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EPC ratings plunge into danger zone

A property software company has issued an urgent MEES warning after a ‘re-simulation’ exercise on thousands of  commercial buildings registered on its system showed a third dropping into the 2018 danger zone of F and G ratings.

Research carried out by Arbnco, previously CO2 Estates, found that a third of the commercial real estate with EPCs rated D and E on its system dropped into the ‘at risk’ categories of F and G upon re-simulation.

In total almost a quarter of the 3,500 commercial buildings on its Carbon Estates platform achieved a lower EPC rating upon re-simulation.  All the properties were said to be from portfolios of well-managed building stock, with EPCs produced within the last five years.

The company said the EPCs produced by energy assessors on earlier versions of iSBEM were modelled on their system, and ratings were re-simulated into the latest iSBEM version, 5.3a, to produce the new ratings.

The re-simulation found that 24% of all buildings in the portfolios achieved a lower rating, with buildings falling into the F & G band rating increased from 14% to 22% and 33% of all D and E ratings dropped to an F or G.

They added that their re-simulation research will serve as a stark warning to the industry, with the Minimum Energy Efficiency Standards (MEES) legislation coming into force in April 2018.

Simon West, co-founder of Arbnco said: “With MEES just over a year away, landlords, property managers and their advisors need to be acting now to ensure buildings do not pose a risk.

“Our analysis was conducted on well-managed building stock, so there is potential to observe a greater percentage drop in EPC ratings in poorer performing portfolios.

“Not everyone involved in the management of a building has a background in engineering, but the impacts of poor energy performance and forthcoming MEES legislation will affect all, and informed decisions need to be made.”

To facilitate decision making the company has scheduled next month for the launch of its Arbn Consult software platform to the consultant and EPC assessor market.  It said the software produces bespoke, fully costed retrofit packages for delivering improvements in energy performance in commercial property.

“The software provides the ability to quickly and accurately assess the EPC rating improvements required to ensure a property meets MEES regulatory compliance,” said the company.

There is no information available prior to the launch of how this software will be available or what cost may be involved.

Founded in 2009 as CO2 Estates, Arbnco claims to be one of the leading software providers to the UK real estate market, enabling some of the world’s largest property investors to make better and quicker decisions regarding the energy performance and regulatory compliance of commercial property.

The Arbnco research report can be downloaded from http://tinyurl.com/EPC-resimulation

Details of the Carbon Estates software can be found at http://www.co2estates.com/software/

Source: Energy Assessor Magazine

Landmark fees are down

Good news for assessors may have been thin on the ground recently, but some has turned up with news today that Landmark fees are being cut by up to a fifth.

The move, which only directly affects England and Wales, follows amendment to the regulations which govern the work of energy assessors.

As a result Landmark domestic lodgement fees will be reduced from Thursday 6 April by 12%, from £2.07 to £1.82, and non domestic fees will be cut 21%, from £12.82 to £10.12.

This should be particularly good news for commercial assessors, who were stung with an especially heavy increase last time around.

Hopefully the changes will also apply in Northern Ireland, which usually follows England and Wales, but Scottish lodgement fees will not be affected.

Source: Energy Assessor Magazine

UK emissions down but future uncertain

The UK’s greenhouse gas emissions are continuing to fall year on year and should continue to do so up to 2050 despite growth of the economy, according to the latest update from the Department of Business, Energy and Industrial Strategy.

But the document emphasises that the accuracy of its projections will be largely dependent on future government policies from 2020 on – by which time we should have left the European Union.

Greenhouse gases, primarily carbon dioxide from fossil fuels such as coal, oil and natural gas, are blamed for global warming, but the UK has a good record in reducing them.

Between 1990 and 2015, UK GHG emissions fell 38%, according to provisional statistics, whilst the economy grew by 64%. Emissions are projected to continue falling against the backdrop of a growing economy.

Legally binding carbon budgets are set for five year periods and are aimed at reducing emissions by at least 80% by 2050.  The latest BEIS report presents the 2016 projections of the UK’s energy demand and greenhouse gas (GHG) emissions up to 2035.

