Business demands will drive energy efficiency
Cost pressures on businesses will be a bigger driver for building improvements than ‘green’ goals and renewable subsidies, says David Frise, head of sustainability at the Building & Engineering Services Association (B&ES).
Gas and electricity prices could rise by as much as 80% over the next 10 years, depending on which reports you read, and some energy experts predict even higher increases. With overall UK energy demand also set to grow by 80% by 2030, the ability to cut energy consumption will become a huge priority for individual commercial building users.
25% of our electricity generating capacity is also about to be decommissioned with the closure of ageing nuclear plants, which means we are facing a potentially catastrophic energy-security problem. This will also, inevitably, contribute to rising costs, and the best way for commercial organisations to insulate themselves against the vagaries of an increasingly volatile energy market is to operate from energy-efficient buildings.
These drivers, more than any lofty ‘green’ ambitions, will help to kickstart the massive programme of building retrofits that will, at the same time, lower the carbon footprint of our existing commercial building stock. Uncertainty about the shape and long-term role of publicly funded subsidies like the Renewable Heat Incentive (RHI) and the Green Deal means that business leaders are increasingly unlikely to rely on these when putting together future budgets.
However, the deepening financial crisis in Europe is playing a big part in their thinking. When cutting carbon was the main preoccupation, it was possible to simply throw money at the problem and deploy renewables wherever possible.
However, the tax revenues are no longer there, and the need to take the pressure off businesses has created a more pragmatic approach from politicians and legislators. This is good news for the building engineering services sector as we have the expertise to help clients optimise their built assets.
Gas will also continue to play a role for considerably longer than many of us might have suspected before the financial crisis struck and when the force was with renewables. Again, pragmatism is extending our reliance on gas — but by increasing the energy efficiency of buildings, we can also ensure that it is used to best effect.
In fact, the International Energy Agency (IEA) says that the ‘golden age of gas’ is just dawning. It predicts that global gas trade will expand by 35% after 2015 and account for 25% of primary energy demand; it was only 21% in 2010. Annual gas demand is predicted to rise by 2.7% over the next five years, and suppliers are confident of meeting that demand with liquefied natural gas, international pipelines and emerging sources of shale gas.
|‘The golden age of gas’ is predicted by the International Energy Agency.|
There was considerable controversy over ‘fracking’ (hydraulic fracturing), the method of extracting shale gas from rock, earlier this year. However, a report prepared by the Royal Society and the Royal Academy of Engineering, commissioned by the Government’s chief scientist, gave fracking a clean bill of health at a particularly expedient political moment.
The main benefit for end users will be the extended operating life of existing ‘conventional’ technologies, so postponing the need for expensive replacements. However, planned and strategic maintenance of gas-fired plant is the real key and that is where the building engineering services industry will play an important part.
The combination of energy-efficient buildings and improved prospects for gas supplies will help the UK bridge the energy gap while giving renewables time to catch up. This is a pragmatic and politically acceptable approach — a manageable transition that does not put too heavy a financial burden on end users, but which still allows building engineering firms to invest in new skills that will deliver carbon reductions far into the future.
The recast European Energy Performance of Buildings Directive (EPBD), which came into force earlier this year, also reflects this new pragmatism. It states that all new buildings are to be ‘nearly zero energy’ by December 2020, with all public buildings to achieve this goal by 2018. The original EPBD talked about ‘net zero carbon’, but now targets are also no longer expressed in terms of carbon, but in kWh/m2 per year. It is relatively easy for end users to see these values in commercial terms; carbon was a much more difficult concept.
The revised Part L of the Building Regulations, which is driven by the EPBD, comes into force next year and uses the expression ‘cost optimal’ throughout to constrain energy saving measures. Therefore, anything required to meet the regulations must also be cost beneficial to the building owner.
The new EPBD has also extended the scope of Display Energy Certificates (DECs). They will be required in all public buildings over 500 m2 next year and those over 250 m2 by 2015. DECs are a legal requirement, but they are also a valuable mechanism because they capture so much data about the ‘actual’ energy consumption of a building.
We must help clients recognise the value of the data-gathering exercise required by DECs because, as they become more commonplace, DECs will give them a clearer picture of how their building is performing. This will give building engineering contractors an opportunity to close the gap between DECs and the Energy Performance Certificates (EPCs) that show how a building ‘should’ perform.
By closing that gap, we can start to deliver the promise that helps building clients achieve cost savings that will be increasingly important to their future business prospects. For example, many tenants are already refusing to take on a building if it does not have an acceptable DEC rating. In the future we will see rents reflecting the increased value of energy-efficient buildings.
A DEC will establish how the building is performing and its accompanying report gives detailed information about where most energy is being wasted. As more smart meters are installed in buildings, they will also contribute to a more comprehensive picture of building performance.
Building owners will become bolder as they start to see the savings coming through so those early, basic energy-saving measures will eventually lead to the more ambitious renewable projects we all want to see in the future.
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