Energy Efficiency Standard for Social Housing post-2020 (EESSH2): consultation

Part One: Background

EESSH 2020

3. The EESSH was introduced in March 2014 and aims to encourage landlords to improve the energy efficiency of social housing in Scotland. This supports the Scottish Government's vision of warm, high quality, affordable, low carbon homes and a housing sector that helps to establish a successful low carbon economy across Scotland.

4. The EESSH set a milestone for social landlords to meet for social rented homes by 31 December 2020. This is a minimum Energy Efficiency (EE) rating that varies dependent upon the dwelling type and the fuel type used to heat it. The ratings reflect that some dwelling types can be more or less challenging to improve than others.

5. The minimum EE ratings for the 2020 milestone are set out in Table 1. The target was defined by reference to minimum ratings in the UK Government's Standard Assessment Procedure for Energy Rating of Dwellings (SAP 2009). The table also includes the equivalent ratings for SAP 2012. In terms of Energy Performance Certificates (EPCs), these ratings straddle Band D (55-68) and Band C (69-80).

Table 1: EESSH minimum ratings for 2020 (by dwelling type)

EE Rating	SAP 2009	SAPEPC 2012
Dwelling type	Gas	Electric	Gas	Electric
Flats	69	65	69	63
Four-in-a-block	65	65	65	62
Houses (other than detached)	69	65	69	62
Detached	60	60	60	57

6. For dwellings that do not use gas or electricity for heating, the EESSH target is the same as the Scottish Housing Quality Standard (SHQS). The equivalent ratings for SAP 2001, 2009 and 2012 are shown in Table 2.

Table 2: EESSH minimum ratings for 2020 (other fuels, all dwellings)

Fuel	SAP 2001	SAP 2009	SAP 2012
Oil	60	54	47
Liquid Petroleum Gas (LPG)	60	63	59
Solid Fuel	60	63	60
Biomass	60	64	65

7. The social rented sector has some of the most energy efficient homes in Scotland, and landlords have made encouraging progress towards meeting the 2020 milestone. Three quarters of the social housing stock already meets the standard, with projections for 79% compliance by 2018 and 97% compliance by 2020 (these are based on landlords' anticipated exemptions, and it can be expected that actual EESSH compliance by 2020 will be lower than this).

8. As part of the Scottish Housing Regulator's (SHR) statutory objective to safeguard and promote the interests of tenants, homeless people and others who receive housing services, it monitors and reports on social landlords' compliance with the EESSH. The SHR publishes the data it collects from the annual returns on EESSH and the Scottish Social Housing Charter and uses this information as part of its annual risk assessment of social landlords.

EESSH Review

9. When EESSH was introduced, a review was proposed for 2017 to assess progress towards the 2020 target and to consider future milestones beyond 2020. To deliver this, the EESSH Review Group was set up in March 2017, including representatives from: the Scottish Government; Local Authorities (LAs); Registered Social Landlords (RSLs); Historic Environment Scotland (HES); the Scottish Federation of Housing Associations (SFHA); the Glasgow and West of Scotland Forum of Housing Associations (GWSF); the Convention of Scottish Local Authorities (CoSLA); and the SHR.

10. Phase 1 of the review was completed in October 2017, assessing progress towards the 2020 target and updating the EESSH Guidance for Social Landlords produced by the Scottish Government^[1]

11. Phase 2 of the Review considered milestones and activity post-2020, with the proposals contained within this document recommended through the EESSH Review Group for public consultation. Phase 2 of the Review, and indeed the Review itself, will be completed following the conclusion of this consultation and confirmation of its outcomes.

Energy Efficient Scotland

12. Scottish Ministers announced in June 2015 that they would take long-term action to reduce building energy demand and decarbonise heat supply; designating energy efficiency as a national infrastructure priority. Energy Efficient Scotland is the culmination of this thinking, and will improve energy efficiency and promote low carbon heating in Scotland's homes and buildings. It will make our existing homes, shops, offices, schools and hospitals warmer and cheaper to heat.

13. Once fully operational, Energy Efficient Scotland will be a whole system approach to delivering energy efficiency improvements and the provision of low carbon heat. A framework of energy efficiency standards, advice and funding will help create long-term consistency and confidence for consumers and industry, backed up by legislation where needed. The programme will help support skills and supply chains across Scotland with appropriate protections for consumers. Energy Efficient Scotland can also deliver significant health and wellbeing benefits, particularly for those living in cold and damp homes.

14. EESSH2 will be a critical part of Energy Efficient Scotland, and realising its vision that by 2040, our homes and buildings are warmer, greener and more efficient.

