An important – and potentially game changing policy for the building industry – the Energy Performance of Buildings Directive (EPBD), has been designed to radically reduce the amount of CO2 produced by buildings.
Under the terms of the Directive, an energy performance certificate (EPC) must be produced whenever a building is sold, constructed or rented out. The EPC shows the energy efficiency of a property and includes recommendations on how it can be improved. Also, a display energy certificate (DEC) must be produced every year for public buildings larger than 1000 m².
The DEC shows the actual running costs of the building. The other components mandate that air-conditioning installations above a certain size must be inspected every five years, and boiler installations above a certain size must either be inspected regularly or advice must be provided to users
Overall though, assessing a building’s energy efficiency profile is an extremely complex process and requires a thorough assessment. And considering the fact that buildings account for a substantial level of carbon emissions (i.e. 50% in the UK), and around 40% of the EU’s energy consumption, improvements in this area will make a significant difference to the carbon footprint of residential dwellings, organisations and other business and industrial premises.
That’s the theory, but defining exactly how this should be done – and even what this should actually mean when it has been done – has proved tricky.
The situation has become clearer recently, however. In July this year, the European Commission published proposals for a 'recast' of the EPBD (where existing legislation is ‘modified’). The purpose of recast was to extend the scope of the original Directive; strengthen certain provisions; clarify other aspects; and give public sector a leading role in promoting energy efficiency.
As we go to press, news filtering out of Brussels suggests that there has been a political agreement on a recast of the EPBD:
- The recast introduces for the first time a European-wide definition of nearly zero energy buildings. Up to now only a handful of Member States had varying definitions for low energy / plus energy or zero carbon buildings. This new definition requires a decreased energy use in buildings, but also entails a renewable energy requirement so that this low energy can be covered to a greater extent by a renewable source;
- All new buildings have to be nearly zero by 31 December 2020 with public buildings having to fulfill this standard already by 31 December 2018;
- And regarding the financing of implementation of the Energy Performance of Buildings’ Directive, the recast foresees that Member States must come up with a ‘list’ of measures and instruments, ‘including those of a financial matter’, and the European Commission will publish an analysis by 2011 regarding additional money granted under the future financial perspectives to the building sector. According to the European Renewable Energy Council (EREC), the upcoming financial perspectives which will be adopted in 2013 should reflect this urgent priority, and enable better financing of renewable energy integration in buildings.
Giving teeth to the mandate – a view from the UK and the Carbon Reduction Commitment
Making laws is one thing, but making sure companies comply with them is another.
Birmingham, UK-based Trevor Floyd, Principal Consultant, Tenby Consultancy Group, says the requirements of the EU-EPBD are now fully implemented in the UK in terms of law but not actually in the form of compliance.
This means that many, according to Floyd, are ignoring the requirements for building certification as there is minimal checking at this time. “The recasting of the EPBD is an obvious necessity to keep up with the demand for working towards low carbon buildings and a zero carbon economy. The new draft of the UK building regulations out in 2010 will, for once almost be ahead of the EU with its likely requirement for another 25% improvement in carbon emissions from new and refurbished buildings,” Floyd tells Renewable Energy Focus.
The main stumbling block, according to Floyd, is that compliance with current and future regulations/guidelines seems to take many years before it has full coverage.
“There are many who manage to ignore the requirements until punitive actions take place and are published in the press. It’s like speed limits on the roads, we all try to comply but it is so easy to ignore the limit until one gets caught then caution will prevail and compliance is more likely,” says Floyd.
From EDF Energy’s perspective, its Energy Efficiency Manager – Energy Services, Julie Allen, feels some good progress has been made over the last year.
Citing an example, she says, one organisation EDF’s Energy Services team worked with used its DEC and EPC ratings and the accompanying recommendations to make significant changes to its operations. These changes, including the installation of a building management system to centrally control consumption and turn off energy outside of the necessary hours, resulted in a 35% overall energy reduction.
Overall, Royal Institution of Chartered Surveyors’ (RICS) Russell-Croucher Martin feels that the initiative was progressing well until the European Parliament made a substantial number of amendments this year. “This has delayed the process while the Commission made a response...this has appeared to delay the whole implementation by a year,” he says.
Where does planning fit in?
It is critical to assess how the current energy prices and environmental concerns have resulted in energy efficiency becoming an integral part of any organisation’s planning or corporate social responsibility (CSR).
