Pandora’s Box: How a new European directive will lift the lid on energy in the built environment

In this issue of IQ we examine key aspects of the UK’s progress towards implementing the Energy Performance in Buildings Directive and investigate what lies further down the track.

The EU’s growing dependence on energy imports has long been a concern of the European Commission. Ensuring security of energy supply and addressing the environmental impacts of energy use are driving research and development programs, demonstration and dissemination projects and legislative change.

Encouraged by initial successes in doubling energy efficiency standards in the white goods industry, the commission is the turning its gaze on buildings in the form of the catchily titled ‘Energy Performance in Buildings Directive’ or EPBD.

The EPBD is amongst the most significant diktats to have issued from Brussels since Eddie Merckx was told to remove his stabilisers. The directive should create a step change in public and institutional awareness of the energy use of buildings and will significantly tighten energy efficiency standards across the EU. It should also further encourage the installation in buildings of low and zero carbon energy systems such as CHP and the various solar technologies– particularly in the non-domestic sector.    

Figure 1: Europe’s gas guzzling buildings. (IEA, 2004)

Figure 2: The hissing sound of Europe’s gas supplies. (IEA, 2004)

The directive has five main requirements. These are: minimum standards for all newly constructed buildings, formal consideration of Low or Zero Carbon technologies (LZCs) at the design stage for larger buildings, certification of the energy performance of all buildings when they are constructed, rented or sold, regular inspection of cooling and heating equipment and a requirement that larger buildings must upgrade to meet the minimum standards when they undergo major refurbishment.

The directive was supposed to be transposed into national law by January 2006 but had a built-in deadline extension of an additional three years to implement the parts concerned with inspection and certification. This is to allow member states enough time to train and accredit enough individuals to deliver this enormous task. Not surprisingly, most member states have taken full advantage of the extension.

So, nine months after the directive was supposed to be transposed into UK law, how are we doing? Trying hard but could do better. In fact the EU commission is on the point of writing to the UK and eight other member states with ‘reasoned opinions’ about a lack of ‘notification of measures’ emerging from Westminster. Presumably Westminster is being somewhat taciturn about implementing the EPBD because it hasn’t fully worked out all the details yet – let alone begun the process to get the measures into legislation. Nonetheless, in certain key areas we are well up to speed.

BERs, TERs and LZCs
The requirement to establish a method for measurement of energy performance and to set minimum efficiency standards for new buildings has fallen to the 2006 revision of part L of the building regulations.  The final approved versions of part L were released in April and are available through the Department for Community and Local Government (http://www.communities.gov.uk/index.asp?id=1501258 ).

The basic principle of the method is fairly simple. The fabric and services of a proposed building are modelled to generate a predicted rate of carbon dioxide emissions from the building – the so-called Building Emissions Rate or BER. This is measured in kg of CO2 per m2 per annum. The BER is then compared with a target emissions rate - the TER. The TER is derived by modelling a ‘notional’ building which has the same usage and geometry as the proposed building but is built to 2002 standards. Calculated emissions for this notional building are then adjusted by an ‘improvement factor’ to calculate the TER for the building. To comply with part L the BER must equal or better the TER.

For gas heated domestic buildings, the ‘improvement factor’ is set to 0.2 i.e. the proposed house must generate 20% less carbon dioxide than an identical house built to 2002 standards.  The requirements for non-domestic buildings are more stringent. These have an additional ‘Low or Zero Carbon technology factor’ (LZC) applied which is set to 10% or 0.1. Applying the LZC factor for non domestic buildings results in TERs which are either 23.5 or 28% below 2002 standards depending on the proposed building services.

Although this factor is termed the ‘Low or Zero Carbon technology’ factor, part L does not require that LZC technologies are specified. In theory, further efficiency measures such as very high insulation standards could be used to reach the TER.  However, the intent is that the LZC term will mean that LZCs such as CHP systems, solar hot water etc are sometimes necessitated or at least considered.  In this way, the UK hopes to be in compliance with the part of the directive requiring formal consideration of LZC technologies for buildings of over 1000m2 useful floor area.

These new standards are fairly tough and will require architects and developers to rethink the use of materials, designs and services provision, particularly in the non-domestic sector.  Sustain has been checking new part L compliance for domestic and non-domestic structures. In one instance, the proposed non-domestic building comfortably passed 2002 regulations but would only pass the 2006 regulations if a CHP system was installed. This was despite a fairly energy efficient fabric. Therefore it appears that the LZC factor is working as intended. 

Certification across the nation
The most onerous part of the directive is the requirement that all buildings, with the exception, perhaps, of Stonehenge, should have an Energy Performance Certificate (EPC) ‘made available’ when they are constructed, rented or sold. These certificates have to be produced by an independent qualified assessor.

Producing EPCs on construction should not pose too many problems. Standard Assessment Procedure (SAP) ratings have been a requirement for domestic new build since 1995 and the SAP calculation engine is at the heart of the 2006 method to assess part L compliance outlined above. Therefore there is already a large number of building control officers and other qualified SAP assessors out there who are familiar with the principles of energy assessment of new build using SAP software.

Producing an energy rating for proposed non-domestic buildings is something new and has required the development of a specific model – the so-called Simplified Building Energy Model (SBEM). Version 3 of SBEM is now available free of charge from the Building Research Establishment and is still fairly clunky and buggy. However BRE are continually improving it and there are also two approved versions of the model available from independent software companies which promise a more user friendly experience.

