December 2007Carbon Reductionsin New Non-DomesticBuildingsA report by the UK-GBC Task Group

Executive Summary

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INTRODUCTION

The publication of the Code for SustainableHomes set out targets to achieve radicalemissions reductions from new homes. Thisproject was commissioned by the Departmentfor Communities and Local Government to addto the understanding of whether similartargets in the non-domestic sector can be setand achieved and on what timescale.

The Task Group endeavoured to answerthe following questions:

1. What is total energy use in non-domesticbuildings?

2. Is it feasible to reduce the carbonemissions resulting from this energy use downto zero?

3. What would be the estimated cost of thesecarbon emissions reductions?

4. Over what timescale could zero carbon newnon-domestic buildings be achieved?

QUESTION 1: WHAT IS TOTAL ENERGYUSE IN BUILDINGS?

After collecting considerable amounts ofexisting energy-use data in non-domesticbuildings from across the membership of theUK-GBC, and modelling a number of buildingtypes, estimates of total energy use could becalculated. However, energy-use data for nondomestic buildings was found to beinconsistent, ad hoc and by no meanscomplete. A greater understanding of energyuse in buildings is essential not only tounderstand the feasibility and cost of zerocarbon new non-domestic buildings, but alsoto the successful implementation of policymeasures to achieve it.

Therefore the first recommendation of thisreport is the implementation ofEnergy Performance in Buildings Directive(EPBD) as soon as possible, which mustinclude Display Energy Certificates (DEC) forall new and existing non-domestic buildings.If implemented in conjunction with aconsistent data gathering and reportingmechanism, this will allow accurate data tobe gathered around the actual use of energy.With this data it will be possible to design andmodel future buildings with confidence that

energy consumption estimates are accurate.Therefore the second recommendationis the construction of a national databaseto collate and store this data and makeit available to the whole industry.

In addition, although not necessarily relatedto new-buildings, accurate building energydisplays could contribute to the developmentof zero carbon energy solutions whichencompass both new and existing buildings.

QUESTION 2: IS IT FEASIBLE TO REDUCETHE CARBON EMISSIONS RESULTINGFROM THIS ENERGY USE DOWNTO ZERO?

It is difficult to generalise across all non-domestic building forms and uses, but energyuse, and in particular the electricity to heatratio, is significantly higher for non domesticbuildings than it is for domestic property.This means that for most building formsand uses, the implementation of on-siterenewable energy solutions is much morechallenging. Indeed, the report shows thaton-site renewable energy solutions that arecapable of meeting all building energydemand are unlikely in most instances,without significant heat dumping orconnection to a local heat network.

This leads to recommendation three: theimplementation of an effective hierarchyfor carbon emissions reductions includingenergy efficiency in design and theuse of on-site, near-site and off-siterenewable energy generation solutions.It is relatively well understood, but alwaysworth stating, that there should be a clearhierarchy for achieving emissions reductions,starting with demand reduction, throughpassive design measures and high-performance specification. Even sourcesof “renewable energy” can have a finitecapacity, and therefore as much, if not more,effort should be put in to designing out energydemand as is put in to designing in energygeneration and supply.

Once high levels of passive performance havebeen achieved the issue of energy supply canbe addressed. Ideally the generation capacityshould be located as close to the developmentas possible in order to avoid unnecessarydistribution losses, increase local awarenessof energy supply issues, and ensure that

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all available renewable energy capacityis exploited.

All solutions would need to ensure additionalrenewable energy generation to avoid doublecounting of carbon reductions. It is alsorecognised that the considerable renewableresources of the UK, although very large (oneof the largest in Europe) are nonethelesslimited and therefore the use of localresources should be prioritised before the useof national offsite sources. Testing of whenthis should be prioritized should form part ofthe work on a resource estimation tool.

Therefore the fourth recommendationis the construction of a UK-wide renewableresource estimation tool, tied to localplanning requirements. This tool would beused at the planning stage of developmentsto assess their renewable energy potential.This would need to take into account thepotential both for renewable energygeneration on the site and for decentralisedenergy networks which should be testedand set by the planning authority.

The fifth recommendation is that certainminimum energy efficiency measuresalso be incorporated within higher levelsof any rating system, much the same as theCode for Sustainable Homes has a minimumheat loss parameter. This should includeminimum cooling load parameters forbuilding uses in order to ensure efficientuse of resources before drawing uponUK-wide resources.

QUESTION 3: WHAT IS THE ESTIMATEDCOST OF THESE CARBON EMISSIONSREDUCTIONS?

The estimated cost of delivering all new non-domestic buildings to zero carbon standardsvaries widely with both the form and the useof the building.

