8/8/2019 Low Carbon Buildings Report
1/38
J30254075
Low Carbon Buildings
3rd November 2009
8/8/2019 Low Carbon Buildings Report
2/38
J30254075
CONTENTS
1 DEFINITIONS OF THE INDUSTRIAL TECHNOLOGY .................................................................... 11.1 Core and Range of Technologies .................................................................................................. 11.2 Applications .................................................................................................................................... 22 UK CENTRES OF EXPERTISE AND EXCELLENCE ..................................................................... 42.1 Science and Technologies ............................................................................................................. 42.2 Commercialisation .......................................................................................................................... 52.3 International and National Standing ............................................................................................... 63 THE VALUE CHAIN ......................................................................................................................... 83.1 Applications, Products and Markets ............................................................................................... 83.2 Drivers of Demand ....................................................................................................................... 113.3 The Chain of Inputs and Outputs ................................................................................................. 213.4 The Position of UK Producers ...................................................................................................... 234 DEVELOPING UK ASSETS IN LOW CARBON BUILDINGS ....................................................... 254.1 The Interface between science, R&D and business .................................................................... 254.2 Industrial Capacity ........................................................................................................................ 294.3 Framework Conditions ................................................................................................................. 315 SPATIAL DISTRIBUTION .............................................................................................................. 335.1 Technology by Region ................................................................................................................. 33ANNEX 1: LIST OF CONSULTEES ..................................................................................................... 36
8/8/2019 Low Carbon Buildings Report
3/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
1
J30254075
1 DEFINITIONS OF THE INDUSTRIAL TECHNOLOGY
1.1 Core and Range of Technologies
Low Carbon Building (LCB) technologies fall into two key areas: building fabric (materials,
including electronic controls) and renewable energy for buildings (microgeneration). These
technologies are relevant for all residential, commercial and industrial buildings. They are
also relevant for new and existing buildings with new build and retrofit.
Figure 1.1 presents the specific material technologies.
Figure 1.1: Low Carbon Building Technologies (Materials)
Window
Technologies
Electro Chromatic Window Glass
Double Glazed Units
Triple Glazed Units
Advanced Plastic Thermally Insulated Frames
Honeycomb Systems
Insulated Alloy Frames
Door
Technologies
Insulated Plastic Doors
Insulated Alloy Doors
Insulation and
Heat Retention
Materials
Wall Insulation Materials
Controlled Venting & Ducting
Heat Retention Ceramics
Heat Retention Surfaces
Fibre Insulation Materials (Roofing)
Granular Insulation Materials
Electronic Control Systems
Monitoring and
Control
Systems
Motorized Valves and Actuators
Sensing Devices
Inter Building Electronic Control Systems
Balanced Inter Building Heating Systems
Energy Monitoring Systems
Source: Adapted from Innovas, Low Carbon and Environmental Goods and Services; An Industry Analysis, 2009
The above technologies are focused on materials to improve insulation and reduce heat
loss through windows, doors, walls and roofing, but also include a range of monitoring and
control systems which aim to ensure energy is used more efficiently by users of the
building.
In addition to these materials technologies, there are a number of different microgeneration
technologies offering low carbon or carbon-neutral ways to produce heat and/or electricity.
The Department of Energy and Climate Change (DECC) provides a list of these
technologies, split between two groups:
Microgeneration technologies for heat generation:
8/8/2019 Low Carbon Buildings Report
4/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
2
J30254075
Solar thermal water heating systems comprising solar collectors, a heat
transfer system and a hot water store. A 4sqm solar collection area will provide
50-70% of a typical home's annual hot water requirement.
Ground source heat pumps (GSHP) use warmth from the ground to heat fluid
circulating through pipes. A heat exchanger then extracts the heat, while a
compression cycle raises the temperature to supply hot water for heating.
Air source heat pumps (ASHP) operate in a similar way using temperature
differentials in the air (although less efficient than ground source heat pumps).
Biomass stoves and boilers can burn wood (pellets, chips and logs) and non-
wood fuels to provide space and/or water heating.
Microgeneration technologies for electricity generation:
Micro and small wind turbines use wind to drive a generator and produce
electricity. Designs typically involve three blades mounted on a tall mast, or the
building itself.
Solar photovoltaic (Solar PV) generates electricity from sunlight using small-scale PV modules as roof mounted panels, roof tiles and conservatory or atrium
roof systems. A typical PV cell consists of two or more thin layers of semi-
conducting material (usually silicon), which generates an electrical charge when
exposed to light.
Micro-hydro typically used in hilly areas, river valleys or anywhere with a flow
of water. The amount of electricity produced depends on the quantity of water
and the speed of the flow.
Micro combined heat and power (CHP) - systems using natural gas (or fuel cells)
to provide electricity as well as heat, using either reciprocating engines or Stirling
engines.
1.2 Applications
The literature often uses low carbon buildings (LCB) as a catch-all term covering the whole
suite of future buildings that have lower carbon footprints, including zero-carbon buildings.
For the purposes of this report, the term LCB will also cover zero-carbon buildings as these
LCB technologies are likely to be a major factor in the achievement of Government targets
for zero carbon development for houses by 2016, public buildings by 2018 and other non-
residential buildings by 2019.
As well as future buildings, many LCB technologies can also be applied through retrofit to
existing buildings. This represents an even greater challenge as it is more difficult to modify
and retrofit existing properties, than it is to design and build new buildings with LCB
technologies. However, given that the majority of the building stock that will exist in the UKin 2050 has already been built, and buildings currently account for around 45% of the UKs
carbon emissions, there is a considerable need to address the carbon emissions of existing
buildings. Not only is this important in terms of meeting targets for reduced carbon
emissions, but there is also growing consumer and commercial awareness and demand to
reduce carbon footprints, which suggests that there are significant opportunities for LCB
technologies in the UK but also overseas.
A summary of the key LCB technologies is outlined in Figure 1.2. All of these technologies
are currently available for adoption by the market and can be applied to new build and
retrofit markets. R&D is currently being directed towards all technology types in order to
produce major improvements in performance efficiencies (e.g. insulation and renewable
technologies) as well as cost reductions that will enable faster market adoption over the
next 5 to 10 years.
8/8/2019 Low Carbon Buildings Report
5/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
3
J30254075
Figure 1.2: Market Application of Low Carbon Building Technologies
Low Carbon Building Fabric / Materials Microgeneration
Wall systems
Roof systems
Floor systems
Insulation
Glazing
Solar hot water panels
Ground-source heat pumps
Air-source heat pumps
Biomass heating
Wind turbines
Photovoltaic (PV) panels
Micro-hydro
Combined heat and power (CHP)
8/8/2019 Low Carbon Buildings Report
6/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
4
J30254075
2 UK CENTRES OF EXPERTISE AND EXCELLENCE
2.1 Science and Technologies
Figure 2.1 summarises the relevant LCB research expertise across universities in the UK
and shows the broad geographic spread and range of research expertise.
Figure 2.1: Location of Academic Institutes for Low Carbon Building Technologies
and Microgeneration
Region University Main area of focus
North
East
Newcastle: Sustainable
Power Research Group
Microgeneration
Durham Energy Institute Social aspects of microgeneration
Northumbria University Photovoltaic
North
West
University of Salford:
Research Institute for theBuilt & Human Environment
Management in Construction Research Centre, the
Construction IT Research Centre and the ResearchCentre for Education in the Built Environment
University of Liverpool:
Construction and
Infrastructure Research
Group
Concrete and structural research
Yorkshire University of Sheffield:
Building Environments
Analysis Unit
Building Design
West
Midlands
Universities of Birmingham
and Warwick : Science City
programme
Energy Efficient Technologies
Keele University Microgeneration.
