Green builders welcome London boost

The UK's green building sector received a dual boost last week with the announcement of plans for a new £4m fund to support building improvements in London and the opening of one of the country's first community energy developments in Hackney.

The developments came as the UK Green Building Council downplayed reports that the industry will struggle to meet government targets to ensure all new-build homes meet "zero carbon" standards by 2016.

According to a report in yesterday's Sunday Times, a recent survey from Loughborough University's civil and building engineering department showed that construction firms would rather pay fines for missing the 2016 target than increase costs by investing in the development of low-carbon homes.

The paper quoted Mohamed Osmani, a lecturer at the university as saying that without more financial and technical incentives, construction firms would " prefer to absorb financial penalties rather than implement the new standards".

However, a spokesman for the UK Green Building Council said that the response to the government's recent consultation exercise on the zero carbon home strategy had revealed that the vast majority of the industry remained fully committed to meeting the 2016 target.

"We know the target is demanding, but that is the point," he said. "The recent announcement of the definition of a zero carbon home means that we now have a pragmatic approach from the government that will result in homes with a high level of energy efficiency and onsite technologies where appropriate, as well as 'allowable solutions' where the developer can invest in surrounding low-carbon infrastructure."

He added that widely reported estimates that compliance with the zero carbon standards would add up to £40,000 to the price of a new home were now outdated. He argued that the cost projections did not take account of the new more flexible definition of "low carbon", nor the likely economies of scale that are likely to be delivered as the green building sector expands.

In related news, London mayor Boris Johnson last week unveiled plans for a new eco-innovation fund designed to stimulate investment in green building retrofits.

A spokeswoman for the Mayor's Office said the new plan, which is expected to be approved by the London Development Agency in the autumn with a view to launching the fund by next April, will initially provide up to £4m to "pump prime" energy efficiency and micro renewables projects.

Under the proposals, public sector bodies or businesses would then repay loans using the savings they realise through the energy efficiency projects. The Mayor's Office said it would also look to bolster the fund with extra investment from the EU, philanthropic groups and the private sector.

The announcement came in the same week as building giant Barratt and energy firm E.ON cut the ribbon on a new "Eco-Homes" development in Hackney, East London.

The Dalston Square development is one of the first in the UK to draw on a " decentralised energy centre", which provides a new library and retail units with electricity, heat and hot water from a single biomass and gas combined heat and power (CHP) unit. New residential units will also receive hot water and heat from the energy centre, as part of an arrangement that the developers said will cut heating and water bills by 23 per cent and carbon emissions by 25 per cent.