Article published in Construction News - 27th October 2011
The carbon agenda will fundamentally change the way in which built assets are designed, constructed and operated by the end of the decade.
A Bank of England inflation report out earlier this year pointed to an expected 10-15% increase in energy prices by the end of this year. With OFGEM and the Sunday Times respectively predicting 80% and 100% price increases by the decade end, and with the built environment and construction industry contributing 56% of the UK's carbon emissions, this sector, and its supply chain, will feel the impact of price increases the most.
When you consider these price increases alongside growing carbon reduction legislation and targets, (e.g. - the adoption of the 4th Carbon Budget signalling a 50% reduction in UK emissions by 2025), it's possible to sense that the cost of energy and carbon is set to increase exponentially.
So what does this mean for the construction industry?
Firstly, there will be greater awareness regarding energy costs of new buildings. However, merely providing a 'green certificate' such as BREEAM may not be enough, nor will a Part L focus on regulated energy (which excludes items such as lifts, life systems, IT, catering and appliances). Developers will have to demonstrate that final energy bills of buildings will be lower. When it comes to existing buildings, many more clients will be interested in undertaking a low carbon refresh of their estates, and low carbon/energy retrofitting will become ever more important. As energy prices increase, one of the benefits for the retrofit market is that the payback period will substantially decrease. For instance, a measure that has a five year payback in today's terms will be less than two by 2020.
To date, many clients have failed at articulating a business case for energy efficiency in sufficiently robust terms to attract the attention of the FD. There is an opportunity here for the construction industry to up-skill and arm themselves with the ability to easily communicate future economic benefits of retrofit work. Indeed, by reviewing investment decisions on the basis of projections, future costs and incomes from areas such as renewable incentives, the case for investment becomes clear. For those companies who get their strategy right, business, even in these gloomy economic times, is likely to flourish.
What's more, it's clear that those businesses that have low carbon operations and supply chains in place will be at an advantage. For instance, a factor which influences the carbon emissions of site works is the availability of a mains power connection and the reliance on generators, the latter being significantly more carbon and energy intensive. A simple action such as bringing on mains power during pre-commencement works could result in substantial savings.
Clearly renewable energy will play its part in the transition to the low carbon future but over reliance on this will need to be avoided. Carbon demand reduction and increased resilience should be the focus for the next decade.
By taking these simple steps, the construction industry will drive the future. A failure to make these changes could see companies out in the cold.
To help address all these points, Sustain and CIRIA (The Construction Industry Research and Information Association) is holding an event, 'Whole Life Carbon in Construction' on the 15th November in London.
Our aim is to bring some clarity for industry professionals including contractors, product manufacturers and sustainability managers. The conference will feature addresses from some of the UK's most forward thinking construction companies such as Balfour Beatty, Kier and F&G/Atkins and Davis Langdon and we will explore a large number of key issues, including that of low carbon buildings.
This event is discounted for CIRIA Network, Core, and Associate members at £30 +VAT and costs £75 + VAT for non members. Interested parties can register online at: www.ciria.org/service/e11222
