Podcast Episode 12
Will Ray from Clarion
This week, we're talking with Will Ray, the Head of Sustainability at Clarion. We talk about exciting retrofit initiatives inside Clarion and throughout the industry, the speed the industry is moving toward low-carbon retrofitting to hit Net Zero targets and any interesting retrofit technologies he's been spotting.
Welcome to another Switchee podcast. I’m Alastair Thorpe and I’m joined today by a true sustainability and energy champion. Will Ray is the Head of Sustainability for Clarion, which is the largest housing provider in the UK. And I’m referring to Will as a true Sustainability and energy champion because he's been at this since, I think, the 90s if you'll agree with me, Will. There's a feeling around our sector at the moment that finally people, organizations, governments are taking energy efficiency and sustainability seriously. But there are many out there like Will, who have been banging the drum or potentially banging people's heads together for a long time. So look I’m really looking forward to having a chat with you today. There's lots to cover around net-zero plans, grant funding opportunities, social value creation and that sort of thing. But just to start, I do often ask people how they got involved in the housing sector. But I thought it might be more interesting to ask you actually why you chose a path of sustainability and energy all those years ago.
Ah yes, well, I was doing engineering in Melbourne back in Australia and I wasn't really interested in manufacturing or automotive and I kind of discovered renewable energy, solar and wind power. I had some really great professors at university who pioneered work in those areas and I got really interested in that and thought I was going to go and work for the renewable energy company. But I ended up working for the sustainable energy authority in Melbourne, which is a government organization, a bit like Energy Saving Trust and I ended up in their buildings group and just kind of grew from there really. I’ve worked across a lot of different parts of the supply chain. So I’ve been a consultant, I’ve worked for a manufacturer, I’ve worked client-side now. Lots of different parts of the industry so I've gone full circle almost in terms of energy, sustainability and buildings and worked all over the place.
Excellent. And now Clarion, as I mentioned. In the housing sector and a lot of clients as well as the supply chain - they're looking to people like you, Will, to help us all get to our net-zero targets. As councils have declared climate emergencies again, what can the sector do to assist? So I wanted to just ask you about the retrofit model because many properties exist already and so if you're going to do energy efficiency measures they need to go in there. Are there any initiatives that you are involved in or that you've heard about in the wider sector that you're excited about at the moment?
Yeah, I think the most recent announcement by the government, the social housing decarbonization fund, with the longer-term bigger fund that the government appears to be committing to. Also more immediately it's the demonstrator part of that fund, which I think is around £50 or £60 million. We were successful enough to win one of those grants and we've set up a bid to work on looking at whole house retrofit models and trying to scale up. It's the first time I think really since retrofit for the future, which was nearly 10 years ago. Now that we've really tried to take the next step on the whole house retrofit and Clarion have done individual properties that kind of spun out of the energiesprong work. We've learned a little bit from that. We've certainly done programmatic work on solid wall insulation or heat pumps and things like that.
But I think I’m most excited about this ability to trial whole house retrofit models and see if we can achieve the sort of cost savings that the government are looking for. So that sort of 60% cost reduction, which would definitely bring it into the realms of something that social housing providers could start to look at in their planned investment programs. Because at the moment, it's a big stretch. The depth of energy efficiency that they're trying to achieve and the sorts of property that we're trying to achieve that on as well as the supply chain and the state of development of that supply chain. You really need the support, the stimulus and the market signal to say "this is what we're going to do now". I’m really excited that our partner contractors, who are working on this with us, are super keen as well as the supply chain with them. The senior members of our executive team as well. So, that's really good news.
It sits really nicely as part of our whole sustainability strategy which is starting to say, okay there are things that we need to do no. There are things that we need to make progress on now. But we also need to be prepared for this zero-carbon, more sustainable future as well. It's sort of incremental pieces of work now that might be upgrades to communal heating systems and things like that. But also saying, "okay well, what are we going to look like?" Because in 30 years time, we are meant to be at zero and the important thing for the sector to realize is that net-zero means absolute zero so far as we're concerned anyway and if you take what the committee on climate change says. So that's a really, really big commitment. We know beyond 2040 - offsets aren't really going to cut it anymore. So we need to have that endpoint which is absolute zero - so zero-carbon heating and in a context that recognizes our residents are the most important thing. They have to have affordable energy bills. So it's zero-carbon but it's affordable energy for residents.
You've made a few great points there. I think one of them is picking up where you left off 10 years ago. I'm not to say that things haven't been progressing but I've certainly found it quite frustrating over the last decade that we almost seemed to be further along a while ago and then it sort of went dormant for a bit. It seems to be coming back now - that's just my opinion. The other thing there about bringing residents along for the journey but ensuring that the solutions that you're putting in there are adequate not just for the targets. Not for you, as a housing provider but also for the people living in the homes. It's going to be difficult. There's lots of different technologies, lots of different approaches, lots of new and innovative stuff happening which can sometimes create unforeseen consequences. The old adage of you put a load of insulation around the property and then you've solved the heating and fuel poverty issue but you've created some damp and mould somewhere which is really frustrating. It's going to be an interesting journey. So you mentioned net-zero and getting there, do you think are we going to get there? Are we moving fast enough?
