Agenda item

RESOLVED: That the comments and evidence be noted for the  Review.

4.1      Bertie Dixon (Engineer from Max Fordham) made a presentation to the Committee. The key points to note were:

• Max Fordham LLP is a consultancy specialising in engineering and construction, who have been in business for over 50 years. They have worked with numerous local authority housing developments, including projects in Lewisham such as Milton Court. They have installed and refurbished all types of heating system in that period, and followed up the results where possible. 
• The common description for ‘district’ or communal heating system that operates many houses or buildings, like a housing estates or shopping centres from one central boiler plant. The conventional system is the boiler system where you have one boiler per flat/house
• The general convention since the 1980s has been to fit individual boilers rather than communal heating when constructing housing developments. However, in the last 10 years there has been a move to fit communal heating systems.
• This is due to the very strong policy position that has developed that combined heat and power is the most efficient way to generate heat.  The Greater London Authority (GLA) & in turn local councils now all but require communal heating systems in major housing developments in London, and strongly encourage combined heat and power.  Max Fordham LLP believes that there is an ‘gap in understanding’ in the information that has led to this policy position held by the GLA and others, on the operational use of communal heating systems and the inappropriate use of small scale combined heat and power units.
• Government published calculation methods used for building control and planning state that there is a 5% loss in energy with communal heating systems; but Max Fordham LLP own calculations state that for new flat developments it is more like 50%-70%. Losses as low as 30% are possible but with unusually high standards of design and installation.  This causes higher carbon emissions, significantly higher bills than one would predict using the government calculator. Furthermore the uncontrolled heat loss in the distribution system causes overheating with attendant health risks to the tenants.
• Housing developers are now expected by planners to install communal heating systems to meet sustainability requirements for new developments, when better energy-efficient building would have been a more effective solution.
• One of the issues is that policymakers seem not know how inefficient communal heating systems are, particularly in current UK practice, and seem to be unaware of the problems that social housing tenants have with these systems.

4.2      In response to questions from the Committee, Bertie Dixon made the following further points:

• With communal heating systems, the capital costs are substantially higher due to the increased level of infrastructure, and the running costs are higher due to the increased fuel used, maintenance and management. Bills are generally much lower for the tenant with a single boiler system in their dwelling.
• Housing developers do have an option not to install communal heating systems if they so wish, especially if they build more energy-efficient properties. However the policy is loaded against this as installing communal heating systems is a cheaper option to achieve the carbon reduction targets on new housing development than greater levels of insulation, given the unrealistically low loss figures provided in the Governments statutory calculation method.  The pressure from planning to install communal heating make not installing it a greater planning risk. Therefore a policy which encourages district heating discourages inherently energy efficient buildings.  Bertie Dixon observed that those installing communal heating systems should publish the efficiency performance figures at planning and during operation to make these issues public and plain to see.
• There is an acknowledgement that there is still a lot of learning to be done in terms of the knowledge of how communal heating systems function.

4.3      James Gallagher (Chair, Parkside Residents Association), introduced his report. The key points to note were:

• As well as being Chair of Parkside Residents Association, he also has worked as a construction economist during his career, so has some experience of the issues in respect of different heating systems.
• He queried the cost of moving to a communal heating system, and residents were told that the cost to them would be approximately £2-3 a week, which was a factor in many residents staying in Parkside. However the cost to residents has worked out to be in the region of £8-9 a week, a significant increase in what they were originally quoted.
• He estimated that the cost of putting in communal heating systems for the amount of new housing developments planned for London over the next 20 years would be in the region of £2bn, and feels that this money could be put to better use.
• Communal heating systems are utilised better in high demand environments, where they could be in use 24 hours a day/7 days a week; that is not the case in residential housing. The Carbon Trust suggests that communal heating system need to be in use for approximately 4,500 hours a year to be energy-efficient. The communal heating systems in Parkside are only in use for approximately 1400-1750 hours a year.
• The EU Directives of 2002/91/EU and 2010/31/EU should have been considered for housing developers, which would mean they would have to look at various heating systems before start of construction.
• The Mayor of London has a target to achieve 25 per cent of London’s energy supply from decentralised energy sources by 2025. However, he believes that communal heating systems are not the best way to achieve this objective due to their inefficiency, and they also do not help in reducing energy poverty.

4.4       In response to questions from the Committee, James Gallagher made     

           the following further points:

• His calculations conclude that communal heating systems add over £400 a year to bills, when you include tariff, operational, depreciation, and replacement costs.
• Landlords install communal heating systems with the objective of reducing tenants’ energy bills, but this has led to some instances to an increase in overall bills.

4.5      RESOLVED: That the comments and evidence be noted for the Review.