Figure 3: SBEM’s drab front end to the future.

Certification of existing buildings when they are rented or sold is a different ballgame entirely and the rules are still not 100% resolved. What is certain is that domestic buildings will be assessed using a reduced version of SAP – so called RdSAP.  It is also very likely that existing non-domestic buildings will correspondingly be assessed with a version of SBEM.

Dates for the introduction of the various certification requirements are also only partly known.  The EPC required on sale of domestic property will be introduced as part of the Home Information Pack (HIP) which will be mandatory from 1 June 2007. Indeed, since the government decided that the home condition element of the HIP will not be required, at least in the short term, the EPC will be the HIP’s

Figure 4: Coming to a house near you – the proposed Energy Performance Certificate for the Home Information Pack.

The proposed EPC shows how the home rates compared to others on the familiar A to G scale first introduced for white goods. It also shows the buildings potential rating if efficiency measures were implemented and describes their cost and effectiveness. Interestingly, the certificate will also contain information on domestic scale renewable technologies such as photovoltaics and solar hot water.  EPCs for non-domestic and rented sectors should follow similar lines.  

With so much political capital riding on a successful introduction of the HIP it is very likely that requirements for EPCs when non domestic buildings are sold or when any kind of building is rented will take a back seat until the HIP is safely up and running. But time is running out. The deadline extension expires on the 1 January 2009. Therefore it is reasonable to assume that the requirements for EPCs on rental should be in place some time in 2008.

Yvette’s army is on the way
Certificates for all buildings when they are constructed, rented, sold and, in some cases, refurbished? That’s a lot of certificates; in the worst case scenario, the DCLG working group estimates that 450,000 EPCs will be needed in the non-domestic sector with a further 2.5 million in the domestic sector per annum.

Assuming that an assessor can produce one EPC every working day of the year results in an estimate of a minimum of 10,000 assessors required.  The DCLG estimates that 8,000 inspectors will be needed to deliver EPCs for domestic sale in England and Wales alone. Contrast this with the National Energy Foundation’s estimate of 2,500 trained home surveyors currently operating in the UK.

In the domestic rented sector it was hoped that the data already collected by registered social landlords in the form of stock condition and SAP surveys would mean that a further massive data gathering exercise to produce the EPCs would not be necessary. However, it has been found that in fact only a very small number of RSLs collect the right data to produce an EPC.

Clearly, thousands of people will have to become trained in energy assessment and will then have to pass the relevant exam to become an accredited energy inspector over the next year. Even already accredited SAP assessors will still have to pass the exam if they wish to issue EPCs.

Given that there are currently only 7 accredited training centres operating a limited number of courses and that the content of the final exams have still not been decided it seems unlikely that there will be sufficient assessors available to make the roll out of certification as smooth as Yvette Cooper, Minister for Housing and Planning, must fervently hope it will be.  It is safe to say that anyone holding the relevant qualifications will have no shortage of work next summer.

The power of the label
Mandatory energy labelling of white goods and boilers has transformed the energy efficiency of products manufactured in those sectors. In most appliance showrooms you’d now be hard pressed to find anything with less than a creditable ‘B’ rating whilst installing a ‘C’ rated boiler is now illegal other than in exceptional circumstances. 

The overriding lesson from the experience of labelling white goods was that the development classification system (A to G) and a supporting label not only raises awareness of the relative energy performance of the products but also provides the basis for a whole suite of related measures such as procurement, specification and linkages to other policy measures. 

The EPBD is attempting to bring about the same transformation of new buildings and, more importantly, existing buildings which is where the real problem lies. However, persuading premises managers, homeowners and landlords that they should invest thousands in energy efficiency measures so that their property achieves a C rather than a D will not be easy. And it is here that linking the rating on the EPC to other policy measures and initiatives will be particularly important.

A number of ideas are being mooted. There is a lot of cross party political support for a bill which would link the rate of stamp duty to whether the homebuyer invested in energy efficiency measures. Those measures would be spelled out in the energy performance certificate. Unfortunately the bill was dropped from the legislative calendar because other issues were more pressing at the time. It is now waiting in the wings for a return.

Similarly, Yvette Cooper is keen to link EPCs with ‘green’ mortgage lenders and with energy suppliers who need to meet energy savings targets under the Energy Efficiency Commitment.   Elsewhere, one local authority is trialling the linkage of council tax to efficiency rating. All these policy measures would encourage homeowners and home sellers to invest in efficiency.

In the Registered Social Landlord sector the average energy performance of the housing stock as reliably revealed by the certificates could be linked to funding opportunities or standards such as Decent Homes. A database of the energy ratings should also provide the basis for sustainable energy and affordable warmth strategies.

In the non-domestic sector it would also be easy to imagine asset managers implementing internal sustainability policies which, for example, ruled out renting or leasing inefficient buildings. Consequently, building owners would strive improve the energy performance of their buildings to make them more attractive to potential tenants.

As a result of the EPBD there is potential for a web of new policy and incentives to drive up efficiency in our building stock. Expect plenty more from Brussels and Westminster but also from the public for whom bolting a wind turbine to the redundant chimney stack will suddenly start to make a lot more sense.  A perfect juxtaposition of the succession of technology.