. On that area, the Government could have provided far more funding to promote home grown renewable energy (a good case in point is the refusal to fund onshore wind energy, or the premature cancellation of Feed in Tariffs). More UK based renewable energy would have ensured that the current crisis was less acute than it now is.  

Leaving aside the cost of fuel, the problem is the energy efficiency of housing across the country. Poor thermal performance means that more heating is required, taking more energy and costing more money. Insulation may seem a pretty dull subject but those that have it will recount how valuable it is in a time of steeply rising prices.  

Modern building standards demand much higher levels of insulation as part of a better design to prevent thermal bridging and keeping heat in. Combined with air tightness, MHVR and renewable heating systems, heating costs can be reduced to historically low levels. As an owner of a certified Passivhaus, I know this to be strongly evidenced.  

Even if radical retrofit of that nature is not possible, simply improving windows and doors and adding further insulation will have a noticeable effect. What the Government should have done is to launch a nationwide energy efficiency programme for domestic housing as part of the ‘build back better’ initiative after the Covid pandemic. To do so would have addressed this problem earlier and created hundreds of thousands of local jobs, whilst reducing everyone’s heating costs.  

Many of the buildings and housing requiring such treatment reside in the public sector. The Government has at last realised that radical action is necessary to improve the public sector estate if the Climate Change Act targets are to be met. For local authorities, the Public Sector Decarbonisation Scheme has been central to this work over the last few years. Introduced in September 2020, the purpose of this fund includes improvements to energy efficiency. It was a good move to put Salix in charge of the PSDS, as that is a body that understands local authorities and the pressures they work under.  

It now seems that the Government has earmarked the PSDS as the main vehicle for this work in England and Wales, with the recent announcement of another £531m of funding over the period of the next 2 – 3 years.  

However, despite some success, the PSDS has been the subject of significant criticism from local government in the way that it has been operated. These criticisms fall into a number of different areas.  

The main area is timing. When the first tranche of monies were announced there was a very short timescale for applications to the fund. Bearing in mind that substantial sums of money might be being applied for, naturally there were evidential and other governance requirements in place. Many authorities found these so tight as to be impossible to comply with.   

A project that I worked on to build 1 MW of solar PV next to a leisure centre and completely replace the heating from gas boilers to air source heat pumps, with ancillary energy efficiency works, was fortunate to have secured over £6m from the PSDS. This would make the leisure centre largely zero carbon and would reduce the Council’s carbon footprint by nearly a quarter.  

However, its application was only possible because two years of preliminary and feasibility work (including a full business case) had already been completed. Were that not the case, then the project would have had no chance of completing the application in the timescales set.  

Those timescales also caused problems in relation to supply chains. Already under pressure due to Brexit and rising costs of shipping, the Ukraine crisis has made this situation worse. In some cases equipment ordered was late in arrival, putting pressure on completion dates. Salix, on behalf of the government, was forced to give extended timeframes to some Councils for this reason. There are suggestions that others lost the funding they had succeeded in being allocated due to the strict terms imposed and being unable to comply with deadlines.  

Also on terms and conditions, applications had to reach a certain threshold of pounds spent per tonne of carbon savings. Again, rising supply chain costs, often after orders had been placed, put some schemes in jeopardy.  

So whilst the allocation of the next batch of funding under the PSDS is to be welcomed, the view in local government is that lessons need to be learnt from earlier rounds. This is particularly important for the Government if they are to create the conditions which will see a noticeable increase in momentum in this area.   

Local authorities want to undertake this work and welcome the funding but there has to be a better understanding of the pressures on a Council to conceive a project, present it to Members for approval, the undertaking of all feasibility work and bringing it to completion, particularly when other timeframes (such as procurement) are outside of their control.  

Only time will tell whether these lessons have been learnt. 

Photo by Megan ✌🏼and Erik Mclean