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Action on Climate Change: Proposals for Improving the Energy Performance of Existing Non-domestic Buildings - A Consultation by the Scottish Government

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06 Measures to improve the energy performance of existing non-domestic buildings

Background

6.1 As identified in the introduction to this consultation, The Scottish Government is already doing a great deal to promote and encourage better energy performance in the business and public sectors. However, given the challenge of climate change we need to consider other innovative options, including regulatory measures to enhance the energy performance of buildings.

6.2 The EU Directive 2002/91/ EC on the energy performance of buildings ( EPBD) introduced a requirement for existing non-domestic buildings to have Energy Performance Certificates ( EPCs) in certain circumstances. EPCs will provide important information on the energy performance of buildings, however, the EPBD does not require any action to be taken following the EPC to improve energy performance. It relies instead on the operation of market forces and wider forces in society, such as growing awareness of the importance of climate change, to drive improvements. Building owners may consider that there is a market advantage in making energy performance improvements following an EPC, or they may wish to do so for environmental reasons, but there is no requirement for them to take action at present.

6.3 In addition, EPCs are only required at the points of sale or rental, and for large public buildings of over 1000m 2. The Scottish Government believes there is potential scope to go beyond the regime already required by the EPBD. This cannot be done using the powers contained within the European Communities Act 1972, but the proposed Scottish Climate Change Bill offers an opportunity to create the necessary primary legislation.

6.4EPCs have a lifespan of 10 years and, in Scotland, legislation requires that all EPCs be produced using an asset rating. An asset rating is a calculated rating based on standard weather data and building use. It is similar in principle to 'typical use' consumption figures for cars and is useful when comparing two buildings with different users, i.e. provides like-for-like figures. This is not only useful for potential owners and occupiers of buildings, but also has the ability to drive those who invest in buildings, the building owners, to spend money on appropriate carbon emissions reducing building fabric and services.

6.5 The Sullivan Report on a Low Carbon Building Standards Strategy for Scotland www.sbsa.gov.uk/sullivanreport.htm includes the following recommendations concerning existing non-domestic buildings and energy performance certificates, for which there could be enabling powers included in the Scottish Climate Change Bill:

  • consideration of developing practical performance standards for existing buildings (aligned with the energy performance certificates);
  • the introduction of legislation to require all owners of non-domestic buildings to conduct a carbon and energy assessment and produce a programme for upgrading;
  • the empowerment of local authorities, or similar public bodies, to check such assessments;
  • the publication of guidance for different types of non-domestic buildings to assist in this process;
  • consideration of ways to encourage owners to implement recommendations arising from the carbon and energy assessment; and
  • that primary legislation is sought to allow Scottish Ministers the opportunity to extend the provision and type of Energy Performance Certificates.

In the light of their advice, the Scottish Government wishes to take this opportunity to consult publicly on these recommendations.

Proposals

6.6 New legislation could require the owners of non-domestic buildings, or persons delegated by those owners, to obtain an Assessment of the Carbon and Energy Performance ( ACEP) of their building, even if they were not required to obtain EPCs under the EPBD. Following such an assessment, owners could simply be given advice or guidance to encourage them to implement the recommendations; or they could be legally required to develop a programme of cost-effective improvements to reduce emissions and improve energy performance, and thereafter to carry out any necessary improvements. The partial RIA which accompanies this consultation document sets out eight scenarios to reflect potential combinations outlining carbon dioxide measures. These measures could be developed through secondary legislation from the broad powers being sought.

6.7 It is proposed that ACEPs would have sufficient regulatory 'push' to encourage adoption of improvement measures by building owners or their delegated persons, when they consider it to be the most appropriate solution to reducing carbon emissions. Improvement measures might include insulation, measures to reduce air infiltration, equipment efficiency and equipment controls, and low carbon equipment where these are cost-effective.

