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£15bn plan to retrofit existing homes in Wales could eradicate fuel poverty says Future Generations Commissioner

12 Jul 2021 5 minutes Read
Sophie Howe, Future Generations Commissioner for Wales

 

Fuel poverty could be eradicated in Wales by 2030 if Welsh Government commited to a long-term plan to retrofit existing homes, a report by the Future Generations Commissioner has argued.

A £15bn investment plan for housing would, according to Sophie Howe, be a “game-changer” for the Welsh economy and help Wales and the UK meet their carbon emission targets.

The long-term plan to ‘retrofit’ homes to reduce heating/energy demand would create 26,500 jobs by 2030, saving bill-payers hundreds of pounds each year, while also improving and modernising Wales’ housing stock, she said.

Wales has some of the oldest and least efficient housing in Western Europe and around 155,000 (12%) of Welsh homes are in fuel poverty due to the economic impact of Covid-19.

More than 66,000 households in Wales have fallen behind on their energy bills since the start of the pandemic, says Citizens Advice, and disabled people are four times more likely to be in energy debt.

Vulnerable people living in a cold home have an increased chance of serious illness or death, according to the National Institute for Health and Care Excellence, and are at higher risk of heart attack, stroke, breathing problems, flu, depression and falls.   

Sophie Howe said: “The climate emergency and fuel poverty are two parts of the same problem and if we are truly determined to solve it, we need ambitious and interconnected policy actions.

“Right now we have the chance to do something life-changing for the families, pensioners and people who simply cannot afford to heat their homes properly, and to eradicate fuel poverty for generations to come.

“The Well-being of Future Generations Act says that by law, the way we get to net zero has to improve Wales’ well-being as a whole.

“A long-term plan to decarbonise Wales’ housing stock isn’t merely an aspiration, it’s an absolute necessity – and it’s the only way to pull thousands of people out of fuel poverty as part of a true green, just and equal recovery – and show just how far we can go as a country as the world combats climate change.”  

The report

The commissioner’s new report, Homes fit for the Future: The Retrofit Challenge, in partnership with New Economics Foundation, argues that a Welsh housing decarbonisation programme could have a huge impact on Wales’ social, economic, environmental and cultural well-being by:   

  • Eradicating fuel poverty and saving £8.3bn in energy bills by 2040.
  • Reducing the strain on health and social care services, particularly during the winter – generating a cost saving to the NHS of £4.4 bn by 2040.
  • Creating new industries, skills and jobs, based on local supply chains – 26,500 new jobs by 2030, helping to offset the economic impact and job losses of the pandemic. Jobs could include in areas such as installation of solar panels and ground source heat pumps, retrofit assessing and coordinating. Many are roles where existing trades can upskill/ retrain into, via ‘feeder trades’ such as electrician, plumber, plasterer. 
  • Creating £19.32bn in additional GDP and £3.54bn of net tax benefit by 2030. 

Welsh Government has set itself a legal duty to reduce harmful greenhouse gas emissions to reach net zero by 2050 – and 10% of Wales’ emissions come from the residential sector, one of the slowest areas across the UK to decarbonise. 

Wales’ Well-being of Future Generations Act requires Welsh Government to use joined-up thinking to develop long-term solutions and prevent problems, and a ‘Retrofit Plus’ approach, the commissioner said, should be used to improve communities in line with the Act, while housing investment should be treated as essential infrastructure – as important as public transport and power.

The report says that it is the poorest and most marginalised populations are least responsible for climate change but the most likely to be exposed to its negative effects, more susceptible to damage and have the least resources to respond, cope and recover, so Wales should target the worst homes first.

Welsh Government also needs to urgently address the skills gaps in retrofit jobs, both in numbers and diversity, or risk having an ill-prepared workforce, the report argues.

The report also suggests a new Welsh Energy Service Company is set up to coordinate and fund improvements, with new legal requirements for homeowners to bring their homes up to standard, alongside loans to support the improvements.

‘Urgent’

Lead author of the report, Donal Brown, sustainability director at Sustainable Design Collective, said that the report makes the case for a ‘Marshall plan’ scale investment for Wales to get on track for housing decarbonisation.

“While we see a central role for government in reducing fuel poverty and helping those on low incomes, we also propose a major role for private investors in the form of green bonds and green mortgages,” he said.

“Importantly, finance alone will not solve this challenge with regulation, skills and coordination essential to deliver the vast benefits of this program over the next decade.”

Chaitanya Kumar, head of environment and green transition at the New Economic Foundation, added: “The housing stock in Wales is some of the leakiest in the UK and needs urgent upgrading. This comes at a cost but it also brings immense benefits by creating thousands of jobs, slashing energy bills and improving public health.

“Our report lays out a clear roadmap for the next decade that brings public and private finance together to help bankroll Wales’s ambitious decarbonisation targets but Welsh government needs to lead the way with urgent public investment at scale.”

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Kerry Davies
Kerry Davies
3 months ago

The Welsh Government is driving forward the WHQS for social housing in Wales and councils have far more ambitious plans for replacing gas boilers with heat source power. The WAG gave councils and housing associations over £100M for 2021-2022 for maintenance of these standards. The conundrum that Ms Howe faces is to answer the questions around value and supply. Should taxpayers hand over cash to increase the resale value of privately owned property, be that property owner-occupied or rented? Raising the value of social housing is a win-win, especially in a time of house price inflation. Taking money from the… Read more »

Morris Dean
Morris Dean
3 months ago
Reply to  Kerry Davies

You raise an interesting point, and it’s hard to see how any value to private owners can be recaptured by the state.

I keep coming back to the Welsh energy company idea. It’s probably not profitable but neither is subsidising private house owners as you say.

Need to think more about this because it’s definitely a big problem in Wales.

Carol Loughlin
Carol Loughlin
3 months ago
Reply to  Kerry Davies

Many property owners are asset rich but cash poor, particularly pensioners who are often refused loans because of their age. A more equitable way to manage the situation could be to make grants to property owners with a caveat that the grant is repaid when the property is sold. As a pensioner myself I would be more than happy to do this.

Ric
Ric
3 months ago
Reply to  Carol Loughlin

To a degree I agree with you, however, as things stand with regard to energy cost and supplies, it makes little economic or energy use /co2 emission sense to replace perfectly servicable gas boilers with heat pumps. When a gas boiler reaches the end of its service life then a publicly funded grant would be the ideal option. Better use of funds would be to make more generous financial help available for heating to those on lower incomes.

Mar k
Mar k
3 months ago

what about using all that geothermally heated water that is filling up all those disused mines in the South Wales Coalfield, thousands of houses could be heated very cheaply and with virtually no carbon production, how’s that for a retrofit?

Hannergylch
Hannergylch
3 months ago
Reply to  Mar k

The BBC published an article about this on their web site a few days ago: https://www.bbc.com/future/article/20210706-how-flooded-coal-mines-could-heat-homes

Mark
Mark
3 months ago
Reply to  Hannergylch

perhaps they should contact the people in Heerlen in the Netherlands, they appear to have it all sussed out. https://guidetodistrictheating.eu/heerlen/

Ric
Ric
3 months ago

If you add up all the embodied energy cost and through life energy cost of retro fitting and maintaining heat pumps, plus all the new plumbing, is there actually an energy saving compared to using simple electric heaters that require minimal manufacture and maintenance energy input? Consider the ERoEI (net energy) figures for the different options. On top of that, electricity cost has to fall substantially compared to gas for the economic sums to stack up. Gas is around a fifth the cost of electricity per kwh and heat pumps output around 3 times the electrical energy input so even… Read more »

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