The UK’s primary energy demand is projected to fall by a total of 6% over the next 10 years, before rising to 2% above current levels by the end of 2035. Up to 2020, the reference scenario reflects current power sector policy.

BEIS added: “The main projection is the ‘reference case’, which is one view of how the UK energy and emissions system could evolve if existing and agreed government policies were implemented but no new policies or changes to existing policies were introduced. Other views of the future are possible and there are significant uncertainties in these projections.”

Low carbon generation is projected to increase from 47% of the generation mix in 2015 to 61% in 2020, whilst final electricity demand is expected to fall by 1%, but emissions from the domestic sector and transport are expected to rise.

Since the late 1970s, the Government has published projections of UK energy demand

and supply, and in the 1990s these were extended to include projected carbon dioxide

(CO 2 ) and other greenhouse gas (GHG) emissions as well.

The Department for Business, Energy & Industrial Strategy (BEIS) is responsible for publishing these projections annually, and before BEIS was formed, projections were published by the Department of Energy and Climate Change (DECC).

Source: Energy Assessor Magazine

Confidence on Brexit negotations

With Britain about to start negotiating its exit from the European Union, accreditation bodies and some assessors’ leaders are optimistic about the outcome for the energy assessment industry.

Both Stroma and Elmhurst were confident about the future prospects for the energy assessment industry, and Quidos MD Philip Salaman said firmly: “I am certainly not worried about Brexit impacting our businesses.”

ABs were confident that EPCs are here to stay, and assessors’ leader Glen Neville was also optimistic, but Ian Sturt was concerned about the effect that uncertainty would have on the property industry.

It has taken eight months for Theresa May’s government to reach the point of giving notice to the European Union of our intention to leave, although they were slowed down by court proceedings and the resultant need to pass an Act approved by both houses of Parliament.

Notice to leave is now due to be given by letter on Monday, to take effect on Wednesday, 29 March, under Article 50 of the Treaty of Lisbon which became law in December 2009 – though no state has used the provision before.

Negotiations are expected to start soon afterwards, but it is likely to be at least 18 months before we know how good a deal we can expect from the other EU members, and no doubt we are in for an extended period of media ‘shock horror’ revelations in the meantime, but the industry generally plans to keep calm and carry on.

Philip Salaman (left), Managing Director of Quidos, said: “In my opinion Brexit will have limited impact on EPBD regulations. Ultimately these regulations cost the public purse very little, as they are largely self regulated, and yet it provides the government with an accurate picture of the property stock in the UK. The EPC rating is built into property vocabulary now, so to remove this would serve no purpose.

“I suppose the AirCon reports are most at risk, as the take up has been so woeful, but again what does the government gain in removing them from the requirements? It is far easier to transpose current regulations than to rewrite new ones.

“At the end of the day the UK does have environmental obligations, and it would be very unwise to ignore methods of a) measuring the property stock, and b) proving that they are trying to do something about the carbon levels.  I am certainly not worried about Brexit impacting our businesses.”

Andy Parkin (right), Technical Manager at Stroma Certification, said: “We are in regular dialogue with the Department of Communities and Local Government about the implications of Brexit, and will continue to be so during the forthcoming negotiations over the coming years.

“At present there have been no substantial negative ramifications of the decision to leave the EU. In fact it can be argued that the UK economy is performing strongly, with investment maintaining at a positive level.

“We will be reminding Government of the advantages of the EPC and the improvements that have been made on existing and new build housing stock. The welfare and sustained prosperity of our members is a key priority for the business, and we are optimistic that the UK will continue to set the benchmark for energy efficiency and carbon reduction best practice for the foreseeable future.”

Martyn Reed (below), Managing Director of Elmhurst Energy, was also optimistic, but had some concern about the uncertainty ahead.  He told us: “Anyone in business will know that there is nothing more difficult to  cope with than uncertainty.

“Whilst Elmhurst Energy believe that the EU have been good for energy efficiency, and our sector, the referendum decision was made, and it is now the responsibility of government to re-establish the  economic and political environment, so that businesses can make medium and long term decisions with confidence.

“Obviously EPCs emanated from an EU directive, and when BREXIT is complete that driver will be gone. Elmhurst is aware, and has inputted  into government’s post BREXIT plans and all the indications are that EPCs are here to stay.

