Net zero: preparing for an all-electric future
We have become more aware of the world around us during the pandemic and perhaps become a more enlightened society and with COP26 just around the corner we are again posed the question of climate change and what to do. The property sector has a large part to play in helping to deliver this by creating building solutions capable of meeting these demands.
Let us consider some of the big challenges we are facing to achieve our 2045 net zero target. Regulation change is coming more to the fore and with several consultations and workstreams such as the draft Heat in Buildings Strategy, the Public Sector Net Zero Carbon Buildings Pathfinder and the LEIP funding initiative all making similar moves in changing the way we design buildings and what energy sources we use to supply our buildings.
All these documents are tending towards all electric energy solutions in the short to medium terms be that in the form of direct electric, heat pump technology or low carbon heat networks. In addition to delivering all electric buildings we also have the challenge of electrification of transport which is moving at an even faster pace.
This obviously presents some challenges as the electrical networks must grow with the increasing demand and as such significant investment is required in these networks to facilitate growth.
If we look at the National Grid Future Energy Scenarios 2020 report it indicates that in all but one of the energy scenarios analysed, we will need more than double our power capacity of today. The report also suggests that around 42% of the power generation could be decentralised by 2050.
The industry is already seeing some of these challenges manifest themselves with higher power capacity costs to assist in funding this move, but whilst the move to net zero carbon buildings is supported by us all, it is the pace at which electrical network infrastructure implementation is taking that is a cause for concern. It can take three years to establish a primary substation from concept to completion and that is only once a project is committed.
Another consideration is the consumer price of electricity which is significantly higher than gas meaning that all electric buildings will be more expensive to operate unless there is a greater focus on the reduction of energy. The average residential unit prices are 4.3p/kWh for gas and 19.6p/kWh for electricity based upon the statistics from the Department for Business, Energy & Industrial Strategy. In each of the tariffs there is an environmental and social obligation cost and again we see how the energy market is lagging upcoming legislation. Gas unit prices have a 1.86% obligation cost and electricity has a 22.92% obligation cost. If we are seriously looking at moving our buildings to all electric, then this needs to be switched.
What does not help our situation is that our buildings are amongst the least efficiently constructed in Europe. As a result, heating our buildings makes up 40% of the UK’s energy consumption with 78% of Scotland’s homes being heated using fossil fuels according to research carried out by Savills in 2019.
Fundamentally, the good news is the challenges we face are solvable, we now need to focus on reducing our energy consumption especially our heat demands through better fabric design and then deliver an energy solution tailored to the selected site dependent upon its local challenges. For example, if the capacity exists then a dedicated in-house heat pump is viable if the power is not then a Low Carbon Heat Network solution with thermal and electrical energy storage could be the solution.