15. The Programme for Government commits to investing more than half a billion pounds to Energy Efficient Scotland over the four years to 2020/21, setting out a clear commitment to develop this programme with substantial annual funding.

16. An Energy Efficient Scotland Route Map has been published proposing: both long and short-term actions to successfully implement energy efficiency and decarbonisation measures; the introduction of the Energy Efficient Scotland Energy Performance Standard; phasing of the programme; and the programme's offer itself.^[2]

17. The Energy Efficient Scotland consultation Making our homes and buildings warmer, greener and more efficient is being undertaken in parallel with this consultation^[3]. The Energy Efficient Scotland consultation proposes that all homes are at least EPC C by 2040, where technically feasible and cost effective; and that the private rented sector (PRS) meets EPC C by 2030, following on from the minimum standards confirmed in the Route Map.

18. It may be helpful to consider this consultation within the context of both the Energy Efficient Scotland Route Map and the Energy Efficient Scotland consultation, as well as our Energy Strategy, The Future of Energy in Scotland, which looks at meeting the country's energy needs over the next 20‑50 years^[4].

Fuel Poverty

19. We have recently consulted on a new Fuel Poverty Strategy for Scotland, which sets out proposals for a new strategic approach to tackling fuel poverty, including how it will be delivered and a timeline for this^[5]. To date, Scottish Government efforts to tackle fuel poverty have focussed on the energy efficiency of people's dwellings. The new draft strategy sets out an approach that considers wider issues of social justice and the health impact of tackling fuel poverty. A new definition of fuel poverty and long-term target relating to the eradication of fuel poverty are also proposed, with a Fuel Poverty Bill tabled for introduction in the Parliament later this year.

20. Despite the reductions in fuel poverty levels we have seen in recent years, it remains a pressing issue with far too many households struggling with unaffordable energy costs. The most recent statistics show that there are around 200,000 social rented households in Scotland (around one third of all social rented households) living in fuel poverty, based on the current definition^[6]. We recognise that the lowest rates of fuel poverty are associated with higher energy efficiency standards, and underpinning an overarching statutory target we will set ambitious targets that will help us achieve our aim to remove poor energy efficiency as a driver for fuel poverty.

Climate Change Ambition

21. Climate change is already affecting Scotland, with increases in average temperatures, sea level and annual rainfall. Improving energy efficiency in the social rented stock plays an important role in our ambitions for tackling climate change and the transition to a more prosperous, low carbon economy. For climate change carbon abatement, attainment of the EESSH by 2020 is projected to reduce carbon output by 760kT per annum from the social rented sector – equivalent to the combined annual household emissions of Aberdeen and Dundee. The residential sector produced 12.7% of Scotland's greenhouse gas emissions in 2015 (6.1 MtCO₂e)^[7]. Further information on the carbon abatement potential of the proposed EESSH2 milestone is provided at paragraph 62.

22. The Scottish Government's world-leading climate change targets require emissions from across Scotland to be reduced by 42% by 2020 and at least 80% by 2050 on 1990 levels. The Climate Change Plan outlines the steps we will take to reduce emissions across the economy, including in the residential and services sectors, which will see their emissions reduced by 23% and 59% respectively by 2032 on 2015 levels. New and more ambitious climate targets were subject to consultation in 2017 with a new Climate Change Bill to be introduced to Parliament in due course^[8].

Air Quality

23. Air quality is a key health issue affecting people, homes and energy efficiency. While improvements in energy efficiency can lead to improvements in health outcomes, particularly for older people, young children, and those with respiratory and other chronic health conditions, there is the potential for unintended consequences adversely affecting the air quality in a home.

24. One of the health conditions affected by poor indoor air quality is asthma. The UK has one of the world's highest rates of asthma, and it is estimated that around 320,000 people in Scotland are presently receiving treatment for asthma, a fifth of whom are children^[9]. The reasons for the high prevalence of asthma are not clear, and could be due to a number of factors. However, poor ventilation can lead to poor indoor air quality, and in some cases problems can be exacerbated by:

• modern design (e.g. more airtightness; reduced air movement due to fire doors; chemical components in modern construction);
• insulation (by increasing air-tightness or creating cold spots); and
• the behaviour of occupiers (e.g. closing vents to reduce heat loss, closing windows due to security concerns, low recognition of health impacts of air quality).

25. Innovative technologies mean homes can potentially be very efficient. Proper use of energy and ventilation systems will help ensure air exchange rates meet recommended levels, and effective tenant engagement and advice is vital for successful outcomes in these regards.