EPCs to be Used as a Stick to Beat Us

Revisions to EPC regulations deigned for authoritarian control of our behaviour.

Introduction

There is a video doing the rounds on X/Twitter of a man presenting to WEF about Net Zero. In it, he hopes we can be persuaded to achieve Net Zero by using what he terms carrots but threatens the increasing use of sticks if we fail to comply voluntarily.

Bearing this in mind, the Government has recently launched a consultation about reforms to the Energy Performance of Buildings (EPB) regime. Many of the proposed measures look a lot like sticks to beat us with.

The Reforms to the Energy Performance of Buildings Consultation

The consultation was launched on the 4^th of December and runs until February 26^th 2025. It covers Energy Performance Certificates (EPCs) for domestic and non-domestic buildings, Display Energy Certificates (DECs) for public buildings and air conditioning inspection reports (ACIRs) for systems above a certain size. For simplicity, this article will focus on EPCs.

The Government says:

“[B]uildings account for around 20% of the UK’s total greenhouse gas emissions. In order to meet the government’s net zero commitments, a significant shift in the way domestic and non-domestic buildings use energy needs to occur.”

They want EPCs to act as an enabling tool to support actions across a range of areas working to improve the energy performance of buildings. This will include supporting lenders with information to assist with finance for improving energy efficiency. They also want to allow businesses to provide innovative products and services based on accurate building data.

The Government notes that since EPCs were introduced, the energy policy landscape has changed. They make particular reference to the new Government’s plan for Clean Power by 2030 (CP2030). Readers may recall that NESO’s plan for CP2030 assumed residential electricity consumption would fall by 20% from 2023 levels, see Figure 1.

Figure 1 - NESO Change in Electricity Demand 2023-2030 (TWh)

For some strange reason, they also believe that the new EPB regulations will improve decency as well as reduce carbon emissions and tackle fuel poverty. Assuming households are going to reduce energy use sounds pretty indecent to me.

The Government is proposing to use six metrics to provide a “more complete representation of building energy performance.” These are energy cost, fabric performance, heating system, smart readiness, energy use and carbon.

Energy Cost

The Government wants to keep energy costs as part of the EPC regime, but also wants to ensure that energy costs are not the sole headline metric used to determine EPC ratings. In essence, they want to de-emphasise energy costs by adding extra metrics, perhaps because heat pumps use electricity that is four times more expensive than gas, and even with the efficiency gains of heat pumps, they may struggle to be cheaper than a gas boiler.

Fabric Performance

The Government recognises that fabric performance is a crucial aspect of a building’s energy efficiency. This is related to the level of insulation, the type of windows and the quality of construction. They believe that a fabric metric could provide a clear basis for identifying and prioritising improvements to the thermal performance of buildings.

However, as we have discussed before, measures to improve the fabric of buildings are very expensive and often have payback periods measured in centuries or millennia, see Figure 2.

Figure 2 - DEEP Case Study Payback Periods

In the impact assessment that accompanies the consultation, the Government shies away from including the costs of installing the measures recommended by the EPCs because it is assumed the benefits will be paid back through lower energy bills. But if the payback periods are so long, these measures will never be implemented voluntarily.

Heating System

They want to use the heating system metric to “incentivise the transition to efficient low-carbon options like heat pumps over more energy intensive direct electric heating or carbon intensive fossil fuels.”

They say that by “clearly distinguishing systems and highlighting both their environmental impact and efficiency, a heating metric could provide straightforward guidance for achieving net zero emissions in buildings.”

Accordingly, they want to rank different heating systems according to their environmental impact, efficiency and how well they align to achieving net zero emissions. The examples they give clearly indicate they want to give high rankings to heat pumps and low rankings to other options like gas boilers.

Smart Readiness

The Government says they have a vision for:

“[A] smarter and more flexible energy system, which is better able to manage the expected increase in demand for low-carbon electricity. Smart meters, intelligent appliances like EV charging points, Solar PV battery storage, and heat pumps, along with smart tariffs and services, will enable and encourage users to adapt their consumption patterns to match periods of cheap, abundant low-carbon electricity supply. These services may often operate automatically, programmed to meet user needs by storing cheaper renewable energy in batteries for use during pricier peak periods, optimising consumption to leverage low-carbon sources when most available and cost-effective.”

