Low Carbon Buildings Report

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Low Carbon Buildings

3rd November 2009


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CONTENTS

1 DEFINITIONS OF THE INDUSTRIAL TECHNOLOGY .................................................................... 11.1 Core and Range of Technologies .................................................................................................. 11.2 Applications .................................................................................................................................... 22 UK CENTRES OF EXPERTISE AND EXCELLENCE ..................................................................... 42.1 Science and Technologies ............................................................................................................. 42.2 Commercialisation .......................................................................................................................... 52.3 International and National Standing ............................................................................................... 63 THE VALUE CHAIN ......................................................................................................................... 83.1 Applications, Products and Markets ............................................................................................... 83.2 Drivers of Demand ....................................................................................................................... 113.3 The Chain of Inputs and Outputs ................................................................................................. 213.4 The Position of UK Producers ...................................................................................................... 234 DEVELOPING UK ASSETS IN LOW CARBON BUILDINGS ....................................................... 254.1 The Interface between science, R&D and business .................................................................... 254.2 Industrial Capacity ........................................................................................................................ 294.3 Framework Conditions ................................................................................................................. 315 SPATIAL DISTRIBUTION .............................................................................................................. 335.1 Technology by Region ................................................................................................................. 33ANNEX 1: LIST OF CONSULTEES ..................................................................................................... 36


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Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies

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1 DEFINITIONS OF THE INDUSTRIAL TECHNOLOGY

1.1 Core and Range of Technologies

Low Carbon Building (LCB) technologies fall into two key areas: building fabric (materials,

including electronic controls) and renewable energy for buildings (microgeneration). These

technologies are relevant for all residential, commercial and industrial buildings. They are

also relevant for new and existing buildings with new build and retrofit.

Figure 1.1 presents the specific material technologies.

Figure 1.1: Low Carbon Building Technologies (Materials)

Window

Technologies

Electro Chromatic Window Glass

Double Glazed Units

Triple Glazed Units

Advanced Plastic Thermally Insulated Frames

Honeycomb Systems

Insulated Alloy Frames

Door

Technologies

Insulated Plastic Doors

Insulated Alloy Doors

Insulation and

Heat Retention

Materials

Wall Insulation Materials

Controlled Venting & Ducting

Heat Retention Ceramics

Heat Retention Surfaces

Fibre Insulation Materials (Roofing)

Granular Insulation Materials

Electronic Control Systems

Monitoring and

Control

Systems

Motorized Valves and Actuators

Sensing Devices

Inter Building Electronic Control Systems

Balanced Inter Building Heating Systems

Energy Monitoring Systems

Source: Adapted from Innovas, Low Carbon and Environmental Goods and Services; An Industry Analysis, 2009

The above technologies are focused on materials to improve insulation and reduce heat

loss through windows, doors, walls and roofing, but also include a range of monitoring and

control systems which aim to ensure energy is used more efficiently by users of the

building.

In addition to these materials technologies, there are a number of different microgeneration

technologies offering low carbon or carbon-neutral ways to produce heat and/or electricity.

The Department of Energy and Climate Change (DECC) provides a list of these

technologies, split between two groups:

Microgeneration technologies for heat generation:


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Solar thermal water heating systems comprising solar collectors, a heat

transfer system and a hot water store. A 4sqm solar collection area will provide

50-70% of a typical home's annual hot water requirement.

Ground source heat pumps (GSHP) use warmth from the ground to heat fluid

circulating through pipes. A heat exchanger then extracts the heat, while a

compression cycle raises the temperature to supply hot water for heating.

Air source heat pumps (ASHP) operate in a similar way using temperature

differentials in the air (although less efficient than ground source heat pumps).

Biomass stoves and boilers can burn wood (pellets, chips and logs) and non-

wood fuels to provide space and/or water heating.

Microgeneration technologies for electricity generation:

Micro and small wind turbines use wind to drive a generator and produce

electricity. Designs typically involve three blades mounted on a tall mast, or the

building itself.

Solar photovoltaic (Solar PV) generates electricity from sunlight using small-scale PV modules as roof mounted panels, roof tiles and conservatory or atrium

roof systems. A typical PV cell consists of two or more thin layers of semi-

conducting material (usually silicon), which generates an electrical charge when

exposed to light.

Micro-hydro typically used in hilly areas, river valleys or anywhere with a flow

of water. The amount of electricity produced depends on the quantity of water

and the speed of the flow.

Micro combined heat and power (CHP) - systems using natural gas (or fuel cells)

to provide electricity as well as heat, using either reciprocating engines or Stirling

engines.

1.2 Applications

The literature often uses low carbon buildings (LCB) as a catch-all term covering the whole

suite of future buildings that have lower carbon footprints, including zero-carbon buildings.

For the purposes of this report, the term LCB will also cover zero-carbon buildings as these

LCB technologies are likely to be a major factor in the achievement of Government targets

for zero carbon development for houses by 2016, public buildings by 2018 and other non-

residential buildings by 2019.

As well as future buildings, many LCB technologies can also be applied through retrofit to

existing buildings. This represents an even greater challenge as it is more difficult to modify

and retrofit existing properties, than it is to design and build new buildings with LCB

technologies. However, given that the majority of the building stock that will exist in the UKin 2050 has already been built, and buildings currently account for around 45% of the UKs

carbon emissions, there is a considerable need to address the carbon emissions of existing

buildings. Not only is this important in terms of meeting targets for reduced carbon

emissions, but there is also growing consumer and commercial awareness and demand to

reduce carbon footprints, which suggests that there are significant opportunities for LCB

technologies in the UK but also overseas.

A summary of the key LCB technologies is outlined in Figure 1.2. All of these technologies

are currently available for adoption by the market and can be applied to new build and

retrofit markets. R&D is currently being directed towards all technology types in order to

produce major improvements in performance efficiencies (e.g. insulation and renewable

technologies) as well as cost reductions that will enable faster market adoption over the

next 5 to 10 years.


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Figure 1.2: Market Application of Low Carbon Building Technologies

Low Carbon Building Fabric / Materials Microgeneration

Wall systems

Roof systems

Floor systems

Insulation

Glazing

Solar hot water panels

Ground-source heat pumps

Air-source heat pumps

Biomass heating

Wind turbines

Photovoltaic (PV) panels

Micro-hydro

Combined heat and power (CHP)


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2 UK CENTRES OF EXPERTISE AND EXCELLENCE

2.1 Science and Technologies

Figure 2.1 summarises the relevant LCB research expertise across universities in the UK

and shows the broad geographic spread and range of research expertise.

Figure 2.1: Location of Academic Institutes for Low Carbon Building Technologies

and Microgeneration

Region University Main area of focus

North

East

Newcastle: Sustainable

Power Research Group

Microgeneration

Durham Energy Institute Social aspects of microgeneration

Northumbria University Photovoltaic

North

West

University of Salford:

Research Institute for theBuilt & Human Environment

Management in Construction Research Centre, the

Construction IT Research Centre and the ResearchCentre for Education in the Built Environment

University of Liverpool:

Construction and

Infrastructure Research

Group

Concrete and structural research

Yorkshire University of Sheffield:

Building Environments

Analysis Unit

Building Design

West

Midlands

Universities of Birmingham

and Warwick : Science City

programme

Energy Efficient Technologies

Keele University Microgeneration.

