$1 billion of warm homes

The have been the usual voices in favour and against the Greens’ decision to back the Emissions Trading Scheme, and I’ll talk more about that later. But I also just saw a media release coming from a different angle from the Director of the University of Otago Wellington’s He Kainga Oranga/Housing and Health Research Programme and Centre for Sustainable Cities has welcomed concessions the Greens have won to the emissions trading scheme.

Professor Philippa-Howden Chapman says of the establishment of a $1 billion fund to insulate every house in NZ as part of the Government’s climate change policy: “This is an extraordinary example of a creative shift in thinking that truly places New Zealand in the twenty-first century.”

“Insulating all houses and reducing fuel poverty by compensating residential electricity users for raised prices should lead to evident health benefits for all New Zealanders.”

He Kainga Oranga has some interesting research on the health impacts of crowding, insulation and heating of New Zealand houses.   Its work suggests that there are 1600 excess deaths in winter when the temperature drops, compared to summer.

This is a similar move to the Dutch, who used the proceeds of North Sea Gas finds to centrally heat all homes in the Netherlands in the mid-1970s and were able to track an associated improvement in life expectancy.

“The present poor energy efficiency of our houses in New Zealand has had serious public health consequences,” Professor Howden-Chapman says. “Many of our homes were built in the late 19th century and the early part of the 20th, when energy seemed so cheap we just used lots of it. With the certainty of climate change, we don’t have the luxury of doing that any more.”

And here’s a view you may not have heard in among all the strategic political noise about game playing:

“This political deal is an example of rational policy making at its best.  It puts in place a policy which deals with bad environmental consequences of energy inefficient houses by insulating them, which has been repeatedly shown to be the most cost-effective policy for reducing climate change.”

47 thoughts on “$1 billion of warm homes

  1. Given the health benefits and the economic benefits – less power used means the future cost of power will fall (therefore the economic gain to business), why is this funded over 10 years? Surely there is a case for this to be fast forwarded to within the shortest possible time frame for implementation. There must be a better case for borrowing the money to pay for this than building more roads.

  2. >>$1 billion fund to insulate every house in NZ

    What on earth are you talking about? $1B over 15 years is not going to insulate every house in Wellington, let alone New Zealand.

  3. I second that. This should be fast forwarded, and all non-essential road-building stopped. That should free up a few billion dollars so that 1600 lives are saved annually.

  4. BP

    To insulate every house in New Zealand requires the insulation of those houses not yet insulated. Some already are. The focus is on the poorer family homes etc which have the most difficulty affording this investment.

  5. There are approximately 2 million dwellings in New Zealand. Can Frog or Toad tell us approximately how many of them are insulated?

  6. SPC Says:
    August 27th, 2008 at 5:07 pm

    > why is this funded over 10 years? Surely there is a case for this to be fast forwarded to within the shortest possible time frame for implementation.

    I don’t know, but it may be that 10 years is the shortest practical timeframe for implementation. You’ve got to train people up to do it correctly, and then you’ve got to let the contracts in a way that guarantees you’re not being ripped off. So there’s likely to be a bit of capacity building involved.

  7. SPC

    The report said every house.

    How many houses aren’t insulated, and how much money will each uninsulated house receive?

  8. georgedarroch & BP, According to EECA: “Research [The BRANZ House Condition Survey] indicates that around 375,000 New Zealand homes have inadequate ceiling insulation and over one million have inadequate underfloor insulation.”

    http://www.branz.co.nz/branzltd/pdfs/SR142.pdf

    The ceiling space is the most common zone to be insulated, being the simplest and least expensive space to retrofit, while giving highest benefits, and this is reflected in the high levels of ceiling insulation. Very few houses (6%) were without any ceiling insulation, and 69% had fully insulated ceilings.
    However wall insulation is difficult and expensive to install in existing walls, with the high proportions of houses with no wall insulation reflecting the low level of retrofit in walls of houses built prior to mandatory requirements. Only 29% of houses have all walls insulated (with many of these being foil only), and only 15% had some walls insulated (usually walls of recent additions).
    Floor insulation was even less common with 64% of floors being completely uninsulated. While floors are not the largest contributor to heat losses, the current fashion of polished floors in lieu of carpet makes the lack of floor insulation more important. Only the more recent houses tended to have draped foil, and most of these (being of the era which used particleboard flooring) had carpet and underlay as well.