Look, I think the good news is we do have time. It is a 30-year program of work. We do have time but we don't have any time left if that makes sense. We have to start now and we have to start things like the social housing decarbonization fund which is urgently needed and the time frames on that which are very quick. We have to do something within a year. I think it's good to stimulate the sector because we need that action on the supply chain as we test, learn and grow. We've got probably the next 5 to 10 years to really work out what that model of zero-carbon retrofit looks like and to test that to make sure that it's robust. To make sure all the unforeseen consequences that you talked about are dealt with and brought into the part of the design and delivery process.
So we've got time but we need to be cracking on now basically. We've got a learning curve and the difficult challenge for the sector is not so much that we're not capable of delivering at scale. Construction can definitely do that and they can definitely ramp up at speed. But I think it's the speed of our learning cycles within the industry. That is something that we need to change. It's very difficult to achieve learning. So if you're somebody who's working on a construction project - even a whole house retrofit might take a year and a half to get to fruition and then another year after that to get data out. That's two and a half years down the track. Okay, that's great - you've done 80 houses. But I’ve got 125,000 in my portfolio. I’m not going to retrofit all of them but I’m going to be doing quite a lot. And everybody else does as well.
So it's the ability to learn at speed across the sector and to take the learnings on what we're doing on the Social Housing Decarbonisation Fund Demonstrator and get that into the industry more broadly. So that the supply chain can adapt their products and technologies and the way they provide that to us. So that your contractors and installers can learn. Even the people who are managing the projects - who aren't familiar with doing this. They might be very familiar with upgrading kitchens, bathrooms, replacing roofs etc. But, they're not familiar with whole-house retrofitting. It includes technologies they're unfamiliar with. It's done in a way that is different in terms of the integration between components and the reliance of one component on another to achieve an end result. And that is different to delivery. But I’m optimistic in that if we can achieve mass kitchen and bathroom retrofits in the social housing sector and we do that cost-effectively and quickly, there's no reason why we can't do that with a whole-house approach and achieve something really good. The activity and scale of decent homes but with perhaps a few slightly different measures and ensuring that they work together as well.
I just wanted to stick with the social housing decarbonization fund piece because I know a number of housing providers are kind of watching the demonstrator. I think they thought, "Oh! We could get involved in this." but it wasn't quite the right time for them. So I’m not putting you up there as the expert in bidding for social housing decarbonization fund stuff. But if you've got any advice for those other housing providers that might be looking at the demonstrator and thinking - we might jump on it in a year's time?
Yeah, I think for us what made it possible was the fact that we had a really good long-term partnership set up with our planned investment contractors. That framework enabled us to adapt something very quickly and come up with a pricing structure - a kind of procurement approach - that we're comfortable with. That's got the flexibility that can be improved over time and that was kind of our USP - we could apply this contractual approach which uses a target cost model to work towards a thing. An approach where a whole-house retrofit could be included in this target cost model in the same way that we do for kitchens and bathrooms. It recognizes that every property is different. Some are cheaper to do and some are more expensive but if you keep aiming for the target and you share the benefits as well as the costs. You share the learnings between ourselves as a client and our partner contractors and all the people involved in that partnership. So I think that was the strength of what we were able to do.
I think it allows us to be flexible and learn on the job as well - both from a client point of view and a contractor point of view. So I think that's something that we're keen to do. To get to the point at the end of this where what we're doing - we can go and do 80 more houses. In each house, we're going to get better at this and we're going to accumulate the learning. The goal for us is to share that broadly with the sector. We're not going to keep that to ourselves. I think that's important. That we are taking a leadership role and we want to be able to kind of show people what's possible. So watch this space. I’ve been talking to a number of friends, colleagues and acquaintances in and around this subject and I think for the broader funding opportunities there's been a reference to I think they're referred to as regional energy hubs. There's lots of different local authorities there that might not have the time, expertise or resources in-house to go and apply for funding. But actually, under these regional hubs, they're channelling funding in a slightly quicker, easier, whole house way. So any local authorities should go to their regional energy hub, I would suggest.
Yeah, I think that's exactly that thing about replicating the learning and helping people to do things more quickly.