East ofEngland

University of Cambridge

Low Energy Ventilation for Health Buildings

East

Midlands

Nottingham University:

Sustainable Technologies

Group

Sustainable building design

Photovoltaic

Solar thermal systems

Earth construction (environmentally responsible

alternatives to cement and concrete)

Biomass

Loughborough University Sustainability and Building Performance

Innovative Construction Technologies

Photovoltaic research laboratory

De Montfort University CaRB Project: Modelling of economic impact of

various carbon saving measuresSouth

West

University of Bath

Sustainable Energy

Research Team

Low Carbon Buildings: The Inventory of Carbon and

Energy

Bristol, Plymouth, Exeter,

UWE

Built environment and

Constructing excellence

University of West of

England

Environmental engineering

University of Exeter -

Environment and

Sustainability institute

Energy efficiency

South

East

Southampton Sustainable

Energy research group

Microwind and urban microgeneration

Commercial buildings retrofits


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University of Oxford Lower Carbon Futures: Integrating sustainable

energy systems into homes

Building Market Transformation; Awareness raising /

demonstration of ways to reduce carbon emissions

London Imperial College Research activity through the Centre for Energy

Policy and Technology; including the Technology

and policy assessment for industry and governmentdepartments.

South Bank University: Research and demonstration of low carbon energy

technologies in the built environment

Centre for Efficient and

Renewable Energy in

Buildings (CEREB)

Research and demonstration of specific sustainable

energy technologies including photovoltaic, solar

thermal, ground source heat pumps and wind power

Scotland Heriot-Watt University Technology Assessment for Radically Improving the

Built Asset Base (Tarbase), aimed at identifying

appropriate carbon saving technologies

University of Strathclyde Energy Systems Research Unit; research into

approaches to energy demand reduction in the built

environment and the introduction of sustainable

means of energy supplyWales Cardiff University Low Carbon Research Institute: a virtual

organisation that aims to develop capacity and

facilities around the existing areas of low carbon and

energy expertise in Wales whilst also having an

international outlook and developing a strategic long

term programme of research.

Source: EPSRC, Low Carbon Task Force 2009

Discussions with BIS and the Buildings Research Establishment (BRE) indicate that the

leading academic institutes are: Nottingham University; Cambridge University; Imperial

College; Cardiff University; and University of Bath due to their close relationships with

industry, however discussions with the BRE also highlight that there remains a disconnectbetween most UK academic research into building technologies and industry uptake.

Principally universities have traditionally focussed on Technology Readiness Levels (TRL) 1

to 3 whilst the industry interest is around TRL 4 5.1

2.2 Commercialisation

There are a range of research institutes and industry associations in the UK relating to the

built environment, many of which contain R&D capacity focused on elements of the

Sustainable Construction agenda. Figure 2.2 contains details of R&D Centres specifically

targeted at the commercialisation of new technologies through market adoption of

business-led academic research.

Figure 2.2: Location of R&D Centres for Low Carbon Buildings and Microgeneration

Region Name Remit in relation to LCBs

North West Centre for

Construction

Innovation

The CCI supports construction sector R&D, helping to

facilitate the Construction Change Agenda throughout

the North West, addressing issues in the built

environment such as sustainability; design;

procurement; skills; and construction processes. It

delivers the 6m Construction Knowledge Hub in

partnership with Salford, Lancaster and Liverpool

Universities, which aims to help companies increase

competitiveness and productivity and respond to

climate change,

1Discussion with BRE


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North East NaREC Assists all sizes of companies with deployment and grid

integration of renewable energy and low carbon

generation technologies, including utilising wind; solar

PV; thermal power; and microgeneration.

Yorkshire SaBRE SaBRE is a joint venture between Sheffield University

and the BRE. The project provides a range of services

to industry; including collaborative research;

consultancy; expert witness; testing and analysis; and

product development.

East of England Building Research

Establishment (BRE)

BRE collaborates with a range of research

establishments to offer sustainable design, construction

and management advice for all types of buildings.

Institute for

Manufacturing and

SmartLIFE,

Cambridge

IfM links academic research with industry through

bespoke research and dissemination. The SmartLIFE

project aims to address three challenges of housing

delivery in growth areas: affordability; sustainability /

energy efficiency; and skills / capacity shortages in the

construction industry

Source: Low Carbon Task Force 2009

2.3 International and National Standing

There are many UK universities, research institutes and industry associations undertaking

R&D relating to the sustainable construction agenda across a wide range of disciplines,

from science and engineering to environmental, geological and social sciences. The UK

has a strong materials science base and is also well known for innovative manufacturing

research. Figure 2.3 identifies some specific strengths relating to UK capabilities

compared to other countries.

Figure 2.3: UK Capability Assessment of LCB Materials and Microgeneration in

Relation to Wider International Activities

UK Capability Area Market Potential

High Small wind turbines

Medium. The UK market for domestic wind turbines isnew but may develop quickly, with UK manufacturersin a strong position to supply. There is high exportpotential to countries with similar urban requirements,e.g. New Zealand, and a large US market, wheredemand is for larger machines on high towers.

High PV materials science Global market potential

HighPV system andcomponents testing and

installation

Global specialist market potential

HighPV system andcomponents performancemonitoring

UK specialist market potential

HighEngineering solutions forfuture technologies

Global market potential

HighEnvironmental impactand life cycle analysis ofnew energy systems


Medium PV cell design UK industry application

Medium PV integrating system UK installer application

MediumDemonstration anddeployment of existingbioenergy technologies


Low PV module manufacture Stable marketSource: UKERC, Energy Research Atlas: Solar, Bioenergy and Wind, May 2009


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The UK has capabilities covering materials science and renewable energy technologies

including wind turbines, biomass, CHP systems, solar, etc. There are also many

international organisations involved in these research areas, and many of these are

investing and collaborating with UK programmes such as through the EU Framework

Programmes, and the International Energy Agency (IEA). Key areas of R&D focus include

improving efficiency and reliability of technologies, whilst reducing the cost of energy

production, in order to increase deployment of microgeneration technologies.

In the case of photovoltaic research, the potential to develop a specific UK research

community has not been fulfilled. UK universities are involved in a number of areas of

photovoltaic research including PV materials, PV systems and Building Integrated PV

(BIPV). However, the UK research community remains small compared to that in other

countries such as Japan, USA, Germany and other European countries, Korea, Australia

and many others. There are significant opportunities for further PV R&D to reduce

generated electricity costs in order to be competitive with conventional and alternative

renewable sources. An improvement in conversion efficiency is required to achieve this,

together with reduced costs of production. Key areas of focus for R&D need to be around

PV module design and manufacture, although PV systems also require improved balance

of system components and in particular the inverter. UKERC also suggests thatperformance prediction tools are inadequate and can result in potential customers being

misled2.

2UK Energy Research Centre (UKERC) Energy Research Atlas: Solar Energy


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3 THE VALUE CHAIN

3.1 Applications, Products and Markets

Applications & Products

The LCB market comprises a wide range of products relating to domestic, commercial and

some industrial buildings, in both the new build and retrofit markets. The scale of

opportunity presented by these two markets will depend on the level of efficiency that the

UK wants to achieve in its existing building stock. If the UK Government makes a

commitment to reducing carbon emissions from buildings by 80% and is willing to invest to

support innovation and market development to create demand (for example through

Forward Commitment Procurement programmes linked to social housing and public office

stock) then the retrofit market would be significantly greater than that of new build.

However, if there is limited or delayed commitment to moving to a significant decrease in

carbon emissions from buildings then the main market growth will relate to new build.

Domestic and non-domestic buildings both offer considerable future opportunities for LCBtechnologies through retrofit and new build as there are significant stocks of both

types/uses of building and a continuous supply of new developments. The existing stock of

non-domestic buildings typically has a younger average age than domestic property and

has a higher turnover, which means these buildings are more likely to provide a better fit

with the existing LCB technologies installed through retrofit as well as new build. However,

there are also significant barriers to the uptake of LCB technologies for both building types,

as discussed below.

