Rising to grand challenges shows the best side of human endeavor. Whether visiting the moon, mapping the human genome or splitting the atom, answering big questions requires a heady mix of attractive human qualities; insight, innovation, determination, inspiration, trust and collaboration.
For Governments which invariably fund the projects, the outcome is more about the spin off potential of the many smaller innovations that inevitably make up solving a grand challenge. As far as short-term impact on national Gross Domestic Product is concerned, solving the ‘grand challenge’ is smaller than the sum of its parts. Sending a man to play golf on the moon was costly, but the technology that sent him there would then put satellites in space to power our economies in so many ways – none more so than the US, where the grand challenge sprang.
Grand Challenges for the UK
The link between a Government’s role in driving innovation on a grand scale and economic success is not lost on Theresa May as she set out her Industrial Strategy as a series of four Grand Challenges:
- Put the UK at the forefront of the design and manufacturing of zero emission vehicles, with all new cars and vans effectively producing zero emission by 2040
- Use data, Artificial Intelligence and innovation to transform the prevention, early diagnosis and treatment of chronic diseases by 2030
- Ensure that people can enjoy at least five extra healthy, independent years of life by 2035, while narrowing the gap between the experience of the richest and poorest
- At least halve the energy use of new buildings by 2030
As an insulation provider to the construction market, it is the final mission that excites us and carries clear implications for us. Knauf Insulation has invested and innovated to support that vision in the expectation that Government will play its role in supporting those innovations in the form of ready markets. However, and here is the rub – we have seen policies before built on Zero Carbon Homes (ZCH) and Green Deal (GD) that were abandoned before mission completion.
The answer to the conundrum is to look at the detail. What levers exist for Government to deliver against its ambition to cut energy use in new buildings? It should be noted that existing buildings were wrapped in to the announcement too, representing a far greater challenge than new buildings. Crucially for us, is there evidence Government are willing to pull those levers?
Before considering levers…what might ‘halving the energy use in buildings’ mean? One accusation of the old ZCH policy was that the commitment to ever-decreasing U-values in home fabric was only driving a ‘theoretical improved efficiency’ – it was only creating a bigger performance gap between designed energy performance of the home and the ultimate reality of higher than expected bills for its occupants. So this time, let’s go beyond the theoretical to focus on delivering real, evidenced improvements in running costs.
Delivering meaningful change
Measuring and proving these efficiency gains will depend on whether the construction sector will act on the advances in data analytics capacity present in other industries, and the roll out of smart meters that may provide the input data needed for proper evaluation. So, given the 12-year timeline to Theresa May’s mission and all the talk of ‘the Internet of Things’, this time we must deliver a real and demonstrable improvement on new and existing homes and commercial buildings. Unlike ZCH, there can be no performance issues with the latest ambition.
So to the levers of power. Government’s obvious options begin with regulation and subsidy. Through Building Regulations and the current retrofit subsidy scheme, ECO, government governs how energy efficiency measures are installed. In England at least, these are the only two levers currently being operated, although other options are talked about, such as tax nudges linked to stamp duty. In reality, neither live policy, under their current design, has brought forward the innovations, or the scale, to live up to the mission of genuinely halving UK building energy use.
Visualising the required policy redesign is tricky, but the ‘tools’ to deliver better buildings are much easier to imagine;
- Construction process control enhancements – some linked to offsite construction
- Installation verification technologies creating a digital record of install
- Measurement technologies to verify home or building infrastructure improvement or actual building performance vs designed performance
- Rapid energy efficient product improvements driven by better performance data feedback from the innovations above
- Energy insight technologies that allow the occupants to operate the property efficiently
While the above lists innovations, Government must calibrate its levers to reward business models that combine these innovations into new services that support the efficient construction and operation of homes and buildings, whether new or old. It is a dramatic change from the current model of selling units of energy, to one where service providers earn revenue by helping customers operate their homes more efficiently.
Realising the vision
If we imagine a more energy-efficient future where the 2030 mission has been achieved, what service propositions might have supported that outcome? There is likely a thriving service sector offering a suite of energy performance type contracts. In new build, the service provider supports house-builders to ensure the design has been delivered robustly. There may be technology that, at various stages of the build, allows us to track adherence to the original specification and check that the building is performing as per initial design expectations.
The same service provider likely offers on-site energy generation and storage technologies and supports the specification of any infrastructure for car charging. The mortgage industry has recognised such homes as having lower operating costs and offers more competitive lending rates to those occupying them.
Once the property is complete, we could expect energy insight services to be operating in the background to support occupants in its efficient running. Perhaps many autonomous decisions are made by the home management system, reacting to long-range weather forecasts to charge the building fabric with heat ready for a cold period, or exporting the energy stored in the battery to the grid in reaction to energy spot market prices. Although less ambitious, but still impactful, perhaps it turns the lights off when no-one is home.
Similar services combining home infrastructure efficiency improvement and efficient operation are also offered in existing homes. At the same time, energy suppliers have either transitioned to play a role in such service provision, or failed in the face of competition from broadband service providers that have bundled energy into their existing billing operations.
Reframing the challenge
Some may say Government’s desire to drive such a change in the culture of construction is pie in the sky. However, the counter argument would surely be that the challenge wouldn’t be a very ‘grand’ one if it was too easily achieved, and in fact, it is just within reach.
There are encouraging signs if you look for them. Technologically, some energy providers are already offering ‘prosumer’ energy services for those generating, storing and managing energy onsite, alongside their standard consumption tariffs. Government’s moves to allow people to take ownership of their own data will speed the development of further services to be offered for occupants’ benefit, as the home increasingly becomes a platform for services - both those once provided by the high street, and many not yet conceived.
But there are still big hurdles to overcome, not least the culture change required across the construction sector identified in the Hackitt Review, into fire safety and building regulations concerning quality control through the design, build, commissioning and verification stages.
In summary, the more dramatic the lever the more innovation will be inspired. To boost confidence, a similar mission in the UK housing stock has already been achieved with a domestic UK gas consumption drop of c30% between 2005-2015 (weather adjusted). Much of this drop was a result of previous energy efficiency schemes driving low cost measures such as loft and cavity wall insulation.
No Government has yet claimed success for this phenomenal achievement. Yet efficiency schemes have shrunk by half since that time with much of the low hanging fruit, in terms of easy savings in the existing stock, already picked. If the government is serious about halving energy in existing buildings as well as new, it should recognise that the 50% target is therefore much bigger, even if the timeframes proposed are similar. However, unlike landing on the moon, it is not rocket science.