Yeah, we were lucky. I guess my skills and experience enabled us to bid for that. The skills of our partner contractors and their supply chain helped us. I think also the other side of it is actually a focus on process and not technology. So saying "okay we don't need to necessarily go full energiesprong automated off-site". That's a good approach in some cases. But actually, there's plenty of room and plenty of scope for doing something whole house that's a bit more optimized and a bit more cost-effective and efficient just by getting the process right. Getting the supply chain right. Getting the right materials to site at the right time. Incremental improvements can achieve really good results.
Yeah. I think some housing providers who have got a DLO model, Direct Labour Organization, in-house to do the majority of planned works and repairs and compliance and that sort of thing. I think some of us feel like that's a great opportunity for them to make it happen in the social housing sector and then actually bring it out to the private sector. We've got even more properties in the private sector that need this to happen and it might be even more difficult to do that but that was a thought from someone I was speaking to. I just wanted to ask you quickly, Will, I totally agree with you that you shouldn't pick a shiny technology and sort of try and stuff it into a property and think yes, that's what we're trying to do here. But are there any process or technology advancements that you've become aware of under the social housing decarbonization fund or in recent times that you're excited about?
Yeah, I think that's a good question. I’m not necessarily as interested as a lot of people in some of the shiny things. I mean they're definitely around. I mean I think there's specific technologies for maybe specific property types that are really interesting. Vacuum glazing technology I think has made another little advance which I think is really interesting. I think the controls technology side of things continues to improve and I think we're not kind of at the end game there yet. The feedback that you can get from those technologies is really, really interesting. I think there's still a really big gap in the area of mass customization. They've made a bit of a stride on this in some of the external wall insulation after some of the disasters of previous installs where there were big thermal bridges left out. They had a sort of standardized product that didn't fit around waste pipes or gas meter boxes or whatever. Some of the suppliers have kind of learned from that and they are providing the kind of the bits and pieces that make a tea cosy type solution, which avoids those unforeseen consequences. The mould, the damp and the things like that. I think that that's really, really good.
But I think there's still a way to go on that. Things like getting window mounts that are insulated that allow windows and external insulation to work together more easily. Things like the integration between ventilation systems and the rest of the house. Retrofit of ventilation systems full stop I think is still a big challenge you know. Where do you put the ducts, how do you get them in and out of the building, where do you site those ventilation units. Technology that allows more flexibility and it's not really difficult stuff. It's things like insulated housing, pre-insulated ductwork. It's very simple technology. I think that it's not maybe as high-tech as people think. I think there are big gaps still in insulation. The technology in that area, your external wall solution hasn't really changed that much in 20 years or more. So I think it would be nice to see some progression on that. Look, let's see what comes out of the social housing decarbonization fund demonstrator and hopefully, that will point to some interesting ideas for the future where you can achieve some of the cost savings that you need.
Absolutely. So, I think we're coming to the end of our discussion here but I just wanted to ask one quick final question because I’ve watched from afar mainly on social media but also some of the publications that have been put out that. Clarion have been pretty trailblazing in terms of social value creation. This is something that the housing sector has been doing from day dot - but actually tracking it and putting a framework in place to show where you're creating that and ensuring that you are increasing it is quite important. So I just wondered if you could tell our viewers a little bit about Clarion's journey with regards to social value creation.
Yeah, it's fundamental really to what we do. Beyond the provision of affordable homes, that's a social value in itself you know. The cluster of work that we do around that as a responsible landlord in terms of providing great places to live, places that people want to live and places that allow them to live affordably and securely and safely. All of that stuff has a value to people in terms of their well-being and we did a bunch of work with HACT on their social value methodology and index. That included work on energy efficiency improvements. Recognizing that after you pay rent and after you pay for your groceries, energy is one of the key costs particularly when you're around that poverty threshold. So any improvements that we make on the energy efficiency side and on the comfort side will go into the well-being of residents.
I mean the classic one that I talk about is - you think of someone who's perhaps unemployed, perhaps has health issues. If they can't afford a heating bill, they get cold and they get health problems. This triggers their asthma and you have a cascading thing where they can't attend an interview then they don't get work and then they can't heat their home. Yeah, so there's a virtuous circle when you can create a good place to live. Social housing has always been the engine of social mobility and a stable safe secure home is part of that. So providing something that's then affordable and sustainable has a great advantage to people in terms of being able to enjoy a good quality of life. The focus of what we do is around residents so it makes sense that we put a monetary value on that, to that social value. That's what the HACT index does. And being able to put that forward alongside any work that we do on employment and training and energy efficiency work - it has value for that as well. Any work that we do on financial inclusion, digital access, access to good food and everything else. So I think that's really part of it.
Great. Thank you for that and I think it's quite fitting that we can end bringing it full circle back to residents because ultimately all of these decarbonization strategies - they have to work for the housing provider, the government, the climate, society and the people that are living in those homes to benefit from them. So listen, Will, thank you so much for joining us. It's been great chatting with you. And yeah, we'll be watching the social housing decarbonization fund demonstrators.
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