Nevertheless, UK companies have developed some world class examples of LCB, some of

which are presented in this report. Coupled with increased customer demand, the main

driver for the development of LCBs in the UK has been the introduction of legislative

planning instruments as a direct result of international agreements. This has caused the UKconstruction industry and supplier base to adapt and introduce more low carbon products

and processes3. These products and processes comprise two categories, as described

previously:

Low Carbon Building Materials

The development of LCBs has been characterised by the innovation of existing materials,

rather than development and adoption of new, discrete technologies. Examples include the

use of: concrete to retain and store heat; intelligent air flow design to cool buildings in warm

weather; and hemp lime concrete. LCB materials not only deliver a reduced carbon footprint

associated with the construction process, compared to traditional materials, but they also

reduce the required energy use throughout the lifetime of the building by reducing occupant

energy demands. Furthermore increased off-site production has resulted in reducedwastage of materials. Japan leads this market, where prefabricated houses account for

roughly one in seven newly-built houses.4

UK companies operate across the LCB materials value chain; examples of quality design

and construction are provided in this report. Discussions with UKTI indicate that whilst large

UK contractors and consultants operate in almost every country in the world, the UK

construction sector is dominated by SMEs and has a relatively small number of large

companies. This suggests that increasing the UKs current market share may be only

incremental and, given the developing strengths of other countries, might be difficult to

achieve.

3BIS, DECC (2009) The UK Low Carbon Industrial Strategy. P.40

4Carbon Hub, Zero Carbon Compendium. P.45


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Microgeneration

BIS suggests that microgeneration technologies could meet 30-40% of the UKs electricity

demands by 2050. The most effective technologies are expected to be combined heat and

power (CHP) systems, followed by micro wind turbines and solar PV. Current BIS

estimates suggest there are approximately 100,000 microgeneration installations in the

UK5

. The vast majority of these installations have involved solar water heating, which islikely to reflect the relatively low purchase and installation costs. This is interesting as BIS

analysis suggests that solar water heating technology will be one of the last to become

cost-effective (taking until at least 2017 before the price per kWh for the micro-generator is

equivalent to todays domestic electricity prices). In contrast, there has been relatively little

uptake of the technologies expected to be cost effective already or in the near future (i.e.

biomass boilers, ground source heat pumps, CHP systems and micro wind turbines).

The increasing purchases of microgenerators offer opportunities to UK companies,

although most units have been manufactured overseas to date, with some assembly taking

place in the UK. However,the domestic service and repair industry around microgeneration

has grown more markedly6

and the assembly and service capacity that now exists in the

UK may form the basis for growth. Microgeneration is seen as a growth area for LCB dueto it being relevant to both new build and retrofit markets, while the Zero Carbon Hub

recognises that the UK now has emerging strengths in microgeneration7.

A further attempted market stimulus for LCBs is provided through the UK Government

Forward Commitment Procurement (FCP). The aim of the programme is to create demand

through public sector procurement for environmental innovation, creating a tipping point at

which there is sufficient critical mass for high performing environmental alternatives to

traditional products and services. The FCP is part of theInnovation through ProcurementProgramme, which aims to help deliver better, cheaper solutions to meet pressing social,

economic and environmental challenges, such as climate change8. A key application is

building technologies, at both the new build and retrofit stages, and early stage pilot activity

is being developed by Birmingham City Council.

However, more significant activity is being led by the Homes and Communities Agency

(HCA). As part of the HCA Housing Growth Stimulus Programme, support for low carbon

retrofit projects has been put in place for designated Housing Growth and Growth Point

Areas. A budget of 70m was set aside for community-scale low carbon energy

microgeneration projects, comprising 25 million for low carbon heating schemes and 45

million for small-scale renewable electricity and heat technologies delivered primarily

through the Low Carbon Buildings Programme9.

Development of New-Build Zero Carbon Homes in the UK

Two hundred zero carbon homes are currently being developed at a site in Bristol by

Barrett Developments. This is the first development of zero carbon homes built by a

commercial, high-volume house builder. The most significant energy savings in the newhomes come from: minimising heat loss through the walls and windows; heavy concrete

floors to store warmth; and venting air for cooling. The building also uses photovoltaic and

hot-water solar panels, a heat exchanger and an electronic climate control system. The

building features are outlined in Figure 3.1.

5http://www.berr.gov.uk/files/file46372.pdf


7 Carbon Hub, Zero Carbon Compendium. P.478

BIS (2008) Forward Commitment Procurement: practical pathways to delivering innovation9

http://www.homesandcommunities.co.uk/low-carbon-infrastructure


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Figure 3.1: The Zero Carbon Affordable Home

Source:http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1

Of course the potential for LCB covers commercial as well as residential premises and the

West Midlands is making advances in this area with several examples of good practice,

including:

South Shropshire District Council and AWM have developed an eco-business park in

Ludlow with a BRE Environmental Assessment Method (BREEAM) Excellent rating;

Kidderminster has the first UK retail store to be awarded a BREEAM Excellent

rating;

Office space also provides significant retrofit and new build opportunities. GVA

Grimley suggest that 80% of Birminghams new city centre office space would

achieve a BREEAM Excellent rating, compared to 40% in Manchester and 20% in

Leeds.

Birmingham City Council is also working with Utilicom Ltd as part of a Combined

Heat and Power (CHP) scheme, which produces 1.5MW of electricity from the new

CHP system at the Broad Street city centre energy network.

Figure 3.2: Examples of Low Carbon Buildings

A Low Carbon Demonstration Energy House:

Sigma Homes

The CIS Tower, Manchester: the largest

commercial solar facade in Europe
http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1


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3.2 Drivers of Demand

The development and commercialisation of LCB technologies is driven by recent building

regulations, acting to stimulate innovative design and construction, and respond to the

growing imperative among the design, construction and property management industry to

reduce resource consumption energy, water, materials and land thereby reducing

bottom line capital and operating costs.

The fact that 80% of energy costs arise during the service life of buildings10

also provides a

compelling market driver for the commercialisation of innovative technologies for both the

new build and retrofit market.

The value chain represents the various stages of the life of a construction project, from

selection of land and buildings through to 'end of life'. Development of low carbon products

and processes are applicable throughout a projects whole life.

Figure 3.3: Construction Sector Value Chain

Source: http://www.sustainabilityatwork.org.uk/deliverables/construction

The key players in this process are the designers, contractors and builders. It is through

their interaction with each other and the knowledge base at various stages in the value

chain that innovation in product and service design will change the nature and scope of

commercial opportunities.

The UK Regulatory Environment

The significant contribution of the built environment to UK carbon emissions provides clearevidence for the rationale behind public policy interest in this area of technology

commercialisation. The regulatory environment is a significant and long term driver for the

low carbon agenda, which will only become stronger in the future. Some of the largest

environmental impacts in the UK come from buildings and the potential carbon savings from

improved performance are significant. For example:

45% of total UK carbon emissions are from buildings: 27% from domestic and 18%

from non-domestic,

73% of current domestic carbon emissions arise from space and water heating.

Figure 3.4 outlines the relative significance of the various component parts of the built

environment to UK Greenhouse Gas (GHG) emissions. This clearly outlines the substantialpart played by the domestic housing market, and the significant commercial opportunities

which will continue to exist for both retrofit and new build LCB technologies.

10http://www.nationalplatform.org.uk/uksra/consumption.jsp
http://www.sustainabilityatwork.org.uk/deliverables/constructionhttp://www.nationalplatform.org.uk/uksra/consumption.jsphttp://www.nationalplatform.org.uk/uksra/consumption.jsphttp://www.nationalplatform.org.uk/uksra/consumption.jsphttp://www.sustainabilityatwork.org.uk/deliverables/construction


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Regulation Building Regulations Part L, updated in 2006. Minimum standards for newbuildings involving average & limiting u-valves, air permeability, heating &boilers, pipework insulation, mechanical ventilation & cooling, internal &external lighting.

