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Is this fine by the Flemish government appropriate?

As of January 2009, all new residential houses in Flanders must be audited by the Flemish Energy Agency (VEA). This is to ensure that energy use is kept within appropriate limits. Houses are rated according to their so-called E-level, which must be less than 100 to receive approval.

Minimum Efficiency Performance Standards (MEPS) like this can be a very effective tool for reaching carbon emission reductions. However, the way in which MEPS are established is crucial if they are to reach their goal in the medium and long term. A Flanders case clearly demonstrates how this idea can take a wrong turn.

Recently, the VEA (note – VEA = the Flemish Energy Agency) fined a couple in the small Flemish town of Kuurne €16,000 for having built a house with an E-level of no less than 175. The insulation of the house is according to modern practice. The main cause for the high E-level appears to be the electric accumulation heating. This is a strange conclusion, and raises questions about proportionality that merit further investigation.


Reducing energy consumption as the criterion

Masser, a Belgian manufacturer of heating systems asked the VEA why people building a house using electric accumulation heating and subsequently buying green electricity are still penalised. Luc Peeters from the VEA answered (1) that it is impossible for them to take into account whether or not the resident will buy green electricity in the future.The VEA has a logical argument- future energy purchasing arrangements cannot be verified. Could a long-term supply contract not overcome this argument?

In addition, Peeters explained that the E-level is calculated based on (primary) energy consumption. Adding sufficient embedded renewables should therefore reduce or eliminate the fine. But VEA will not verify that these embedded facilities are maintained, perform adequately, have a long enough working life, etc. Neither does VEA verify user behaviour. Dwellings can meet the standards through their technical installations, but nothing prohibits excessive heating or use of hot water except the utility bill.

The fine gives a strong signal to avoid accumulation heating (or use it in combination with much better insulation). But is the right alternative a 100% fossil fuel energy use, however efficiently it may be used? Such move increases carbon emissions, and it is exactly these carbon emissions – more than primary energy – that are the limiting factor in our energy use. 

Primary energy and carbon emissions

The intent of the penalty concept is to make the housing stock more sustainable. The internationally approved methodology to measure this is Life Cycle Analysis (LCA). The problem is that LCA takes six major impact categories into account, without consolidating them into a single figure or value: acidification, eutrophication, ozone layer depletion, ground level ozone, global warming, and primary energy use. The E-level apparently only integrates primary energy use. It is strange that a regulatory measure that was put into force with the aim of global warming mitigation does not at least partially take the global warming potential itself into account.

Looking at the global warming potential, namely the carbon emissions, the picture of electric accumulation heating becomes quite different. A highly efficient natural gas boiler emits approximately 250 gCO2/kWh. Electricity production in Belgium is currently at 300 to 350 gCO2/kWh during the day and 200 to 300 gCO2/kWh at night (2). Since accumulation heaters are generally recharged at night, their CO2 emissions are of the same order of magnitude as that of the gas boiler.

Taking the future potential into account

Another important factor is that the electricity system is evolving rapidly. If we are to reach the EU 2020 goals, the average CO2 emissions for generating electricity will have to decrease significantly. Even the daytime emissions will have to slip below those of natural gas boilers.
Today, houses are built for at least a 50-year lifespan, and 2020 is most certainly not the final date for climate change mitigation. If we are really up to tackling the climate change problem seriously, we will have to evolve (close to) a zero emissions building stock (3). This is already reflected in the policies of certain countries, such as the Code for Sustainable Homes in the UK (4).

While a zero-emission building is possible using electricity, the zero emission natural gas boiler has yet to be invented. The VEA may not be aware of it, but by giving a preferential treatment to natural gas heating compared to electrical heating for new dwellings, it is sending out a wrong signal.

Comparing the fine with the market price

Now suppose that we leave out the future potential of decreasing carbon emissions, and only use today’s figures. And then suppose we take into account the worst case for the electric heating system, charging it up during the day causing 350 gCO2/kWh. In that event, the fine of €16,000 is still outrageously high compared to what industry has to pay for exceeding mandated carbon emission levels. This quickly becomes clear with a simple calculation:

  • 350 gCO2/kWh (electric heating) minus 250 gCO2/kWh (natural gas heating) = 100 gCO2/kWh extra
  • The house cited in this case uses 7,500 kWh/year for heating
  • 7,500 kWh/y x 100 gCO2/y = 0.75 tons of CO2/year
  • 0.75 t CO2/y x 50 y = 37.5 tons of CO2 over 50 years
  • The current market price of carbon emission credits is €11.65/ton CO2 (5)
  • 37.5 tons of CO2 x €11.65/t CO2 = €436.87

In other words, the couple in Kuurne pays 36 times more for their excess carbon emissions than does European industry.

Possible remedies

It’s well established that the use of electric heating makes more sense when the heat demand has been minimised, and therefore, the house could have been better insulated.  When building a passive house, there would have no problem reaching the E-level.

The use of heat pumps is another possibility. A ground source heat pump would not make sense since the heat demand is already so small that the owner would never earn a return on the investment. But air source heat pumps with coefficients of performance between 3 and 5 are available at reasonable cost.

Finally one could use embedded renewables. To offset the electricity demand for heating would require a 7 kWp system, costing at least 3 times the fine. But if it can eliminate the fine, and produce green certificates at 450 euro / MWh as well as free electricity, this may be the best option, provided that around 60 square meters of southern-oriented land or roof area is available. It would be ironic if we ended up offsetting a Draconian fine with an equally Draconian incentive.

References

(1) Article ‘Elektrische verwarming onder vuur’ on the Web site of Livios

(2) Paper ‘De invloed van de ogenblikkelijke energiemix voor elektriciteitsproductie op de overeenkomstige emissies’ from the KU Leuven

(3) The book ‘Sustainable Energy – without the hot air’ by David JC MacKay

(4) LE Blog article ‘All new houses to be zero-emission’

(5) European carbon price of 19 January 2009

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