East ofEngland
University of Cambridge
Low Energy Ventilation for Health Buildings
East
Midlands
Nottingham University:
Sustainable Technologies
Group
Sustainable building design
Photovoltaic
Solar thermal systems
Earth construction (environmentally responsible
alternatives to cement and concrete)
Biomass
Loughborough University Sustainability and Building Performance
Innovative Construction Technologies
Photovoltaic research laboratory
De Montfort University CaRB Project: Modelling of economic impact of
various carbon saving measuresSouth
West
University of Bath
Sustainable Energy
Research Team
Low Carbon Buildings: The Inventory of Carbon and
Energy
Bristol, Plymouth, Exeter,
UWE
Built environment and
Constructing excellence
University of West of
England
Environmental engineering
University of Exeter -
Environment and
Sustainability institute
Energy efficiency
South
East
Southampton Sustainable
Energy research group
Microwind and urban microgeneration
Commercial buildings retrofits
8/8/2019 Low Carbon Buildings Report
7/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
5
J30254075
University of Oxford Lower Carbon Futures: Integrating sustainable
energy systems into homes
Building Market Transformation; Awareness raising /
demonstration of ways to reduce carbon emissions
London Imperial College Research activity through the Centre for Energy
Policy and Technology; including the Technology
and policy assessment for industry and governmentdepartments.
South Bank University: Research and demonstration of low carbon energy
technologies in the built environment
Centre for Efficient and
Renewable Energy in
Buildings (CEREB)
Research and demonstration of specific sustainable
energy technologies including photovoltaic, solar
thermal, ground source heat pumps and wind power
Scotland Heriot-Watt University Technology Assessment for Radically Improving the
Built Asset Base (Tarbase), aimed at identifying
appropriate carbon saving technologies
University of Strathclyde Energy Systems Research Unit; research into
approaches to energy demand reduction in the built
environment and the introduction of sustainable
means of energy supplyWales Cardiff University Low Carbon Research Institute: a virtual
organisation that aims to develop capacity and
facilities around the existing areas of low carbon and
energy expertise in Wales whilst also having an
international outlook and developing a strategic long
term programme of research.
Source: EPSRC, Low Carbon Task Force 2009
Discussions with BIS and the Buildings Research Establishment (BRE) indicate that the
leading academic institutes are: Nottingham University; Cambridge University; Imperial
College; Cardiff University; and University of Bath due to their close relationships with
industry, however discussions with the BRE also highlight that there remains a disconnectbetween most UK academic research into building technologies and industry uptake.
Principally universities have traditionally focussed on Technology Readiness Levels (TRL) 1
to 3 whilst the industry interest is around TRL 4 5.1
2.2 Commercialisation
There are a range of research institutes and industry associations in the UK relating to the
built environment, many of which contain R&D capacity focused on elements of the
Sustainable Construction agenda. Figure 2.2 contains details of R&D Centres specifically
targeted at the commercialisation of new technologies through market adoption of
business-led academic research.
Figure 2.2: Location of R&D Centres for Low Carbon Buildings and Microgeneration
Region Name Remit in relation to LCBs
North West Centre for
Construction
Innovation
The CCI supports construction sector R&D, helping to
facilitate the Construction Change Agenda throughout
the North West, addressing issues in the built
environment such as sustainability; design;
procurement; skills; and construction processes. It
delivers the 6m Construction Knowledge Hub in
partnership with Salford, Lancaster and Liverpool
Universities, which aims to help companies increase
competitiveness and productivity and respond to
climate change,
1Discussion with BRE
8/8/2019 Low Carbon Buildings Report
8/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
6
J30254075
North East NaREC Assists all sizes of companies with deployment and grid
integration of renewable energy and low carbon
generation technologies, including utilising wind; solar
PV; thermal power; and microgeneration.
Yorkshire SaBRE SaBRE is a joint venture between Sheffield University
and the BRE. The project provides a range of services
to industry; including collaborative research;
consultancy; expert witness; testing and analysis; and
product development.
East of England Building Research
Establishment (BRE)
BRE collaborates with a range of research
establishments to offer sustainable design, construction
and management advice for all types of buildings.
Institute for
Manufacturing and
SmartLIFE,
Cambridge
IfM links academic research with industry through
bespoke research and dissemination. The SmartLIFE
project aims to address three challenges of housing
delivery in growth areas: affordability; sustainability /
energy efficiency; and skills / capacity shortages in the
construction industry
Source: Low Carbon Task Force 2009
2.3 International and National Standing
There are many UK universities, research institutes and industry associations undertaking
R&D relating to the sustainable construction agenda across a wide range of disciplines,
from science and engineering to environmental, geological and social sciences. The UK
has a strong materials science base and is also well known for innovative manufacturing
research. Figure 2.3 identifies some specific strengths relating to UK capabilities
compared to other countries.
Figure 2.3: UK Capability Assessment of LCB Materials and Microgeneration in
Relation to Wider International Activities
UK Capability Area Market Potential
High Small wind turbines
Medium. The UK market for domestic wind turbines isnew but may develop quickly, with UK manufacturersin a strong position to supply. There is high exportpotential to countries with similar urban requirements,e.g. New Zealand, and a large US market, wheredemand is for larger machines on high towers.
High PV materials science Global market potential
HighPV system andcomponents testing and
installation
Global specialist market potential
HighPV system andcomponents performancemonitoring
UK specialist market potential
HighEngineering solutions forfuture technologies
Global market potential
HighEnvironmental impactand life cycle analysis ofnew energy systems
Global market potential
Medium PV cell design UK industry application
Medium PV integrating system UK installer application
MediumDemonstration anddeployment of existingbioenergy technologies
Global market potential
Low PV module manufacture Stable marketSource: UKERC, Energy Research Atlas: Solar, Bioenergy and Wind, May 2009
8/8/2019 Low Carbon Buildings Report
9/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
7
J30254075
The UK has capabilities covering materials science and renewable energy technologies
including wind turbines, biomass, CHP systems, solar, etc. There are also many
international organisations involved in these research areas, and many of these are
investing and collaborating with UK programmes such as through the EU Framework
Programmes, and the International Energy Agency (IEA). Key areas of R&D focus include
improving efficiency and reliability of technologies, whilst reducing the cost of energy
production, in order to increase deployment of microgeneration technologies.
In the case of photovoltaic research, the potential to develop a specific UK research
community has not been fulfilled. UK universities are involved in a number of areas of
photovoltaic research including PV materials, PV systems and Building Integrated PV
(BIPV). However, the UK research community remains small compared to that in other
countries such as Japan, USA, Germany and other European countries, Korea, Australia
and many others. There are significant opportunities for further PV R&D to reduce
generated electricity costs in order to be competitive with conventional and alternative
renewable sources. An improvement in conversion efficiency is required to achieve this,
together with reduced costs of production. Key areas of focus for R&D need to be around
PV module design and manufacture, although PV systems also require improved balance
of system components and in particular the inverter. UKERC also suggests thatperformance prediction tools are inadequate and can result in potential customers being
misled2.
2UK Energy Research Centre (UKERC) Energy Research Atlas: Solar Energy
8/8/2019 Low Carbon Buildings Report
10/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
8
J30254075
3 THE VALUE CHAIN
3.1 Applications, Products and Markets
Applications & Products
The LCB market comprises a wide range of products relating to domestic, commercial and
some industrial buildings, in both the new build and retrofit markets. The scale of
opportunity presented by these two markets will depend on the level of efficiency that the
UK wants to achieve in its existing building stock. If the UK Government makes a
commitment to reducing carbon emissions from buildings by 80% and is willing to invest to
support innovation and market development to create demand (for example through
Forward Commitment Procurement programmes linked to social housing and public office
stock) then the retrofit market would be significantly greater than that of new build.
However, if there is limited or delayed commitment to moving to a significant decrease in
carbon emissions from buildings then the main market growth will relate to new build.
Domestic and non-domestic buildings both offer considerable future opportunities for LCBtechnologies through retrofit and new build as there are significant stocks of both
types/uses of building and a continuous supply of new developments. The existing stock of
non-domestic buildings typically has a younger average age than domestic property and
has a higher turnover, which means these buildings are more likely to provide a better fit
with the existing LCB technologies installed through retrofit as well as new build. However,
there are also significant barriers to the uptake of LCB technologies for both building types,
as discussed below.
