Energy Efficiency: Key findings from mPOWER Exchange

Successful energy transitions need to be empowered and resourced to be led locally, to be ambitious and smart. It needs to target results but to engage with the complexity of the challenge and potential benefits of action (rather than multiple siloed approaches looking at specific sectors). 

                        ―Anonymous participant mPower Exchange

In 2019/20, 20 cities from across Europe took part in the peer-peer learning programme mPower Exchange. Structured around city visits, mPOWER Exchange enabled local authorities to spend face-to-face time exploring, understanding and developing new and existing energy projects. With five themed learning sets based on geographical location and energy system focus, this highly participatory learning programme was focused on exchanging practical knowledge and expertise.

It included online expert witness accounts from practitioners in the field, study visits, peer group learning sessions and individual and collective action research supported by the group facilitators. At the end of the programme each city developed a replication project inspired by best practice from within their groups and beyond. In November last year the groups came together to share challenges and learnings across the groups.

The focus themes were domestic retrofit, local energy communities and renewables expansion. Some additional themes crystalised in the process, namely stakeholder engagement and decarbonising heat. We will publish some of the key findings from each theme in a series of blog posts.

FOCUS TOPIC 1: Energy efficiency

In 2019, four cities completed a joint research and education project to identify possible activities that municipalities can do within the field of domestic retrofit, to save carbon, improve comfort, health, citizen participation, community resilience and the local economy. Here are our group’s findings. 

Many of the case studies included here focus on the UK context due to our group’s focus on exploring the activities of Plymouth City Council, whose past experiences in fuel poverty, energy advice and community support were of shared interest to our group. We hope that these findings will provide insight and inspiration for those in different country contexts.

Our key findings

1. We found that overseeing local domestic energy efficiency improvements, also known as retrofit, is a fast emerging role for municipal governments. Private sector progress has proved slow and often inadequate in undertaking effective measures. With the increasing national and European targets for improving building energy efficiency, the need for focus and drive to spur on real world action consistent with carbon targets is growing. As democratically elected organisations that are responsive to local needs, municipalities are well placed to respond to this. 

2. We identified a number of motivators for municipalities choosing to pursue domestic retrofit as part of their local climate change strategies. The factors that resonated with the group most were the need to reduce carbon emissions, the opportunity to improve living standards, comfort and health benefits for residents and the potential for increased local economic activity.

We identified five building blocks that could provide the basis for developing a municipal domestic retrofit strategy: householder centered approach, ambitious carbon savings, quality, accessible funding & local economy benefits.

3. Householder centered approach – for domestic retrofit improvements to be installed at scale and achieve the desired social and environmental outcomes, householders’ needs must be at the center of municipal strategies. Opportunity to shape new policies provides an opportunity for enhanced understanding, trust building and ownership of solutions by those that will decide whether to retrofit their homes or not. Working with householders to identify appropriate retrofit measures will increase householder satisfaction, their ability to use newly installed technologies and the house’s post-retrofit performance from both a comfort and carbon perspective.

Portsmouth Council showed us one example of how this could be achieved where the municipality took a resident centered approach to renovating one of their council owned tower blocks, Wilmcote House. Rejecting the idea of demolition on the grounds of social disruption, embedded carbon and cost, steps were taken to include residents in their process of developing a list of energy efficiency measures for the building. A resident liaison officer was appointed to act as a first point of contact and led a series of engagement activities allowing residents to shape plans, centering on open days and the set up of a demo home for residents to visit and provide feedback on. Portsmouth Council then integrated feedback provided into their final designs such as the creation of a new space for clothes drying that had been displaced by some of the newly installed energy measures. 

4. Ambitious carbon savings – Within the EU, households make a large contribution to our collective carbon footprint, taking up around 26% of final energy consumption with space heating as the largest contributor. Energy efficiency measures help to overcome this challenge by reducing our need for carbon intensive forms of heating and cooling. Models of domestic retrofit that lock-in deeper levels of energy saving, such as fabric first and whole house approaches will help to ensure that measures taken in homes make the greatest contribution to decarbonisation work.