“If anything, the UK legislation such as PRS / Minimum Energy Efficiency Standards, which is built upon EPCs, will get landlords to take an active interest in energy efficiency and will, undoubtedly, drive up levels of compliance.

“It is also important to remember that the 5th Carbon Budget and the Paris Agreement are not EU commitments but relate to the United Nations – they will continue, BREXIT, or no BREXIT.

“I have no doubt that BREXIT will impact on EPCs but I am totally confident that energy assessment and energy certificates are here to stay. Whilst there is likely to be change at the edges, Elmhurst will be doing its part to ensure that it is change for the good.”

Ian Sturt (right) of the Alliance of Energy Assessor Organisations, was also concerned about uncertainty in the future, though he emphasised that he was speaking personally and not for the Alliance.

He told us: “Energy Assessors are reporting a drop off in work, mortgage lenders are reporting a drop off in mortgages, and article 50 is about to be triggered. Is there a link?

“Anyone who has got money saved or invested must be aware of the potential for the value of those savings to fall off a cliff as soon as the threat of Brexit becomes the reality of Brexit.  If that will actually happen nobody knows, but the possibility cannot be ignored.

“Whether or not you believe Brexit will be good in the long run, the next few months and years are impossible to forecast, other than that it is likely to be a rocky ride.

“I suspect there is an significant element of ‘battening down the hatches’ going on at the moment, and if the people with money are nervous, property transactions will drop.

“It also seems that ECO and RHI have dwindled, FiT is a shadow of its former self, Green Deal has essentially gone, and son of Green Deal is generating some interest but is not yet mature enough to be actually generating any work.”

Glen Neville (left), President of Midlands assessor organisation MEP, who also stressed he was speaking in a personal capacity, was cautiously optimistic about the future.

He said: “In the changing world within which we are living following the Brexit vote, we are finally moving away from the endless wrangling and spin over the result to a phase in which negotiators can begin to formulate the basis of our future.

“I am hopeful that we can emerge from this phase in due course with an agreement which will be good for our industry, and good for everyone in the UK.”

Source: Energy Assessor Magazine

Wales gives go-ahead to efficiency project worth millions

The Welsh government has green lit a multi-million-pound energy efficiency project to help local authorities in the country reduce their carbon emissions.

The initiative, approved last week, will see Monmouthshire Council receive £4.5m worth of funding through Wales’ ‘Invest to Save Green Growth Fund’, which will help it operate a solar farm on council-owned land.

Meanwhile Flintshire Council is to receive £3.13m to contribute towards a rollout of 11,000 LED streetlights which are expected to save the authority roughly £360,000 each year.

Annual maintenance costs are also forecast to fall due to an expected reduction in the number of faults.

All savings and revenue generated from projects supported by the fund will repay the initial investment and then help support local community projects by leaving the council with a residual net income.

The recent allocation effectively doubles the amount of funding that has been issued through the Green Growth Wales initiative to £14m and Lesley Griffiths, cabinet secretary for environment and rural affairs, lauded the initiative’s work in support of public sector energy efficiency projects.

“I am delighted we have been able to support these ambitious projects, which will save significant money for the future. These projects have huge potential and all public bodies should be developing green growth projects like this to deliver decarbonisation in Wales,” she said.

Mark Drakeford, cabinet secretary for finance, added: “At a time of reducing budgets, public services need to think and work differently.  I’m very pleased to see the fund will not only enable the council to generate savings but also become more energy efficient, improving the wellbeing of communities across the county.”

Source: Energyzine

Government efficiency plans may make homes unavailable

17 per cent of homes on the private letting market could become unavailable to rent by 2018 under proposals from the Government to increase the minimum efficiency standard for rental properties.

New research from Urban.co.uk suggests that the Energy Efficiency Regulations passed in 2015 could lead to a number of properties being unfit. This is a concern given the existing supply/demand imbalance.

The 2015 Energy Efficiency Regulations set out minimum energy efficiency standards for England and Wales. The legislation makes it unlawful for landlords to offer a new tenancy agreement on properties with an Energy Performance Certificate (EPC) rating below E from the 1st April.

