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"London Skyline" (CC BY-NC 2.0) by Raphael Faeh

London Local Story: A world-class city, but its buildings lag behind

ACE’s latest Local Story, on energy efficiency in London, has found that despite London’s world status, many of its homes and workplaces are highly inefficient, leading to inflated fuel bills, squeezed family budgets, ill health and reduced business competitiveness.

The challenge London set itself in its 2011 Climate Change and Energy Strategy is ambitious. To reduce the city’s CO2 emissions, the target for buildings is to retrofit 2.9 million homes; retrofit public buildings comprising a total of 11 million m2 of floor space; and retrofit 44 million m2 worth of private sector workplaces by 2025. These 55 million m2 constitute two thirds of London’s current non-domestic stock of buildings. Currently, London is falling well behind on its milestones to 2025, and the rewards of stepping up energy efficiency action in the capital are too good to miss.

Heating, cooling and powering London’s homes and workplaces is costly

  • London’s 3.35 million homes account for 36% of its CO2 emissions, and every household spends on average £1,175 on gas and electricity bills every year – a total of £3.9 billion. Workplaces – 265,000 buildings – account for 42% of London’s emissions, and companies pay a total of £4 billion each year in gas and electricity bills.
  • 830,000 homes (a quarter) and 37% of non-domestic buildings that have been given an Energy Performance Certificate since 2009 have the worst energy ratings of E, F or G and are therefore wasting a large proportion of their energy.
  • 348,000 London households are considered to be fuel poor. This means they can’t afford to keep their homes warm due to a combination of low incomes and high energy costs. In addition to being below the poverty line, each year, they are estimated to have to spend £336 more on their energy than a typical household needs to.

Significant upgrades to the efficiency of London’s buildings have been made in recent years

  • In homes, energy efficiency programmes have helped to insulate 350,000 lofts and 257,000 cavity walls in London. 803,000 efficient boilers have been installed. Also, London’s RE:NEW programme has helped to underpin energy efficiency improvements through advice provision and delivery support in 119,000 homes to date. 400 households have taken up low carbon heating, and 19,000 have installed solar photovoltaic panels.
  • Less is known about improvements made in workplaces. Public buildings’ Display Energy Certificate ratings have been steadily improving since 2009, and London’s RE:FIT programme has underpinned £93m investment in 619 public buildings, cutting annual energy costs by £6.9m. The amount of energy London uses per unit of its economic output has reduced by 40% and its energy consumption has fallen by 16% since 2005.

These improvements bring a wide range of benefits to London

  • London’s homes and workplaces spend upwards of £7.9 billion on energy bills every year – money which doesn’t stay in London’s economy. Improving efficiency and cutting energy costs means more invested in and spent on London’s economy, while further improving its energy productivity and competitiveness
  • Many of these efficiency improvements are delivered by London businesses. An ambitious national retrofit programme for homes, with London taking up its fair share, would support 10,300 jobs in the capital.
  • Thermal comfort in the work environment is now well-established as a real boon to workers’ health, wellbeing and productivity, and cold homes have been shown to be damaging to both physical and mental health. For every £1 invested in renovating cold homes the NHS saves 42 pence in reduced hospital admissions and GP visits.

Millions of homes and businesses still stand to gain from energy efficiency upgrades. A step-change in delivery is needed, combined with a panoramic view and thorough understanding of all the benefits it can bring. Capturing the above benefits simultaneously, by investing in the energy performance of our buildings, will help London to meet its targets, maintain its economic competitiveness and to be a place that people want – and can afford – to live and work.


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