Market influences on low carbon energy designs in buildings

This research explores the relationship between the energy market; the political and regulatory context; and energy design decisions for buildings, and asks what form the energy market landscape would need to take if tailored to encourage low carbon solutions. The links between market dynamics, Government strategies and building designs are mapped to understand the necessary steps that achieve carbon reduction from building operation. The Building Energy and Cost Model (BECM) uses financial and energy components with market and design variables to provide net present cost and annual carbon outputs. The financial component applies discounted cash flow analysis over the building lifespan, with discount rates reflecting contractual characteristics. The carbon component uses Standard Assessment Procedure (SAP 2005). A scenario approach has been adopted to test alternative strategies selected to encourage low carbon solutions in two residential and two office designs. The results show that, of the technological options, micro-CHP is most likely to offer economic carbon reduction. There are, however, important considerations before proceeding along a CHP route, and some circumstances that favour renewable microgeneration. The rate of energy price escalation is most influential on energy investment, together with the expected differentiation between the escalation of gas and electricity. Low interest rates encourage low carbon designs further and, if combined with increasing energy prices, renewables can offer the best long-term solution. Other beneficial measures include a 20% mandatory microgeneration requirement; a long-term ESCO contract; and imposing a carbon price of £200 to £300 per tonne CO2. Increasing capital grants encourages renewables, while raising fossil fuel taxation benefits efficient and micro-CHP solutions. However, alone these measures are insufficient to catalyse low carbon solutions (except micro-CHP) and should form part of a raft of market changes. The divergent priorities of landlord and tenant should be addressed for well constructed and efficiently operated buildings. This research reveals trends and strategies that will achieve mainstream application of energy efficiency and microgeneration technologies, and reduce carbon emissions in the built environment.