Allen (EDF Energy) feels that the industry is definitely seeing energy efficiency and carbon management moving up the corporate agenda, with both generating interest from senior level decision makers.
“Organisations are now seriously considering the benefits of energy efficiency from a reputational and environmental perspective. The UK’s upcoming Carbon Reduction Commitment (CRC) Energy Efficiency Scheme (effectively a proposed mandatory cap and trade scheme in the UK applying to large non energy-intensive organisations in the public and private sectors) is already heightening this focus by raising the issue of reputational benefits/risk of a company’s energy efficiency performance through the public league table mechanism,” says Allen.
On the other hand, Floyd says: “My experience of the market place over the past few decades indicates knee jerk response to pressures such as price fluctuations, and a perception that energy is regarded as only a small proportion of total operational costs.
“After all these years and the uplift in information on climate change etc, the reaction should be automatic but still we backslide after the initial shocks and carry on as before. Already we are seeing the CRC being watered down to remove some of the sting. Organisations must treat energy and environmental impacts with the same reverence as the company accounts. i.e. improve profitability / financial viability at the same time as reducing energy use and environmental impact. After all, they go hand in hand don’t they?,” questions Floyd.
RICS’ Martin explained that, currently, energy prices are still too low to seriously affect an organisation’s planning. Bigger companies with large portfolios appear to be doing more than the SMEs, he says.
According to him, energy efficiency will be driven more by the carbon reduction commitment than by EPBD for larger energy users in the short to medium term.
“CSR is driving sustainability generally rather than just energy efficiency,” he says.
Coming to grips with energy efficiency
According to specialists, the best way for an organisation to manage its energy use is to firstly understand its consumption, through good quality meter reading. This means having high frequency reads, say every half hour, delivered reliably to a system that allows the data to be interpreted. From here, one will need to apply sound energy engineering practices to properly identify areas of wastage and remedial actions. With this knowledge, an organisation can make an informed decision when choosing energy efficiency initiatives.
“When it comes to implementation some organisations are being clever with their budgets, using ‘quick-win’ tactics to make initial savings, then ring-fencing these savings for reinvestment into more costly initiatives in the longer-term,” Allen points out.
For his part, RICS’ Martin says, “the best way to understand energy is by metering a property. This is needed for DECs anyway in order to produce the rating. DECs would enable owners/occupiers to know what their energy usage is, and as it also comes with an advisory report (every 7 years) this should enable improvements to be made if the recommendations are followed.”
Floyd feels for organisations to understand and manage their energy use, enabling them to embark on a process that will deliver a long-term and sustainable reduction in energy consumption, is quite a tough task.
“I look at the implementation of ISO14001 and note that its took many years to be accepted and implemented but now it is recognised as the way forward environmentally, well I hope that now that the European energy standard 16001 is available that will become the foundation for a positive approach to energy management. This will then be demonstrated by better results for building certification,” he says.
He adds that preparation for any certification or audit or assessment is simply having all the necessary information available and already understood: “Asking for energy data on a visit should not result in an embarrassing trawl through invoice archives to get basic information on such a vital aspect of an organisation’s activities."
In the UK, retailer Marks & Spencer (M&S) last year launched its own Automatic Monitoring and Targeting (AM&T) system which allows employees in stores to see how much energy is being used, and to identify any problems. The AM&T system is supported by robust database information on each of M&S’sites, their size, trading hours and other data affecting energy usage.
The company has installed detailed sub-metering systems in many locations to gain a clear picture of how much energy is used by lighting, food refrigeration, etc. Both these systems then support accurate benchmarking which in turn informs about the relative success of a range of energy efficiency schemes. Based on this information, the company can determine the amount of capital investment required in the future and the results which can be expected from this in terms of reduced consumption.
Giving an insight into the role of EPBD in countering carbon emissions on an immediate basis, Allen points out that not all elements of the EPBD directly relate to the carbon impact of buildings but all will contribute to a country’s overall carbon output.
An EPC is an ‘asset’ rating so it shows how energy efficient a property is, however, a DEC is an ‘operational’ rating based on the energy consumption of the building as recorded by gas, electricity and other meters. EPCs must be done for all buildings, DECs for Public Sector but they should be used together as an EPC shows how a building should behave and a DEC shows how a building does behave. And the difference between these two highlights the extent of work that needs to be done.
The very fact that both certificates need to be publicly displayed is a great way of raising awareness of energy efficiency and providing transparency, Allen says.
