City heat

In tackling the dual issues of climate change and population growth, the Government has unveiled its recent plans for more sustainable methods of development. Simon Ricketts and Sue Davidson report

Climate change is a hot topic. The Prime Minister has made it clear that he considers it as the world’s greatest environmental challenge. And in order to meet that challenge, the Government has included a mixed bag of measures in its recent Energy Review that are aimed at reducing our greenhouse gas emissions. One of the areas the Government is focusing on is improving the energy performance of new developments. Encouragingly, it appears that leading developers and institutions are now responding positively to the challenge.

The Government’s ambitions

Over a quarter of the UK’s emissions are attributable to the domestic sector and, with a growing population, these emissions are set to increase. Homes, therefore, are critical to the Government’s climate change programme. The Government has recognised that some may respond to this issue by opposing new development, or cutting plans for new homes. However, it considers that such a course of action would be utterly unsustainable.

Instead, the Government sees the need for new homes as an opportunity, not a threat, and considers that “we need to seize on the opportunity afforded by new development to change the way we do things, to build communities that are truly sustainable in all senses of the word”. In order to drive that change forward, the Government’s long-term ambition is to move towards carbon-neutral development. It proposes to do this by strengthening planning requirements and improving building design and construction through a mixture of mandatory and voluntary measures.

It is important for all lawyers who advise on residential, commercial and mixed-use developments to be aware not only of the mandatory measures, but also the voluntary measures. Not only is it the case that in many respects what is voluntary now will become mandatory in the future, but experience shows that a constructive approach to these issues is invaluable in negotiations on major schemes – as well as often fitting with clients’ corporate social responsibility initiatives, as well as those of their prospective tenants.

Strengthening planning requirements

The Government is developing a new ‘Planning Policy Statement [PPS] on Climate Change’, which it intends to consult on later in the year and introduce in 2007. The new PPS will make it clear that the location and design of new developments should promote the reduction of carbon emissions and encourage the use of more sustainable energy sources.

The Government also plans to urge local planning authorities in England to set ambitious policies for the percentage of energy in new developments to come from onsite renewables. The situation will be monitored with a view to taking action, if necessary, to ensure that local authorities set appropriate targets. There is already a number of local authorities leading the way on this.

Improving building design and construction

The Government is to develop five performance levels for the Code for Sustainable Homes, with the lowest being level one (which will require energy efficiency performance above the current requirements under the Building Regulations) and the highest being level five (requiring new homes to be carbon-neutral). All government-funded housing will be required to reach at least level three. The levels in the Code for Sustainable Homes will indicate the long-term direction of the Building Regulations. Therefore, we can expect to see a continued strengthening of the energy efficiency requirements under the Building Regulations.

There has been some criticism of the lack of enforcement in the regulations and the Government recognises that this is an issue. Various measures have been introduced in order to improve compliance with the regulations, including mandatory pressure testing for new buildings, a simplified approach to showing compliance, a new training programme and an extension of the time period for local authorities to prosecute breaches of energy efficiency standards.

Also, as from June 2007, home information packs will be required for all new and existing homes that are put on the market. The packs will include energy performance certificates, which will rate the energy efficiency of a house on a scale of A to G. The certificates include information on the current average costs for the heating, hot water and lighting of the house and practical information on how to cut fuel bills and improve the energy efficiency rating. This is intended to act as a powerful new indicator for buyers, increasing demand for more energy-efficient homes.

The requirement for energy performance certificates is an EU initiative. Under the Energy Performance of Buildings Directive, the certificates must be prepared when buildings are constructed, sold or rented out. Furthermore, certain public sector buildings are required to put their energy performance certificates on display, and the Government is considering widening the display requirement to include certain private sector buildings as well. The Government has not yet transposed the requirement for energy performance certificates to be displayed, or for certificates to be prepared for buildings other than homes. This is expected to happen next year.

Local and regional authorities lead the way

A number of local authorities is augmenting national requirements and targets to a significant degree, with more onerous local measures. Is this unnecessary and potentially confusing ‘gold plating’ (after all, climate change is hardly a local issue) or simply enlightened local politics?Through the London Plan, the Mayor is taking the lead in promoting low-carbon developments. In particular, there is a number of policies in the London Plan aimed at improving energy efficiency and promoting renewable energy. For example, the Mayor will require the inclusion of energy-efficient and renewable energy technology and design in new developments wherever feasible, including natural ventilation, combined heat and power, community heating, photovoltaics, solar water heating, wind power, fuel cells and biomass-fuelled electricity.

The London Plan also includes a policy that the Mayor and London boroughs should request an assessment of the energy demand of proposed major developments, which should demonstrate the steps taken to apply the Mayor’s energy hierarchy – ie use less energy or use renewable energy or supply energy efficiently (in order of priority).

Also, the Mayor’s energy strategy includes ambitious targets for renewable energy generation in London by 2010 and 2020. The Mayor is currently consulting on amendments to the London Plan that will, if adopted, strengthen the policies in this area. In particular, it is proposed that the plan should include a policy that the Mayor will, and London boroughs should, require developments to achieve a reduction in carbon dioxide emissions of 20 per cent from onsite renewable energy generation.

For many years Woking Borough Council has been pioneering the introduction of decentralised and renewable energy networks in its local area and has already reaped substantial rewards. The council, acting through a public/private joint venture energy services company, has developed a network of 18 sustainable and/or renewable energy installations over 60 local generators, including combined heat and power plants supplying electricity, power, heating and cooling directly to customers’ houses; tri-generation plants supplying cooling, heat and power to council buildings; photovoltaic arrays on council buildings; and a hydrogen fuel cell combined heat and power plant serving Woking Park and its swimming pool complex and leisure centre.

A number of town centre businesses are also connected to the local energy supply network. This has enabled the council to cut its C02 emissions in its own buildings by 79 per cent since 1990. The council has reportedly saved nearly £5.4m due to reduced energy consumption, as well as further savings for householders and businesses in the borough.

Simon Ricketts is head of planning and environment at SJ Berwin and Sue Davidson is an associate