Development

Property giants including British Land, Hammerson, Hermes, Land Securities, Legal and General. Prupim and SEGRO, who own and manage the country’s biggest shopping centres and offices, want to see display energy certificates (DECs) which clearly show the performance of building when in use, should be made mandatory for all buildings.

Patrick Brown, assistant director for sustainability at the British Property Federation, said:

“We really need clarity now given that the development process can start over a decade in advance of a brick being laid. This is a welcome consultation but the bottom line is that our 2050 target of reducing carbon emissions by 80pc will be missed unless a greater level of attention is given to existing buildings.

“The consultation prioritises energy efficiency which is a good thing since building regulations are readily understood by developers and the bar is raised over a gradual period of time. But the overwhelming focus on new buildings must be accompanied by a greater level of attention to existing stock. The majority of buildings with us now will still be in use in 50 years’ time and side-stepping the difficult questions will cause us more problems in the long term.”

Real estate is responsible for around half of the UK’s carbon emissions.

The industry however, believes government policy has ignored the fact that the majority of commercial property is rented out.

This means landlords cannot simply walk into a tenant’s shop, for example, and turn the lights off. Therefore, any incentives and responsibilities for improving energy performance are widely split between the two groups.

The BPF wants to see measurement based on actual energy use made obligatory for the private sector. This could happen by expanding display energy certificates (DECs) – which measure the operational performance of a building – so that they do not just cover public buildings. (See notes).

Property is responsible for a massive 50 per cent of the UK’s carbon emissions, but one of the easiest places to make savings if data is shared and landlords and tenants work together.

Energy use needs to be made transparent if the industry has any hope of meeting green energy targets, believes BPF chief executive Liz Peace. The BPF is pushing for EU law to be changed so that landlords and tenants will be obliged to share energy data. If this happens, then both sides can work together to support real change.

However, Peace admits there is a critical need for firms to change the way they view energy and reduce usage via more effective management before looking at refitting buildings with expensive new gadgets. It is also vital to ensure that any newly installed kit delivers the promised energy and carbon savings, as there is evidence that some developments employ it at planning stage but often don’t use it properly. Essentially, it comes down to effectively measuring what is used.

Experts believe a third of energy use can be cut without any major expenditure, but want research carried out into what financial incentives could spur landlords on to undertake higher cost improvements, looking at where costs and benefits currently do not add up, when all other factors are balanced.

Despite setting up the new Department for Energy and Climate Change there has been no clear policy direction in government with various other departments all covering the same ground. A staggering 70 national and 96 regional bodies currently offer energy efficiency advice. The BPF therefore wants greater clarity on grants and advice that could help green the nation’s buildings. An array of financial benefits already exist (see notes) but few people really know about them.

Peter Clarke, executive officer at British Land, said:

“We have found that simple improvements in energy use can be made by sharing data, which often reveals that changes to behaviour can yield big savings on energy and carbon. The key barrier is that, in many cases, landlords and tenants are unaware of where the opportunities lie. The BPF’s www.les-ter.org toolkit, developed with the Carbon Trust, provides a set of tools and a process to enable landlords and tenants to measure, understand and reduce their emissions.”

Dave Farebrother, environmental director at Land Securities, which has recently announced it will voluntarily introduce DECs across its London portfolio, said:

“At Land Securities we are finding a high degree of willingness among our clients to engage on matters of energy efficiency, and as existing buildings form the larger part of the ongoing carbon problem the quickest, cheapest and biggest wins for the sector come from changing attitudes and behaviours. DECs, which reflect how buildings actually operate, are much more helpful in this regard than a theoretical EPC.”

Bill Hughes, managing director at Legal and General Property, said:

“There is a clear desire at all levels for greener buildings, but this won’t be achieved by focusing exclusively on new build and it won’t be achieved unless the government begins to understand how the market in existing property actually works. Designing new efficient buildings is relatively easy, but without a government-backed initiative to manage down energy use in old stock, targets will remain aspirations.”

Martin Moore, chairman of the BPF’s sustainability committee and chief executive of Prupim, said:

“We need to focus on methods to improve our understanding of what energy we’re actually using. Expanding display energy certificates and providing support to firms to help them measure and reduce energy use is vital. If you cannot measure it, you cannot manage it and if you cannot manage it, you certainly cannot reduce it.”

Claudine Blamey, head of sustainability at SEGRO, said:

“The most significant amount of carbon used during the life of a building is in its use phase. At the moment there are no real drivers for occupiers to reduce their energy. We need incentives to change behaviour if we are going to become a low carbon economy.”

Notes for editors

General background

The government will fail to achieve an overall reduction in total UK carbon emissions by 80 per cent by 2050 compared to 1990s levels.

The government is due to produce a big policy paper later in the year on how it intends to deliver these savings. This will be based on consultations like this Heat and Energy Saving Strategy report and the advice of a body called the Committee on Climate Change, composed of independent experts and led by Adair Turner (at the moment).

As buildings account for around half of UK and European emissions, the property industry can most likely bank on having to make sizeable emissions reductions. Certainly the prevailing direction of policy would suggest it.

In its report, the Committee on Climate Change advised the Government to pretty much decarbonise the energy supply in this country. There are significant issues with that, not least the ones experienced by developers who are essentially having to build power stations next to developments. Many want to see a proper national energy strategy to manage the transition to such a low carbon energy supply. In any case it will take time – and so energy efficiency is important to manage energy demand and emissions until we make that transition to low carbon energy supplies.

The adoption of DECs in the private sector could:

• expose the benefits of better management and motivate users to make improvements;
• tackle existing as well as new non-domestic buildings;
• at relatively modest cost, offer recommendations for improvement;
• incentivise local generation or onsite renewable energy production;
• offer a comparison with the rating for the building’s EPC would act as a neat barometer of ‘potential’ versus ‘actual’ energy performance, promoting understanding of this issue; and
• assist in the generation of a database of true building energy performance, which would lead to better policy.

Awareness among possible beneficiaries of Government fiscal support is limited. A report by Element Energy detailed that the following percentages were previously aware of the fiscal support mechanisms listed below:

• Landlord’s Energy Savings Allowance (LESA) – 19%
• Enhanced Capital Allowances (ECA) – 22%
• 5% VAT on energy efficient purchases – 57%
• Grant from the Low Carbon Buildings Programme – 49%
• Climate Change Levy Exemption – 46%