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UK government must insulate energy inefficient commercial buildings, report warns

02 March 2009

The UK government must tackle energy inefficient commercial buildings if it is to meet stiff emissions reduction targets, a new report warns.

Published by Environmental Data Interactive Exchange (EDIE)

Speeding up the "thermal refurbishment" of inefficient non-domestic buildings could also create up to 50,000 new "green collar" jobs and save organisations around £450 million in energy bills, according to a report by consultancy Caleb Management Services.

The report says: "In order to help meet government's carbon reduction targets, the UK as a whole must address its inefficient non-domestic building stock."

"The scale of the challenge, to refurbish up to 2 million existing non-domestic buildings and achieve at least an 80 per cent cut in carbon emissions by 2050, is somewhat daunting, and clearly cannot be done by a business as usual approach."

Caleb, commissioned to draft the report by manufacturer Kingspan Insulated Panels, says existing non-domestic building stock shows "poor energy performance".

They emit more than 100 million tons of CO2 per year - some 18 per cent of total UK emissions.

It declares energy efficient buildings "need to be at the frontline of emission reduction efforts".

It advocates an "accelerated thermal refurbishment programme" as part of a Green New Deal to stimulate the economy.

The insulation programme would see existing non-domestic buildings upgraded to a minimum Display Energy Certificate/Energy Performance Certificate rating of C between 2010 and 2022.

Caleb estimates presently some 80% of existing buildings are rated below C.

It urges the government to provide upfront zero or low interest loans as an incentive to do the work, to be paid back from future savings.

The work could be done at a cost of £1.18 billion per year, it calculates, or £14.7 billion in total by 2022 resulting in related saving of some £5.65 billion per year.

The programme would generate between 30,000 and 50,000 long term jobs, cut greenhouse gas emissions by up to 23Mt a year and save around £450 million a year in energy bills, it estimates.

"Now is the time to accelerate the refurbishment of non-domestic buildings," the report says.

It adds: "The climate, energy security and employment benefits of accelerated refurbishment are significant and increasingly important for the country as a whole."

The Non-domestic Buildings Refurbishment Report was launched last week at a parliamentary reception addressed by Energy and Climate Change secretary Ed Miliband.

Louis Eperjesi, Kingspan managing director, said the firm hopes "the government follows this lead in promoting measures which would help secure a triple-benefit of more jobs, fewer carbon emissions and lower energy bills for hard-pressed businesses".

David Gibbs

‘Green buildings’ will mean more savings

26 February 2009

Refurbishing office buildings to a higher environmental standard would create around 30,000 new jobs and save companies more than £700m ($1bn) a year, according to a study.

By Fiona Harvey, Environment Correspondent, Financial Times, 25 February 2009

The construction industry is taking a renewed interest in “green building”, which could provide the sector with a much-needed boost as it struggles with the effects of the recession.

Gordon Brown, the prime minister, has leant his weight to efforts to raise the environmental standards of homes through a widespread programme of insulation, but this has focused on the domestic market.

Non-domestic buildings, including offices, public buildings such as hospitals and factories account for nearly a fifth of the UK’s emissions, according to a study from the consultancy Caleb Management Services, commissioned by Kingspan, the insulation manufacturer. About £27bn is spent a year on average in refurbishing such buildings, but many refurbishments devote little attention to improving the efficiency and environmental performance of the buildings.

The study concluded that spending 7 per cent more on refurbishment would cut carbon emissions by the equivalent of taking 5m cars off the road, and would lead to the creation of between 30,000 and 50,000 jobs.

Alan Whitehead, chair of the parliamentary renewable and sustainable energy group, said: “If the government’s emissions reduction targets are going to be met, then energy efficiency has to be the place to start. [There is] huge scope for emissions savings in buildings such as schools, hospitals, factories and warehouses.”

Buildings must now be rated for their energy efficiency, receiving an Energy Performance Certificate graded A to G according to their performance. But few buildings meet the higher standards, and the government’s own building stock are among the worst offenders: about three quarters of the UK’s public buildings were graded at D or below in a recent test.

The report found that many of the measures, such as enhanced capital allowances, put in place by government to help companies to cut emissions from their buildings were difficult for businesses to access.

In recent years, the construction industry has been reluctant to embrace “green buildings”, seeing them as an extra cost which would cut into their margins and discourage buyers. But the precipitous decline in the industry’s fortunes owing to the recession has encouraged companies to look to new areas of potential investment, such as low-emissions homes and offices, many of which qualify for some form of government support.

Every UK home to get green makeover

13 February 2009

Government proposes "green version of Changing Rooms" for housing stock and hints small businesses could also access new financing mechanisms

James Murray, BusinessGreen, 12 Feb 2009

Every home and small business in the UK could gain access to free or low-cost measures to enhance their energy efficiency as part of a nationwide programme proposed by the government today, which promises to deliver a huge boost to providers of energy-efficient and microgeneration technologies.

Likening the proposed "Great British Refurb" to the 1960s rollout of an entirely new gas network, energy and climate change secretary Ed Miliband said the government would aim to provide whole-house energy makeovers to seven million homes by 2020 and cut carbon emissions by a third on 2006 levels by the same date.

