Domestic UK Retrofit Challenge

Domestic UK

Retrofit Challenge:

Barriers, incentives and current performance leading into the Green Deal

Mark Dowson

Adam Poole

Presentation Overview

Who we are

Overview of Buro Happold refurbishment projects

Thermal efficiency of UK housing stock

General barriers to retrofitting

Specific challenges for the Green Deal

Outputs of internal business modelling / ‘war-gaming’ workshops

Summary & questions

UCL Wates House (The Bartlett)

Deep refurbishment strategy

currently being developed

Thermal imaging study to inform

the building fabric upgrade works

UCL Kathleen Lonsdale Building

Grade II listed building

Department of Chemistry, Earth

Sciences, Physics & Astronomy

Design targets

• Achieve a 20% reduction in

operational carbon emissions

• Achieve a 25% improvement

in regulated CO2 emissions as

modelled under Part L 2010

• Achieve a BREEAM excellent

rating under the 2008

Education ‘fit out’ criteria

Arup Building (University of Cambridge)

Designed in late 1960s by Arup

Associates & opened in 1971

Museum of Zoology, Department

of Zoology, Department of

Materials science and Metallurgy,

University computing services and

Babbage lecture theatre

Major refurbishment being

undertaken. Will be a new

headquarters for Cambridge

conservation initiative (CCI), a

collection of environmental

organisations moving into the

building.

Site wide strategy

District heating connection

CHP supplying heat, power and hot water

Green roof covering 30% of available roof area

Photovoltaic panels for electricity generation

Downpipes for site wide rainwater harvesting

Double stacked cycle racks and showering facilities

New double glazing and improved air tightness

Internal insulation going beyond 2010 Building Regulations

Photovoltaic glass atrium roof

New windows to allow more daylight

Site wide strategy

Phase change materials on top floor to reduce overheating

New glass atrium provides daylight deep into floor plan (PV provides glare control)

Natural ventilation of all perimeter office bays

Window vents with temp and CO2 automated control

Lighting controls for daylight dimming and occupancy sensing

Combined lighting & acoustic raft for acoustic control and low energy consumption. LED lighting in corridors.

Energy displays in foyer of building

Energy and water sub-metering per floor

Thermal mass of concrete to reduce overheating

Low energy ICT infrastructure to reduce overheating

Cross ventilation for upper level

Single Sided ventilation for levels 1 & 2

Biodiversity roof

Bespoke sustainability framework



Domestic refurbishment

Retrofit for the Future case study

1960s end terrace in

Thamesmead South London

Retrofit strategy was to aiming to

reduce CO2 emissions by 80%

Aimed for Passivhaus

Developed a novel solar air

collector pre-heating warm air in

mechanical ventilation

Modelled CO2 savings

4 bedroom layout (pre-retrofit)

6 bedroom layout (post retrofit)

Aerogel solar collector

Solar air collector pre-heating the air in mechanical

ventilation with heat recovery systems


Instead of a glass cover, there is a lightweight

polycarbonate cover filled with aerogel insulation


Aerogel retains 4 times as much heat as conventional

insulation and is highly translucent to solar radiation

Monitoring data

Controlled test during October 2011 (cold sunny conditions)

Outlet temperature of 45°C observed inside the collector

Monitoring data

Outlet air indirectly pre-heats fresh incoming air to 25-30 °C

Internal temperatures remain stable at 20-21°C

UK housing stock

UK housing stock

millions of terrace

houses built

before the 1930s

UK housing stock

millions of terrace

houses built

before the 1930s

millions of semi-

detached houses

built after the war

UK housing stock

millions of terrace

houses built

before the 1930s

millions of semi-

detached houses

built after the war

millions of flats

built in the 1960s

UK housing stock

millions of terrace

houses built

before the 1930s

millions of semi-

detached houses

built after the war

millions of flats

built in the 1960s

Solid walls were

common until 1930s

UK housing stock

millions of terrace

houses built

before the 1930s

millions of semi-

detached houses

built after the war

millions of flats

built in the 1960s

Solid walls were

common until 1930s

Cavity walls introduced

to prevent dampness

UK housing stock

millions of terrace

houses built

before the 1930s

millions of semi-

detached houses

built after the war

millions of flats

built in the 1960s

Solid walls were

common until 1930s

Cavity walls introduced

to prevent dampness

Only in the 1976 Building Regulations

was insulation a legal requirement

Thermal efficiency of the stock

Thermal efficiency of the stock

Millions of homes built before Building

Regulations have lowest energy efficiency

Hard to treat stock

Hard to treat stock


Up to 1.2 million homes are in conservation areas

Up to 300,000 homes are listed

Expensive & disruptive to improve hard-to-treat homes


Discrepancies between predicted and actual savings

Thermal bridges and gaps in insulation reduce energy savings

Thermal comfort “take-back” resulting occupants increasing the

amount of heating they use following a refurbishment


Uncertainty regarding capital costs & payback periods

Not all properties and/or occupants qualify for grants

Too much insulation could cause overheating


Lack of public engagement

Energy efficiency not viewed as a priority when upgrading homes

Lack of incentives for landlords (if tenants are reaping the benefits)


All of the above, plus more!

Size of Green Deal loan is limited by the Golden Rule

Lack of incentives for private investors looking for a high IRR

Lack of public engagement with scheme – low penetration rates in early trials


KEY


8 million lofts lack 300mm insulation KEY


6.5 million homes have unfilled cavities KEY


14 million homes need boiler upgrades

KEY


6.6 million homes have solid walls

KEY


6.5 million homes still have single glazing

KEY

Cost effectiveness of measures

Investors will want to target low hanging fruit

War-gaming the Green Deal

Q: What does a policy look like that has not been wargamed?

