Agenda item

[Report of the Director for Housing, Regeneration and Planning.  To be introduced by the Cabinet Member for Housing and Estate Renewal]

The Council has been successful in securing £1.6m of funding from BEIS to undertake an Energiesprong pilot.   This report asks Cabinet to accept the funding and confirm that we will proceed with the project.

The Cabinet Member for Housing and Estate Renewal introduced the report which sought approval to undertake an Energiesprong pilot project on 51 Council-owned and tenanted properties on the Orlit properties (Tunnel Gardens) or White Hart Lane ward (centred around Rivulet Road and/or sheltered accommodation bungalows) or Coldfall Estate (near Hill Road), and to accept the Business, Energy and Industrial Strategy (BEIS) funding to deliver the pilot.  The pilot aimed to retrofit homes to be net zero energy.

The Cabinet Member and Joe Baker, Head of Carbon Management, responded to questions from Councillors Bull and Cawley-Harrison:

-           The criteria for assessing properties was set out at paragraph 6.6 of the report.

-           Officers would confirm with Homes for Haringey on whether there were any sheltered accommodation bungalows on Rivulet Road.

-           The level of Comfort Charge was yet to be decided.

-           The installations were designed to prevent air circulation issues and damp, however, the properties would be monitored to ensure that these issues did not occur.

-           The service was working with the GLA on how the scheme could be rolled out for leasholders.

RESOLVED to

1.         Approve the undertaking of an Energiesprong pilot project on Option A, the Orlit tenanted properties on Blake Road, Durnsford Road, Tunnel Gardens and Park Grove N11.  Or, in the event that structural surveys identify substantial remedial works are required, to undertake the pilot project on Option B, 51 tenanted properties located in White Hart Lane Ward (centered around Rivulet Road and/or sheltered accommodation bungalows) or Option C 51 tenanted properties on the Coldfall Estate (around Hill Road).

2.         Note that the decision on which option proceeds as the pilot project will be made by the Director of Housing, Regeneration and Planning in consultation with the Cabinet Member for Housing and Estate Renewal.

3.         Accept £1.6m funding from the BEIS Social Housing Decarbonisation Fund (SHDF) Demonstrator to part fund this whole house retrofit project.

4.         Approve the procurement of a contractor through the innovation partnership procedure to be carried out with the GLA to deliver an Energiesprong pilot project on Option A, the Orlit tenanted properties on Blake Road, Durnsford Road, Tunnel Gardens and Park Grove N11.  Or, in the event that structural surveys identify substantial remedial works are required, to undertake the pilot project on Option B, 51 tenanted properties located in White Hart Lane Ward (centered around Rivulet Road and/or sheltered accommodation bungalows) or Option C 51 tenanted properties on the Coldfall Estate (around Hill Road).  The value of the contract will be less than the agreed maximum price of £4.3m and this will be funded from the £1.6m BEIS award and £2.7m from the HRA Capital.

5.         Agree to design and consult with tenants on the Energiesprong model and Comfort Charge.

6.         Note that the decision whether or not to proceed with Energiesprong pilot, including the Comfort Charge value, and implementation process will be determined by the Cabinet Member for Housing and Estate Renewal.

Reasons for decision

The Council is required to tackle and fund the energy efficiency of its housing stock to meet zero carbon commitments, alongside future legislation requirements. The Energiesprong approach could provide more benefits to residents than could normally be afforded as it allows retrofit costs to be paid back to the Council or private financing company through energy and maintenance savings over a 30-year period. 

The UK Government offer of funding to support this pilot shows strategic buy-in and will reduce the financial ask on the Council’s own funding.  This benefit can then be passed on to tenants of the chosen properties. Should Cabinet decide to proceed with the Energiesprong project and claim the funding capital delivery costs could reduce from £4,335,000 to £2,817,750.  However this comes with a requirement to complete the project by 31 December 2021 and will require an award of contract during the pre-election period.