Nevertheless, UK companies have developed some world class examples of LCB, some of
which are presented in this report. Coupled with increased customer demand, the main
driver for the development of LCBs in the UK has been the introduction of legislative
planning instruments as a direct result of international agreements. This has caused the UKconstruction industry and supplier base to adapt and introduce more low carbon products
and processes3. These products and processes comprise two categories, as described
previously:
Low Carbon Building Materials
The development of LCBs has been characterised by the innovation of existing materials,
rather than development and adoption of new, discrete technologies. Examples include the
use of: concrete to retain and store heat; intelligent air flow design to cool buildings in warm
weather; and hemp lime concrete. LCB materials not only deliver a reduced carbon footprint
associated with the construction process, compared to traditional materials, but they also
reduce the required energy use throughout the lifetime of the building by reducing occupant
energy demands. Furthermore increased off-site production has resulted in reducedwastage of materials. Japan leads this market, where prefabricated houses account for
roughly one in seven newly-built houses.4
UK companies operate across the LCB materials value chain; examples of quality design
and construction are provided in this report. Discussions with UKTI indicate that whilst large
UK contractors and consultants operate in almost every country in the world, the UK
construction sector is dominated by SMEs and has a relatively small number of large
companies. This suggests that increasing the UKs current market share may be only
incremental and, given the developing strengths of other countries, might be difficult to
achieve.
3BIS, DECC (2009) The UK Low Carbon Industrial Strategy. P.40
4Carbon Hub, Zero Carbon Compendium. P.45
8/8/2019 Low Carbon Buildings Report
11/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
9
J30254075
Microgeneration
BIS suggests that microgeneration technologies could meet 30-40% of the UKs electricity
demands by 2050. The most effective technologies are expected to be combined heat and
power (CHP) systems, followed by micro wind turbines and solar PV. Current BIS
estimates suggest there are approximately 100,000 microgeneration installations in the
UK5
. The vast majority of these installations have involved solar water heating, which islikely to reflect the relatively low purchase and installation costs. This is interesting as BIS
analysis suggests that solar water heating technology will be one of the last to become
cost-effective (taking until at least 2017 before the price per kWh for the micro-generator is
equivalent to todays domestic electricity prices). In contrast, there has been relatively little
uptake of the technologies expected to be cost effective already or in the near future (i.e.
biomass boilers, ground source heat pumps, CHP systems and micro wind turbines).
The increasing purchases of microgenerators offer opportunities to UK companies,
although most units have been manufactured overseas to date, with some assembly taking
place in the UK. However,the domestic service and repair industry around microgeneration
has grown more markedly6
and the assembly and service capacity that now exists in the
UK may form the basis for growth. Microgeneration is seen as a growth area for LCB dueto it being relevant to both new build and retrofit markets, while the Zero Carbon Hub
recognises that the UK now has emerging strengths in microgeneration7.
A further attempted market stimulus for LCBs is provided through the UK Government
Forward Commitment Procurement (FCP). The aim of the programme is to create demand
through public sector procurement for environmental innovation, creating a tipping point at
which there is sufficient critical mass for high performing environmental alternatives to
traditional products and services. The FCP is part of theInnovation through ProcurementProgramme, which aims to help deliver better, cheaper solutions to meet pressing social,
economic and environmental challenges, such as climate change8. A key application is
building technologies, at both the new build and retrofit stages, and early stage pilot activity
is being developed by Birmingham City Council.
However, more significant activity is being led by the Homes and Communities Agency
(HCA). As part of the HCA Housing Growth Stimulus Programme, support for low carbon
retrofit projects has been put in place for designated Housing Growth and Growth Point
Areas. A budget of 70m was set aside for community-scale low carbon energy
microgeneration projects, comprising 25 million for low carbon heating schemes and 45
million for small-scale renewable electricity and heat technologies delivered primarily
through the Low Carbon Buildings Programme9.
Development of New-Build Zero Carbon Homes in the UK
Two hundred zero carbon homes are currently being developed at a site in Bristol by
Barrett Developments. This is the first development of zero carbon homes built by a
commercial, high-volume house builder. The most significant energy savings in the newhomes come from: minimising heat loss through the walls and windows; heavy concrete
floors to store warmth; and venting air for cooling. The building also uses photovoltaic and
hot-water solar panels, a heat exchanger and an electronic climate control system. The
building features are outlined in Figure 3.1.
5http://www.berr.gov.uk/files/file46372.pdf
6http://www.berr.gov.uk/files/file27578.pdf
7 Carbon Hub, Zero Carbon Compendium. P.478
BIS (2008) Forward Commitment Procurement: practical pathways to delivering innovation9
http://www.homesandcommunities.co.uk/low-carbon-infrastructure
8/8/2019 Low Carbon Buildings Report
12/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
10
J30254075
Figure 3.1: The Zero Carbon Affordable Home
Source:http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1
Of course the potential for LCB covers commercial as well as residential premises and the
West Midlands is making advances in this area with several examples of good practice,
including:
South Shropshire District Council and AWM have developed an eco-business park in
Ludlow with a BRE Environmental Assessment Method (BREEAM) Excellent rating;
Kidderminster has the first UK retail store to be awarded a BREEAM Excellent
rating;
Office space also provides significant retrofit and new build opportunities. GVA
Grimley suggest that 80% of Birminghams new city centre office space would
achieve a BREEAM Excellent rating, compared to 40% in Manchester and 20% in
Leeds.
Birmingham City Council is also working with Utilicom Ltd as part of a Combined
Heat and Power (CHP) scheme, which produces 1.5MW of electricity from the new
CHP system at the Broad Street city centre energy network.
Figure 3.2: Examples of Low Carbon Buildings
A Low Carbon Demonstration Energy House:
Sigma Homes
The CIS Tower, Manchester: the largest
commercial solar facade in Europe
http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=1http://www.building.co.uk/story_attachment.asp?storycode=3111357&seq=3&type=G&c=18/8/2019 Low Carbon Buildings Report
13/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
11
J30254075
3.2 Drivers of Demand
The development and commercialisation of LCB technologies is driven by recent building
regulations, acting to stimulate innovative design and construction, and respond to the
growing imperative among the design, construction and property management industry to
reduce resource consumption energy, water, materials and land thereby reducing
bottom line capital and operating costs.
The fact that 80% of energy costs arise during the service life of buildings10
also provides a
compelling market driver for the commercialisation of innovative technologies for both the
new build and retrofit market.
The value chain represents the various stages of the life of a construction project, from
selection of land and buildings through to 'end of life'. Development of low carbon products
and processes are applicable throughout a projects whole life.
Figure 3.3: Construction Sector Value Chain
Source: http://www.sustainabilityatwork.org.uk/deliverables/construction
The key players in this process are the designers, contractors and builders. It is through
their interaction with each other and the knowledge base at various stages in the value
chain that innovation in product and service design will change the nature and scope of
commercial opportunities.
The UK Regulatory Environment
The significant contribution of the built environment to UK carbon emissions provides clearevidence for the rationale behind public policy interest in this area of technology
commercialisation. The regulatory environment is a significant and long term driver for the
low carbon agenda, which will only become stronger in the future. Some of the largest
environmental impacts in the UK come from buildings and the potential carbon savings from
improved performance are significant. For example:
45% of total UK carbon emissions are from buildings: 27% from domestic and 18%
from non-domestic,
73% of current domestic carbon emissions arise from space and water heating.
Figure 3.4 outlines the relative significance of the various component parts of the built
environment to UK Greenhouse Gas (GHG) emissions. This clearly outlines the substantialpart played by the domestic housing market, and the significant commercial opportunities
which will continue to exist for both retrofit and new build LCB technologies.
10http://www.nationalplatform.org.uk/uksra/consumption.jsp
http://www.sustainabilityatwork.org.uk/deliverables/constructionhttp://www.nationalplatform.org.uk/uksra/consumption.jsphttp://www.nationalplatform.org.uk/uksra/consumption.jsphttp://www.nationalplatform.org.uk/uksra/consumption.jsphttp://www.sustainabilityatwork.org.uk/deliverables/construction8/8/2019 Low Carbon Buildings Report
14/38
8/8/2019 Low Carbon Buildings Report
15/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
13
J30254075
Regulation Building Regulations Part L, updated in 2006. Minimum standards for newbuildings involving average & limiting u-valves, air permeability, heating &boilers, pipework insulation, mechanical ventilation & cooling, internal &external lighting.
