Commercial and industrial buildings have a key role to play in helping the UK achieve net-zero greenhouse gas emissions by 2050.
Objectives of the consultation
The Government has predominantly used the Energy Performance Certificate (EPC) to assess energy performance and carbon emissions in buildings. However, the EPC does not measure metered energy consumption and associated carbon emissions. That will depend on how well the building is being maintained and how effectively regulated and unregulated energy is used in the building in reality. Therefore a high EPC score is no guarantee that a building will use less energy and emit less carbon as a result. In large and complex buildings in particular, the evidence is showing that there is almost no correlation between a building’s EPC score and its actual energy and carbon performance in practice.
In October 2019, the Government told the Climate Change Committee that it would address this issue by putting in place a policy framework that can measure and assess building performance. This consultation delivers on that commitment. It sets out the Government’s plans to introduce a national performance-based policy framework for assessing energy use and carbon emissions in commercial and industrial buildings.
These proposals have been developed with industry experts and are based on international best practice, building on the approach that has made the National Australian Built Environment Rating Scheme (NABERS) world leading.
The Government plans to introduce the performance-based rating in three phases over the 2020s. As a first step, the Government proposes that owners and single tenants of buildings above 1,000m² will be required to obtain a rating for their building on an annual basis, and have that rating disclosed publicly online. This will ensure that large businesses and building owners will be aware of, and accountable for, how effectively they are using energy. It sends a clear signal to businesses and buildings owners that, having legislated for net-zero by 2050, the Government is ready to recognise businesses and landlords who have a low annual carbon footprint, and drive those who consistently emit more carbon to improve.
The consultation closed on 9 June 2021.
To download documents, which supported this consultation, follow the links below.
- A performance-based policy framework in large commercial and industrial buildings - The strategy paper
- Phase one of the performance-based policy framework - Proposals for commercial and industrial offices above 1,000m² in England and Wales
- Phase one impact assessment
- BEIS consultation page
CIBSE very much welcomes this consultation. We appreciate all the work and detail that went into it and are hugely supportive of the introduction of in-use performance ratings, including annual ratings and mandatory disclosure as first step. This is a great step forward. CIBSE has been advocating for this for many years and led industry on in-use performance by including it as central requirement for its awards.
We agree with the statement “these ratings must improve over time. This will require clear incentives, and potentially regulation in the future”. We would welcome more detail on this. The evidence from Australia is that public procurement has an important role to play in driving the market.
CIBSE have long advocated that DECs could be a very powerful instrument, but have suffered from lack of investment and enforcement. We recommend that the rating system for public buildings, i.e. DECs, be upgraded and made consistent, to create a single operational rating system. This will very much reduce confusion in the market and send a clear message on what is considered good performance. Having two systems is likely to create all sorts of confusing messages, and unhelpful situations where, for example, buildings change hands between a public and private organisation, or are multi-tenanted with some public and private occupiers. In addition, a single operating system would allow public procurement to play its full role in driving the whole market: this option is very limited if the buildings occupied by public bodies are on a separate (and out of date) system.
We agree that the commercial office sector is the most appropriate to start with. However:
- We think this should include a requirement for tenancy ratings of spaces of over 1,000 m2 (preferably GIA, for consistency with the thresholds for base build and whole building ratings, but NLA could be used if that is deemed easier for tenants). These uses can represent a large proportion of energy use in offices (e.g. the NABERS figures for FY2020 energy intensity are 301 for tenancy ratings, of the same order of magnitude as 373 for base buildings). While CIBSE are not 100% sure this is on the basis of the same floor area definition, clearly the magnitude of tenancy energy uses should not be ignored., so the current proposals would miss a significant opportunity. In addition, for “fairness”, it seems appropriate that if a tenant who occupies a whole building of 1,000 m2 is required to obtain a rating, then so should a tenant occupying a space of similar size in a larger building (with a tenancy- rather than whole-building rating).
- This must be expanded to other sectors as soon as possible. There is little detail on this in the consultation. One of the key reasons why ratings in other sectors would be difficult at this stage is lack of shared data to establish a suitable rating scale. We therefore recommend that, as offices are required to “onboard” with the scheme from 2022/23, so other sectors should be required to start providing data on the energy performance of their buildings. This could be done by disclosure to BEIS and industry working groups possibly, without being fully public; it could also be without a rating, but an indication of performance could be provided in return, for example by comparison with a DEC rating (in sectors where these are available) or the latest CIBSE benchmarks - this could be acknowledged to be provisional but would prompt queries about what a suitable rating system could be. It really is crucial to start this data gathering process and industry-government working groups as soon as possible. The information required could be similar to that for offices and, in addition, include what is required for DECs (in sectors where they exist) and the parameters used by CIBSE benchmarks (e.g. for hotels: number of bedrooms, whether they have a pool and whether they have a restaurant).
- There must be a clear timeline to expand the requirements to smaller size thresholds, for example 500m2 to match the current threshold for public EPCs, or 250m2 to match the current threshold for DECs in public buildings.
Our main reservation is on the use of primary energy as metric. It is not possible to find a single metric which satisfies all policy outcomes, and different sources of energy clearly have different attributes. However, primary energy (or electricity equivalent on the basis of primary energy, as proposed in this consultation) has 2 significant drawbacks:
- It favours gas and other fossil fuels, compared to electricity. As stated in the consultation itself, currently using gas would be favourable to the rating, compared to direct electric heating. By 2030, both gas and electricity would be seen as similar. This goes counter to heat decarbonisation.
- It is not at all well understood by most people, which creates a further disconnect between stakeholders and energy use. Calling the metric “electricity equivalent” will not help, without stating what the equivalence is based on: people are likely to assume it is carbon (as for non-domestic EPCs) or costs (as for domestic EPCs).
Using metered energy (allowing for central generation and distribution in the case of buildings connected to a district heating scheme) would not have this disadvantage of favouring gas and fossil fuels over electricity, and it is much more easily understood by most people. We acknowledge the choice of a single metric is a difficult issue, hence why we initiated a comparison of metrics against desired outcomes, but we strongly recommend that more thinking should be done to make sure that the rating system does support heat decarbonisation and engagement of stakeholders with energy use.
The issue of metric is also a key point when considering how EPCs and operational ratings will work together: CIBSE think that both are required, as buildings need both to have the potential to perform well and to be operated well, and policy needs to maximise its reach to different stakeholders. However, with non-domestic EPCs being based on carbon and operational ratings on primary energy, currently there is a real risk of drivers pulling in different directions.
CIBSE have worked on energy benchmarking and energy use distribution for a number of years, with our project partner UCL; our public online energy database covers a large range of sectors and regularly being added to. In addition, we have been very active in industry efforts to define best practice targets, including with the RIBA, LETI, and the UKGBC. While we agree that the experience from NABERS on scale setting is important to take into account, we also think there is a role for exemplar targets to influence the rating scale (rather than just using a total number of increments e.g. 6, and a benchmark used as median), to ensure the end point is both achievable and aspirational. We would very much appreciate the opportunity to continue to support the work of BEIS on this, including details of the rating scale for offices, and how to expand ratings to other sectors.
To read the full CIBSE response follow the link below.