“The EPC “advisory report” also needs to be publicly accessible if requested. And the time frame for renewal provides added impetus for improvement,” Allen adds.
RICS’ Martin mentions that the only immediate affect will be on new buildings through the requirement for setting energy standards. The effect on existing buildings will be slower but as more and better information is made available to owners, hopefully they will start to make the energy improvements listed in the recommendations.
As per the information, the European Commission is proposing that the Directive should be implemented by 31 December, 2010 where proposals affect the public sector, and 31 January 2012 for other buildings.
On the same, Martin says: “Whilst the delay in the process is to be regretted, it is now 2012 for public and 2013 for non-public, there are some areas which could be brought in more quickly which would have an affect on implementation in the UK. Firstly bring in the requirement for EPC information to be part of the advertising, this will ensure that EPCs are in place as required by the directive and available for potential owners and occupiers of buildings as part of their decision making process.”
“Secondly, introduce display energy certificates for publicly accessible buildings rather than just public buildings. The starting point for making energy efficiency improvements is knowing how your building performs now, so without DECs how will an owner of occupier know where to start,” Martin recommends.
From organisations’ perspective, Floyd says most of them have to initially become aware that there are regulations that pertain to them and their activities after which they have to decide how they demonstrate compliance.
“Unfortunately, the regulations and legislation are growing in volume and it is difficult for an organisation to keep up to speed,” Floyd says.
Organisations in the US for example are showcasing how green business practices can be not only good for the environment but also for the bottom line as well.
Medline Industries earned more than US$113,400 in rebates for its proactive efforts in reducing energy usage at its Dubuque, Iowa facility. The facility, which houses the company’s customer service centre, features energy efficient lighting, building insulation and a geothermal heating system. The installation of these and other green technologies resulted in an electrical use reduction of 320,565 kWh, which avoids more than 230 metric tonnes of CO2.
In the UK, M&S is committed to making all of its UK and Republic of Ireland operations (stores, offices, warehouses, business travel and logistics) carbon neutral. This is as per its M&S’ Plan A, its 100 point eco-plan.
M&S’ head of energy management, Mervyn Bowden, tells Renewable Energy Focus: “We aim to source or generate 100% renewable electricity for M&S stores, offices and distribution centres in the UK and Republic of Ireland; 31% of our electricity is now sourced from ‘green’ tariff renewable suppliers, compared with a starting point of just 2% in 2006/07.
“We have also signed a new green electricity contract which will gradually increase the amount of renewable electricity for our stores and offices in England and Wales. We also have `green’ tariff renewable electricity contracts for our stores in Scotland, Northern Ireland and the Republic of Ireland.”
When it comes to securing renewable electricity, M&S has gone down two separate routes. One is by insisting on suppliers providing certified 'green tariff' electricity to the company via its main supply contracts. The biggest challenge here is the supply / demand balance whereby over recent years there has been a shortfall of supply of renewable power. “We’ve therefore have needed to negotiate with suppliers to ensure that we meet our targets here,” Bowden says.
“We’ve also gone down the route of working with our supply base and farmers generally to encourage them to build and operate renewable power plants. Partnering with a range of companies, we’ve been very successful in providing reassurance and support for developers like this in uncertain times. We’ve also simplified the complex contract processes which discourage many from proceeding,” Bowden adds.
There are still many uncertainties for small developers, which can be anything from vague regulation through to prevailing exchange rates or problems with grid connection, he says.
“From the feedback we’ve received, our group of renewable energy suppliers have found our support essential in achieving their project aims,” Bowden adds.
Over the last three years, the company has looked at the technical and economic feasibility of providing on-site generation at its stores.
“Clearly, there are many challenges associated with urban environments, where most of our stores are located, and we’ve moved our focus to the encouragement of newcomers to the business of renewable power generation where we are now seeing a take-up of a range of renewable generation technologies,” Bowden explains.
M&S for one is committed to reducing the amount of energy it uses in its stores by 25% ft2 of floor space.
Company’s store energy efficiency has improved by 10% by the end of 2008/9, at 61.4 kWh/ft2 against 2006/07 (67.9 kWh/ft2).
The company has applied a wide range of energy efficiency schemes, many involving improved control of disciplines like lighting and HVAC but many more which improve the actual efficiency of items of plant and equipment.
“Both the energy saving initiatives and our involvement in renewable energy projects are a major part of our long-term sustainability aspirations as well as being key measures in controlling operating costs – both of which are extremely important to the business,” Bowden concludes.