    There was an article in Wednesday’s The Press on a more recent insulation survey which goes into more detail about houses from different periods and attitudes of landlords and homeowners. Older homes should be quite cheap to insulate because they are smaller and have easier access to wall cavities and underfloor areas. Art deco houses are a pain to inulate because of their flat rooves. Post-WWII homes tend to be closer to the ground making underfloor inulation difficult to install and houses from the sixties onwards often use newer building methods and materials that make retrofitting wall and floor insulation very difficult. I would guess that $1b will be enough to insulate all ceilings and most accessible underfloors. Wall insulation and double glazing in colder climates is where things get really expensive.

  9. georgedarroch, Roads (and PT) are funded from roading revenue. It is a bit difficult to justify using those funds for something completely unrelated to transport. Those funds would be better spent making roads safer as that would save just as many lives per year, using the same premature death definition rather than the official road toll definition of death within thirty days. Does the 1600 deaths include deaths resulting smog from solid fuel heating? Living in Christchurch that is the thought that immediately springs to mind whenever home insulation is mentioned.

    I believe the intention is to use the revenue from the ETS to fund this scheme. Despite commuting by car I can’t see why motorfuels were exempted from the ETS except shortsighted political expediency of the sort that restricted the regional fuel taxes to a couple of cents when Auckland needs the whole 10 cents for rail electrification now.

  10. These concessions for insulating homes is just rhetoric, make the greens feel good but actually do nothing.

    Another token gesture by Labour to make the Greens feel important but which actually provides nothing to them.

    Not a single penny (cent) will be spent by the government to fulfill this “concession”.

    It is not in this years budget so has to be in the next. Will labour be setting the budget? mmmmmmmmmmmmm maybe, maybe not.

    it is easy to grant “concessions” when in all likelyhood they will never be called upon to be actioned.

    And what will the greens do if Labour renegages on this? (nothing, I would say!)

    After we send a billion dollars to Russia every year, where will the money come from?

    What service will the Greens propose is cut or what tax will you raise to pay for the implementation of the “concession”?

    Mind you if I can get government funding to insulate my rental properties, great “concession”, love it, lets do it.

    Or will only people who own their own homes get assistance?

    What are the details again?

  11. OK I’m at the coal face of this, getting accredited to be a Home Energy Rating Assessor for the HERS scheme under development by ECCA and others. I applaud this initiative, focusing on state houses is the way to raise the bar for all. I agree with others that, given the multitude of benefits to NZ of insulation/energy efficiency, it should have more and faster funding. Further it should include school buildings and ultimately all state buildings, not just houses.
    However lets start with houses. Current insulation practice is poor and I am concerned that the all the usual suspects will ‘advise’ the government as to what products to use. Those just so happen to be the products they produce and are often the cheapest to produce with the highest profit margin. A typical example is an underfloor insulation product closely associated with penguins. Now that is probably the worst option to insulate underfloor for many reasons, however their extensive and clever marketing has wooed us all.
    I could repeat the above accusation at wall & ceiling insulation, cladding, water heating etc.
    We need to ascertain current best practice before forking out a $billion.
    There is one chance to get each dwelling right, lets do it right.
    You need experts, INDEPENDENT from the established building supply Goliath’s, to set this up. Greens this is your baby, let’s make it a gem. I can be contacted sam@edgetoedge.co.nz.
    I’m off skiing now ;^)

  12. samiam said: OK I’m at the coal face of this…

    Somewhat poor choice of metaphor samiam – part of the reason behind this is to reduce dependency on coal for electricity generation.

    But good points.

  13. >>Another token gesture by Labour to make the Greens feel important but which actually provides nothing to them.

    Indeed. You can tell how hollow it is by the fact there is no detail or plan provided. Vapourware.