He added that in addition to the medium-term targets, the government would seek to ensure every home has access to whole-home refurbishment services by 2030 and cut emissions from the entire UK housing stock to almost zero by 2050.

"We are proposing a universal street-by-street, house-by-house scheme with everyone offered free or low-cost advice," he said. "This cannot just be about a few million homes – we need to think bigger than that."

Central to the new plan are proposals for a new financing scheme designed to help householders overcome the high up-front costs typically associated with the installation of energy-efficient and microgeneration technologies.

Under the scheme, householders would be offered loans to cover the cost of green refurbishments with repayments being made through part of the savings on energy bills that would result.

Miliband said that importantly, repayment of the loan would effectively be linked to the property rather than the resident. "People only live in their homes for an average of nine years, [and] when we talk about up-front costs of £4,000 or £5,000 [for green refurbishments] they would not recoup the cost in saved energy bills [before moving]," he said, adding that under the scheme the next resident would be able to continue to make the repayments from the continued savings on their energy bills.

The loans are expected to be provided by a range of different entities, including energy companies, local authorities and potentially loan providers such as banks and supermarkets.

Miliband admitted that the government had not yet looked at the regulatory regime that will govern the loans, but he said that several local authorities had already expressed interest in offering green home financing schemes and predicted that private sector companies would be interested in a lending model that guarantees them a reliable revenue stream.

The proposals are now open to public consultation and Miliband said the government would also look at extending the financing scheme to small businesses to help the commercial sector deliver similar improvements to the building stock.

Speaking at the launch of the scheme, housing minister Margaret Beckett said that the refurbishment programme would be truly universal, with the social housing sector set to benefit from government subsidies that will make it a " giant demonstration project" for other sectors of the housing stock. She added that the government would also offer the same financing and incentives to landlords, and investigate the measures that may be needed to be taken to ensure costs are fairly split between tenants and landlords.

In addition to the new financing schemes, the strategy confirms plans to roll out a feed-in tariff for installations of microgeneration technologies in April 2010 and introduce a new incentive scheme for deployments of renewable heat technologies by July 2011.

It also sets out many new measures designed to underpin the rollout, including plans to provide free or low-cost energy audits to every home, set up a central body to co-ordinate how companies and local councils undertake refurbishments, and set up accreditation schemes for installers.

The proposals were broadly welcomed by green and business groups, which praised the scale of the measures and the move to overcome the high up-front costs that have hampered all previous attempts to promote energy-efficiency measures.

Colin Butfield, head of campaigns at WWF UK, praised the government's " laudable targets", adding that a focus on enhancing the energy efficiency of the building stock represented the most cost-effective way of cutting emissions. However, he warned that the government needed to provide more details on precisely how the various schemes will be funded as "a matter of urgency".

His sentiments were echoed by Paul King, chief executive of the UK Green Building Council, who said that the strategy could help to create 40,000 new jobs and showed that the government "understands the scale of the challenge and has set suitably ambitious targets".

But he also called on the Treasury "to raise its game in the upcoming Budget " and provide more immediate funding to help promote green refurbishments. " Financial incentives are needed to encourage major green refurbishments – the precedent has already been set with stamp duty rebates for zero-carbon homes," he said, adding that the government should also promise to underwrite its proposed loan scheme to encourage take-up and step up efforts to promote green refurbishment of commercial buildings.

Miliband admitted that the proposals had not yet been fully costed as the final bill would depend on the rate of take-up of the new services and financing schemes, the final level of the feed-in tariff and renewable heat incentive that is still being worked on, and the extent to which economies of scale enjoyed by expanding developers of microgeneration technologies such as heat pumps and solar panels results in cost savings.

EPCs: costly and complex for pubs

05 February 2009

Licensees are still confused over Energy Performance Certificates (EPCs) and are unwilling to pay for them in the difficult trading environment.

By Gemma McKenna, Morning Advertiser

EPCs are still causing confusion

That’s the message from leading energy consultants about controversial EPCs, which rate commercial properties on energy efficiency.

The new certificates became compulsory from 4 January 2009. Sellers risk penalties from £500 to £5,000 for failure to provide one to a prospective buyer.

Steven Daniels, sales director with BES Consulting, which provides Marston’s energy compliance services, said: “There has not been a surge from customers buying energy performance certificates, because I still don’t think they understand the consequences or legislation. But larger corporations do understand and are following procedure.”

He added: “Smaller solicitors aren’t getting the message across to their clients.”

Darren Bond, head of valuation services, at Christie + Co, said: “Most people know they should have one, but it is difficult for licensees to understand the tangible benefits when the industry faces other challenges.”

But he pointed out that in the longer term it should save licensees money.

Andrew Whelan, managing director of EPCforProperty, said: “There was a rush to get them done before 4 January, but since then demand has been steady.

“Some people also aren’t aware that there is a difference between domestic and commercial EPCs.”

All three agents agreed that sellers are reluctant to pay for an EPC up front, but once their property is under offer they are happy to pay for it. An average pub can expect to pay around £500 for an EPC.