6.8 Owners, or persons delegated by the owners, could be required to retain the assessment and keep a record of the improvements that are made. They could also be expected to obtain a further ACEP every 5 years (for example) and draw up a further programme of improvements. One criticism of the EPBD is that at 10 years, the lifespan of an EPC is too long and when such a certificate reaches 7-8 years, it may no longer reflect the energy performance of the building. It is therefore proposed that powers are sought to vary the lifespan of EPCs.

Q4. Should Scottish Ministers take powers that place a statutory duty on the owners, or persons delegated by the owners of non-domestic buildings, to carry out an Assessment of Carbon and Energy Performance ( ACEP) other than when a building is sold or rented out?

Q5. Should Scottish Ministers be able to vary the time intervals between EPCs as a part of ACEPs?

Q6. Should it be mandatory for cost-effective improvements identified within the ACEP to be actioned by the owners, or persons delegated by the building owners, or should action be at the discretion of building owners?

6.9 Consideration could also be given to investigating the potential to extend legislation to include a requirement for operational ratings to be undertaken alongside asset-based ratings. An operational rating is based on measured energy use. It takes account of how the building is used and managed and is useful for energy managers of the building because it includes factors they control. It has the scope to drive those who manage non-domestic buildings to deliver carbon savings from the equipment already installed. With the inclusion of operational ratings, as well as asset ratings, then not only would improvements affecting comfort loads be incorporated, but also improvements that affect how the building is managed. For example, printers and photocopiers in office buildings could be included. While such a combined approach should be a more powerful driver for reduced carbon emissions than using asset-based ratings alone, this may require additional action by building owners to prevent some of the unintended consequences that could arise from the inclusion of operational ratings. For example, it could be prudent to introduce sub-metering to enabling 'comfort' energy usage to be isolated from that relating to 'business' energy usage. Sub-metering would allow energy managers to monitor which equipment in their buildings use the most energy.

Q7. Should consideration be given to extending legislation to include a requirement for operational ratings, as well as asset based ratings? If yes, should provision be made for sub-metering?

Assessment of historic and traditional buildings

6.10 The precise assessment process and any programme of improvements emerging from an ACEP would need to be specific to each building. An important issue to consider is whether or not the characteristics of historic and traditional buildings are such that an entirely different assessment process is required for them, or whether the ACEP process can be developed to enable sufficient flexibility to ensure that historic and traditional buildings are treated appropriately and that measures suitable for traditionally constructed buildings are promoted. 6 It may be necessary for any secondary legislation and guidance to take factors such as this into account and separate assessment criteria may be required for traditional and non-traditional buildings.

6.11 The term 'traditional building' is used for the purposes of this consultation to define a building of traditional construction built before around 1919. The term is not confined to listed buildings or buildings within conservation areas. 7 Many, but not all, of these are traditionally-constructed. The majority of buildings erected before around 1919 are not designated as listed buildings, however, they do function in a different way to buildings erected with more modern construction techniques and therefore need to be approached in a different way. For example, giving recognition to how traditionally constructed buildings interact with moisture in the air.

6.12 For the assessment process, taking into account the needs of traditional and historic buildings would require determining appropriate measures to reduce carbon emissions with due consideration to the historic character of the building; including the embodied energy of existing materials and any replacement materials. If replacement materials are incompatible with existing traditional materials they may damage existing building fabric and shorten the life of the building. The materials used in traditional buildings are often a key part of their authenticity.

6.13 Any improvement programme following from the assessment would need to ensure that environmental improvements were undertaken with due consideration to:

  • the historic character of a building;
  • the materials used in construction and the embodied energy contained in new materials;
  • appropriate improvements in management to reduce carbon emissions;
  • appropriate building repair and maintenance to limit emissions; and
  • recognition that traditional buildings must permit appropriate air circulation.

Q8. Should there be an entirely separate process for historic/traditional buildings to reflect their distinct characteristics, or should the requirements of such buildings be incorporated into a single assessment process which takes account of the characteristics of older buildings?

