Registered provider housing stock energy modelling – a crucial part of anasset management strategy

Embarking on stock modelling is a majorcommitment, and a registered provider shouldchoose a supplier who’s both up to the job and onethe client is confident that he can get on with for theforeseeable future. Ideally, the supplier shouldprovide a complete end-to-end package ofprofessional services, be a ‘critical friend’ and guidethe client through the associated technical, financial,social and logistical challenges.

The modelling of energy efficiency measures is oftenundertaken in isolation and there is a significant lackof understanding of how investments in low-carbonrefurbishment can affect the Net Present Value(NPV) of assets, tenant satisfaction and their ability to pay, reactive maintenance spend, void turnover and exist-ing planned investment and divestment programmes.

Many software platforms and consultancy services have a narrow focus on energy use, CO2 emissions, runningcosts and SAP rating impacts - but fail to consider wider matters that ultimately affect investment decisions.What’s more, detailed energy modelling of assets is often outsourced and, as a result, findings end upde-coupled from other internal investment decision-making.

A good housing stock energy modelling service should combine stock assessment and profiling with a detailedreview of existing repair and maintenance plans and budgets. It should also actively consider real worldimplementation challenges such as local site conditions, planning constraints, occupancy levels, behaviourpatterns and other variables as well as longer term NPV based on likely maintenance and management costs andpotential grant and subsidy revenue.

This kind of approach enables you and your supplier to consider the improvement potential of the stock as awhole and how it aligns with your wider asset management strategy and any property-level factors such aspractical application, risk issues, occupancy profiles and other variables.

Stock analysis and benchmarkingAt the National Energy Foundation, we start by analysing and characterising all the provider's housing stock data- checking for its completeness, reliability and any conflicts; identifying areas where information is missing orquestionable; and making recommendations on how it might be improved. We also profile the stock, benchmarkit against both other registered providers and the national average, and identify any quick-win opportunities. Wealso work with the client at this stage to understand its existing repair and maintenance programme as well asits longer term aspirations in terms of wider planned investment and divestment.

Stock archetypes and targetsNext, we determine a suite of representative sub-sets (typically 20-30 housing types) where buildings havesimilar physical descriptions and practical limitations. We then identify improvement targets for each of thesearchetypes, taking into consideration your wider refurbishment, as well as property-level factors such as practicalapplication, risk issues, occupancy profiles and other variables.

Baseline modelling and advanced improvement option evaluationThe third stage is to combine the stock data with other supplementary information in order to build detailedenergy models for each archetype and determine their baseline performance. We then model the optimalimprovement package for each archetype based on a balance of the client's priorities – for example; residentrunning costs, cost effectiveness, energy use, CO2 emissions, EPC rating and capital budgets. This is followed bythe development of a long-term refurbishment strategy for each archetype that ensures flexibility and takes intoconsideration the client's existing refurbishment and maintenance plans as well as any context-specific risks andopportunities.

ReportingFinally, we report on the before and after performance/profile of the stock as a whole, and on any detailedindividual property-level refurbishment strategies. We also provide:

Practical guidance on refurbishment selection and any associated risks and mitigation measures.All the software used in our stock modelling exercise.Training on how to use the software.Board engagement on stock modelling scenarios and outcomes.Presentations and other support services.

In an environment where there’s a continued drive to improve energy efficiency, invest in housing stockcost-effectively, tackle fuel poverty and save residents money on their fuel bills, stock modelling is a crucial tool.Registered providers should concentrate on the big picture and look for a supplier who can help them do thatwhile, at the same time, offers an innovative approach, provides independent professional support and isinterested in helping the client achieve its goals by developing a mutually beneficial long-term relationship.

Luke Smith - Principal Energy Specialist - National Energy Foundation - www.nef.org.uk