X X X
Economic:
fiscal
Enhanced Capital Allowance (ECA). Enables businesses to claim 100% first-
year capital allowances on their spending on energy - and water - saving plantand machinery, low CO2 emission cars, and natural gas and hydrogen vehiclerefuelling infrastructure. Incoming Feed in Tariff for electricity (April 2010) andrenewable heat obligation (April 2011).
X X X
Economic:installationgrants
Low Carbon Building Programme (LCBP), 2006-2010. 28.5M grantscheme for microgeneration technologies, including PV, wind turbine, hydro,fuel cells, string engine, renewable CHP, heat pumps and biomass; conditionalon other energy saving measures being in place: loft or cavity wall insulation,low energy light bulbs, heating systems controls.
X X X
Economic:R&D grants
BIS, Carbon Trust, TSB, RDAs Grants for R&D.N/A N/A N/A
Source: GHK
As noted above the domestic housing market will be a significant factor in the development
of LCB technologies. However, it should also be noted that planning and building
regulations are only likely to apply to the new build market, and not retrofit projects on a
smaller scale. Furthermore, these regulations alone are unlikely to fully deliver their targets
given a reported lack of enforcement in building regulations for efficiency in new build
houses. These factors highlight the importance for grants and other incentives to
encourage the uptake of LCB technologies in the retrofit and new build markets.
A recent development for the retrofit market has seen the introduction of a new rule for
European Regional Development Framework (ERDF) interventions relating to housing in all
Member States. A number of UK regions have taken advantage of this new ruling which
allows up to 4% of structural funds to be used for the purposes of deploying energyefficiency improvements and renewable energy technologies in the existing social housing
stock, in order to support social cohesion. This will enable a range of innovative measures
to be demonstrated at a large scale and support the SME base in the UK to increase
capability ahead of increasing demand.
Within the above range of policy drivers, perhaps the most significant is the commitment to
develop a feed-in tariff for the UK. This commitment was made in the Energy Act 2008. It
has since been out for consultation and DECC has confirmed that it will be deployed by
April 2010 for electricity (e.g. photovoltaics). It is more difficult to establish an incentive for
renewable heat technologies, but this is expected to be developed by April 2011. Both
fiscal incentives are likely to significantly increase demand for microgeneration in the UK. A
similar model has already been deployed successfully in other European countries, mostnotably in Germany.
The Zero Carbon Hub has established a Zero Carbon Delivery Timeline (presented in
Figure 3.6 as a roadmap for achieving the regulatory requirements outlined above. This
provides evidence of the likely lead-in times for large scale commercialisation of the
opportunities from LCB technologies for large scale domestic developers. What should be
noted is that a key timeline assumption, with implications for the strategys critical path, is
that a pragmatic definition of zero carbon can be achieved, which is acceptable to industry.
Progress on this issue has not yet been published, however the Zero Carbon Hub Progress
Report in April 2009 suggested that a four-year lead-in time is required from defining and
implementing building regulations to mass-scale build.11
11Zero Carbon Hub, (April, 2009) Zero Carbon Homes Programme Delivery Programme Update.pp.2.
8/8/2019 Low Carbon Buildings Report
16/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
14
J30254075
Figure 3.6: Carbon Homes Strategy Time Line
Source: Zero Carbon Hub, 2009
The International Regulatory Environment
Progressive building regulations in the UK, coupled with enforcement, will help drive new
product commercialisation and innovative building developments. This in turn will help open
up new global markets in those countries where regulation is likely to eventually catch up
with the UK.
To help achieve their Kyoto Protocol targets, many countries have set emissions targets for
buildings coupled with major incentive schemes to help change consumer and industry
behaviour around both new build and retrofit (see Figure 3.4). Should agreement bereached at the December 2009 Copenhagen UN Climate Change Conference for significant
tightening of these emissions targets, there are likely to be further revisions to schemes
resulting in tighter domestic planning regimes and greater opportunities for adoption of
green building technologies.
Clearly several countries already have building standards and incentive schemes that have
both helped change consumer behaviour and stimulate their own domestic supply base
around low carbon buildings and microgeneration. Good examples include Germany,
Sweden and Japan:
A German government scheme funds building renovation measures which yield
energy savings as well as the construction of new, low-energy homes. Between 2006
and 2007 scheme loans totalling EUR 32.9 billion were issued.
Japan introduced a PV roof market incentive programme in 1994 which covered 50%
of installation costs. Huge industrial and domestic take up transformed a fledgling
market into a world leading one and reduced PV costs by over 75% in which Japan
has market leading R&D and supply of PV cells, modules and balance of plant.
In contrast, currently lax regulations in China are creating a building footprint that will
quickly open up a massive retrofit market if regulations change12
:
China is the worlds largest construction market, accounting for half of new buildings
built per year. By 2015 half of all buildings in China will be less than 15 years old.
However the regulatory framework is not as stringent regarding energy standards for
12Zero Carbon Hub Compendium 2009
8/8/2019 Low Carbon Buildings Report
17/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
15
J30254075
new domestic and office space compared to European standards. Fourtimes more
energy is required per m2
for heating and cooling in China compared to Europe.
Changes to this regulatory framework would open massive market opportunities for
technology areas where the UK has a strong capability including around supply of
building fabric materials (i.e. UK setting up manufacturing plants in China).
8/8/2019 Low Carbon Buildings Report
18/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
16
J30254075
Figure 3.4: International Emissions Targets and Incentive Schemes
Country Kyoto-specific and Buildings Emission Targets Major Incentive Schemes
Australia Reduce 2020 GHG emissions by 515%; and 2050 Green House GasEmissions to 60% (targets based on 2000 baseline)
Between 2000-05 AUD 40.4 million was provided to encourage take up of PV
Technology (maximum grant of 4,000 AUD per household) Take up was poor
due to product and installation costs remaining high.
For retro-fit, the Energy Efficient Homes [National] scheme and individual State
funded schemes provide rebates for homes installing solar heating systems
Austria The Austrian Action Plan contains a commitment o reducing GHGemissions by 13% based on 1990 levels. Austrian Federal Law on Environmental Support is considered an internationalexample of an efficient and effective funding instrument in the environmentalsector. For retro-fit state policy for energy efficient design and offer specific
financial support exists for biomass, solar and heat pump systems to consumers,
who can also claim rebates for purchasing energy-efficient appliances.
China Five-Year Plan of China aims to reduce China's total emissions by 10%;double renewable energy generation to 15%; and reduce energy
consumption of residential and public buildings by 50% by 2020
China's Renewable Energy Law, 2006 requires power grid operators to purchase
renewable energy from registered producers. Financial incentives are also
provided: a national fund to encourage technology development, discounted
lending, preferential loans with subsidised interest and tax benefits for renewable
energy projects.
Germany Target of reducing carbon emissions by 12% by 2012. Achieved in 2007.Revised target of 40% reduction by 2020.
For retro-fit there and new build a government scheme funds building renovation
measures which yield energy savings as well as the construction of new, low-
energy homes. Between 2006 and 2007 scheme loans totalling EUR 32.9 billion
were issued.
Japan Committed to reducing CO2 emissions by 6% between 2008 and 2012based on 1990 levels.
In 2006, the government announced a target for energy saving measures
to be implemented in 40% of households by 2015. In 2008, a target for
solar panels to be installed in 30% of households by 2030 was set.
Subsidies in the form of low-interest loans are available for the purchase of more
efficient homes. Combined heat and power generation is also promoted through
a generous taxation and financial support system. Tax incentives are also being
offered for the installation of energy efficient equipment.
Sweden Sweden's Kyoto commitment is to reduce GHG emissions by 13% by2020 based on 1990 levels. Further to this, a target was set in 2006 to
reduce energy use in residential buildings by 20% by 2020.
Sweden has adopted a progressive taxation system. The overall fiscal energy
structure in Sweden (including environmental taxes on electricity and heating oil,
high performance construction standards, financial incentives, and public
procurement and R&D efforts) has provided a sufficient framework for breaking
8/8/2019 Low Carbon Buildings Report
19/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
17
J30254075
the normal barriers to market adoption.
