Climate legislation will radically affect building – but who pays?

Grace Mair is regional director and M&E team leader at Thomas & Adamson

It’s no longer a case of if or when new climate legislation will impact the construction industry – it’s already here.

“In the here and now, we still don’t know how this radical and fundamental change to construction is going to work”

The laws are in place and decarbonisation is now a concrete fact of life. Even more so in recent weeks with the Scottish Government’s legislation on energy and environmental standards in force as of 1 February. This requires all new domestic buildings in Scotland to have a 32 per cent reduction in carbon emissions compared with the Section 6 regulations back in 2015, while non-domestic buildings must have 30-40 per cent of their electricity from renewable or low-carbon sources.

Acting as a precursor to 2024 regulations, the new standards will help the phasing-out of direct emission on non-domestic buildings and the use of combustible-fuel sources in new domestic properties. The plans stem from the findings of a 2021 Building Standards Energy Review Panel consultation, which also includes cladding and ventilation rules and clauses, as part of the general rethink of buildings for a safe and sustainable future.

Positively, sustainability and green thinking has become ever more important for clients and consumers, and the industry is supportive of plans to reduce emissions and fossil-fuel dependence. This move towards more environment-friendly heating systems is positive – they are more efficient and sustainable over the long term.

But in the here and now, we still don’t know how this radical and fundamental change to construction is going to work, or whether it’s even feasible within the energy infrastructure.

Simply put, who is going to pay for this?

Will it be developers, energy suppliers or new homeowners? What support will there be to avoid extra costs and charges impacting an industry already coping with a challenging economic landscape? And how do we avoid adding thousands of pounds to the burden of first-time buyers with interest rates rising?

Investment needed

With the new legislation all but ruling out natural gas supplies for heating systems, much of the focus for replacements will be on air-source heat pumps (ASHPs) powered by electricity. The installation of heat pumps is more expensive than for other heat sources, such as boilers. Currently, these will not be any cheaper to run, even with the enhanced coefficient of performance – a measure of the efficiency of a heat pump – offered by ASHPs. Although the systems are more efficient, the cost in real terms to the consumer is passed on in the electric bill, at a time when power has never been more expensive.

It is vital that government, energy firms and regulators update legislation and price units in terms of the cost of electricity compared to gas, to reflect the incoming changes and new reality of fuel usage across the country. As well as rising consumer costs, the imminent move towards electric-based heating away from gas will increase electricity usage across the network. The national grid is already operating at capacity and, as yet, there have been no government or regulatory updates to explain how the energy networks will cope with such massive surges in usage.

This is why the major energy companies must lead the investment in our electrical infrastructure to ensure the move towards decarbonisation is not just feasible, but smooth and efficient.

There also needs to be greater investment in the energy efficiency of existing buildings, which would help mitigate the expected spike in demand, along with wider programmes of education to help the public take simple steps to improve heat retention and insulation at home. Could this be an opportunity to utilise smart home technologies to optimise the use of energy in the home/business to align with the move towards decarbonised generation technologies?

In terms of the construction industry’s investment in new heating-system installations, it is currently assumed that it will be the developers who will bear the initial cost of this and need to pass it on.

In the construction business, as across society, there is an understanding that more must be done to help reduce carbon emissions. It is time for change. But it’s also time for answers.