1.6 National and International Context

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This lesson looks in more detail at the big picture and the issues that relate to national and international policy.

For those professionals dealing with retrofit on a large scale or at policy level, these wider issues are very important.

However, we can all be affected by government policies so it is useful to understand the big picture and how our own retrofit work fits into that.

By the end of this lesson you will have learned about…

  1. Benefits of retrofit to the UK and society
  2. Why heating matters
  3. Fuel poverty
  4. Energy security
  5. Climate change
  6. “Less is More” report
  7. What can buildings contribute?

1. Benefits of retrofit to the UK and society

As mentioned briefly in Lesson 1.3, home owners and tenants are not the only ones to benefit from a good retrofit that is successful in the short and long term.

We are now going to look at these wider benefits in more detail:

  • improvements in public health
  • higher levels of energy security
  • a lower carbon UK to reduce global warming
  • homes that have been adapted for climate change
  • economic benefits (jobs and tax take) from widespread retrofit work

2. Why heating matters

Heat is a big part of UK energy use, and significant contributor to UK CO2 emissions. Lack of (affordable) heat is a major contributor to poor health, well-being and avoidable winter deaths.

Facts and figures:

The key point to take from the chart below is:

  • Up to 65% of the energy used by UK households is estimated to be used for space heating.
  • Water heating takes up another 15% or so, as does lighting and appliances, with cooking using rather less.
Non-transport end consumption of energy, 2012 Source: See updated report, this link will download the pdf doc:footnote 1

After transport, domestic space heating is the single biggest energy consuming sector in the UK economy. According to the UK government, in 2012, domestic space heating accounted for around 20% of total end use energy* (or 34% of non-transport end use energy).

Note: accounting for primary energy** rather than ‘end use’ would increase the proportion of non-heat forms of energy, as these are mainly grid supplied electricity, which wastes around twice as much energy in generation and transmission as is consumed by the end process itself. Nonetheless, domestic space heating clearly looms very large.

*Delivered, or end use energy: the amount of energy which is supplied to final users, e.g., households, office buildings, schools, factories and cars.

**Primary energy: the amount of energy mined or extracted at source; e.g., from coal, oil, natural gas, uranium or wood. Includes losses within processes, such as electricity generation and transmission.

(See Module 4 for more detail on delivered and primary energy.)

3. Fuel poverty

According to which definition is used, there are between 3 million and 4.5 million households in the UK living in fuel poverty.


Until recently the UK definition of a household in fuel poverty was: “a household that needs to spend more than 10% of its income on all fuel use to heat its home to an adequate standard of warmth”.

This definition has been changed in England to “has required fuel costs that are above the median level, and were they to spend that amount they would be left with a residual income below the official poverty line” (defined as 60% of median income after housing costs).

The new definition means that fewer households are now classified as being “in fuel poverty” – obviously, the actual circumstances of fuel poor households did not change at the moment in time when the definition of fuel poverty changed.

Figures brought together by the think tank Policy Exchange show that 10-20% of English households are in fuel poverty, while in the colder, wetter nations of Wales and Scotland, around one in four households are affected. In Northern Ireland, where the weather is often unfriendly and fewer households have access to mains gas, fully 40% of households cannot afford to keep warm.

Fuel poverty can severely affect people’s health – as those affected often under-heat their homes. Cold housing places a burden on the NHS (an estimated cost of £1.36bn per annum), and is also a known contributor to the 25,000 ‘excess winter deaths’ per year in England and Wales (Office of National Statistics, 2010-2012). Low temperatures are implicated in heart, circulatory and lung problems, and also affect mobility and may increase the risk of falls.

As Policy Exchange commented on the research they published in 2015: ²

“Fuel poverty is essentially a cost of living problem – the inability to afford to heat your home adequately. It has been an increasing problem in recent years due to the sharp increase in consumer energy prices (for example retail gas prices rose by 128% in real terms between 2003 and 2013) combined with stagnant wages driven by the economic downturn. “

“It also reflects the inefficiency of the UK’s housing stock – which remains woefully poor compared to other European countries. The number of people who say they cannot afford adequate heat in the UK is around three times higher than in Scandinavia, despite significantly lower temperatures there.

“The ‘fuel poverty gap’ is a measure of the difference between how much a household currently spends on fuel (heating and power) and what they would need to spend to live in comfortable conditions. Policy Exchange calculated that fuel poor households living in the most inefficient properties could need to spend as much as £1,700 a year extra to heat their home to a comfortable level. Households facing the highest fuel poverty gaps include those in homes with the lowest energy efficiency ratings, those in rural areas, older properties and properties not linked up to the gas grid.”

In the years after 2010 a number of policies that were nominally aimed at tackling fuel poverty, such as Warm Front, CERT and CESP were wound down, particularly those covering England. The Energy Company Obligation that began in 2013 has since been through three funding periods. The first period beginning in 2013 was called ECO1, the second ECO2 began in 2015 and ended in 2017, then ECO3 began in 2018 and ended in March 2022. The latest policy, ECO4 will apply to measures completed from 1st April 2022 and will cover a four year period until 31 March 2026.