X X X

Economic:

fiscal

Enhanced Capital Allowance (ECA). Enables businesses to claim 100% first-

year capital allowances on their spending on energy - and water - saving plantand machinery, low CO2 emission cars, and natural gas and hydrogen vehiclerefuelling infrastructure. Incoming Feed in Tariff for electricity (April 2010) andrenewable heat obligation (April 2011).

X X X

Economic:installationgrants

Low Carbon Building Programme (LCBP), 2006-2010. 28.5M grantscheme for microgeneration technologies, including PV, wind turbine, hydro,fuel cells, string engine, renewable CHP, heat pumps and biomass; conditionalon other energy saving measures being in place: loft or cavity wall insulation,low energy light bulbs, heating systems controls.

X X X

Economic:R&D grants

BIS, Carbon Trust, TSB, RDAs Grants for R&D.N/A N/A N/A

Source: GHK

As noted above the domestic housing market will be a significant factor in the development

of LCB technologies. However, it should also be noted that planning and building

regulations are only likely to apply to the new build market, and not retrofit projects on a

smaller scale. Furthermore, these regulations alone are unlikely to fully deliver their targets

given a reported lack of enforcement in building regulations for efficiency in new build

houses. These factors highlight the importance for grants and other incentives to

encourage the uptake of LCB technologies in the retrofit and new build markets.

A recent development for the retrofit market has seen the introduction of a new rule for

European Regional Development Framework (ERDF) interventions relating to housing in all

Member States. A number of UK regions have taken advantage of this new ruling which

allows up to 4% of structural funds to be used for the purposes of deploying energyefficiency improvements and renewable energy technologies in the existing social housing

stock, in order to support social cohesion. This will enable a range of innovative measures

to be demonstrated at a large scale and support the SME base in the UK to increase

capability ahead of increasing demand.

Within the above range of policy drivers, perhaps the most significant is the commitment to

develop a feed-in tariff for the UK. This commitment was made in the Energy Act 2008. It

has since been out for consultation and DECC has confirmed that it will be deployed by

April 2010 for electricity (e.g. photovoltaics). It is more difficult to establish an incentive for

renewable heat technologies, but this is expected to be developed by April 2011. Both

fiscal incentives are likely to significantly increase demand for microgeneration in the UK. A

similar model has already been deployed successfully in other European countries, mostnotably in Germany.

The Zero Carbon Hub has established a Zero Carbon Delivery Timeline (presented in

Figure 3.6 as a roadmap for achieving the regulatory requirements outlined above. This

provides evidence of the likely lead-in times for large scale commercialisation of the

opportunities from LCB technologies for large scale domestic developers. What should be

noted is that a key timeline assumption, with implications for the strategys critical path, is

that a pragmatic definition of zero carbon can be achieved, which is acceptable to industry.

Progress on this issue has not yet been published, however the Zero Carbon Hub Progress

Report in April 2009 suggested that a four-year lead-in time is required from defining and

implementing building regulations to mass-scale build.11

11Zero Carbon Hub, (April, 2009) Zero Carbon Homes Programme Delivery Programme Update.pp.2.


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Figure 3.6: Carbon Homes Strategy Time Line

Source: Zero Carbon Hub, 2009

The International Regulatory Environment

Progressive building regulations in the UK, coupled with enforcement, will help drive new

product commercialisation and innovative building developments. This in turn will help open

up new global markets in those countries where regulation is likely to eventually catch up

with the UK.

To help achieve their Kyoto Protocol targets, many countries have set emissions targets for

buildings coupled with major incentive schemes to help change consumer and industry

behaviour around both new build and retrofit (see Figure 3.4). Should agreement bereached at the December 2009 Copenhagen UN Climate Change Conference for significant

tightening of these emissions targets, there are likely to be further revisions to schemes

resulting in tighter domestic planning regimes and greater opportunities for adoption of

green building technologies.

Clearly several countries already have building standards and incentive schemes that have

both helped change consumer behaviour and stimulate their own domestic supply base

around low carbon buildings and microgeneration. Good examples include Germany,

Sweden and Japan:

A German government scheme funds building renovation measures which yield

energy savings as well as the construction of new, low-energy homes. Between 2006

and 2007 scheme loans totalling EUR 32.9 billion were issued.

Japan introduced a PV roof market incentive programme in 1994 which covered 50%

of installation costs. Huge industrial and domestic take up transformed a fledgling

market into a world leading one and reduced PV costs by over 75% in which Japan

has market leading R&D and supply of PV cells, modules and balance of plant.

In contrast, currently lax regulations in China are creating a building footprint that will

quickly open up a massive retrofit market if regulations change12

:

China is the worlds largest construction market, accounting for half of new buildings

built per year. By 2015 half of all buildings in China will be less than 15 years old.

However the regulatory framework is not as stringent regarding energy standards for

12Zero Carbon Hub Compendium 2009


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new domestic and office space compared to European standards. Fourtimes more

energy is required per m2

for heating and cooling in China compared to Europe.

Changes to this regulatory framework would open massive market opportunities for

technology areas where the UK has a strong capability including around supply of

building fabric materials (i.e. UK setting up manufacturing plants in China).


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Figure 3.4: International Emissions Targets and Incentive Schemes

Country Kyoto-specific and Buildings Emission Targets Major Incentive Schemes

Australia Reduce 2020 GHG emissions by 515%; and 2050 Green House GasEmissions to 60% (targets based on 2000 baseline)

Between 2000-05 AUD 40.4 million was provided to encourage take up of PV

Technology (maximum grant of 4,000 AUD per household) Take up was poor

due to product and installation costs remaining high.

For retro-fit, the Energy Efficient Homes [National] scheme and individual State

funded schemes provide rebates for homes installing solar heating systems

Austria The Austrian Action Plan contains a commitment o reducing GHGemissions by 13% based on 1990 levels. Austrian Federal Law on Environmental Support is considered an internationalexample of an efficient and effective funding instrument in the environmentalsector. For retro-fit state policy for energy efficient design and offer specific

financial support exists for biomass, solar and heat pump systems to consumers,

who can also claim rebates for purchasing energy-efficient appliances.

China Five-Year Plan of China aims to reduce China's total emissions by 10%;double renewable energy generation to 15%; and reduce energy

consumption of residential and public buildings by 50% by 2020

China's Renewable Energy Law, 2006 requires power grid operators to purchase

renewable energy from registered producers. Financial incentives are also

provided: a national fund to encourage technology development, discounted

lending, preferential loans with subsidised interest and tax benefits for renewable

energy projects.

Germany Target of reducing carbon emissions by 12% by 2012. Achieved in 2007.Revised target of 40% reduction by 2020.

For retro-fit there and new build a government scheme funds building renovation

measures which yield energy savings as well as the construction of new, low-

energy homes. Between 2006 and 2007 scheme loans totalling EUR 32.9 billion

were issued.

Japan Committed to reducing CO2 emissions by 6% between 2008 and 2012based on 1990 levels.

In 2006, the government announced a target for energy saving measures

to be implemented in 40% of households by 2015. In 2008, a target for

solar panels to be installed in 30% of households by 2030 was set.

Subsidies in the form of low-interest loans are available for the purchase of more

efficient homes. Combined heat and power generation is also promoted through

a generous taxation and financial support system. Tax incentives are also being

offered for the installation of energy efficient equipment.

Sweden Sweden's Kyoto commitment is to reduce GHG emissions by 13% by2020 based on 1990 levels. Further to this, a target was set in 2006 to

reduce energy use in residential buildings by 20% by 2020.

Sweden has adopted a progressive taxation system. The overall fiscal energy

structure in Sweden (including environmental taxes on electricity and heating oil,

high performance construction standards, financial incentives, and public

procurement and R&D efforts) has provided a sufficient framework for breaking


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the normal barriers to market adoption.

The 2006 Energy Declaration of Building Act include support for the purchase of

energy efficient windows and biomass boilers for up to 30% of the cost.