Alternative options considered

Undertake conventional energy retrofit programmes ie a package of measures, carried out in phases

Installing energy saving components individually is time consuming and causes increased and repeated disruption for tenants. Some of these (such as internal wall insulation) require decanting.  Energiesprong is a novel approach to ‘whole house’ retrofit. Whilst its cost is currently higher than the more usual incremental insulation upgrades it creates a net zero energy home in one step, which avoids later spending on a decarbonised heat system and also avoids potential spending on further efficiency measures in the future. Repeat visits to properties to carry out multiple energy efficiency projects is therefore not sustainable or suitable for all homes. Where this can be avoided this should be, for ease of delivery on the tenant and project management. The properties best suited for Energiesprong are those with a simple design.

Undertake conventional energy retrofit programmes ie a package of measures, all at the same time

Energiesprong is procured to deliver a ‘design, build and guarantee’ contract against the Energiesprong Performance Specification which guarantees the retrofit delivers predicted energy savings.  Monitoring equipment is included within the installation which monitors energy use, humidity, air quality and comfort levels on a daily basis throughout the lifetime of the retrofit.  Each property must achieve the performance outputs and maintenance costs predicted in the design stage or financial penalties can be placed on the contractor for up to 10 years after the installation.  A conventional retrofit does not offer such certainty around the outcome or paybacks that will be achieved.  Often a set of measures have interdependencies, for example the air ventilation system will need to work in conjunction with the air source heat pump (the heating system). If one fails it can impact on the operational performance and the guarantee of the other. Undertaking multiple contracts of multiple measures will require increased resources for contractual management and performance.

Energiesprong installations can be achieved without decanting residents.  Roof units, modulated heating systems and prefabricated wall panels including windows and doors can all be manufactured off site making installations faster and reducing the impact on residents. The properties identified are simple in design, and are ideal for the Energiesprong approach.

Deliver the project on another estate

The Orlit properties have poor thermal energy performance.  The units also suffer from internal damp through condensation brought on by cold bridging. The estate has been identified as in need of investment to get the properties up to the required standard.

Other estates have been considered and reviewed.  The Orlit properties were chosen due to the simplicity of the design, and the need to invest in the estate to improve the quality of living.   However further investigation into the structural integrity of these properties is required.  Visual structural surveys are therefore in process.  Should these surveys indicate that substantial spend is required to remedy structural faults it is proposed that the pilot project is undertaken on 51 properties in White Hart Lane ward or the Coldfall Estate.  These areas include properties with a simple architectural design which fits with the Energiesprong model.  These areas have been identified on the basis that external works are required and the properties have EPC ratings of E, F and D.

To not include a Comfort Charge

Due to the scale of funding required to deliver energy efficient projects across the whole of the Council’s Housing Estate, it is vital that the model of delivery is financially sustainable.  If the Council did not introduce a Comfort Charge and capture some of the energy savings secured by tenants who live in super insulated properties then the funding agreed for energy efficiency measures may not stretch across the whole portfolio.  This may introduce inequality between properties, as although tenants may pay the same rent, they may have significant differences in their energy bills which would not be fair for tenants.  The Housing Revenue Account (HRA) is paid into by all tenants and the benefits of any spend from it should be as equitable as it can be, benefiting as many as it can.  The Comfort Charge will help refund the costs of the measures delivered by the Council through the HRA, and enable the Council to deliver further carbon reduction and energy efficiency projects across the wider Council Housing Estate.

Do Nothing

The Council has a commitment to become a zero carbon borough by 2041.  Accepting the funding from BEIS would allow a net zero energy retrofit to be trialled at a significantly reduced cost.

Delay

The Council could wait until November 2023 when it is expected that a national framework will be available for Energiesprong and the gross maximum price for an Energiesprong installation is expected to have fallen by around 35%.  However there is no financial benefit to this approach as Government subsidies are unlikely to be available once the economic price point has been reached.  There is also the risk that Energiesprong will be dismissed as energy plans for the whole Council housing portfolio are being designed and conventional retrofits commence on estates which would have offered better results from an Energiesprong installation. 

On the Orlit properties the Council would still be required to undertake upgrade works on the properties to ensure that they achieve the Council’s housing standards. 

Note – Councillor Chandwani did not vote on the recommendations as she had lost connection during the discussion of the report.