Construction has a major role in the UK economy. Output in the non-residential sector was estimated to grow in real terms in 2010, but subsequent years are likely to see a decline as a consequence of public expenditure cuts.
It is unlikely that growth in the private sector will be able to offset the decline in construction in the public sector, with the latter being particularly affected by the cancellation of the Building Schools for the Future (BSF) programme.
Regionally, the highest growth over the 2009 to 2013 period will be expected to occur in Northern Ireland and London and the South East; negative growth is expected to be seen in the South West and Yorkshire and Humberside. One reason for the regional variations is major infrastructure and publicly-funded projects.
There were around 27 million dwellings in the UK in 2010. The refurbishment sector will remain under pressure due to the cuts in public finances and to the cautious attitudes of consumers towards big investments in uncertain economic time. However, the targets of carbon emission reduction are expected to push retrofitting for energy efficiency reasons in the next few years.
In 2007, the Labour government set a target of building an additional three million homes in England by 2020, an ambition abandoned by the following coalition government. As a result, the rate of new build construction has dropped well below the targeted levels in recent years.
In 2009, an incentive programme called Kickstart Housing Delivery was introduced to boost housing development. Thus far the programme has approved the construction of 22,000 homes.
Until recently, the UK was largely self-reliant for energy, through its indigenous oil, gas and coal resources. The gradual depletion of these resources has led to a growing dependence on imports.
Natural gas and oil dominate the UK primary energy generation, with the share of natural gas increasing significantly, a total increase of 85 per cent since 1990. At the same time solid fuel consumption has reduced by 40 per cent. The use of renewable sources has also increased, although their share is still below the EU average (six per cent).
Environmental concerns have given energy policy high priority in the last couple of years. The UK energy policy has the following goals:
- To cut carbon dioxide emissions by 80 per cent by about 2050, with real progress by 2020
- To maintain the reliability of energy supplies
In 2007, the UK generated 5.17 million tonnes of oil equivalent energy from renewable sources. The split was 81.8 per cent biomass, 8.8 per cent wind, 7.6 per cent hydro and geothermal, and 1.8 per cent from active solar heating. The majority of this was used to generate electricity.
Although the UK's gas grid is being extended, it is unlikely that it will reach 100 per cent of the UK households. The gradual take off of micro-generation products and of heat pumps may offer a solution for those off-grid communities, thought to account for only 10 per cent of the total population by 2020.
The improvement of insulation, together with energy efficiency measures and the increased use of renewables, is likely to contribute to a fall in UK gas consumption over the longer term.
District and community heating
Between 250,000 and 500,000 dwellings are currently served by district heating networks in the UK. This large range results from the lack of a proper definition of district or community heating.
In recent years the district heating market has been driven mainly by Government grant programmes. These programmes have only provided short bursts of funding, and the lack of long term policies - and therefore market security - has led investors to take a gradual approach to expansion, seeking to maximise returns during the funding bursts to cover leaner periods of activity.
This has led to higher investment costs. As a consequence, the cost of a community heating infrastructure in the UK is around 20 per cent higher than in other European countries.
Energy efficiency directives
As part of the international agreement from Kyoto to reduce emissions of greenhouse gases, the EU Council and Parliament the ENE Directive, which set a target of at least nine per cent of total energy savings. This target corresponds to one per cent every year from 2006 to 2014.
The EU's Energy Efficiency Plan (EEP) includes review of the results, measurement of the achieved improvements and revision or correction, wherever required, of the measures set up to reach the targets.
For the residential market, the ENE Directive recommends that EU Member States set up schemes, regulations and measures to stimulate:
- Improved performance of HVAC
- Use of energy efficient lighting
- Use of enhanced energy performance home appliances
- Use of renewable energy sources.
The EU's Energy Performance of Buildings Directive (EPBD) was adopted in 2002. A recast of this Directive was adopted in 2010 to strengthen the energy performance requirements and clarify some of its provisions. The recast EPBD was transposed into national legislation from 9 July 2012.
Member States are now required to set requirements at cost-optimal level. They will be able to choose whether to calculate and set the requirements from the building owner's perspective or from the macro-economic perspective.
The EPBD also requires minimum energy efficiency requirements to be set at a system level. This requires a minimum energy efficiency level to be set and measured for a whole system, (such as a heating system) rather than at a product level, such as a boiler. This will have to be proven by the installer or designer.
The 1000 m2 floor area threshold was also removed from the EPBD with regard to renovation requirements and feasibility checks for alternative energy systems.
Under the EPBD, Member States have to come up with a plan to increase the national number of nearly energy-zero buildings. Member States will have to report their detailed definitions to the Commission. Member States should ensure accurate and sufficient information is given to building owners and tenants via energy performance certificates. This can be done by random sampling checks.
Member States are now required to establish financial support for energy saving investments with the aim of increasing energy efficiency in buildings, especially existing buildings, by supporting the exchange of best practice between responsible national or regional authorities or bodies.
Krystyna Dawson MA is a senior manager, Heating Special Projects, in BSRIA's Worldwide Market Intelligence.