As a consequence, they want to implement a smart readiness metric into EPCs to:

“[H]elp users understand their building’s potential to optimise energy usage and reduce demand during peak periods through smart technologies like meters, appliances, storage systems, and time-of-use pricing.”

In other words, your home will be judged on its ability to be automatically controlled to charge you penal prices when renewables cannot meet electricity demand and force you to buy a battery or even turn off appliances when the grid is struggling most. Rationing by another name.

This is in line with the Energy Act 2023 that grants sweeping powers to introduce regulations to centrally control domestic appliances (see Figure 3, Clause 239), together with powers of forced entry to enforce compliance (Clause 241).

Figure 3 - Energy Act Para 239 Control Smart Appliances

Despite the Government using soft language like “enable” and “encourage”, we can see the real agenda from Lucy Yu’s foreword to a paper on Smart Building Rating by Octopus Energy’s captive think tank, the Centre for Net Zero that Yu leads. She said that “flexibility is not optional” and “we need tens of millions of people participating in flexibility year-round.” They have designed the grid around the needs of intermittent wind power and now they want to force us to change our behaviour to compensate for its inadequacies.

Energy Use

The Government appears undecided on whether the energy use metric to be used on EPCs should measure primary energy consumption (for instance the gas used to generate electricity) or delivered energy. The latter would just focus on the electricity, gas and other fuels used by the home itself. They seem to be erring towards using delivered energy as the primary metric.

Carbon

Current EPCs use an overall Environmental Impact Rating (EIR) based on modelled carbon emissions of the building. The Government believes that a carbon metric should not be the primary indicator of building performance because it “may not effectively incentivise the actions necessary to achieve net zero emissions in an energy efficient manner.” It wants to place more emphasis on the heating system metric instead. More “encouragement” to install the heat pumps that MPs have complained about being installed in Parliament.

SMETER Methods and Data

The consultation also looks at other proposals for EPCs. For instance, the government is proposing that methods for measuring the thermal performance of homes by combining smart meter, weather and internal temperature data. These methods are collectively known as Smart Meter Enabled Thermal Efficiency Ratings or SMETERs. The government is currently moving to pilot SMETER applications in what it terms “net zero priority areas,” prior to full nationwide rollout.

Reducing EPC Validity Periods and Increasing Penalties

The consultation also makes proposals for reducing the validity period for EPCs. Currently EPCs are valid for ten years, and the consultation asks whether the validity period should be reduced to less than two years, or to 2, 5 or 7 years or whether the current 10-year period should be retained. They also seem to want to ensure that an EPC has been produced, not just commissioned before a property is put on the market.

As well as proposing to reduce the validity period of EPCs, the Government wants to double the penalty for breaches of the regulations from £200 to £400, effectively adding an extra tax on home ownership.

Currently EPC data is kept on the EPB register for 20 years and building owners can opt for their EPC to be not made available for public access. The government is proposing that this opt out be removed so all address-level EPC data is publicly available.

Conclusions

Taken individually, most of the proposed measures look to be needless nanny state tinkering, but relatively innocuous. But when taken together, they start to look much more sinister.

Essentially, the proposals on building fabric and heating systems amount to an attempt to shame homeowners into installing uneconomic insulation measures and heat pumps that may not be suitable for older, less insulated homes. By de-emphasising energy costs as a primary metric, they seem to want us to gloss over the fact that electricity costs about four-times as much as gas per kWh, yet the typical heat pump delivers a coefficient of performance of about three. This means that the running costs of heat pumps, without spending extra on insulation and new radiators are likely higher than a gas-fired boiler.

The proposal to add Smart Readiness to EPCs is a blatant attempt to force homeowners to install smart meters and appliances so their energy use can be controlled remotely. This is moving towards a level of control that is incompatible with a modern democracy, all in the name of the totalitarian Net Zero agenda. The sticks predicted by the chap from WEF to enforce Net Zero are becoming all too visible.

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