Stability and a long-term approach essential to Net Zero
Clive Feeney, LHC group director details the main asks from the not-for-profit public sector construction framework provider in response to the government’s Net Zero Review.
The recently announced Net Zero Review sets out a clear aim to find a ‘pro-business, pro-growth’ road to carbon neutral by 2050, calling for evidence from businesses, local government and the public on what is needed, what is working and where the decarbonisation challenges lie.
Headed by former Energy Minister Chris Skidmore MP, it is a welcome step to finally gather intelligence on what is really happening across our regions and presents an opportunity to unearth what is working and scale this up to a national level.
As a not-for-profit public sector construction framework provider with regional business hubs, LHC sees many low carbon, built environment projects in action at a local level. The outcomes of these projects are bringing significant benefits for local authorities and social housing providers in procuring low energy, built environment solutions such as modern methods of construction (MMC) new builds and energy efficiency retrofit.
Demand is there for growth of net zero solutions through frameworks, but LHC is calling for the following out the Net Zero Review to speed the transition:
- Clear, long-term net zero policy from government to produce much-needed confidence and grow the marketplace.
- More significant matched funding support for carbon neutral building methods and energy efficiency measures for retrofit.
Procurement provides the right environment to guarantee demand and encourage growth. LHC’s frameworks, particularly Energy Efficiency and Associated Works (N8) and Offsite Construction of New Homes (NH2), prove that marketplace confidence and the right procurement routes can result in trailblazing projects across England, Scotland and Wales.
The issue of confidence
The UK is still relatively new to its journey to net zero, with low carbon technology and the surrounding marketplace not yet fully mainstream. Businesses are yet to feel the full benefits and profits of a booming net zero economy and remain uncertain around when to fully invest in green careers and decarbonising products and services.
This certainty is also needed in the case of frameworks. Most operate on four-year cycles, meaning long-term policies and funding can provide guarantee for businesses that it is worth investing in services, products, and training, as they will still be needed beyond 2030.
A long-term, clear and unwavering carbon net zero policy is needed from government to remove barriers to growth.
This is also true for growing green workforce skills, for which the government is targeting filling two million green jobs by 2030. But there is a long road ahead. LinkedIn’s recent Global Green Skills Report 2022 estimated jobs requiring green skills increased by eight per cent annually over the last five years, while the share of green talent grew by just six per cent. Meanwhile, the construction sector is estimated to require 10,000 skilled retrofit professionals alone by 2025.
The capability, appetite and agility is there across the construction sector, but these issues combined often make upscaling feel risky for innovative SMEs.
Focus on the long-term
The Net Zero Review calls for solutions to help ‘lower the cost curve’ for net zero technologies. However, this cannot be a cheap, or quick fix. The built environment accounts for 39% of all global carbon emissions, while UK housing stock produces 20% of the country’s carbon emissions and uses 35% of energy.
The government’s price cap freeze to reduce household energy bills this autumn, winter and beyond was predicted to cost £72-140billion, before Chancellor Jeremy Hunt announced the freeze would cease next April 2023. The necessary support provided highlights the need for a realistic assessment on the cost of net zero and the long-term rewards for growth.
Current retrofit measures are welcome in tackling the problem of energy inefficient existing properties. The National Retrofit Strategy (NRS) is the UK government’s policy proposal to make existing homes greener and more energy efficient across the next 20 years, creating 500k jobs. The Social Housing Decarbonisation Fund is providing almost £1.8bn across two waves, including matched funding. Combined, the Home Upgrade Grant Schemes (HUG) and Local Authority Delivery Scheme also inject £1.2bn into problem, with ECO4 on the way.
However, Climate Change Committee estimates show £360bn is needed to retrofit UK housing stock by 2050.
To achieve this, while policy and funding must sit front and centre, standards and regulation around net zero solutions must be baked in. Quality assured low carbon delivery and retrofit is central to a thriving net zero economy and should not be viewed as a regulatory burden hampering progress.
Frameworks make competencies and quality assurance part of the assessment process and can progress net zero in a safe and scalable way – another important factor in market confidence.
Using these procurement routes means applicants must illustrate compliance with standards such as PAS 2035 – the process for energy retrofit measures on existing UK buildings. Contractors and suppliers working on LHC’s and other providers’ frameworks are already reaping the benefits of investing that time in upskilling their workforces and updating processes to meet standards, through growth and guarantee of future work.
This is encouraging. Despite a tough 2022 with lingering effects of a global pandemic, war in Europe, and energy and cost of living crisis, the move to carbon net zero is already happening in local authorities and housing associations. The challenge is to reflect this success at a national policymaking level to bring the confidence needed to scale up.