Urban’s Landlord Knowledge Survey Report questioned around 4,000 UK landlords on a number of issues relating to the UK market, with the research suggesting that many current private landlords are unaware that a large chunk of homes available in the rental market are currently below the minimum energy efficiency standards proposed.

Adam Male, co-founder of Urban.co.uk, claims that one reason to explain the lack of industry knowledge could be due to the recent influx in new regulations, which have flooded the rental market.

“With landlords facing more changes than ever over the past couple of years, it is no surprise that many find it tricky to keep up-unfortunately that’s no defence should it all go disastrously wrong,” he said.

Planning and preparation will be needed in order to mitigate the impact of the new legislation. Landlords are being urged to act now to make sure their properties come up to at least an E standard.

Danny Luke, managing director at Quick Move Now, added: ‘It is commendable that the government is keen to improve the quality of rental property, but for the proposed new legislation to be workable, a great deal of thought will need to go into how landlords can be supported to make the necessary changes.

“This is especially true in light of the government’s decision to stop funding Green Deal improvements.

‘If significant energy efficiency improvement work is likely to be required, landlords will need support if we want to ensure a vibrant and efficient private rental market in the coming years.”

SOURCE: Energyzine

Ground-breaking energy centre set to power thousands of homes

A ground-breaking District Energy Centre, launched in Gateshead, is set to cut energy bills and carbon emissions for homes and businesses.

The first of its kind and scale in the North East, the Centre houses a small but highly-efficient power station which will generate and supply low-carbon energy for thousands of homes and businesses through a new underground network of high voltage ‘private-wire’ electricity cables.

The development is capable of capturing up to 85 per cent of the waste heat created during the energy generation process, which will then be fed directly to public buildings, businesses and people’s homes. It is hoped that the energy centre and network will be able to meet all the energy needs of future developments planned for Gateshead town centre.

Leader of Gateshead Council, Martin Gannon, believes that the Centre is an important project which will give the area “a real cutting edge.”

“Our District Energy Centre is twice as efficient as a conventional power station, and far greener, and we can pass on some of those cost efficiencies to local people and businesses in the form of cheaper heat and power. This alone will make a real difference to people’s lives. We are also helping to substantially reduce Gateshead’s carbon footprint,” he said.

“This project clearly demonstrates what a forward-thinking local authority can deliver, and the kind of resources we can marshal to deliver a complicated and innovative development such as this.”

Jesse Norman MP, Parliamentary Under-Secretary of State for Industry and Energy, who recently visited the facility believes that the project is a great example of the kind of local initiatives the Government’s new Industrial Strategy is looking to support.

“This investment in local energy supplies is intended to deliver low carbon energy at competitive prices for local customers,” she said.

“Through our ambitious Industrial Strategy Green Paper, the Government is working hard to promote growth across the North East and the rest of the UK, and to ensure the supply of secure, affordable and low-carbon energy for businesses and households.”

Gateshead District Energy Centre uses a pair of 2MW gas-powered combined heat and power (CHP) plants to generate enough electricity to power 5,000 homes, with the waste heat from the engines being recovered to provide hot water for heating. In conventional power stations this waste heat is simply lost to the atmosphere.

The project has been funded entirely by Gateshead Council, without use of grants or subsidies, and is expected to be fully self-financing, with construction and operating costs recouped over the life of the project by energy sales both locally and to the National Grid.

The scheme recently partnered with demand-response company Flexitricity in a £1m fifteen-year deal to supply electricity to the National Grid during peaks and troughs in national electricity demand.

Source: Energyzine

EU member states could rally against energy efficiency goals

EU member states are considering an attempt to weaken the Union’s 2030 energy efficiency goals, in a move that could put them at odds with the European Parliament, which backs stronger legislation.

A number of leaked documents prepared by Malta, which holds the rotating Presidency of the EU, revealed that member states will accept the executive’s proposed 30 per cent increase in energy efficiency compared to 1990 levels.

However, governments have pushed back at the Commission’s demand that the 2030 targets be made binding, calling for them to be “indicative,” or non-binding, instead.