USA In 2007, the Department of Energy established requirements for federalbuildings requiring improved energy performance of at least 30%

compared to prevailing building codes.

The 2009 Obama-Biden New Energy for America plan established a

target of reducing GHG emissions 80% by 2050. The Department of

Energy Builders Challenge states that by 2030 Americans will have the

opportunity to buy a cost-neutral, net-zero energy home anywhere in theUnited States.

Tax credits available to residents and constructors are the main financial

incentive available in the USA. Made possible through the Energy Policy Act of

2005 these include, Home Energy Efficiency Improvement tax credits;

Residential Renewable Energy tax credits; and Federal Tax Credits for Energy

Efficiency

Source: Adapted from: Zero Carbon Compendium 2009


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Financial Incentives

In the UK there are a small number of mortgage providers that are helping to encourage the

retrofit of existing stock. These have developed from an initial range of lending based on

carbon offsetting (Hanley Economic Building Society, Teachers Building Society, Giraffe) to

specific green mortgages or loans such as those provided by Yorkshire Building Society,

the Cooperative Bank, the Ulster Bank and the Norwich & Peterborough Building Society.

Whilst these financial products offer capital finance for homeowners looking to make green

investments, for example around energy efficiency measures, they do not offer the type of

pure Green Mortgage, beyond offsetting called for by the UK Government, in the

Renewable Energy Strategy,13

and the Energy Efficient Partnership for Homes14

. Whilst

there is not huge consumer demand for this it is expected to develop over time.15

The prevailing global recession has also reduced the rate at which conventional and

innovative financial products have been offered particularly in the housing and commercial

building sector which has had an inevitable knock-on effect on to the desire by lenders to

offer more innovative products.

As the availability of finance in world markets begins to flow again it is likely that the UK

housing market, will start to pick up again raising demand for all mortgage products and

financial services as well as more innovative green mortgages which will help to stimulate

investment in energy efficiency and microgeneration by spreading the high upfront

payments over the life of the mortgage. The added incentive of a UK feed-in tariff for

microgeneration will also help to sell these products. . Public sector assistance may still be

required to encourage financial institutions to provide such green mortgages.16

In the USA, two dozen insurers offer premium credits and discounts for owners of green

commercial and residential buildings in the USA.17

Strategic Players

There are three key groups of players within the LCB supply side that will help to drive the

commercialisation and adoption of LCB technologies in the UK:

House builders a key group, both due to their knowledge of new low carbon

technologies and products, and their expertise in installation and maintenance. The

skills profile of the UK construction sector is a critical consideration in this context.

Product suppliers an important interface between house builders and developers of

new technologies. The emergence of new LCB technologies and resulting products

will create opportunities for new supply chains to develop in the UK and globally.

However, there is a growing trend towards firms diversifying their product offer to

embrace low carbon technologies so that they are able to maintain market share.

Examples include the boiler manufacturer Worcester-Bosch moving into the

manufacture of solar thermal hot water systems; Everett double glazing offering solar

PV and thermal systems alongside double glazing; and British Gas investing both in

the commercialisation of micro-CHP systems for homes as well as companies that

install a range of energy efficiency products and technologies (e.g. UK based

Semplice in the South East of England).

13The UK Renewable Energy Strategy (2009) Department for Energy and Climate Control.

14The Green Mortgages Report (2007) Warren and Weatherall

15 The Green Mortgages Report (2007) Warren and Weatherall. pp.416

Sunday Times (21 July, 2009)17

http://www.greenbuildingfocus.com/default.aspx?id=1033
http://www.greenbuildingfocus.com/default.aspx?id=1033http://www.greenbuildingfocus.com/default.aspx?id=1033http://www.greenbuildingfocus.com/default.aspx?id=1033http://www.greenbuildingfocus.com/default.aspx?id=1033


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Architects and designers vital to the continued success of LCBs becoming more

prominent in UK and international markets. Early domestic successes in the LCB

market have been achieved through the construction of iconic designs which have

both enthused consumers and, as a result, encouraged developers that returns are

likely to be high, despite the slightly higher initial investment costs.

Market Value

Innovas suggests that Building Technologies is worth 12.9bn in the UK. Future

projections of growth suggest that the Building Technologies will become even more

significant with annual growth forecasts consistently above 5% until 201518

.

The estimated current global market value of Low Carbon Building (LCB) Technologies

(windows, doors, insulation & heat retention materials, monitoring & control systems) is

390bn (Innovas, 2009). The global market for goods and services produced in the sector

is forecast to grow by at least 4.5% each year, to around 600bn by 2020. However, it has

been suggested that some market estimates for building technologies can be exaggerated.

The market for microgeneration technologies in the UK is forecast to show rapid growth19

as a result of the stimulating effects of zero carbon buildings regulations as well as the

proposed feed-in tariff for installations up to 5MW capacity (which the government is

currently consulting on20

). By 2025, the market value for microgeneration has been

estimated at 3.69 billion, broken down into three key technologies (see Figure 3.8):21

Figure 3.8: Market Value for Microgeneration

Technology Installations per annum Market value m per annum

Ground source heat pumps 400,000 1,600

Solar thermal 300,000 900

Wind 241,375 1,187

Total 941,375 3,687

Source: Renewable Energy Office for Cornwall, Nov 2008

The Differing Nature of the New Build and Retrofit Markets

In 2007 there were approximately 27 million houses in the UK, just under 5 million of which

are in Local Authority or Registered Social Landlord ownership22

. Incorporating LCB

technologies is more easily achieved when it is part of the design process for new build,

rather than as a refurbishment. However the retrofit market for LCB technologies also has

significant potential and it has been estimated that the domestic LCB refurbishment market

for power generation could be worth between 3.5bn and 6.5bn per year23

, with an upper

ceiling of 11bn, based on the value of domestic energy consumption24 (equating to around400 per house per annum). This represents a considerable potential value of more than

10% of the current value of the UK construction sector of around 100bn per year25

.

However, the LCB technologies will be more appropriate for some buildings than others and

buildings of different ages are likely to present different challenges that require different

18Innovas (2009) Low Carbon and Environmental Goods and Services; an industry analysis. p.37

19The market for microgeneration, Presentation by Charmian Larke and Gage Williams, Renewable Energy Office for Cornwall,

September 200820

www.decc.gov.uk/en/content/cms/consultations/elec_financial/elec_financial.aspx21

The market for microgeneration, Presentation by Charmian Larke and Gage Williams, Renewable Energy Office for Cornwall,September 200822

http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/stockincludingvacants/livetables/23 http://www.cnplus.co.uk/hot-topics/sustainability/mccloud-urges-great-british-refurb/5205093.article24

http://www.decc.gov.uk/en/content/cms/statistics/projections/projections.aspx25

http://www.innovateuk.org/_assets/pdf/corporate-publications/lowimpactbuilding_innovation%20platform.pdf
http://www.decc.gov.uk/en/content/cms/statistics/projections/projections.aspxhttp://www.innovateuk.org/_assets/pdf/corporate-publications/lowimpactbuilding_innovation%20platform.pdfhttp://www.innovateuk.org/_assets/pdf/corporate-publications/lowimpactbuilding_innovation%20platform.pdfhttp://www.decc.gov.uk/en/content/cms/statistics/projections/projections.aspx


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solutions. For example many of the existing LCB technologies are likely to be more

appropriate for a 20 year old property than a 100 year old property.

The potential value of the new build market is also likely to be significant, despite the fact

that the construction industry is under severe pressure and many projects have been

postponed as a result of the current economic climate. This also suggests that short-term

activity in the retrofit market is crucial to ensure that key construction skills, that will be vitalover the next ten years, are not lost due to the current downturn. Furthermore, focusing

activity on the retrofit market will help to ensure that social issues such as fuel poverty are

tackled simultaneously.