The 2006 Energy Declaration of Building Act include support for the purchase of
energy efficient windows and biomass boilers for up to 30% of the cost.
USA In 2007, the Department of Energy established requirements for federalbuildings requiring improved energy performance of at least 30%
compared to prevailing building codes.
The 2009 Obama-Biden New Energy for America plan established a
target of reducing GHG emissions 80% by 2050. The Department of
Energy Builders Challenge states that by 2030 Americans will have the
opportunity to buy a cost-neutral, net-zero energy home anywhere in theUnited States.
Tax credits available to residents and constructors are the main financial
incentive available in the USA. Made possible through the Energy Policy Act of
2005 these include, Home Energy Efficiency Improvement tax credits;
Residential Renewable Energy tax credits; and Federal Tax Credits for Energy
Efficiency
Source: Adapted from: Zero Carbon Compendium 2009
8/8/2019 Low Carbon Buildings Report
20/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
18
J30254075
Financial Incentives
In the UK there are a small number of mortgage providers that are helping to encourage the
retrofit of existing stock. These have developed from an initial range of lending based on
carbon offsetting (Hanley Economic Building Society, Teachers Building Society, Giraffe) to
specific green mortgages or loans such as those provided by Yorkshire Building Society,
the Cooperative Bank, the Ulster Bank and the Norwich & Peterborough Building Society.
Whilst these financial products offer capital finance for homeowners looking to make green
investments, for example around energy efficiency measures, they do not offer the type of
pure Green Mortgage, beyond offsetting called for by the UK Government, in the
Renewable Energy Strategy,13
and the Energy Efficient Partnership for Homes14
. Whilst
there is not huge consumer demand for this it is expected to develop over time.15
The prevailing global recession has also reduced the rate at which conventional and
innovative financial products have been offered particularly in the housing and commercial
building sector which has had an inevitable knock-on effect on to the desire by lenders to
offer more innovative products.
As the availability of finance in world markets begins to flow again it is likely that the UK
housing market, will start to pick up again raising demand for all mortgage products and
financial services as well as more innovative green mortgages which will help to stimulate
investment in energy efficiency and microgeneration by spreading the high upfront
payments over the life of the mortgage. The added incentive of a UK feed-in tariff for
microgeneration will also help to sell these products. . Public sector assistance may still be
required to encourage financial institutions to provide such green mortgages.16
In the USA, two dozen insurers offer premium credits and discounts for owners of green
commercial and residential buildings in the USA.17
Strategic Players
There are three key groups of players within the LCB supply side that will help to drive the
commercialisation and adoption of LCB technologies in the UK:
House builders a key group, both due to their knowledge of new low carbon
technologies and products, and their expertise in installation and maintenance. The
skills profile of the UK construction sector is a critical consideration in this context.
Product suppliers an important interface between house builders and developers of
new technologies. The emergence of new LCB technologies and resulting products
will create opportunities for new supply chains to develop in the UK and globally.
However, there is a growing trend towards firms diversifying their product offer to
embrace low carbon technologies so that they are able to maintain market share.
Examples include the boiler manufacturer Worcester-Bosch moving into the
manufacture of solar thermal hot water systems; Everett double glazing offering solar
PV and thermal systems alongside double glazing; and British Gas investing both in
the commercialisation of micro-CHP systems for homes as well as companies that
install a range of energy efficiency products and technologies (e.g. UK based
Semplice in the South East of England).
13The UK Renewable Energy Strategy (2009) Department for Energy and Climate Control.
14The Green Mortgages Report (2007) Warren and Weatherall
15 The Green Mortgages Report (2007) Warren and Weatherall. pp.416
Sunday Times (21 July, 2009)17
http://www.greenbuildingfocus.com/default.aspx?id=1033
http://www.greenbuildingfocus.com/default.aspx?id=1033http://www.greenbuildingfocus.com/default.aspx?id=1033http://www.greenbuildingfocus.com/default.aspx?id=1033http://www.greenbuildingfocus.com/default.aspx?id=10338/8/2019 Low Carbon Buildings Report
21/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
19
J30254075
Architects and designers vital to the continued success of LCBs becoming more
prominent in UK and international markets. Early domestic successes in the LCB
market have been achieved through the construction of iconic designs which have
both enthused consumers and, as a result, encouraged developers that returns are
likely to be high, despite the slightly higher initial investment costs.
Market Value
Innovas suggests that Building Technologies is worth 12.9bn in the UK. Future
projections of growth suggest that the Building Technologies will become even more
significant with annual growth forecasts consistently above 5% until 201518
.
The estimated current global market value of Low Carbon Building (LCB) Technologies
(windows, doors, insulation & heat retention materials, monitoring & control systems) is
390bn (Innovas, 2009). The global market for goods and services produced in the sector
is forecast to grow by at least 4.5% each year, to around 600bn by 2020. However, it has
been suggested that some market estimates for building technologies can be exaggerated.
The market for microgeneration technologies in the UK is forecast to show rapid growth19
as a result of the stimulating effects of zero carbon buildings regulations as well as the
proposed feed-in tariff for installations up to 5MW capacity (which the government is
currently consulting on20
). By 2025, the market value for microgeneration has been
estimated at 3.69 billion, broken down into three key technologies (see Figure 3.8):21
Figure 3.8: Market Value for Microgeneration
Technology Installations per annum Market value m per annum
Ground source heat pumps 400,000 1,600
Solar thermal 300,000 900
Wind 241,375 1,187
Total 941,375 3,687
Source: Renewable Energy Office for Cornwall, Nov 2008
The Differing Nature of the New Build and Retrofit Markets
In 2007 there were approximately 27 million houses in the UK, just under 5 million of which
are in Local Authority or Registered Social Landlord ownership22
. Incorporating LCB
technologies is more easily achieved when it is part of the design process for new build,
rather than as a refurbishment. However the retrofit market for LCB technologies also has
significant potential and it has been estimated that the domestic LCB refurbishment market
for power generation could be worth between 3.5bn and 6.5bn per year23
, with an upper
ceiling of 11bn, based on the value of domestic energy consumption24 (equating to around400 per house per annum). This represents a considerable potential value of more than
10% of the current value of the UK construction sector of around 100bn per year25
.
However, the LCB technologies will be more appropriate for some buildings than others and
buildings of different ages are likely to present different challenges that require different
18Innovas (2009) Low Carbon and Environmental Goods and Services; an industry analysis. p.37
19The market for microgeneration, Presentation by Charmian Larke and Gage Williams, Renewable Energy Office for Cornwall,
September 200820
www.decc.gov.uk/en/content/cms/consultations/elec_financial/elec_financial.aspx21
The market for microgeneration, Presentation by Charmian Larke and Gage Williams, Renewable Energy Office for Cornwall,September 200822
http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/stockincludingvacants/livetables/23 http://www.cnplus.co.uk/hot-topics/sustainability/mccloud-urges-great-british-refurb/5205093.article24
http://www.decc.gov.uk/en/content/cms/statistics/projections/projections.aspx25
http://www.innovateuk.org/_assets/pdf/corporate-publications/lowimpactbuilding_innovation%20platform.pdf
http://www.decc.gov.uk/en/content/cms/statistics/projections/projections.aspxhttp://www.innovateuk.org/_assets/pdf/corporate-publications/lowimpactbuilding_innovation%20platform.pdfhttp://www.innovateuk.org/_assets/pdf/corporate-publications/lowimpactbuilding_innovation%20platform.pdfhttp://www.decc.gov.uk/en/content/cms/statistics/projections/projections.aspx8/8/2019 Low Carbon Buildings Report
22/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
20
J30254075
solutions. For example many of the existing LCB technologies are likely to be more
appropriate for a 20 year old property than a 100 year old property.
The potential value of the new build market is also likely to be significant, despite the fact
that the construction industry is under severe pressure and many projects have been
postponed as a result of the current economic climate. This also suggests that short-term
activity in the retrofit market is crucial to ensure that key construction skills, that will be vitalover the next ten years, are not lost due to the current downturn. Furthermore, focusing
activity on the retrofit market will help to ensure that social issues such as fuel poverty are
tackled simultaneously.
