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Mandatory display of annual energy certificates to be extended

In a new scheme proposed by the government, all larger commercial and industrial buildings will be mandated to display annual energy certificates.

Monday July 12, 2021

In a new scheme proposed by the government, all larger commercial and industrial buildings will be mandated to display annual energy certificates. This will initially affect offices over 1,000m2of which there are approximately 10,000 in England and Wales. However, the proposal includes plans to extend to more varied sites in the future, including smaller buildings. So, why the change and how might it impact businesses in the UK?

What does the proposal include?

Currently, large commercial buildings are required to display an Energy Performance Certificate (EPC) only if their total useful floor area is over 500 square metres, is frequently visited by the public, and an EPC has already been produced for the building’s sale, rental or construction. EPCs measure the building emission rate (kgCO2/m² per year) and primary energy use (kWh/m² per year) for the core HVAC and building fabric assets.

EPCs are valid for 10 years, once an EPC reaches the ten year point and expires, there is no automatic requirement to produce a new one. A further EPC will only be required when the property is next sold, let or modified.

In October 2019, the Government told the Climate Change Committee that it would consult on introducing a new scheme that would rate commercial and industrial buildings based on their actual energy consumption and carbon emissions.

As a result of this, the government launched a new consultation called ‘Introducing a Performance-Based Policy Framework in large Commercial and Industrial Buildings in England and Wales’. This is the first step towards introducing a national performance-based policy framework that aims to reduce energy consumption and emissions.

How does this differ from DECs?

A Display Energy Certificate (DEC) rates public sector buildings over 250m2 based on actual energy consumption, so why not simply expand this to commercial buildings? According to the proposal, the new rating framework will look to modernise and go beyond what (DECs) currently offer.

Why the change?

Larger office buildings use over 53% of the energy used by all commercial and industrial buildings. This means that more frequent audits and stricter oversight will help to root out waste and reduce overall consumption. Success from similar policies has already been seen in countries like Australia who reduced consumption by 34% in 10 years with the National Australian Built Environment Rating System.

In this global push for energy efficiency and retrofitting, the UK is falling behind. Since 2016, similar requirements have been mandatory in all non-residential buildings over 500m2 throughout the European Union.

What are the benefits of the proposal?

Mandating more frequent energy evaluations will help to identify areas of inefficiency or, at the very least, raise awareness around energy consumption. While retrofitting the UK’s predominantly old building stock is a daunting task, the benefits could be enormous. This initiative alone is predicted to save British businesses over £1 billion annually and reduce carbon emissions by 8m tonnes when completed.

The Government is also considering including waste, water usage and air quality standards. None of these are currently required for either EPCs or DECs, and could lead to further cost savings for businesses.

How can EIC help?

The government plans to introduce the new rating system in 3 phases over the 2020s. The 1st phase is aimed at the office sector and has been planned to start in April 2022. EIC helps its clients stay informed and prepared for policy shifts such as these. In a net zero economy, staying ahead of the curve will be crucial to business resilience and growth.

As emission reduction targets become more important, energy reporting will become an essential part of managing a successful business or property. EIC can help you stay compliant with fast-changing legislation by streamlining and simplifying any and all of your energy admin. Our energy specialists have extensive experience with EPBD requirements including DECs, EPC and TM44 certification. We can go beyond mandatory reporting and certification to ensure you are as sustainable and energy-efficient as possible.

EIC can help you stay ahead of the curve. To find out more contact us today.

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