The National Planning and Housing Advice Unit, a non-departmental public body sponsored

by DCLG, provides independent advice on future housing supply to Government and the

regions which forms the basis of the ranges tested in the respective regional spatial

strategies. In light of the impact of the recession and prevailing contraction of available

credit, the NPHAU recently revised the maxima and minima guidelines for regional planning

authorities. These revisions represent the most up to date estimates of potential new

housing completions, and their spatial distribution, for the next 20 years. The NPAU

highlights four key assumptions on which these estimates are based:1. UK residents are living longer and birth rates have increased, net migration to the UK is

also expected to be larger than previously predicted between 2006 and 2026. The

impact of this will vary by region;

2. The long term legacy of the recession will be a reduction in earnings growth, resulting

in reduced demand for owner occupation;

3. The current difficulty experienced by many buyers in obtaining mortgages will inhibit

the ability of many to buy in the short term. Over the long term prices and affordability

will revert to previous levels.

4. The recession has reduced the number of housing completions in the short term, but

over the longer term, the total number of completions will meet demand and the UKGovernment requirement to improve affordability across the housing market, including

by increasing the supply of housing26

.

Figure 3.9: NPAU Recommended Housing Levels 2008-2031

Minima Average 2008-31 Maxima Average 2008-31

North East 7,200 8,200

North West 26,400 29,900

Yorkshire & Humber 26,400 29,400

East Midlands 25,100 26,800

West Midlands 19,600 23,200

East of England 31,600 40,000

London 33,100 44,700

South East 38,000 53,800

South West 30,400 34,500

England Total 237,800 290,500

Source: NPHAU (2009): More homes for more people: advice to Ministers on housing levels to be considered in

regional plans p.10

The above housing projections show that the majority of new build housing is expected to

take place in the more Southern regions. This in turn creates a major challenge as the

South East is already experiencing water stress and implies that a differential market will

open up across the UK for new build and retrofit variants of LCB. As climate change

impacts are felt, through to 2030 and beyond, further water stress, especially in the

26Department for Communities and Local Government. (2006) Planning Policy Statement 3 (PPS3): Housing, p.6


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southern UK, will lead to more drastic measures to conserve water such as grey and black

water recycling, implying significantly higher costs for both retrofit and new build in this part

of the UK. Japan, for example, is already a market leader in this area. There will also be a

need for existing buildings in the UK to be resilient to increased summer temperatures so

that their occupants do not experience high levels of thermal discomfort or even heat

stress. Those buildings most at risk include those with poor insulation and air tightedness,

and without shading and controllable ventilation. Providing appropriate solutions to this

challenge without contributing to energy loading and high carbon emissions will drive

demand for natural ventilation methods, both through design (e.g. with atriums, Passiv

House) and technological fixes (e.g. E-Stack in Cambridge).

While there are also significant numbers of houses projected in the Midlands and Northern

regions, these regions would perhaps benefit from focusing more heavily on the retrofit

opportunities for LCB technologies.

There is a lack of data relating to non-domestic buildings in the UK, which will comprise a

wide range of different types and uses of buildings including: offices; schools, colleges and

universities; factories and warehouses; retail shops and shopping centres; hotels,

restaurants and leisure centres; libraries; transport hubs and stations, etc. The bestindication of the current stock of existing non-domestic buildings is the floorspace of

commercial and industrial properties, produced by the Valuation Office Agency. This data

suggests that there was 596 million square metres of floorspace in commercial and

industrial buildings in England and Wales in 2008.

The non-domestic building stock represents a significant opportunity for retrofit since much

of it has poor energy performance, whilst it is estimated that the UK already spends 27

billion per annum on the refurbishment of commercial & public refurbishment27

. Two-thirds

of this refurbishment spend (around 18 billion) is estimated to relate to commercial

buildings, with approximately 9 billion spent on public buildings. Non-domestic buildings

are also considered likely to have poor fabric, inefficient plant, poor controls and low levels

of occupant energy awareness and therefore represent a considerable challenge but also a

significant opportunity to meet the Government targets for carbon reductions. The specific

issues and challenges relating to non-domestic buildings include:

A lack of understanding, knowledge and data relating to non-domestic buildings and

their energy use,

A reluctance to spend time and money on energy efficient improvements,

Issues such as landlord-tenant problem, where energy performance improvements

will benefit the tenant while the cost of improvements might be the responsibility of

the landlord.

3.3 The Chain of Inputs and Outputs

The greatest value in the LCB value chain is generated by the Tier 2 and 3 suppliers, andthis is also the source of much of the innovation in LCB technologies. However, these

companies also have limited influence over the market and technology standards.

Innovas estimates the Building Technologies supply chain to be relatively high compared to

the other low carbon goods and services, accounting for 60% (7.75bn) of the total market

of 12bn28

. This reflects the large number of materials manufacturers, suppliers and

installers involved in the LCB technologies, from low carbon doors and windows, to the

suppliers of components for microgeneration.

The estimated unit cost of large scale production of zero carbon homes in the UK is

between 120,000 and 140,000, compared to around 85,000 for similarly sized traditional

27Kingspan, The UKs approach to the thermal refurbishment of non-domestic buildings, February 2009

28Innovas (2009) Low Carbon and Environmental Goods and Services; an industry analysis. p.30


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constructions29

. However, this does not include the cost of land, which will obviously vary

considerably between, and within, regions in the UK; and does not consider developer

profits. Of course, the unit build cost will reduce over time as more properties are built and

more cost effective LCB technologies enter the market.

Many of the products required to assemble zero carbon housing are functions or

adaptations of existing building manufacturing processes, for example triple glazing doesnot require substantial novel R&D to establish the most suitable materials and

manufacturing methods for zero carbon homes, likewise modifications such as the use of

exposed concrete floors in order to increase thermal mass and cool the home during warm

weather are unlikely to require more than recalibration of existing production techniques,

with some upskilling of the supplier workforce.

A simple estimate of the potential new build market for LCB technologies can be obtained

by assuming that the value of these technologies is at least equivalent to the estimated

35,000 to 55,000 premium on the unit cost for a zero carbon house. The real figure will

be clearly be larger than this since the low carbon materials and systems will be replacing

some traditional materials and systems rather than supplementing them, although this

provides a minimum figure. Multiplying these estimates by the regional NPAUrecommended housing levels (discussed above) will provide estimates of the potential

market size, assuming all new homes are constructed as zero carbon homes. The

estimates are provided in Figure 3.10 below, which suggest that the new build market for

LCB technologies could be worth 8-16bn per annum across England.

Figure 3.10: Estimated Minimum New Build Market Values (per annum) for LCBTechnologies based on NPAU Recommended Housing Levels 2008-2031

Market Value based on Minima

Housing Average 2008-31

Market Value based on Maxima

Housing Average 2008-31

North East 0.25bn-0.4bn 0.3bn-0.45bn

North West 0.9bn-1.45bn 1.1bn-1.6bn

Yorkshire & Humber 0.9bn-1.45bn 1.0bn-1.6bnEast Midlands 0.9bn-1.4bn 0.9bn-1.5bn

West Midlands 0.7bn-1.1bn 0.8bn-1.3bn

East of England 1.1bn-1.7bn 1.4bn-2.2bn

London 1.2bn-1.8bn 1.6bn-2.5bn

South East 1.3bn-2.1bn 1.9bn-3.0bn

South West 1.1bn-1.7bn 1.2bn-1.9bn

England Total 8.3bn-13.1bn 10.2bn-16.0bn

Source: GHK analysis

The Innovas study suggests that the UK Building Technologies sector currently exports

1.35bn of LCB materials associated with windows, doors, insulation and heat retention

and monitoring and control systems. Exports therefore account for just over 10% of the

value of the Building Technologies market. A more detailed analysis of the data suggests

that these exports comprise:

500 million (37%) associated with windows for LCBs, particularly insulated alloy

window frames and advanced plastic thermally insulated window frames.