The National Planning and Housing Advice Unit, a non-departmental public body sponsored
by DCLG, provides independent advice on future housing supply to Government and the
regions which forms the basis of the ranges tested in the respective regional spatial
strategies. In light of the impact of the recession and prevailing contraction of available
credit, the NPHAU recently revised the maxima and minima guidelines for regional planning
authorities. These revisions represent the most up to date estimates of potential new
housing completions, and their spatial distribution, for the next 20 years. The NPAU
highlights four key assumptions on which these estimates are based:1. UK residents are living longer and birth rates have increased, net migration to the UK is
also expected to be larger than previously predicted between 2006 and 2026. The
impact of this will vary by region;
2. The long term legacy of the recession will be a reduction in earnings growth, resulting
in reduced demand for owner occupation;
3. The current difficulty experienced by many buyers in obtaining mortgages will inhibit
the ability of many to buy in the short term. Over the long term prices and affordability
will revert to previous levels.
4. The recession has reduced the number of housing completions in the short term, but
over the longer term, the total number of completions will meet demand and the UKGovernment requirement to improve affordability across the housing market, including
by increasing the supply of housing26
.
Figure 3.9: NPAU Recommended Housing Levels 2008-2031
Minima Average 2008-31 Maxima Average 2008-31
North East 7,200 8,200
North West 26,400 29,900
Yorkshire & Humber 26,400 29,400
East Midlands 25,100 26,800
West Midlands 19,600 23,200
East of England 31,600 40,000
London 33,100 44,700
South East 38,000 53,800
South West 30,400 34,500
England Total 237,800 290,500
Source: NPHAU (2009): More homes for more people: advice to Ministers on housing levels to be considered in
regional plans p.10
The above housing projections show that the majority of new build housing is expected to
take place in the more Southern regions. This in turn creates a major challenge as the
South East is already experiencing water stress and implies that a differential market will
open up across the UK for new build and retrofit variants of LCB. As climate change
impacts are felt, through to 2030 and beyond, further water stress, especially in the
26Department for Communities and Local Government. (2006) Planning Policy Statement 3 (PPS3): Housing, p.6
8/8/2019 Low Carbon Buildings Report
23/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
21
J30254075
southern UK, will lead to more drastic measures to conserve water such as grey and black
water recycling, implying significantly higher costs for both retrofit and new build in this part
of the UK. Japan, for example, is already a market leader in this area. There will also be a
need for existing buildings in the UK to be resilient to increased summer temperatures so
that their occupants do not experience high levels of thermal discomfort or even heat
stress. Those buildings most at risk include those with poor insulation and air tightedness,
and without shading and controllable ventilation. Providing appropriate solutions to this
challenge without contributing to energy loading and high carbon emissions will drive
demand for natural ventilation methods, both through design (e.g. with atriums, Passiv
House) and technological fixes (e.g. E-Stack in Cambridge).
While there are also significant numbers of houses projected in the Midlands and Northern
regions, these regions would perhaps benefit from focusing more heavily on the retrofit
opportunities for LCB technologies.
There is a lack of data relating to non-domestic buildings in the UK, which will comprise a
wide range of different types and uses of buildings including: offices; schools, colleges and
universities; factories and warehouses; retail shops and shopping centres; hotels,
restaurants and leisure centres; libraries; transport hubs and stations, etc. The bestindication of the current stock of existing non-domestic buildings is the floorspace of
commercial and industrial properties, produced by the Valuation Office Agency. This data
suggests that there was 596 million square metres of floorspace in commercial and
industrial buildings in England and Wales in 2008.
The non-domestic building stock represents a significant opportunity for retrofit since much
of it has poor energy performance, whilst it is estimated that the UK already spends 27
billion per annum on the refurbishment of commercial & public refurbishment27
. Two-thirds
of this refurbishment spend (around 18 billion) is estimated to relate to commercial
buildings, with approximately 9 billion spent on public buildings. Non-domestic buildings
are also considered likely to have poor fabric, inefficient plant, poor controls and low levels
of occupant energy awareness and therefore represent a considerable challenge but also a
significant opportunity to meet the Government targets for carbon reductions. The specific
issues and challenges relating to non-domestic buildings include:
A lack of understanding, knowledge and data relating to non-domestic buildings and
their energy use,
A reluctance to spend time and money on energy efficient improvements,
Issues such as landlord-tenant problem, where energy performance improvements
will benefit the tenant while the cost of improvements might be the responsibility of
the landlord.
3.3 The Chain of Inputs and Outputs
The greatest value in the LCB value chain is generated by the Tier 2 and 3 suppliers, andthis is also the source of much of the innovation in LCB technologies. However, these
companies also have limited influence over the market and technology standards.
Innovas estimates the Building Technologies supply chain to be relatively high compared to
the other low carbon goods and services, accounting for 60% (7.75bn) of the total market
of 12bn28
. This reflects the large number of materials manufacturers, suppliers and
installers involved in the LCB technologies, from low carbon doors and windows, to the
suppliers of components for microgeneration.
The estimated unit cost of large scale production of zero carbon homes in the UK is
between 120,000 and 140,000, compared to around 85,000 for similarly sized traditional
27Kingspan, The UKs approach to the thermal refurbishment of non-domestic buildings, February 2009
28Innovas (2009) Low Carbon and Environmental Goods and Services; an industry analysis. p.30
8/8/2019 Low Carbon Buildings Report
24/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
22
J30254075
constructions29
. However, this does not include the cost of land, which will obviously vary
considerably between, and within, regions in the UK; and does not consider developer
profits. Of course, the unit build cost will reduce over time as more properties are built and
more cost effective LCB technologies enter the market.
Many of the products required to assemble zero carbon housing are functions or
adaptations of existing building manufacturing processes, for example triple glazing doesnot require substantial novel R&D to establish the most suitable materials and
manufacturing methods for zero carbon homes, likewise modifications such as the use of
exposed concrete floors in order to increase thermal mass and cool the home during warm
weather are unlikely to require more than recalibration of existing production techniques,
with some upskilling of the supplier workforce.
A simple estimate of the potential new build market for LCB technologies can be obtained
by assuming that the value of these technologies is at least equivalent to the estimated
35,000 to 55,000 premium on the unit cost for a zero carbon house. The real figure will
be clearly be larger than this since the low carbon materials and systems will be replacing
some traditional materials and systems rather than supplementing them, although this
provides a minimum figure. Multiplying these estimates by the regional NPAUrecommended housing levels (discussed above) will provide estimates of the potential
market size, assuming all new homes are constructed as zero carbon homes. The
estimates are provided in Figure 3.10 below, which suggest that the new build market for
LCB technologies could be worth 8-16bn per annum across England.
Figure 3.10: Estimated Minimum New Build Market Values (per annum) for LCBTechnologies based on NPAU Recommended Housing Levels 2008-2031
Market Value based on Minima
Housing Average 2008-31
Market Value based on Maxima
Housing Average 2008-31
North East 0.25bn-0.4bn 0.3bn-0.45bn
North West 0.9bn-1.45bn 1.1bn-1.6bn
Yorkshire & Humber 0.9bn-1.45bn 1.0bn-1.6bnEast Midlands 0.9bn-1.4bn 0.9bn-1.5bn
West Midlands 0.7bn-1.1bn 0.8bn-1.3bn
East of England 1.1bn-1.7bn 1.4bn-2.2bn
London 1.2bn-1.8bn 1.6bn-2.5bn
South East 1.3bn-2.1bn 1.9bn-3.0bn
South West 1.1bn-1.7bn 1.2bn-1.9bn
England Total 8.3bn-13.1bn 10.2bn-16.0bn
Source: GHK analysis
The Innovas study suggests that the UK Building Technologies sector currently exports
1.35bn of LCB materials associated with windows, doors, insulation and heat retention
and monitoring and control systems. Exports therefore account for just over 10% of the
value of the Building Technologies market. A more detailed analysis of the data suggests
that these exports comprise:
500 million (37%) associated with windows for LCBs, particularly insulated alloy
window frames and advanced plastic thermally insulated window frames.
