Retrofit of Non-Domestic Properties

George MarshChair WM Retrofit Steering Group

11 April 13

Birmingham – Scale of Opportunity

Public Sector• Local Authority Offices• Schools• Health Buildings• Colleges & Universities • Leisure Buildings

Private Sector• Industrial• Commercial• Retail• Leisure

Birmingham – Scale of Opportunity

Public Sector• Local Authority Offices• Schools• Health Buildings• Colleges & Universities • Leisure Buildings

Private Sector• Industrial• Commercial• Retail• Leisure

Non-domestic buildings account for circa 20% of carbon emissions

Birmingham’s business energy costs are £500m pa

> 40,000 businesses in Birmingham

450 schools with 10% growth required

BES - 1000 non-dom buildings originally envisaged in 8 yr period

Tenancy Arrangements

Public Sector• Local Authority Offices• Schools• Health Buildings• Colleges & Universities • Leisure Buildings

Private Sector• Industrial• Commercial• Retail• Leisure

Tenancy Arrangements

(Owned or rented)

Have a large effect on the commercial and practical

implementation of retrofit measures

57% of commercial property is rented

• Few case studies to date – although a number of lighting retrofits

• BES Phase 1 – PV on industrial units

• DECC ‘Go Early Pilots’ :

Birmingham : Schools & Community Centres Solihull : Library (listed building) – switch heating from electricity

to gas or biomass – 39% - 62% carbon savings – 5-7 yr payback

: School 1 – replacement boilers 4 yr payback - 50 Kw PV – 7 yr payback (FiT)

: School 2 - effective energy bills reduced to zero thro’

biomass RHI and PV (FiT)

• Solihull College – Lighting, BMS upgrade, Insulation – under 5 yr payback

Early Evidence

Sustainability Drivers for Property Owners

Energy CostsCarbon TaxLandfill Tax

Public OpinionBrand ImageStakeholder demandsEmployee expectations

Occupant Comfort

Future energy costsSupply ChainAsset value retentionObsolescence

CRCEPCsDECsMEPS *

CSR Operational Savings

Business Risk Legislation

* Minimum Energy Performance Standards

Sustainability Drivers for Property Owners

Energy CostsCarbon TaxLandfill Tax

Public OpinionBrand ImageStakeholder demandsEmployee expectations

Occupant Comfort

Future energy costsSupply ChainAsset value retentionObsolescence

CRCEPCsDECsMEPS *

CSR Operational Savings

Business Risk Legislation

* Minimum Energy Performance Standards

But the over-riding requirement for most owners will be ‘bottom-line’ payback

Minimum standards

• All marketing particulars of property must include an EPC• Minimum building energy performance standards by 2018 :

Current intention - minimum EPC rating of E (18% of stock)• ‘Building the Future Today’ (Carbon Trust) – EPC rating must be 4

grades higher by 2050 than today

Resulting in risks to property owners of : Obsolescence and loss of value Negligence claims through not exercising.. ..’the fiduciary duty of

trustees and investors to understand and consider sustainable investment issues when looking at investment in real estate ‘.

Barriers to non-dom retrofit

• Long lifecycles of buildings• Multiple ownership/occupancy & tenancy• Operational Issues - disruption• Information related issues – poor data on energy use• Commercial Issues – varied and uneven distribution as between landlord

and tenant of costs, benefits and control over energy use• Legal Issues - constraints within leases on how costs and benefits can be

allocated between tenant and landlord• Cost of Finance• Reversion Risk• Low awareness and apathy

Practical Areas for Action – 10 Point Checklist

• Sign a Green Lease• Sign a Green MoU• Set up a Green Group for building(s)• Measure & Report Performance• Use ‘Smart’ Metering• Undertake an Energy Audit• Undertake no cost initiatives• Undertake Retrofit Works• Celebrate & Communicate Results

Examples

from

The Better Buildings Partnership

Example – Office Retrofit

Example – Retail Retrofit

Example – Office Retrofit

Thank You

www.shap.uk.com

www.sustainabilitywestmidlands@org.uk