400 million (29%) associated with insulation and heat retention equipment,

particularly materials for wall cavity insulation, fibre insulation for roofing and granular

insulation materials.

330 million (25%) associated with doors for LCBs, including insulated alloy doors,

but especially insulated plastic doors.

29http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=8
http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=8http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=8http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=8


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125 million (9%) associated with LCB monitoring and control systems.

Interestingly the largest export markets are Spain (which has imported 78m of LCB

materials from the UK, including 42m of electro chromatic window glass), Italy (which has

imported 77m of LCB materials from the UK across a wide range of products but including

27 million of insulated doors and window frames), Hong Kong (which has imported 74m

of LCB materials, again including 23 million of insulated doors and window frames),Malaysia (which has imported 73m of LCB materials, including 12 million of insulated

doors) and China (which has imported 72m of LCB materials, again focused on insulated

doors and window frames).

3.4 The Position of UK Producers

There are currently over 6,600 companies in the UK building technologies sector,

employing an estimated 107,000 people30

, but with a number of internationally significant

businesses (Figure 3.11).

Figure 3.11: Top 5 Construction Companies in the UK Ranked by Size

Source: Adapted from: Deloitte, European Powers of Construction 2008 p.4-6

Evidence presented in the European Powers of Construction Report highlights that 28 of

the top 100 construction companies in Europe are based in the UK, operating in countriesacross the globe, including those with the highest volume of construction projects (i.e. the

Gulf, China, EU Member States, Hong Kong, India, Japan, Russia, and USA). These

construction companies operate in extremely diverse collaborative networks composed of

contractors, consultants, building materials and product producers, highlighting the potential

for market growth in emerging sectors and a possible opportunity for the UK.

Whilst these larger companies are important (and have potential to capitalise on

opportunities offered through the construction of LCBs), the fact that the UK construction

industry is dominated by SMEs31

means that consideration must be given to ways they can

also benefit from any future growth in the LCB sector.

30 INNOVAS, 2009: 3331

https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/construction

Company Size Rank

in Europe(by staff no.

& turnover)

International

Markets

Examples of LCB Technology

Use

Balfour Beatty 7 UK, USA, Sweden,

Germany, Italy, Hong

Kong, Middle East

Birmingham New Hospital

Clyde Wind Farm

Taylor Wimpey 13 UK, USA, Spain,

Gibraltar

The Academy Housing

Development, Barking

Oxley Woods Housing

Development, Milton Keynes

Carillion 15 UK, Canada, Trinidad

& Tobago , UAE,

Oman

City of York Council Eco Depot

Queen Alexandra Hospital,Brighton

Laing ORourke 16 UK, India, Cyprus,

Ireland, Germany,

UAE, Australia

Blackfriars Road Tower,

London

Proposed redevelopment work

at Heathrow Terminal 2

Barratt Developments 19 UK Barratt Green Homes, Watford

Hanham Hall eco village

South Gloucestershire
https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/construction


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As stated above, the building technologies sector has a relatively large supply chain

accounting for 60% of the sector value, which is likely to represent an even larger

proportion of the 6,600 companies. The new build and retrofit markets for LCB

technologies offer significant opportunities for these supply chain businesses in the UK,

which potentially includes a vast array of different producers of materials that can be

redesigned to reduce environmental impacts such as: glazing for doors and windows; wood

and metals for frame construction, pipes, components, etc; ceramics for flooring, roofing,

etc; chemicals for paints, sealants, adhesives, cement, insulation, etc.; plastics for window

and door frames, insulation, pipes, etc; as well as the manufacture of high-technology

electronics including electronic sensors and building management and monitoring systems.

More generally, building control, management and monitoring systems will have a key role

to play in the buildings of the future and within the retrofit market. These systems will be

used to monitor energy use and carbon emissions, and control and adjust systems and

processes to ensure efficiency is maximised. This therefore represents a particular

opportunity for development, which would fit with regional priorities across the UK, and

could potentially be incorporated as part of the Digital Britain initiative.

The UK construction materials sector has also been undergoing a period of rationalisationin recent years, with many UK companies now forming part of international companies32

,

which may offer more significant opportunities for future penetration of overseas markets.

Microgeneration

Most microgeneration technologies are not mass-produced in this country, relying instead

on labour intensive processes or assembly in the UK and/or importing products from

abroad, such as ground source heat pumps from Sweden. However, there are some

exceptions, for example Romag, a large manufacturer of photovoltaic panels based in North

East England. Romag currently exports more than 80% of their products to Europe, due to

the lack of demand in the UK. This example reflects the fledgling state of the UK market

and highlights the issue that companies will not invest significantly in manufacturing

facilities before the domestic market is in existence

33

. Additionally, most biomass andground source heat pumps are imported into the UK. The technology is maturing but needs

further promotion, so that rationalising, designing and installing wood heating systems

becomes a standard task for designers, builders, plumbers and heating engineers.

Microgeneration is currently also a cost-inefficient and unreliable alternative to large scale

offshore wind generation, with a number of constraints currently restricting its wide-scale

deployment. Yet, with greater commercialisation, microgeneration has the potential to

become part of a commercial, mass-market, decentralised energy system. For example,

there were five manufacturers selling micro-CHP products on a commercial basis in 2005.

Around 16,000 units were sold that year (2005), representing 31MW of generating capacity

and a value of approximately 135 million. The Baxi-Senertec DACHS unit and the

ECOWILL unit (developed by Honda, Osaka Gas, Toho Gas and others) together

accounted for over 90% of unit sales in this market. Japan itself accounted for over 75% of

these sales (13,000 units) through the ECOWILL unit and Yanmars Genelight unit; while

the German market contributed nearly 20% of these sales (3,200 units) through the DACHS

and Power Plus Technologies Ecopower unit, as shown in Figure 3.12.

Figure 3.12: The Global Micro-CHP Market in 2005

32http://archive.corporatewatch.org/profiles/construction/construction.htm


Firm Country Unit name Output

kWe

Sales

Units

Sales focus

Senertec (Baxi) Germany DACHS 5.5 >2,500 Single/Multiple occupancy

buildings

Power Plus Germany Ecopower 4.7 ~700 Single/Multiple occupancy
http://archive.corporatewatch.org/profiles/construction/construction.htmhttp://archive.corporatewatch.org/profiles/construction/construction.htm


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SouSource: Delta Energy & Environment, UK (2006)

4 DEVELOPING UK ASSETS IN LOW CARBON BUILDINGS

While there is significant potential relating to LCB technologies for UK companies, there are

a number of barriers that need to be overcome before this potential can be fulfilled,

including:

LCB technologies remain niche opportunities, while the benefits and cost-effectiveness have not been sufficiently proven to provide a rationale for developers

(the key decision-makers in the industry) to choose to invest in LCB technologies on

a large scale. It will also take time for suppliers in the UK, and elsewhere, to develop

the scale of operations required to significantly increase production of these

technologies.

There is not sufficient payback from current LCB technologies to justify the

investment. Potential solutions could involve linking property taxes (council tax and

business rates) to energy efficiency in the same way that road tax is cheaper for

more energy efficient vehicles. This is a particular issue for landlords, who are even

less likely to invest in technologies for tenants to enjoy the benefits of reduced

energy bills, with an uncertain and relatively limited impact on capital values.

Planning issues can provide a barrier to the use and installation of LCB materials

and energy efficient technologies, particularly microgeneration solutions.

In order to overcome these barriers and develop UK opportunities and assets, a number of

key areas need to be addressed including:

Technological development The development of LCB technologies will require the

support of research groups and further collaboration between academia, the existing

construction industry and other sectors that could help to provide new construction

materials, such as the chemicals industry. Universities themselves have a large

amount of old building stock that could be used to test and verify retrofit capability

and capacity.