400 million (29%) associated with insulation and heat retention equipment,
particularly materials for wall cavity insulation, fibre insulation for roofing and granular
insulation materials.
330 million (25%) associated with doors for LCBs, including insulated alloy doors,
but especially insulated plastic doors.
29http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=8
http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=8http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=8http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=418676&in_page_id=88/8/2019 Low Carbon Buildings Report
25/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
23
J30254075
125 million (9%) associated with LCB monitoring and control systems.
Interestingly the largest export markets are Spain (which has imported 78m of LCB
materials from the UK, including 42m of electro chromatic window glass), Italy (which has
imported 77m of LCB materials from the UK across a wide range of products but including
27 million of insulated doors and window frames), Hong Kong (which has imported 74m
of LCB materials, again including 23 million of insulated doors and window frames),Malaysia (which has imported 73m of LCB materials, including 12 million of insulated
doors) and China (which has imported 72m of LCB materials, again focused on insulated
doors and window frames).
3.4 The Position of UK Producers
There are currently over 6,600 companies in the UK building technologies sector,
employing an estimated 107,000 people30
, but with a number of internationally significant
businesses (Figure 3.11).
Figure 3.11: Top 5 Construction Companies in the UK Ranked by Size
Source: Adapted from: Deloitte, European Powers of Construction 2008 p.4-6
Evidence presented in the European Powers of Construction Report highlights that 28 of
the top 100 construction companies in Europe are based in the UK, operating in countriesacross the globe, including those with the highest volume of construction projects (i.e. the
Gulf, China, EU Member States, Hong Kong, India, Japan, Russia, and USA). These
construction companies operate in extremely diverse collaborative networks composed of
contractors, consultants, building materials and product producers, highlighting the potential
for market growth in emerging sectors and a possible opportunity for the UK.
Whilst these larger companies are important (and have potential to capitalise on
opportunities offered through the construction of LCBs), the fact that the UK construction
industry is dominated by SMEs31
means that consideration must be given to ways they can
also benefit from any future growth in the LCB sector.
30 INNOVAS, 2009: 3331
https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/construction
Company Size Rank
in Europe(by staff no.
& turnover)
International
Markets
Examples of LCB Technology
Use
Balfour Beatty 7 UK, USA, Sweden,
Germany, Italy, Hong
Kong, Middle East
Birmingham New Hospital
Clyde Wind Farm
Taylor Wimpey 13 UK, USA, Spain,
Gibraltar
The Academy Housing
Development, Barking
Oxley Woods Housing
Development, Milton Keynes
Carillion 15 UK, Canada, Trinidad
& Tobago , UAE,
Oman
City of York Council Eco Depot
Queen Alexandra Hospital,Brighton
Laing ORourke 16 UK, India, Cyprus,
Ireland, Germany,
UAE, Australia
Blackfriars Road Tower,
London
Proposed redevelopment work
at Heathrow Terminal 2
Barratt Developments 19 UK Barratt Green Homes, Watford
Hanham Hall eco village
South Gloucestershire
https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/constructionhttps://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navigationPageId=/construction8/8/2019 Low Carbon Buildings Report
26/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
24
J30254075
As stated above, the building technologies sector has a relatively large supply chain
accounting for 60% of the sector value, which is likely to represent an even larger
proportion of the 6,600 companies. The new build and retrofit markets for LCB
technologies offer significant opportunities for these supply chain businesses in the UK,
which potentially includes a vast array of different producers of materials that can be
redesigned to reduce environmental impacts such as: glazing for doors and windows; wood
and metals for frame construction, pipes, components, etc; ceramics for flooring, roofing,
etc; chemicals for paints, sealants, adhesives, cement, insulation, etc.; plastics for window
and door frames, insulation, pipes, etc; as well as the manufacture of high-technology
electronics including electronic sensors and building management and monitoring systems.
More generally, building control, management and monitoring systems will have a key role
to play in the buildings of the future and within the retrofit market. These systems will be
used to monitor energy use and carbon emissions, and control and adjust systems and
processes to ensure efficiency is maximised. This therefore represents a particular
opportunity for development, which would fit with regional priorities across the UK, and
could potentially be incorporated as part of the Digital Britain initiative.
The UK construction materials sector has also been undergoing a period of rationalisationin recent years, with many UK companies now forming part of international companies32
,
which may offer more significant opportunities for future penetration of overseas markets.
Microgeneration
Most microgeneration technologies are not mass-produced in this country, relying instead
on labour intensive processes or assembly in the UK and/or importing products from
abroad, such as ground source heat pumps from Sweden. However, there are some
exceptions, for example Romag, a large manufacturer of photovoltaic panels based in North
East England. Romag currently exports more than 80% of their products to Europe, due to
the lack of demand in the UK. This example reflects the fledgling state of the UK market
and highlights the issue that companies will not invest significantly in manufacturing
facilities before the domestic market is in existence
33
. Additionally, most biomass andground source heat pumps are imported into the UK. The technology is maturing but needs
further promotion, so that rationalising, designing and installing wood heating systems
becomes a standard task for designers, builders, plumbers and heating engineers.
Microgeneration is currently also a cost-inefficient and unreliable alternative to large scale
offshore wind generation, with a number of constraints currently restricting its wide-scale
deployment. Yet, with greater commercialisation, microgeneration has the potential to
become part of a commercial, mass-market, decentralised energy system. For example,
there were five manufacturers selling micro-CHP products on a commercial basis in 2005.
Around 16,000 units were sold that year (2005), representing 31MW of generating capacity
and a value of approximately 135 million. The Baxi-Senertec DACHS unit and the
ECOWILL unit (developed by Honda, Osaka Gas, Toho Gas and others) together
accounted for over 90% of unit sales in this market. Japan itself accounted for over 75% of
these sales (13,000 units) through the ECOWILL unit and Yanmars Genelight unit; while
the German market contributed nearly 20% of these sales (3,200 units) through the DACHS
and Power Plus Technologies Ecopower unit, as shown in Figure 3.12.
Figure 3.12: The Global Micro-CHP Market in 2005
32http://archive.corporatewatch.org/profiles/construction/construction.htm
33http://www.berr.gov.uk/files/file46372.pdf
Firm Country Unit name Output
kWe
Sales
Units
Sales focus
Senertec (Baxi) Germany DACHS 5.5 >2,500 Single/Multiple occupancy
buildings
Power Plus Germany Ecopower 4.7 ~700 Single/Multiple occupancy
http://archive.corporatewatch.org/profiles/construction/construction.htmhttp://archive.corporatewatch.org/profiles/construction/construction.htm8/8/2019 Low Carbon Buildings Report
27/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
25
J30254075
SouSource: Delta Energy & Environment, UK (2006)
4 DEVELOPING UK ASSETS IN LOW CARBON BUILDINGS
While there is significant potential relating to LCB technologies for UK companies, there are
a number of barriers that need to be overcome before this potential can be fulfilled,
including:
LCB technologies remain niche opportunities, while the benefits and cost-effectiveness have not been sufficiently proven to provide a rationale for developers
(the key decision-makers in the industry) to choose to invest in LCB technologies on
a large scale. It will also take time for suppliers in the UK, and elsewhere, to develop
the scale of operations required to significantly increase production of these
technologies.
There is not sufficient payback from current LCB technologies to justify the
investment. Potential solutions could involve linking property taxes (council tax and
business rates) to energy efficiency in the same way that road tax is cheaper for
more energy efficient vehicles. This is a particular issue for landlords, who are even
less likely to invest in technologies for tenants to enjoy the benefits of reduced
energy bills, with an uncertain and relatively limited impact on capital values.
Planning issues can provide a barrier to the use and installation of LCB materials
and energy efficient technologies, particularly microgeneration solutions.
In order to overcome these barriers and develop UK opportunities and assets, a number of
key areas need to be addressed including:
Technological development The development of LCB technologies will require the
support of research groups and further collaboration between academia, the existing
construction industry and other sectors that could help to provide new construction
materials, such as the chemicals industry. Universities themselves have a large
amount of old building stock that could be used to test and verify retrofit capability
and capacity.