A: Lansley’s Health Service reforms

Interested in policy and what goes wrong

Untended Consequences

Effect of competition

Why

Battle Test Your Innovation Strategy

Companies use war games to focus better on their competitors, while

improving the way they identify, shape and seize opportunities to

innovate.

You thought you did everything right:

Gathered market research and consumer insights

Brainstormed, prototyped and tested a promising new idea

Developed detailed financial models and a solid marketing plan

Yet your company’s new product or service didn’t perform as

expected. What did you overlook?

Battle Test Your Innovation Strategy

If you answered “the competition” you’re far from alone

In our experience, companies making decisions about developing and

launching new products commonly fail to anticipate their rivals’ motivations

and actions.

Moreover, the failure often contributes to innovation-related

disappointments, many of which are below the radar and quite insidious:

E.g. Discounts prices to encourage customers to stock up on its product

rather than try yours ties up distributors so you can’t get shelf space, or

duplicates your service to dissuade consumers from switching.

https://www.mckinseyquarterly.com/Strategy/Strategy_in_Practice/Battle-test_your_innovation_strategy_3038




Some engineering interest

but also a complex scenario

that offered us

Good measure of complexity

Scope to involve a large

number of players

Game play that would call

on a number of skill-sets

Learning objectives for core

business

An opportunity to explore

something on the radar

Green Deal

Describes a spectrum of

modelling approaches

The term & much of the

technique borrowed

from the military

It is about seeing the

consequences of action

Business Wargames

Classical warfare: 7 basic options – which to chose?

1. Penetration of centre

5. Feigned withdrawal

2. Attack in oblique order

7. The indirect approach 6. Envelopment of both flanks 4. Envelopment of a single flank

3. Attack from a defensive position

Imperfect knowledge (you don’t know

where the opponent’s pieces are)

No certainty of outcome in any

encounter

Force multipliers apply (affect of

terrain, generalship and technology)

No certainty in opponent’s objectives

(different victory conditions)

Morale and logistics are factors

Not the same as chess

But military games largely zero-sum

Business games can be zero-sum (bidding)

But can be several other things as well

Finding stable solutions

Win-win solutions

Cooperation and prisoner’s dilemma

Much of the military technique applies to business games

This sets them aside from other

forms of scenario-modelling

By letting testosterone rip

People will ‘game’ the system

Do the unexpected

The unintended consequences

of policy can be revealed

Impossibility theorem – can’t list

the thing you have not thought of

Games are about winning

Green Deal – Where to focus

Government Energy Companies

Banks Selling Training Accreditation

Assessment Warranties Manufacturing Innovation Installation User behaviour

In a universe of fictitious energy

companies, retailers and banks

Between each company’s main

board and its Green Deal

Department

Within alliances between 1

energy company, 1 retailer and

1 bank (a consortium)

Between consortia

Between government and

consortia

Where the action takes place

Consortium members are required to keep the alliance

together while:

Producing a business plan

Negotiating around differing attitudes to risk, reward & return

Managing cashflow and the supply chain

Pursuing individual rather than group victory

Competing with other consortia over particular segments of

the market and parts of the supply chain

Identifying lobbying positions to get government to change

the rules

Coping with changing external events such as the oil price

The Process

CO2 savings & financial payback period of a new boiler

Impact of fuel price rises

Impact of thermal comfort take-back

Impact of one-off replacement

500 homes with insulation, new glazing, new boiler, PV panels & solar thermal

Feed-in Tariffs

Feed-in Tariffs & Renewable Heat Incentive

Reduced capital costs from economies of scale

Marketing & Admin costs

Repeat investment over next 5 years

Net present value of all measures

Business wargames are intended to be more illustrative than predictive

Green Deal involves many unknowns either because we do not know

(household sales conversion rates) or because we are unlikely to be told

(required internal rates of return)

We have made assumptions on these points

People who know about the inner workings of banks, energy companies

and retailers have been positive about our assumptions, particularly in

terms of the Machiavellian implications of some of the victory conditions we

have created

We have run 4 teams that have produced a range of outcomes that are

pretty similar

How accurate is the process?

We have had 24 engineers / MBAs rapidly model different Green Deal

financing options

Not yet made the scheme work for the game parameters we have set:

• IRR targets,

• amount of capital

• conversion rates

It is a long-term game, over several governments in a volatile area

This process is generating a series of useful policy suggestions

Results

Results Move 1– Team 1

IRR: 6.52%. Spent 84% of funds

Saudi stops exporting oil

Results Move 1– Team 2 Saudi stops exporting oil

IRR: 5.94%. Overspent funds by 215%


IRR: 8.54%. Spent 81% of funds


IRR: 3.61%. Overspent funds by 485%

Energy companies are being invited

to sell substantially less product

Doesn’t work with cost of money

Effort being put into increasing

demand while leaving supply

unaddressed

Suppliers have created a monopoly

vehicle

This looks to be setting a trap and it

could be very expensive

Unintended consequences: Green Deal

Our game is intended to be illustrative.

• Business wargaming first

• Green Deal second (design freeze)

Green Deal faces a demand challenge

• Sceptical public

• Consumers require more information about the ‘actual’ energy savings and

payback periods of retrofit packages, opposed to untested predictions.

Green Deal faces a supply challenge – matching finance with acceptable IRR

Players who know about GD said they are thinking about it differently

Importance of the end game – musical chairs – where are you when the music

stops

Summary & conclusions

First Concern:

Testing design for

business wargame

Second Concern:

using game to add

to under-standing

of Green Deal

Green Deal Wargame

Journal paper with more information >>>>

(Search “Green Deal” on www.sciencedirect.com)

Thanks for listening. Any questions?

[email protected]

[email protected]

Office telephone: 020 7927 9700

http://www.sciencedirect.com/

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Domestic UK Retrofit Challenge