Market development The UK Government could help to drive innovation and the

mainstreaming of LCB technologies in both new build and retrofit markets through

FCP models. This would provide an opportunity to support the development of

appropriate and affordable products, suitable not only for social housing and public

sector buildings, but also for private housing and non-domestic buildings.

Skills Training and skills development will be vital in raising awareness of new

materials and microgeneration technologies, amongst the construction and support

industries, and providing training on their installation.

4.1 The Interface between science, R&D and business

Figure 4.1 provides an assessment of (current) non-commercial energy efficiency

technologies in terms of their cost-effectiveness of carbon reduction benefit (x-axis) and

potential economic benefit for the UK (y-axis). The size of the co-ordinate reflects the total

Technologies

(Vaillant)

buildings

Honda and partners Japan ECOWILL 1.0 ~12,00

0

Single occupancy buildings

Yanmar Japan Genelight 5.0 ~1,000 Small commercial

Whisper Tech NZ WhisperGen 1.2 ~400 Single occupancy buildings


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potential carbon reduction associated with each technology. Analyses of this type help to

prioritise R&D investments in LCB technologies and particularly those that will achieve large

efficiency improvements and carbon reductions whilst building UK competitive strengths in

new technology areas.

The chart shows that the largest potential carbon reductions are associated with Building

Management Systems (BMS) and Micro-CHP systems. The technologies of greatesteconomic benefit to the UK are typically high-technology products including organic LEDs,

home networking, LEDs, BMS and intelligent monitoring systems, while the most cost-

effective technologies for reducing carbon emissions range from organic LEDs, to Micro-

CHP and window designs.

Figure 4.1: Energy Efficiency Technologies by Potential for Carbon Reduction and

UK Economic Benefit

Source: Commission on Environmental Markets and Economic Performance 2007

There are currently a range of projects and programmes operating at the science, business

and R&D interface in the UK including:

EPSRC Projects

Carbon Vision Buildings Project (CaRB) is a 3.1 million, 4-year initiative involving a

wide range of academic and private sector partners. It aims to develop computer

models that will make it possible to pinpoint effective ways of cutting carbon

emissions arising from energy use in buildings. Partners include De Montfort

University, University College London, University of Reading, University of

Newcastle-upon-Tyne, University of Sheffield, Royal Institute of Chartered Surveyors

(RICS) and Energy for Sustainable Development Ltd. Stakeholders involved include

NES Ltd, PowerGen, Leicester City Council, the Energy Saving Trust and DEFRA.

Technology Assessment for Radically Improving Asset Base (TARBASE) is a 1.3

million, 4-year initiative focusing on the scope for retrofit measures to reduce carbon

emissions by 50% by 2030. For example, this could be achieved through: greater

use of CHP in buildings; greater use of building materials with improved insulating

properties; and greater use of renewable energy technologies. The project is being

led by Heriot-Watt University and also involves the University of Ulster, University of

Surrey, University of Nottingham, BSRIA, Integer, CIRIA and JB&B.

Built Environment Technology Strategy Board Projects

There are significant existing and emerging commercial opportunities for both retrofit and

new buildings and the Technology Strategy Board (TSB) is currently developing


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technologies with industry for retrofit and new buildings through discrete programme

activity.

For New-Build:

Components and Materials for Intelligent Buildings and Infrastructure involves the

development and integration of materials and components into buildings or building

systems. Applications involve intelligent systems which control and manage

information to deliver better performance of buildings and infrastructure using

intelligent sensors to monitor and control temperature and humidity under defined

parameters34

. This is likely to be an increasingly significant technology area given

the ageing demographic profile of UK residents.

Low Carbon Materials and Energy Efficient Homes The use of energy efficient

materials, which require less energy to manufacture, process and also use less

embodied energy, may contribute significantly to reduced energy and carbon

emissions. For example, materials include clean fossil fuels, hydrogen fuel cells and

distributed generation. The use of these technologies is desirable for end users and

the TSB notes that they offer significant potential to meet the UKs environmental and

economic policy objectives35.

For Retrofit:

The TSBsRetrofit for the futureSBRI competition, part of the Low Impact Buildings

Innovation Platform, was developed in partnership with DCLG and the HCA. It has

challenged the industry to develop and demonstrate solutions to retrofit the social

housing stock. The project aims to deliver deep cuts in energy use and carbon

emissions as well as stimulating the retrofit housing market and developing the

supply chain. The results of the competition will feed into future Government

procurement decisions and the Knowledge Transfer Network for the Modern Built

Environment (MBE-KTN) will be used to diffuse the results of the competition widely

across the industry.

R&D into innovative materials for LCBs is being encouraged by the TSB and EPSRC. 10

million is being invested in R&D projects aimed at developing new materials technologies to

help meet energy challenges across 16 innovative R&D projects. The relevant projects for

LCBs include:

The Polymer Photovoltaic Architectural Glass project is being led by Polysolar Ltd

in collaboration with Linde Electronics, Imperial College, Sagentia and Pilkington

Technology Management. The project aims to develop low cost, translucent

photovoltaic architectural glass based on conjugated organic polymers for use in

building windows and curtain walling.

The Energy Efficient Bio-based Natural Fibre Insulation project is being led by

Bangor University in collaboration with Hemcore Ltd, Natural Building Technologies,Nonwovens Innovation and Research Institute, Plant Fibre Technology, Rachel

Bevan Architects and Consultants, Scitech, Wates Construction, and the University

of East London. It aims to develop a sustainable, thin and highly efficient natural

fibre insulation solution, suitable for the new build and retrofit markets.

The Low Cost Integrated PV in Double Glazed Windows project is being led by

Arup in collaboration with Pilkington Group, CREST (Centre for Renewable Energy

Systems Technology at Loughborough University) and Applied Multilayers. The

project aims to develop an innovative, low cost PV, double glazed window concept

based on a semi-transparent, ultra-thin film solar cell.

34http://www.innovateuk.org/ourstrategy/innovationplatforms/lowimpactbuilding.ashx

35http://mbektn.globalwatchonline.com/epicentric_portal/site/mbektn/menuitem.9fa2db70bf96048028194a100680e1a0/


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The Plastic UV Radiation Protection project is being led by Intrinsiq Materials in

collaboration with Bayer Material Science, Brunel University and Johnson Matthey. It

aims to develop innovative energy harvesting products for a wide range of uses,

including more efficient use of solar and thermal energy, longer life and recyclability.

Two projects aiming to develop new materials for use in fuel cell technologies.

The TSB has also funded projects investigating the properties of paint, including its

potential to offer insulation. For example, the TSB has funded a 3-year project to develop

sustainable paint systems, led by ICI Paints in collaboration with Carillion, the construction

company, and The Forum for the Future, a sustainability charity. The project involved nine

projects tackling the whole life cycle of paint, from formulation to application, recycling and

supplier engagement, in order to develop future products and services.

Energy Technologies Institute (ETI)

ETI is focused on overcoming barriers to the deployment of low-carbon technologies by

establishing projects in areas such as Wind, Marine, Distributed Energy, Transport, Carbon

Capture and Storage, and Waste-to-Energy technologies. The ETI Low Carbon Building

Programme contains a buildings project centred on retrofit, which has two main

components:

Buildings ProjectThe project is identifying and evaluating the most cost effective

and efficient methods of retrofitting existing housing stock through low-carbon

conversions in large volumes. It is hoped that this approach will maximise financial

and carbon savings at individual property and national levels. As part of this work,

the ETI will establish a strategic overview of the buildings sector and develop a

programme of activities for the next three years, working with public sector bodies

including the EPSRC, TSB and Carbon Trust. The ETI is also proposing to fund a

new projec

Low Carbon Buildings Report

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Transcript of Low Carbon Buildings Report