Market development The UK Government could help to drive innovation and the
mainstreaming of LCB technologies in both new build and retrofit markets through
FCP models. This would provide an opportunity to support the development of
appropriate and affordable products, suitable not only for social housing and public
sector buildings, but also for private housing and non-domestic buildings.
Skills Training and skills development will be vital in raising awareness of new
materials and microgeneration technologies, amongst the construction and support
industries, and providing training on their installation.
4.1 The Interface between science, R&D and business
Figure 4.1 provides an assessment of (current) non-commercial energy efficiency
technologies in terms of their cost-effectiveness of carbon reduction benefit (x-axis) and
potential economic benefit for the UK (y-axis). The size of the co-ordinate reflects the total
Technologies
(Vaillant)
buildings
Honda and partners Japan ECOWILL 1.0 ~12,00
0
Single occupancy buildings
Yanmar Japan Genelight 5.0 ~1,000 Small commercial
Whisper Tech NZ WhisperGen 1.2 ~400 Single occupancy buildings
8/8/2019 Low Carbon Buildings Report
28/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
26
J30254075
potential carbon reduction associated with each technology. Analyses of this type help to
prioritise R&D investments in LCB technologies and particularly those that will achieve large
efficiency improvements and carbon reductions whilst building UK competitive strengths in
new technology areas.
The chart shows that the largest potential carbon reductions are associated with Building
Management Systems (BMS) and Micro-CHP systems. The technologies of greatesteconomic benefit to the UK are typically high-technology products including organic LEDs,
home networking, LEDs, BMS and intelligent monitoring systems, while the most cost-
effective technologies for reducing carbon emissions range from organic LEDs, to Micro-
CHP and window designs.
Figure 4.1: Energy Efficiency Technologies by Potential for Carbon Reduction and
UK Economic Benefit
Source: Commission on Environmental Markets and Economic Performance 2007
There are currently a range of projects and programmes operating at the science, business
and R&D interface in the UK including:
EPSRC Projects
Carbon Vision Buildings Project (CaRB) is a 3.1 million, 4-year initiative involving a
wide range of academic and private sector partners. It aims to develop computer
models that will make it possible to pinpoint effective ways of cutting carbon
emissions arising from energy use in buildings. Partners include De Montfort
University, University College London, University of Reading, University of
Newcastle-upon-Tyne, University of Sheffield, Royal Institute of Chartered Surveyors
(RICS) and Energy for Sustainable Development Ltd. Stakeholders involved include
NES Ltd, PowerGen, Leicester City Council, the Energy Saving Trust and DEFRA.
Technology Assessment for Radically Improving Asset Base (TARBASE) is a 1.3
million, 4-year initiative focusing on the scope for retrofit measures to reduce carbon
emissions by 50% by 2030. For example, this could be achieved through: greater
use of CHP in buildings; greater use of building materials with improved insulating
properties; and greater use of renewable energy technologies. The project is being
led by Heriot-Watt University and also involves the University of Ulster, University of
Surrey, University of Nottingham, BSRIA, Integer, CIRIA and JB&B.
Built Environment Technology Strategy Board Projects
There are significant existing and emerging commercial opportunities for both retrofit and
new buildings and the Technology Strategy Board (TSB) is currently developing
8/8/2019 Low Carbon Buildings Report
29/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
27
J30254075
technologies with industry for retrofit and new buildings through discrete programme
activity.
For New-Build:
Components and Materials for Intelligent Buildings and Infrastructure involves the
development and integration of materials and components into buildings or building
systems. Applications involve intelligent systems which control and manage
information to deliver better performance of buildings and infrastructure using
intelligent sensors to monitor and control temperature and humidity under defined
parameters34
. This is likely to be an increasingly significant technology area given
the ageing demographic profile of UK residents.
Low Carbon Materials and Energy Efficient Homes The use of energy efficient
materials, which require less energy to manufacture, process and also use less
embodied energy, may contribute significantly to reduced energy and carbon
emissions. For example, materials include clean fossil fuels, hydrogen fuel cells and
distributed generation. The use of these technologies is desirable for end users and
the TSB notes that they offer significant potential to meet the UKs environmental and
economic policy objectives35.
For Retrofit:
The TSBsRetrofit for the futureSBRI competition, part of the Low Impact Buildings
Innovation Platform, was developed in partnership with DCLG and the HCA. It has
challenged the industry to develop and demonstrate solutions to retrofit the social
housing stock. The project aims to deliver deep cuts in energy use and carbon
emissions as well as stimulating the retrofit housing market and developing the
supply chain. The results of the competition will feed into future Government
procurement decisions and the Knowledge Transfer Network for the Modern Built
Environment (MBE-KTN) will be used to diffuse the results of the competition widely
across the industry.
R&D into innovative materials for LCBs is being encouraged by the TSB and EPSRC. 10
million is being invested in R&D projects aimed at developing new materials technologies to
help meet energy challenges across 16 innovative R&D projects. The relevant projects for
LCBs include:
The Polymer Photovoltaic Architectural Glass project is being led by Polysolar Ltd
in collaboration with Linde Electronics, Imperial College, Sagentia and Pilkington
Technology Management. The project aims to develop low cost, translucent
photovoltaic architectural glass based on conjugated organic polymers for use in
building windows and curtain walling.
The Energy Efficient Bio-based Natural Fibre Insulation project is being led by
Bangor University in collaboration with Hemcore Ltd, Natural Building Technologies,Nonwovens Innovation and Research Institute, Plant Fibre Technology, Rachel
Bevan Architects and Consultants, Scitech, Wates Construction, and the University
of East London. It aims to develop a sustainable, thin and highly efficient natural
fibre insulation solution, suitable for the new build and retrofit markets.
The Low Cost Integrated PV in Double Glazed Windows project is being led by
Arup in collaboration with Pilkington Group, CREST (Centre for Renewable Energy
Systems Technology at Loughborough University) and Applied Multilayers. The
project aims to develop an innovative, low cost PV, double glazed window concept
based on a semi-transparent, ultra-thin film solar cell.
34http://www.innovateuk.org/ourstrategy/innovationplatforms/lowimpactbuilding.ashx
35http://mbektn.globalwatchonline.com/epicentric_portal/site/mbektn/menuitem.9fa2db70bf96048028194a100680e1a0/
8/8/2019 Low Carbon Buildings Report
30/38
Identification of Expertise and Excellence in New Industry New Jobs (NINJ) Industrial Technologies
28
J30254075
The Plastic UV Radiation Protection project is being led by Intrinsiq Materials in
collaboration with Bayer Material Science, Brunel University and Johnson Matthey. It
aims to develop innovative energy harvesting products for a wide range of uses,
including more efficient use of solar and thermal energy, longer life and recyclability.
Two projects aiming to develop new materials for use in fuel cell technologies.
The TSB has also funded projects investigating the properties of paint, including its
potential to offer insulation. For example, the TSB has funded a 3-year project to develop
sustainable paint systems, led by ICI Paints in collaboration with Carillion, the construction
company, and The Forum for the Future, a sustainability charity. The project involved nine
projects tackling the whole life cycle of paint, from formulation to application, recycling and
supplier engagement, in order to develop future products and services.
Energy Technologies Institute (ETI)
ETI is focused on overcoming barriers to the deployment of low-carbon technologies by
establishing projects in areas such as Wind, Marine, Distributed Energy, Transport, Carbon
Capture and Storage, and Waste-to-Energy technologies. The ETI Low Carbon Building
Programme contains a buildings project centred on retrofit, which has two main
components:
Buildings ProjectThe project is identifying and evaluating the most cost effective
and efficient methods of retrofitting existing housing stock through low-carbon
conversions in large volumes. It is hoped that this approach will maximise financial
and carbon savings at individual property and national levels. As part of this work,
the ETI will establish a strategic overview of the buildings sector and develop a
programme of activities for the next three years, working with public sector bodies
including the EPSRC, TSB and Carbon Trust. The ETI is also proposing to fund a
new projec