The European Commission’s bill is being amended by both the Council of Ministers and the Parliament, with both MEPs and national diplomats having to agree an identical text before it becomes law.

 

In October 2014, EU leaders supported a 27 per cent 2030 energy efficiency target, with the executive’s preferred option of a 30 per cent binding goal being diluted.

The Commission, which has vowed to put “efficiency first” in its energy policy, has argued that the December 2015 Paris Agreement on climate justified increasing the draft target back up to 30 per cent. The EU is also revising its Energy Efficiency Directive and putting measures to meet its UN commitments to cap global warming into law.

Energy efficiency helps to prevent environmentally harmful emissions and will be vital if the bloc is to succeed in its low-carbon economy roadmap. That calls for an 80% cut in greenhouse gas emissions, compared to 1990 levels, by 2050.

The European Parliament has backed resolutions demanding a 40% binding efficiency target and is likely to call for greater ambition in the bill. Roland Joebstl of the European Environmental Bureau, believes that member states should be seeking to increase ambition to 40 per cent, as demanded by the European Parliament, “not already scheming about how they might get away with future underperformance.”

The Maltese Presidency has said it wants to deliver an agreed position from member states on the EED before the end of its six-month term in June, with the documents, dated March 9, subject to change as discussions continue.

Marion Santini of the Coalition for Energy Savings, claims that the compromise proposed by Malta falls short of providing certainty to the energy efficiency sector.

“Both a 40 per cent binding target for 2030 and a 2050 perspective for annual energy savings are needed for the EU to act convincingly on energy efficiency and bring tangible benefits to citizens,” she said.

Alix Chambris, director of EU Public Affairs at Danfoss, added: “Now is the time to demonstrate political courage. The industry needs a strong signal to keep investing in innovation in energy efficiency.

“The binding nature of the energy efficiency target clearly gives the industry such clear signal,” said which makes energy efficiency products.”

Source: Energyzine

Invest in energy efficiency technology now, argues CCC report

The Committee on Climate Change (CCC) has advised firms to invest in energy efficiency technologies now to combat increases in energy bills linked to low carbon policies.

Commercial, manufacturing and energy intensive manufacturing could see the percentage of energy costs attributable to low carbon policies increase to 0.5, 1 and 1.6 per cent respectively, claims the CCC.

“Firms could cut these cost by improving energy efficiency, for example the Committee’s scenarios to meet the fifth carbon budget involve measures to reduce business electricity use by around 15 per cent,” the report argues.

However the group also state that the cost of low carbon policies attached to energy bills have had a “limited impact” on the prices paid by business, commercial and industrial customers.

In a report issued late last week, the government’s climate adviser said that despite concerns raised by the business committee regarding such costs, the reality was that low carbon policies had had a “limited impact” on the total costs of production.

The CCC’s analysis found that manufacturing costs attributed to energy had been limited to 0.9 per cent for commercial businesses, 2 per cent for manufacturing entities and 3.8 per cent for manufacturing businesses identified as ‘energy intensive’.

Of those energy costs, just 0.2, 0.4 and 0.7 per cent respectively were the result of low carbon levies passed on by suppliers.

While the CCC did acknowledge that some outlier companies, particularly those in highly energy intensive industries such as steel, would stand to pay more, however these companies tended to be exempt from paying low carbon policies through government intervention.

The CCC also said that while the UK had higher business energy bills than most of Europe, reducing their competitiveness, differences in low carbon policies could not be used to explain the difference in electricity prices.

These variances, the CCC concluded, stemmed “primarily” from higher wholesale and network costs.

Bills do, however, stand to increase in the future as more policy-supported electricity generators come on stream, particularly more significant plants in the offshore wind and nuclear categories.

Iain Wright, chair of the business, energy and industrial strategy select committee, warned that energy companies were “too quick to blame” green policies for price increases, but also stressed that the government must continue to be mindful of their impact on business.

“The government must also be mindful of the burden that decarbonisation policies can place on businesses and ensure that they are able to remain competitive. There are enormous opportunities in the UK moving to a low carbon economy and ministers must take maximum advantage of these by making the transition integral to its Industrial Strategy,” he said.