Very few true zero carbon non-domesticbuildings have been constructed in the UK;as a result there is little empirical evidenceas to what a cost premium might be.Furthermore, due to performance andquality drivers, there is a wide range ofcosts associated with functionally similarnon-residential buildings. Due to the absenceof an established knowledge resource andthe high variability in baseline costs, the

reporting of the extra cost of zero carbonon the basis of a percentage additionruns the risk of significant error, andmisrepresenting the factors that drivethe cost premium in the first place.

Information was taken from completedprojects, which are likely to have relativelylow occupation-related loads. The associatedmodelling, which is based on scenarios thatmore closely reflect the current commercialmarketplace, suggests that the premium couldrange from over 30 per cent down to as lowas 5 or 10 per cent of current baseline costsgiven sufficient time for the market todevelop, and detailed specifications to becosted. In some extreme cases, the premiumcould well be higher than this. It is importantto note that considerable work in building aknowledge base which matches cost premiumswith building type and building performancewill be required to enable a confident andcontextually accurate assessment to be made.

Significant carbon reductions are requiredto mitigate the onset of climate change,but the economic drivers for this are notyet sufficiently in place to respond to therecommendations of the Stern Review.

Therefore recommendation six is that policyintervention is required and should cutacross many policy areas: planning, BuildingRegulations and energy as a minimum.

This report highlights the fact that energy-demand reductions for building occupiers arenot financially incentivised at current energyprices. Therefore, occupiers must be engagedin demand reduction.To do this, and to ensureadditionality for the whole lifetime of thebuilding, the seventh recommendationis that consideration should be given torequiring the occupier to pay for the actualamount of carbon emitted (as shown onthe DEC) over and above that predictedto be used by the building by the EnergyPerformance Certificate (EPC).

QUESTION 4: OVER WHAT TIMESCALECOULD ZERO CARBON NEW NON-DOMESTIC BUILDINGS BE ACHIEVED?

With commercial property valuations at veryhigh levels, there is little prospect for furtherupward growth. As a result, an increasein cost related to low-carbon construction

is likely to affect either levels of rent,developer profitability or the price paidforland in the first instance. That said,the market is already gearing up to achievethe challenging targets of the Code forSustainable Homes and this has been achievedby setting a clear road map for the wholeindustry to work towards.

A challenging yet achievable timeframe forachieving zero carbon new non-domesticbuildings along the lines set for housing isneeded to allow the market to innovate,adapt and deliver in a way which ensures boththe achievement of carbon reduction goalsand the stability of the property sector.

A similar regulatory escalator to that in placefor housing is required for non-domesticbuildings. Therefore recommendation eight isthat the timeline should begin with the nextrevision of the Building Regulations with stepchanges at each revision of the BuildingRegulations, concluding with a zero carbonstandard but adding in an extra level of zero‘regulated’ energy use.

The above cost estimates suggest a very widerange of timelines to achieving zero carbon.However, if a zero carbon new non-domesticbuildings target is to be set, this researchsuggests that with a trajectory in place similarto that adopted for the Code for SustainableHomes, and the above “zero ‘regulatedenergy’” step added, a deadline of 2020 couldbe adopted. This trajectory needs to be clearand fixed to give the industry firm directionto plan and achieve this target. Further workis needed to understand the cost of such a

trajectory and to set these costs in thecontext of the Stern Review. This work hassuggested that collaboration betweenUK-GBC, as the co-ordinating voice ofthe industry, and Government, can definethe most direct road map by bringingtogether all sectors of the building industryand related organisations in search ofcommon goals. The project would need tobe continuous and ongoing. The differentorganizations participating in the UK-GBCprovide effective checks and balances throughdebate and industry consultation at the veryhighest level. The release of the CallcuttReview and the subsequent announcementof an investigation into the feasibility of adelivery body to coordinate the delivery ofzero carbon homes by 2016 is very relevant.Given the findings and recommendationsin this report, attention should be given tohow the delivery of all zero carbon buildingscan be co-ordinated and delivered.

The full report is availableat www.ukgbc.org

UK Green Building Council would liketo thank the following organisationsfor contributing to this report:Arup, Atelier Ten, BRE, David Langdon,Fulcrum Consulting, Gardiner & Theobald,Gazeley, Halcrow Yolles, Hammerson, HeriotWatt University, Laing O’Rourke, LandSecurities, Jones Lang LaSalle, Lend Lease,Marks & Spencer, Bennetts AssociatesArchitects, Segro, University College London,Upstream, Hermes, British Land, Prologis.

Photography courtesy of Kingspan

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