  14. It is a token gesture toad, when it is unsubstanciated and enbudgetted.

    Heck, make it $10000billion and build all those warm houses Sue Bradfford is on about.

    I think the Greens are being naive to except the PROMISE of a billion dollar insulation deal when there are no details, no budget, no infastructure, etc. to implement the “concession”.

    Remind me again where the money is coming from as the EFT only ensures that we can meet the Kyoto agreement. There is no money for local infastructure investment in the EFT unless you have a hidden agenda.

  15. I’m as cynical as the rest of you as to this deal, with this government in it’s last days. However there are so many reasons for insulating (etc) state houses (and I can’t think of any against) that I’m sure it will fly whichever way the electoral pendulum swings.
    Now it’s up to the Greens to get around the table of the next government, the Winston party is gone (well done John Key), now that leaves a choice between the Green party and the brown party.
    Hmmm, let me think… vote for a party founded on environmentalism or one founded on racism? You guys just have to raise the Green banner and stuff the red banner somewhere the sun don’t shine.

  16. toad,

    Is that from the 4% increase scheduled for October PLUS the increases required to pay for the ETS?

    Soon we will have nice warm houses but no money tpo pay for electricity.

    Reminds me of my water bill. Hey, save water they say. Fixed charge is $300+ per year, water usage charge is $1.27 cents per cubic metre. Save all the water you like but the bill will still be high.

    Electricity will become the same. High fixed charges, low user charges. That to keep the cash flow going to pay the Kyoto and the useless ETS scheme.

    Opps, sorry forgot, Russel said the ETS taxation would be neutral. Care to allborate yet?

  17. >>Is that from the 4% increase scheduled for October PLUS the increases required to pay for the ETS?

    If so, then shouldn’t the headline be something along the lines of “Greens achieve higher electricity prices for all?”

  18. Gerrit and BP, the price may go up but the bill can go down, because people will need to use less electricity to heat insulated homes.

    Oh, and for the record, the Greens support low fixed charges and progressive pricing for both water and electricity.

  19. toad, bet they dont as widnessed by our water bills here in Manukau. Even if you saved every last drop of water, you are not goin gto reduce your water bill.

    Same will happen to electricity, The only way the cashtake from electricity charges (fixed and usage) can come down would be for the government to take a lower dividend.

    But having to pay for Kyoto and the ETS, where will the money come from if people are going to be paying less for their electricity?

    Where is Russel’s neutral tax policy? Less then 6-12 weeks from an election, surely that must be out soon (along with the population policy)?

    Again shows lack of economic thinking from the Greens. Remeber you have to find and spend the billion dollar on insulating houses BEFORE you will get the electricity saving benefit. So soemwhere you need to find the money UPFRONT.

  20. >>will need to use less electricity to heat insulated homes

    My home is insulated, yet we still use a lot of electricity.

    It all depends on the price of electricity. As Gerrit says, if the price is high, then you’re going to be paying more, and your ability to cut usage is still minimal.

  21. So Gerrit and BP where would you start? We need to turn the ship of inefficiency around or would you just stem on at full speed? Upgrading state housing will reap a myriad of benefits, it’s a good investment, it just has to be done properly.

  22. Gerrit said: you have to find and spend the billion dollar on insulating houses BEFORE you will get the electricity saving benefit

    Gerrit, the insulation programme is over an extended period, like 15 years, so that isn’t so much of a problem.

    The Greens would rather do it faster, in which case your argument about needing the money upfront would be stronger, but there is a capacity issue that precludes this. Installing insulation is not highly paid work, and with unemployment relatively low it is difficult to find the workers to do it. But the effort to do so should get some of the small pool of long-term unemployed that BB keeps harping on about into paid employment.

    Unless you want to bring in migrant workers from the Pacific Islands to do it, of course.

  23. Samiam,

    I dont have an ounce of a problem with the insulation innitiative. Have a tonne of issues with the implementation and costing.

    I for one hope that this is not a sop by Labour to the Greens that Labour will have no qualms to not deliver on, or be unable to deliver on because of the result of the November election.