Source: Energyzine

UK will need to refurbish ‘1.4 homes per minute’ until 2050

More than one home every minute will need to be refurbished in the UK between now and 2050, according to a report from the UK Green Building Council.

That means 25m homes need refurbishing to the highest standards by 2050 – at a rate of 1.4 homes every minute.

The authors say this huge challenge also offers an opportunity under the government’s infrastructure agenda. Insulating roofs, walls and floors creates more jobs and has more benefits than any existing infrastructure priority, they maintain.

The report recommends:

  • setting staged targets for refurbishing buildings;
  • reintroducing the “zero-carbon” standard for buildings from 2020;
  • recognising energy efficiency as a national infrastructure priority;
  • setting long-term trajectories for ratcheting up home energy standards; and
  • obliging commercial buildings to display the amount of energy they use.

It says the construction industry needs certainty about what it is expected to deliver, and measurement to discover what is already being built.

Julie Hirigoyen, head of the UK-GBC, told BBC News there was a great prize to be grasped in upgrading building stock: “People will have warmer homes and lower bills; they will live longer, happier lives; we will be able to address climate change and carbon emissions.

“We will also be creating many thousands of jobs and exporting our best skills in innovation.”

Tassos Kougionis, principal consultant – residential, at BSRIA’s Sustainable Construction Group, said: “It is true that the existing housing stock in the UK suffers from low energy efficiency, along with other inherited issued. This not only creates social implications, as in the case of fuel poverty, environmental issues and high carbon emissions, but also affects the health and well-being of the people living in these properties.

The UK-GBC announcement comes hot on the heels of Government’s Housing White Paper, which sets out the Government’s preferred approach in tackling the country’s housing crisis focusing mainly on the delivery of higher volumes of new homes.

However, BSRIA believes that the new homes of today will be the retrofits of the future, so it is important to consider resilient new home designs and take into account the buildings’ expected lifecycle. Preventing new homes from facing similar issues in the future will require a good feedback loop being introduced as well as quality standards to be set.

Source: Energyzine

Housing efficiency guidance released in run-up to new regulations

Real estate software provider Arbnco has released a guidance report for commercial real estate (CRE) investors and landlords to help achieve MEES compliance.

The Minimum Energy Efficiency Standards will require properties to achieve a minimum ‘E’ rating and will apply to new leases and renewals from April 2018.

Research produced by Arbnco (formerly known as CO2 Estates) has found that the estimated 19% of properties not complying could see their capital value reduced by as much as 10 per cent with the impact on the total UK value estimated to be as much as £16.54bn.

The paper contains a five-step plan to achieving MEES compliance, which includes identifying properties with no EPC, review lease renewal dates and decide whether a new EPC is required, along with confirming that ‘at risk’ properties in the F and G brackets are really F and G by undertaking new EPCs, in order to provide accurate and dependable ratings before undertaking any retrofit works.

The research also emphasises the need to identify means of retrofitting ‘at risk’ properties to achieve an E rating or better and assess the cost of compliance, as well as reviewing the impacts of future refurbishments and planned preventative maintenance (PPM) schedules.

The need to incorporate energy efficiency improvements into retrofit and PPM schedules and update leases, tenant fit-out and dilapidations processes to allow for appropriate provisions for the landlord/owner to continue to comply with the requirements of MEES is also suggested in the study.

Pauline White, underwriting analyst at Zurich believes action now to identify at risk properties and the costs to improve them will be time and money well spent.

“Without this, the owner could end up with a property that cannot be let, potentially long term unoccupied that becomes a drain on resources instead of generating an income,” she said.

Simon West, founder of Arbnco, added: “All landlords will potentially be affected by the MEES regulations, irrespective of the size and nature of portfolios and early action is advised to mitigate the impact.  Landlords and CRE investors need to acting now to alleviate the risks posed by MEES legislation ahead of the April 2018 start date.”

Arbnco will launch its Arbn Consult software platform to the consultant and EPC Assessor market from April 2017.  It enables quicker and better decisions to be made on the energy performance of commercial property.  The software provides the ability to quickly and accurately assess the EPC rating improvements required to ensure a property meets MEES regulatory compliance.

Source: Energyzine

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