Commercial Energy Management: Barriers and Facilitators

According to the UK Green Building Council (2017), commercial buildings are responsible for 3% of the UK’s greenhouse gas emissions.  Over 58% of EPC's lodged for non-domestic properties in 2018 (Q2) had a rating of D or below and the highest proportion of Display Energy Certificates (DECs) (36%) was in band D (Ministry of Housing, Communities and Local Government, 2018).  Inefficient buildings not only cost more to run and maintain, but also negatively impact comfort conditions and staff productivity.

It is estimated that 40,000 GWh can be saved from energy saving measures such as improving insulation ventilation and lighting in buildings (BEIS, 2018).  The four sectors with the largest energy consumption are industrial, commercial offices, retail and health which accounts for 59% of total energy consumption in the UK.

What are buildings using energy for?

UK businesses (BEES, 2018) spend around £24 billion a year on energy with 48% spent on buildings.  For most sectors, energy costs account for 3% of expenditure, however, for energy intensive industries such as the steel and iron sector, this can be as high as 32%.   This is a large proportion of a company’s bottom line, especially if there are additional energy compliance charges such as a Carbon Tax Levy, SERC or ESOS.

Space heating accounts for 49% of commercial energy consumption, followed by lighting and cooling, both at 11%.   Interestingly, these areas of significant energy use are some of the easiest to manage and optimise.  It is important to ensure the buildings HVAC and lighting system is correctly integrated with the BMS.  Click here to read more about how this can be achieved and some of the common issues faced by Facilities Managers.

Owner occupiers verse tenants

According to BEIS (2015), owner occupied properties use more energy than those that are rented, and this varies across the size of the occupying business.  In the office, retail and hospitality sectors, rented premises had the highest proportion of energy consumption.  To make a significant impact on the total UK energy consumption footprint, the split incentive problem that generally arises when trying to implement energy saving initiatives in rented properties, could hamper these efforts.  Historically one of the options to address this issue is to implement the principles of green leases into standard tenancy agreements; this has gained some traction with the big institution investors but remains best rather than common practice.

Who should own energy management?

An organisations energy culture will ultimately determine who is responsible for energy management.  Every company will have its own challenges in addressing energy consumption, however, there are some common themes that emerge within an organisations energy culture according to the sector it operates in:

  • Managing Agents – Buildings are not owned by the tenant leading to split-incentive problems. Energy efficiency is viewed as an external cost outside of business operations.  Building operators who manage facilities do not always see energy bills.  Upgrades and refurbishments are perceived as a potential risk to increasing tenant complaints.
  • Public Sector – Complex and bureaucratic organisations with multiple stakeholders across many divisions or functions.  Limited budget available to spend on energy saving initiatives.
  • Industrial – The operational costs to produce an ‘output’ impacts profit margin and manufacturing processes are energy intensive. In order to remain competitive, the organisation must respond to fluctuating energy costs and security of supply.
  • Retail – Corporate and Social Responsibility (CSR) is an important focus area due to public scrutiny over operational impact on the environment. Operates in a competitive market with a narrow profit margin.  Tend to have money available to invest in energy saving initiatives and have a dedicated team available to manage projects.

Regardless of the sector, business type or size, it is essential to gain the commitment of senior management to achieve lasting energy efficiency.  Identify individuals within the team that would play a key role in the delivery of the energy strategy and ensure they have a clear understanding of their roles and responsibilities to ensuring its success. Communication barriers between departments can make energy efficiency initiatives difficult to implement. Therefore, clear processes and communication channels need to be established, with an engaged workforce that fully understands how their actions and behaviours contribute to improving energy efficiency.

Barriers and facilitators to energy management

Economic issues are the most commonly perceived barrier to energy efficiency – hidden costs, low return-on-investment (ROI) or low capital available.  Energy culture and complex decision chains are also reported to be a perceived problem among organisations.

Improving energy management knowledge, gaining access to available funding and receiving greater buy-in from the leadership team can enable organisations to achieve their sustainability goals.  ETS is the leading provider in energy culture change and can support organisations with training programmes, as well as securing available funding to deliver energy saving initiatives.  Contact us on 0117 379 0850 to learn more about these services.

Energy Audits

An energy audit is often the first step to making a commercial building more efficient.  It should identify areas of significant energy use, review compliance, determine the current state of dilapidation and life-cycle value of plant equipment.  The results from an energy audit should provide guidance to facilities managers to improve energy efficiency, lower ownership costs, mitigate compliance risk, improve comfort conditions and increase asset value.

There are different kinds of energy audits, each providing varying levels of detail.  This is made more complicated when reviewing the market, as each company differs in the level of detail or specialism applied to the report.  Therefore, it is important for facilities managers to consider their end goals before deciding which kind of audit is suitable for their requirements.

As engineering and energy management specialist, ETS offers two type of energy audits which have been designed around the requirements of a facilities manager; these are:

Level 1 - Building Services Assessment (BSA)

This is an abridged energy survey.  It provides a brief outline of energy saving opportunities and areas of significant energy use.  It also identifies the factors influencing energy consumption within the building and forms the basis for various energy compliance requirements.  The BSA contains:

  • Energy saving opportunities
  • Identifies energy waste
  • A review of utilities
  • A review of the existing BMS and controls automation

Level 2 - Building Services Report (BSR)

The BSR provides a comprehensive review of the all building services.  As well as reviewing the areas of significant energy use, the BSR also applies engineering expertise to review the serviceability and maintainability of plant equipment. The BSR contains:

  • Energy saving opportunities
  • Identifies energy waste
  • A review of utilities
  • A review of the existing BMS and controls automation
  • Plant condition report
  • Plant maintainability and serviceability
  • Statuary compliance assessments
  • Capital expenditure projections
  • Plant replacement programmes

We also offer bespoke energy audits and project related reports which can be tailored to the needs of the client. If you would like to learn more about our services, contact us on 0117 379 0850 or email enquiries@energy-ts.com

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