Most in the property sector are probably now aware the government is currently consulting on the future of minimum energy efficiency standards (MEES) for commercial buildings.
It proposes, as explained in a recent EVORA GLOBAL blog, that the minimum should move from the current ‘E’ rating on an energy performance certificate (EPC) to a ‘B’ or ‘C’ by 2030, although the government’s preference is for the more ambitious ‘B’ target.
The government argues that setting a more ambitious regulatory trajectory will provide the energy efficiency market with the necessary certainty to scale, innovate and ultimately reduce costs to the customer. Some of this has already been seen in action with the solar power industry.
Even so, such a swift and steep change will be expensive for the sector. Currently only 10% of all EPC ratings issued in the past 10 years have reached a ‘B’ or better according to Carbon Risk Real Estate Monitor (CRREM) data for England and Wales.
The government’s own modelling (which some might argue is optimistic) shows improving the commercial building stock in England and Wales to an EPC band B will require a capital investment of about £5bn between 2019 and 2030. This is compared with an estimated investment of £1.5bn to improve stock to an EPC band C.
Even with such an outlay, the government admits 37% of buildings will still fail.
The government also announced it will consult next year on introducing mandatory in-use energy performance ratings next year. It is unclear what this might entail, and if it would replace an EPC or simply improve it. However, other bodies, such as the EU technical expert group on sustainable finance, currently use measures such as annual energy consumption per floor area.
While a decade may seem a long time to prepare for the more ambitious ‘B’ target, in long-life assets such as commercial buildings, that time will pass exceedingly quickly if landlords and asset managers do not make more ambitious changes in their current planned maintenance plans (PMPs) and retrofits.
Even simple changes will take time
The complex nature of mechanical and electrical services in buildings often means that simple changes can have far ranging implications which, in our experience, often exceed asset manager expectations. For example, upgrading a chiller is a project that takes several months not weeks; phasing out gas in a building will require technical assessments of cables and switchgear.
But those buildings that delay adaptation will find the minimum standard can only then be reached via very costly strategies. This will mean early obsolescence and the write-down in value of large numbers of assets.
Here are EVORA EDGE’s top actions to take now to help achieve a ‘B’ by 2030.
- Dynamic simulation modelling on all assets as part of a strategic asset management plan. High capital expenditure should always be considered carefully and modelling each asset will allow decisions to be fully thought through and options compared, as well as provide predicted EPC ratings. DSM modelling will also mean assets are future proofed against any change(s) to EPC’s as DSMs can be calibrated and easily adapted to metrics that measure real world energy consumption.
- If an EPC rating has only recently been provided, consider converting existing EPC SBEM models to DSMs. While this is difficult it can be done. For more information read our case study.
- Investigate the feasibility of converting buildings to an all-electric strategy. The rapid decarbonisation of the national grid means the ‘carbon factors’, that determine the calculations for EPC ratings, will soon favour electricity over gas. However, be aware that some future tenants, such as laboratories, may still require gas and infrastructure decisions should take this into account.
- Greater reliance on passive measures to prevent solar gain and overheating will positively impact EPC ratings. These might include sophisticated window film, brise soleil, shutters or even planting deciduous trees in front of windows that will provide shade during the summer but let in winter sun for heating.
- Ventilation systems controlled by demand are the most energy efficient and, where technically possible, should be linked to carbon dioxide (CO2) sensors. This will also ensure good air quality and the wellbeing of occupants.
- Install LED lighting with a good control strategy. However, be aware that good quality fittings are required to ensure the LED lights do not distort electric harmonics by more than 10% -otherwise the system could cause flicker, voltage sag, load unbalancing and could potentially lead to higher electricity costs as a result. In extreme cases entire electrical systems can be destroyed.
- Begin a cost/benefit analysis of installing renewable technologies, including heat pumps, solar heat and PV This will not only help improve EPC ratings but also reduce real world energy bills.
- Develop an ambitious strategy early and align it with a building’s planned maintenance programme. Remember each building is different – use of modelling will allow different solutions to be arrived at, costed and more easily monitored, even across a portfolio of buildings.
- Allow time within your strategy to engage with occupiers. There will be scope to improve EPC ratings and save energy through service charges but this rarely happens unless occupiers are properly engaged as stakeholders.
EVORA EDGE can help develop and implement a strategic plan to improve the energy efficiency of buildings through modelling, project management and mechanical, electrical and public health (MEP) consulting.
For more information or a chat about drop us an email firstname.lastname@example.org or call on +44 (0)1743 341903