    Lets do it and do it properly. So am look foreward to the implementation and costing plans.

    Toad, I ageree that is should actually be done in the space of five years at the very minimum and would have no trouble if we geared up Technical Training Institutes to run in work training programs to complete the job. And yes let the unemployed be trained.

    But lets see the costs, let see the plans, let see where we will temporary housing will be the tenant will need to occupy while the houses are regibbed, etc. We have plenty of wool insulation so even that can be nice and green.

    I would also like to see the scheme extended to include solar water installation, a water recycling system wherer rain and grey water is stored in tanks for use to flush toilets and water the garden plus proper lagging of all hot water pipes and hot water systems.

    Would include as well proper bathroom and wash house ventilation systems to remove damp air. In fact a heat pump system would be benefical.

    All these are really good green innitiatives I would support. Provided it is costed and planned. Costing of raw material should be a very favourable rates as the bulk purchasing incentives are huge.

    I guess I’m asking for a lot more then this simple insulation innitiative (add fibre optic cabling into the house to future proof the housing stock) simply to maintain rental housing stock.

    Would like to see what subsidies will be made available for private landlords.

  24. toad says the money is coming from State-owned electricity company dividends. With South Island hydro becoming increasingly unreliable there is no guarantee of future dividends.
    http://www.stuff.co.nz/thepress/4669914a6430.html

    With the risk that South Island lake levels could be low again next year, Baldwin said it may be time to reconsider moving the emergency diesel-fired Whirinaki generation plant from Hawkes Bay to the South Island.
    Contact yesterday virtually ruled out building a big new $500 million gas-fired base-load power station in Auckland or Taranaki because it can not get enough long-term gas at the right price, after seeking interest in gas supplies recently.

  25. Agreed Gerrit that a lot more needs to be done to each house to get it right. The code, as it stands, is a dog. Getting it right need not cost much more than getting it half right.
    I’m interested in your suggestions as to funding it?
    Heat pump water heating seems a better option than solar in many parts of NZ.
    Full tax deductibility for private landlords if they achieve certain standards, as opposed to capitalised/depreciated is one solution.

  26. Kevyn

    At the moment the SI default is reducing power to Comalco. So the SI gets some cover in the wevent of hydro shortages.

    But sure building up SI capacity (the future must be coal when they discover clean burning tech) is the alternative to developing secure NI to SI transmission capability.

  27. clean burning technology -pipe dream for the coal kings. That ‘future’ hasn’t moved any closer at all, since the idea was breathlessly mooted by the extraction industry spokespeople, despite the billions poured into research (in Australia in particular)

  28. Before the 1999 parliamentary election I asked a Green Party candidate why she wanted to be a Member of Parliament. Her answer (“Because I’m tired of being poor and I’m tired of being powerless?) revealed her fundamental misapprehensions about the nature of poverty and power….

    full text at http://www.republican.co.nz – The Green Party and the Emissions Trading Scheme

  29. Burning coal seam methane is probably a better option. The big problem with the South Island hydro lakes is that they are all dependent on weather events that are going to happen less frequently as average temps warm up, judging by the way that the ENSO cycle impacts on Central Otago. Hence the confident prediction that next year will be another dry year in the lakes catchments.

  30. “The future must be coal when they discovery clean burning technology…”

    In a country with good wind, wave and tidal flow resources in both islands? By the time they manage to get an acceptable level of clean burning coal – if they ever do – salinity gradient power is also likely to be ready – and New Zealand has GigaWatts of that resource too.

    We don’t need coal or nuclear in our future.

    Trevor.

  31. Trevor29 Says:
    August 31st, 2008 at 1:13 pm

    > In a country with good wind, wave and tidal flow resources in both islands? By the time they manage to get an acceptable level of clean burning coal – if they ever do – salinity gradient power is also likely to be ready – and New Zealand has GigaWatts of that resource too.

    > We don’t need coal or nuclear in our future.

    Absolutely. If I lived somewhere like Poland, which doesn’t have those opportunities, I’d be more open to the possibility of nuclear energy. But in New Zealand it’s completely unnecessary.

