Future Approaches to Heating within New Build Homes
North Lanarkshire Council · 16 November 2022
Back to Housing Committee — 16 November 2022 and its agenda
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North Lanarkshire Council Report Housing Committee Does this report require to be approved? ☒ Yes ☐ No Ref PH/TM Date 16/11/22 Future Approaches to Heating Within New-Build Homes From Pamela Humphries, Head of Planning and Regeneration E-mail mallaghant@northlan.gov.uk Telephone Tony Mallaghan, Housing Development Manager 07970 016251 Executive Summary This report requests that the Committee consider and approve a new approach to providing space and water heating to new-build homes, which complies with the Scottish Government’s Heat in Buildings Strategy, published October 2021. The expectation of the Heat in Buildings Strategy is that emissions of greenhouse gases from heating our homes and buildings will have all but disappeared by 2045. This requires energy demands to be greatly reduced, and space and water heating to be provided by zero emissions heating systems. In the short to medium term, this report proposes that heat pumps are used in place of gas combination boilers to provide space and water heating to new-build homes and to conversions of older buildings to social housing. To mitigate the possibility of fuel poverty, this report proposes that large PV arrays coupled with energy storage (hot water tanks and/or batteries) are provided to each property. In the medium to long term, this report proposes that newer technologies including heat networks and hydrogen fuel should be examined as more information and evidence becomes available. The current energy price increases are noted as a significant barrier to the successful implementation of zero emissions heating systems. Recommendations It is recommended that Committee: 1) Approve the approach to heating new-build homes and conversions as outlined within section 2 of the report. 2) Note that future options to deliver energy efficient homes will continue to be explored as set out in the report.
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1. Background 1.1 The key milestones below are discussed in the Heat in Buildings Strategy to reduce greenhouse gas emissions from Scotland’s homes, workplaces and community buildings. https://www.gov.scot/publications/heat-buildings-strategy-achieving-net-zero- emissions-scotlands-buildings/ Date Milestone 2024 Low or zero emissions heating systems1 required to all New Build Homes. This means that gas boilers will no longer be permitted in Building Warrant applications submitted after 01/04/2024. 2030 75% reduction in greenhouse gas emissions for heating our homes and buildings2 2032 All social housing to achieve an Energy Efficiency Rating of Band B by the end of December 2032 3 2040 90% reduction in greenhouse gas emissions for heating our homes and buildings2 2040 <5% households in fuel poverty (in 2015 prices) 4 2040 <1% households in extreme fuel poverty (in 2015 prices) 4 2045 Net Zero Greenhouse gas emissions for heating our homes and buildings Notes 1 Low and zero emission heating systems are systems that have zero direct greenhouse gas emissions, such as individual electric heat pumps and connection to heat networks, or electric systems such as storage heaters, and systems that have very low emissions such as those that use hydrogen. 2 The Climate Change (Emissions Reduction Targets) (Scotland) Act 2019 3 Energy Efficiency Standard for Social Housing (EESSH2). NLC New Build Housing Specification already exceeds this target 4 The Fuel Poverty (Targets, Definitions and Strategy) (Scotland) Act 2019 1.2 Currently, 88% of the council’s housing stock is heated using gas, compared with 80% across Scotland. 11% are heated using electricity which is comparable to the rest of Scotland. 1.3 Details relating to the requirement for non-gas heating from 2024 and the proposed pilot to examine and evaluate the use of an alternative to gas heating was reported to the Housing and Regeneration Committee on 25 November 2020. The Plan for North Lanarkshire Priority Improve the health and wellbeing of our communities Ambition statement (1) Ensure a housing mix that supports social inclusion and economic growth
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2. Report 2.1 The challenges of meeting the requirements of the Heat in Buildings Strategy whilst keeping rents and heating bills affordable are discussed in The Scottish Government Zero Emissions Social Housing Taskforce Report (August 2021). This report recommends a Just Transition including the need for social landlords to:- • Mitigate against potential negative impacts for social tenants and maximise potential opportunities such as jobs. • Promote a Fabric First approach as an essential step towards decarbonisation. • Continue to evaluate their wider impacts and on-going contribution to tackling the climate emergency, through systematic monitoring and measurement. 2.3 An options appraisal has been carried out to consider various options for zero emission heating systems that could be used in new homes for social rent. The options (set out in table 1) include Air source pumps, electric storage heating and electric wet combi boiler systems. In each option, it is proposed that a PV array and battery storage are provided to help offset the higher unit costs for electricity, and to mitigate the risk of fuel poverty. It should be noted that the combined cost of installing the new technologies is around £15,000 higher per unit than the current specification. The preferred option is to use heat pumps because it is a proven technology in Scotland; the extremely high efficiency will minimise energy consumption, and because it will provide significantly lower running costs for the tenants given current costs of fuel. Ground source heat pumps (shared boreholes and small individual heat pumps within homes), are expected to significantly outperform air source heat pumps in terms of efficiency and running costs, but are not suitable in as many sites. The viability of ground source heat pumps is currently being investigated. Table 1 Space and Water Heating Options Appraisal Typical Capital, Maintenance and Operational Costs Heating Type Capital cost per home (Supply and Install exc VAT) Annual revenue cost per home (Annual maintenance and servicing) Annual net utility cost Baseline Gas Combination Boiler Radiators & Pipework 4kW PV array to houses, 2kW to cottage flats £8,800 £224.67 £1404 - £1974