5. Quality – For domestic retrofit to achieve the desired carbon reductions, energy bill savings and health and comfort improvements, works should be well planned, design consideration made and a good standard of installation undertaken. After all, any poorly installed works are difficult to rectify and may be there for another 40 years. We heard of recent examples from Preston UK, where poorly delivered retrofit schemes have significantly undermined living conditions, exacerbated health inequalities, impacted householder trust and failed to produce the desired carbon savings. Defining a benchmark for quality, taking a fabric first and whole house approach, involving retrofit designers, pre and post works monitoring, and working with suppliers who have a track record on high quality customer service (for the ‘resident-client’ as well as the ‘municipal-client’) are key elements of quality retrofit. To explore this in more detail we looked at Carbon Coop’s People Powered Retrofit services, a householder-led approach to domestic retrofit showing how quality assurance can be threaded into a retrofit service. We also learned about Stuttgart Municipalities ‘care-free renovation package’ where the city developed a retrofit quality mark and support package for citizens. 

6. Accessible funding – the high cost of domestic energy efficiency improvements remains a block for many whose homes are in need of renovation. Where the potential savings on bills made from energy efficiency measures could cover the initial cost or for those that are able to pay, a mixture of long term loans and grants on favourable terms could be offered. This however will not be sufficient to reach all homes in need, particularly where the cost of the measures required to make sufficient carbon reductions outstrips the likely energy bill savings or where there is a risk of the predicted financial savings failing to materialise post retrofit. New models that provide longer term finance and higher levels of grant funding will be needed. We came across a number of examples of such models.

In Dobrich 41 multi-family residential buildings were retrofitted under a national government grant funding programme. As a result 2,400 families have seen improvements in their comfort and living standards with 30-60% savings on their energy bills. In Ghent, the municipality used their internal budgets to run an energy efficiency advice service, provide free energy efficiency audits and offer specific grant and loan incentives for householders. Of all of the financial support available 70% of the grant finance goes to those on lower incomes. In Scotland a variety of loans and grants are available for citizens, advertised through energy advice agency the Energy Savings Trust

7. Local economy benefits – With the threat of a post-covid recession looming, the wider potential impact that domestic retrofit could play in providing jobs, security and revitalising the local economy is an important factor to consider. Installing the solar panels, heat pumps, external wall insulation and wider energy efficiency measures across Europe’s housing stock would require a large increase in activity in the low carbon and heating sector. The skills needed for such work range widely from educators and energy auditors to project management, architecture & general builders. One recent study produced by think-tank IPPR found that as many as 34,000 full-time jobs could be created in the UK in the next two years following a comprehensive buildings retrofit programme. Municipalities could link in efforts to tackle local unemployment with their household energy efficiency strategies through training programmes linked to approved delivery organisations. With such a programme in place, money spent on improving energy efficiency would be locked into and recirculated within the local economy at a time when it’s most needed.

We found out that a municipality can use their powers as an asset owner, coordinator, initiator, supply chain developer, financer, regulator or influencer to enhance local domestic retrofit.

8. As an asset owner, municipalities can develop a programme of energy efficiency improvements for municipal owned local housing stock with direct control over the approach taken to householder engagement, quality and involvement of locally based organisations. For example, during Portsmouth Council’s retrofit at Wilmcote House the municipality wanted to ensure renovation works were done to a high quality standard that achieved specific energy savings and increased the comfort and health of tenants. They chose to build to the EnerPHit standard, a very rigorous energy efficiency standard. This meant that despite difficulties onsite, aiming for this standard drove a higher quality of works. Requirements for other important factors around resident engagement or the local economy could be tied into procurement framework tenders, ensuring that aligned organisations are brought in to contribute towards the renovation activities. 

9. As a coordinator, municipalities can set-up local retrofit services to support householders wishing to undertake energy efficiency improvement works. In Aradippou (Cyprus), the municipality acts as a coordinator of local businesses, bringing together those that can offer a specific service within a wider renovation programme. To encourage citizens to invest the municipality offers a variety of incentives including tax deductions, grants, loan and a ‘CO2 Reward Card’. For a full guide to setting up a retrofit one-stop-shop we’d recommend this guide from Energy Cities.