Q9. Do you agree with the suggested criteria at paragraph 6.13 that should be considered in the assessment of historic/traditional buildings?

Q10. Can you suggest additional assessment criteria and are there other criteria and actions you would like to see included? Are there criteria and actions which you think should be excluded?

Implementation

6.14 It is anticipated that the implementation of such a duty would be phased in gradually through secondary legislation, possibly starting with the largest buildings and coming down in a series of well publicised stages until all non-domestic buildings were covered. The provisions would apply to public buildings, including the Government estate. It is expected that implementation would be done over a number of years, with reappraisal being carried out at regular intervals. Such an approach would help to mitigate the impact of any financial or welfare issues that these proposed measures may have on business and public sector. Broad powers within primary legislation would enable fine-tuning to be addressed through secondary legislation. This would allow opportunities for further engagement with stakeholders and any cost-burden to be minimised.

6.15 Assessments would be targeted at building owners who frequently have complex decisions to make relating to the management of their buildings. It is proposed that building owners could delegate their ACEP responsibilities to others, for example the tenants of buildings. However, it is thought that the decision to accept such delegation should rest with the potential delegate. In this way responsibility would only be accepted when the arrangements are favourable to the person or body which is considering being the delegate. Similar duties already exist for assessment and action plans under disability discrimination and fire safety legislation. Many large companies already have begun the process of sustainability assessments and are likely to present themselves as leaders in this field (e.g. the supermarkets and leading retailers, the banks and major financial institutions). If operational ratings are adopted as well as asset ratings it is appropriate that the person who does the asset rating also completes the operational rating. However, this may cause issues in terms of legislation as responsibility for asset rating is best placed with the building owner, whereas the occupier of a building is in a better position to commission an operational rating.

6.16 The ACEP would operate alongside two key Directives:

a. Energy Performance of Buildings Directive ( EPBD)
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32002L0091:EN:HTML

and

b. Energy End Use Efficiency and Energy Services Directive ( ESD)
http://eur-lexeuropa.eu/LexUriServ/site/en/oj/2006/l_114/l_11420060427en00640085.pdf.

If powers for ACEP were also to include operational ratings, the approach could be consistent with the proposed UK Carbon Reduction Commitment ( CRC), with regard to the collection of data for carbon emissions from buildings.
http://www.defra.gov.uk/corporate/consult/carbon-reduc/index.htm

Enforcement, contraventions and sanctions

6.17 The panel that produced the Sullivan Report has recommended that these ACEP assessments should be checked by local authorities or similar public bodies. Should ACEP be underpinned by an asset rating, then it is appropriate that responsibility for enforcement should rest with local authorities. Such authorities will also have an enforcement role regarding provision of EPCs in terms of the EPBD. However, if ACEP is underpinned by an operational rating, identification of appropriate enforcing bodies becomes less clear. Decisions taken in this regard would be left until the CRC comes into effect.

6.18 Key contraventions could include:

  • owners of non-domestic buildings who fail to obtain an ACEP;
  • providing false or misleading information in an ACEP; and
  • failure to execute work identified in an ACEP.

Contraventions could be dealt with in the first instance through the service of an enforcement notice (failure to comply with such a notice being an offence), or possibly a penalty charge notice.

Q11. Should responsibility for enforcement rest with local authorities or should there be some other body? Please offer suggestions for appropriate bodies.

Q12. Should contraventions and sanctions apply along the lines identified above?

Q13. In many instances, the business and public sectors welcome regulation as it creates a level playing field, however, regulation needs to be proportionate and be sensitive to the needs of these sectors. As a tenant or building owner, what impact would these proposals have on you or your business? (Please indicate all positive and negative effects that you perceive may occur as a result of these proposals).

Q14. Do you have other views or issues with the proposals for existing non-domestic buildings, including those that are of historic/traditional nature?