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Option A Air Source Heat Pump Hot Water Tank Radiators & Pipework 4kW PV array 13.5kW Battery £23,700 £135.19 £612-£886 Option B Storage Heating Elec Hot Water Tank 4kW PV array 13.5kW Battery £21,815 £125.90 £1382 -£1757 Option C Electric Wet Combi Boiler Radiators & pipework 4kW PV array 13.5 kW Battery £21,580 £125.90 £2184 -£2838 2.4 Future Options that will be considered include thermal batteries, mechanical heat recovery and ventilation, solar thermal panels, hydrogen ready boilers, and heat networks. 2.5 The Scottish Government announced the Heat Network Fund in February 2021. This is a fund of over £300million over this parliamentary session to support development and rollout of zero emission heat networks across Scotland. The use of communal heating systems using air or ground source heat pumps for flatted developments may be eligible for this fund. 2.6 A pilot project for net zero emission heating is currently under construction at Dykehead Road, Airdrie. The first properties are due to hand over towards the end of 2022. This pilot project consists of 19 properties (out of a site total of 150 properties) being built with the following additions to our standard New Build specification:- • Air Source Heat Pumps and Hot Water Cylinder in place of a gas combi boiler; • Extra 25mm insulation to external walls; • Extra 50m insulation to loft spaces; • Triple glazed windows; • 4kW PV array (13 panels); and • 13.5kW battery storage. Data and tenant feedback will be collected from both the net zero homes and the properties heated by gas combination boilers. This will allow the council to assess the performance and future viability of these proposals, with particular cognisance of the current energy price increases, to help inform future investment decisions. 2.7 It is proposed that the approach for achieving low/ zero emissions for space and water heating systems to both new-build and regeneration / redevelopment projects should be as outlined below:- ▪ Continue to implement the Fabric First approach which will be reviewed and amended as appropriate to focus on reduced energy consumption.
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▪ Make use of both air and ground source heat pumps (as appropriate to the development) as the principal approach to an alternative to gas heating within new- build and redevelopment projects. ▪ Make use of appropriate supporting technologies, primarily Solar PV and energy storage (hot water tanks, batteries), to support the reduction of tenant energy costs within the council’s housing stock. Solar Thermal Panels and Mechanical Heat Recovery and Ventilation technologies will also be considered as appropriate to the development. ▪ Consider, where viable and appropriate, the use of Local Heat Networks and seek support via applications to the Heat Network Fund. ▪ Continue to examine new heating systems such as hydrogen as they arise for further consideration. 3. Measures of success 3.1 The proposed approach to heating new-build homes detailed within this report will seek to deliver the following outcomes: a) Compliance with Scottish Government Heat in Buildings Strategy. b) Compliance with EESH2 requirements. c) Maintaining similar or betterment of the Energy Performance Ratings performance for New Build Homes. d) Tenant satisfaction. e) That best value for North Lanarkshire Council is both demonstrable and achieved. 4. Supporting documentation There are no Supporting documents. Pamela Humphries Head of Planning and Regeneration
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality-and-fairer- scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Financial Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? The Scottish Government has made additional grant funding available for the installation of heating systems which produce zero direct emissions at the point of use - £4,000 per unit (3 person equivalent benchmark). The net cost to the Council installing the air source heat pump systems is therefore an increase of £10,900 per home compared to installing a gas central heating system once the extra grant is taken into account. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic Solutions? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☐ No ☒ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☐ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐
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5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? Will introduce technologies that may transmit via SIM Cards data relating to Battery Storage and Heat Pumps. These technologies have been used on properties elsewhere. Where the impact identifies a requirement for technology, has an assessment been carried out (or scheduled) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☒ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The proposed approach to heating new-build homes will remove the combustion of fossil fuels from home heating to comply with the Heat in Buildings Strategy and promote successful achievement of the council and Scottish Government goals on Climate Change. 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed? Risk associated with the New Supply Programme is managed within the New Supply Risk Register process. The risk register has been updated to reflect the impact of the installation of the new technology in heating systems