    But I’m interested that you didn’t mention geothermal in your list. While the attempts to make coal environmentally friendly look like a pipe dream, making geothermal energy clean does seem promising. The power stations they are developing in other countries bring the geothermal fluid up and pump it back down without exposing water or air to it – all they take from it is the heat, and use that heat to boil clean water to power steam turbines. That has to be promising.

  32. jh, let me correct that comment for you

    “The Greens should have been pushing new elitism”

    New urbanism is just a mechanism for creating elites out of existing land owners and making housing far too expensive for the poor and the young.

  33. Trevor

    The context was what back-up do we have when the SI hydro dams cannot generate power.

    At the moment we have Comalco taking less energy and a NI to SI transmission of power – this is limited by transmission capability.

    The only way around transmission limitations (apart from investing in greater capability) is local spare (back-up) production of power.

    Wind power capability is not such a back-up. Hydro is not such a back-up.

    Back-up capability is something which can go on or off stream as and when the spare capacity is required.

  34. # john-ston Says:

    New urbanism is just a mechanism for creating elites out of existing land owners and making housing far too expensive for the poor and the young.
    ……………..
    New Urbanism suggests efficient design which means cheaper to live in.
    As for the alternative what assumptions do you make about fuel prices and the energy efficiency of affordable houses?

  35. I didn’t mention geothermal because the issue I was answering related to South island generation, and the geothermal resources suitable for electricity generation are in the North Island. (There are geothermal resources in the South Island, but they aren’t suitable for large-scale electricity generation.)

    We don’t need back-up for South Island hydro. There is enough hydro generation to cope with any single hydro generator going off line or any single transmission failure. All we need to do is keep enough water in our South Island lakes. To do that, we use wind, wave and tidal resources when they are available, and over appropriate timescales and with enough diversity, they will be available.

    Did you even look up “salinity gradient power” SPC? Try “Pressure Retarded Osmosis”. This is a firm resource, just more expensive than geothermal.

    Trevor.

  36. Trevor

    Well sure, one does not need back up for SI hydro, if SI hydro becomes the back up to other SI energy supply.

    This of course means more higher cost (renewable) power capability – given hydro has been the cheapest energy.

  37. SPC – why are you so fixated with the idea that you need two different types of generation? We have enough hydro in enough different locations in the South Island not to need any other type of backup. However we don’t have enough water flowing into our lakes every year to meet our annual power demands, so we conserve that water by adding intermittant generation – wind at the moment and wave and tidal (and perhaps some solar) in the future. Wind is currently cost-effective per kiloWatt-Hour, so I don’t know why you are saying “more higher cost (renewable) power capability”.

    How much did you say it would cost to add CCS to a coal-fired power station?

    Trevor.

  38. Wind and tidal (or various other water movement) generation would be sufficient to back up hydro in the South Island in the forseeable future.

    The old Army joke of “if it moves salute it and if it doesn’t move paint it” etc updated to : “If it moves harness it for electricity generation … ”

    Over time we will have more efficient batteries for storage, from small scale wind and water-movement systems for individual households or neighbourhoods … and this local generation will do away with some of the the significant wastage from power lines over long distances.

    I look forward to our households and neighbourhoods becoming energy independent in the next few years by using scaled down wind generators, solar heating of house and water, plus more effective insulation etc etc.

    Interesting times are before us!

  39. The losses in transmission lines are significant, but in most cases are less than the cycle losses in charging and discharging storage batteries. There is a place for both.

    Trevor.

  40. Re insulating homes: EECA (on Jeanette’s initiative) set up some pilot schemes a few years ago retrofitting older houses with impressive results. One community group up here used it as an opportunity to create training and work for some who’d been laid off the (down-sizing) freezing works – they are still doing the work several years down the track. Warmer homes, fewer cold-related illnesses, and jobs created. It’s modest, but effective.

    The pilot included cost-benefit analysis so much of that work has already been done for this initiative. It isn’t pie-in-the-sky.

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