Study visit to the Plymouth Solar Farm.

10. As an initiator, municipalities can support new energy efficiency organisations to establish themselves within the city. We took inspiration from Plymouth City Council who, after identifying the need for community engagement and ownership within their climate work, decided to support the set-up of a new local energy cooperative. The Council provided crucial staff time to develop an initial business plan, recruit community members and run some start-up projects, providing a base upon which Plymouth Energy Community (PEC) could officially form. Whilst initially focused on small scale energy efficiency audits and community-owned renewables projects, PEC are now exploring adding a deep retrofit service to their existing work. Having such an organisation operating in the city has provided Plymouth Council with a locally rooted and trusted delivery partner capable of rolling out energy work in line with their climate objectives. Staff members split their time working between the council and cooperative allowing easy coordination of activities.

11. Municipalities can also support the development of local supply chains for retrofit services. We heard about how Greater Manchester Combined Authority (GMCA) have been working with local organisations including the Growth Hub, Carbon Co-op, Urbed, Red Co-op, University of Salford, local FE colleges and other educational providers to gather intelligence and plan effective interventions to support the growth of retrofit skills in the region. Work has involved mapping and understanding the market for retrofit, understanding skills shortages, understanding gaps within existing training provision and routes into the sector for both existing contractors and new entrants. GMCA are utilising funding to support educational providers to increase construction industry training opportunities that have clear links to the growing demand for retrofit work in the region.

12. We found that there are a number of financial powers that municipalities could use to support domestic energy efficiency including tax powers, identification of national or EU grant fundings streams and influencing local banks. We learned about how the City of Lausanne have begun collecting two different taxes per KWh consumed in every household. One is earmarked for energy efficiency and one for sustainable development measures in general. The amount of the tax is determined each year by municipal decree (0.3 ct/kW in 2018). The tax is levied directly by the grid operator with the electricity bill, before being transferred to the municipality. In Brussels the municipality set-up two financial partnerships with local cooperative financial Credal to provide a short term consumer loan (0-1% interest) and a separate cooperative finance provider The Housing Fund, to provide long-term finance linked to mortgages. Rates are adjusted for household financial position, enabling a larger number of people to take up the support on offer. 

13. Some municipalities have specific regulatory responsibilities over homes which could be linked to improving domestic energy efficiency. For example, in the UK local governments are responsible for enforcing the Minimum Energy Efficiency Standard (MEES) in the rental sector. Although the requirements of MEES would only go so far in improving household energy efficiency, this could be used as a springboard for  working with landlords to improve their housing stock. Municipalities would play an important role ensuring that renters’ rights are protected and that the financial burden of such improvements does not fall on to residents.

14. We found that municipalities can also use their relationships with large social housing providers to influence their work by creating spaces to discuss housing stock energy performance and impact on resident comfort and health outcomes and support them to develop plans to improve energy efficiency. Municipalities can then use their existing powers to identify ways that they could support the roll out of the proposed measures. For example, in Frederikshavn the municipality secured funding from the EU’s ELENA finance programme to invest in energy efficiency measures on behalf of the local housing association. Equally, municipalities could use their influence over national level decision makers to unlock longer term investment models that enable such organisations to invest in deeper retrofit programmes at scale. 

Quotes from participants

Communication is an art – we needed to ally with the nearby university and bring experts in. You cannot force people, and some people, especially elderly people, can put up a lot of resistance. Everybody has a different motivation for doing or not doing things – people would say “why should I do this, my children will sell it after I’m gone”. I’ve had to use every argument: quality of life, “you’re the only person in this condominium who doesn’t want to participate”.

―Bahram Deghan, Frederikshavn

Whenever you try to persuade a government or business you have to make a commercial case. We need to find a different language: to identify a social need. Social investment banks (e.g. in Scotland) are being set up along commercial lines, bringing in professionals from private commercial banks.

―Andy Cumbers, University of Glasgow

Further reading recommended here