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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
Bespoke sustainability framework
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
Aerogel solar collector
Instead of a glass cover, there is a lightweight
polycarbonate cover filled with aerogel insulation
Aerogel solar collector
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
General barriers to retrofitting
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
General barriers to retrofitting
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
General barriers to retrofitting
Uncertainty regarding capital costs & payback periods
Not all properties and/or occupants qualify for grants
Too much insulation could cause overheating
General barriers to retrofitting
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)
Specific challenges for the Green Deal
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
Specific challenges for the Green Deal
KEY
Specific challenges for the Green Deal
8 million lofts lack 300mm insulation KEY
Specific challenges for the Green Deal
6.5 million homes have unfilled cavities KEY
Specific challenges for the Green Deal
14 million homes need boiler upgrades
KEY
Specific challenges for the Green Deal
6.6 million homes have solid walls
KEY
Specific challenges for the Green Deal
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%
Results Move 1– Team 3 Saudi stops exporting oil
IRR: 8.54%. Spent 81% of funds
Results Move 1– Team 4 Saudi stops exporting oil
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?
Office telephone: 020 7927 9700