Anyone taking up the funding needs to adhere to the eligibility criteria and each ECO version has had different criteria. ECO4 will continue to be focussed on low income and vulnerable or fuel poor households in band D-G homes. To support households on the lowest incomes, households in receipt of means tested benefits will be eligible.

These energy efficiency programmes have tended to allow householders to achieve either lower bills or a warmer home, but routinely achieving both together has proved more elusive than was hoped when the schemes were set up.

So a successful retrofit should ideally bring bills down and increase warmth in the home (for homes that would be considered colder than recommended by Public Health England, see Lesson 1.4).

The Marmot Review: Fair Society, Healthy Lives also recommends home energy efficiency as a priority (under Policy Objective E).

4. Energy Security

Natural gas forms a large part of overall UK energy use – one third of the gas consumed is used in homes. 4

Demand is falling, but production from UK gas fields is falling even faster: the UK now imports almost half the gas it uses. 5

In the graph below, the dark grey shaded areas indicate when imports exceed exports. (The light grey shows when exports exceeded imports).

UK energy imports and exports
Since around 2005 net energy imports to the UK have been rising steeply (dark grey shaded area) and are now at a level not seen since the 1970s.
Source: Energy Imports and Exports House of Commons Library, 2013.

As the country becomes more dependent on gas imports, it is more vulnerable to international instability – in global price fluctuations, geopolitics and conflict. Cutting domestic heating demand helps reduce the exposure of the UK to such factors.

Electricity is also a significant energy source in UK homes, including for some heating. Fuel for generating electricity also has to be imported. Apart from around 20% which is generated from renewables6, UK electricity generation uses a mixture of primary fuels: gas, coal, oil, nuclear (requiring uranium fuel) and some biofuel – the UK is not self sufficient in any of these, so once again, cutting demand would increase energy security.

5. Climate Change

Meanwhile, the overarching issue of climate change threatens everyone’s stability and security. In 2015, the concentration of CO2 in the earth’s atmosphere passed the symbolic 400 ppm mark – a level not seen on earth for more than one million years (i.e. from an era before the evolution of Homo sapiens).

In November of that year, the UK’s Met Office predicted that global temperatures for 2015 were on course to rise more than one degree above pre-industrial levels, for the first time. As the BBC reported, “The world would then be half way towards 2°C, the gateway to dangerous warming”.7

The World Bank warned in the same week that Climate Change could push 100 million more people into extreme poverty by 2030, with some of these effects already being felt worldwide.8

(Module 2 covers UK climate change predictions, and the relevance to UK housing stock.)

6. “Less is More” Report

There are a number of reports by different organisations looking into the future of energy for the UK.

The AECB’s report ‘Less is More – Energy Security After Oil’ examines issues of climate change and energy security.

Less is More
Less is More: The AECB’s analysis of energy security and routes away from fossil fuels.

This report considers saving energy, generating energy and storing energy in such a way that energy security for the UK would be improved and carbon emissions would be reduced.

The scope for saving energy is often overlooked or underestimated in some analyses of future energy security.

However, some energy efficiency options are more cost effective per kWh than the equivalent energy generation, storage and distribution.

(The IMF reports that fossil fuel companies “are benefitting from global subsidies of [at least] $5.3tn (£3.4tn) a year, equivalent to $10m a minute every day”.9)

Essential reading:

Parts of the Less is More have been highlighted to form a summary of the main report. The summary document is available to download here: Less is More – Highlights  see here. (this link downloads the report) Read the black text (the summary) but skip the grey text (the rest of the report). 

Optional reading:

If you wish to read the full ‘Less is More’ report, with carefully researched and comprehensive all-sector analysis, it is available to download from the AECB website: http://www.aecb.net/publications/less-is-more-energy-security-after-oil/

7. What can buildings contribute?

The AECB sets out some possible courses of action including:


1. New buildings could be designed and built to Passivhaus or (where not possible for good reason) AECB Building Standard levels of efficiency.
2. The UK could aim to at least halve the national dwelling stock’s space heating demand – involving overhauling the fabric, heating and ventilation systems of the nation’s existing dwellings. This would also roughly halve the associated CO2 emissions.
3. The UK could aim to halve the remaining domestic heating related CO2 emissions through investing in low-CO2 heat supply and distribution networks.

Building services and appliances

4. Ventilation and hot water systems can be designed to give weight to ‘efficiency in use’ as well as to the capital cost of installation. Replacing an inefficient or ineffective ventilation or hot water system can be disruptive, with a reasonably long lead time, so should be got right first time.
5. Electrical appliance and lighting efficiency represents the ‘low hanging fruit’ of energy efficiency. Equipment replacement pays for itself very quickly out of savings, and inefficient models could be phased out.

These actions should all be based on good value for money, solid engineering and proven technologies which save more energy than they consume.

Objective 1 above, is addressed in the original AECB CarbonLite Programme; Objective 2 is at the heart of this training course, and 4 and 5 are addressed in this course under Module 7 – Building Services.


This lesson has covered some of the national challenges that could in part be addressed by undertaking good, robust retrofit at a UK wide scale.

Lesson tags: CarbonLite Retrofit, climate change, energy, energy security, Less is More report
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