Shopping Centre
Figuring out the details
All buildings will soon need EPCs with A to G ratings measuring energy efficiency. But what of productivity? John Dunn reports
Published:  17 July, 2008
Page 17 

Buildings create a lot of CO2, so let's have an initiative to reduce it. That, more or less, is what the new Energy Performance Certificates are all about.

In 2003 the EU introduced a directive on the energy performance of buildings, since buildings account for 40 per cent of the EU's total energy requirements. Research had shown that more than one-fifth of the energy consumption and 30 to 45 million tonnes of CO2 a year could be saved by 2010 by applying more ambitious energy standards to new and refurbished buildings.

Hence Energy Performance Certificates (EPCs). From April this year in the UK, large buildings over 10,000 sq m need by law to have an EPC if they are bought, sold or leased. And by October all buildings will have to have an EPC.

Will EPCs save the planet? Angus McIntosh, partner at King Sturge, the international commercial property consultant and head of research for its environmental sustainability group, thinks not. "There doesn't seem to me to be any point in having a building that burns no CO2 and has a fantastically good EPC if nobody is going to use it. The key here is productivity - how much CO2 a building creates in relation to the human activity taking place in it.

"An EPC is a measure of how a building is constructed. The assessor has to divide the building up into units. Then each unit is measured in terms of its construction detail, such as air-conditioning, double glazing and so on. An EPC doesn't ask about the management of energy in a building. You may have a very well-constructed building, but if you keep the thermostat at 22°C rather than 20°C, it's going to use more energy.

"Then there's a very complicated bit of software," he adds, "the Simplified Building Environmental Model (SBEM). You put all the numbers in and push the button and out pops the EPC rating." And the problem with shopping centres, says McIntosh, is just what do you feed into SBEM? "What are we measuring? Is it the shopping centre as a whole, the mall, or individual units?"

But his real quarrel with EPCs is that they take no account of how people use buildings - a building's productivity. "Imagine an old downtown shop in the high street that's been there for 200 years. It has lots of embodied energy - the energy spent 200 years ago building it. So we're not going to knock it down and rebuild it because we want to save that embodied energy. Now look at a brand new out-of-town Tesco or Sainsbury's. You've spent a lot of energy in building it. So that's good news for the downtown store and bad news for the out-of-town store."

But what about the actual energy used per square foot? The out-of-town Tesco or Sainsbury's with its chillers and air-conditioning will use far more energy than the old downtown shop, suggests McIntosh. Yet it may well have a better EPC than the downtown store thanks to modern construction methods and double glazing.

Confused? The answer, argues McIntosh, is to forget EPCs and look instead at a building's energy productivity - the amount of CO2 it creates in relation to human activity.

"You have to consider energy consumption in relation to human activity," he says. "What is the turnover of that downtown shop? It might be £50 per sq ft, it might even reach £200 per sq ft. Now look at the turnover of the out-of-town Tesco or Sainsbury's. It could well be £2,000 per sq ft, especially in a busy store.

"Now, if you work out the carbon footprint for every £1 spent, then the carbon footprint of the out-of-town Tesco or Sainsbury's is far, far smaller than the downtown shop.

"Productivity is the driver to saving the planet, not the fact that your building has double glazing or not. If your building has an EPC rating of A, but nobody turns up to use that building, then so what?"

What also bothers McIntosh are the government's plans to introduce vehicle excise duty-style taxes on buildings, with those having a poor EPC rating being taxed more heavily than those with a good EPC rating. "And what will they be taxing?" he asks. "An empty building that may not be used?"

Andrew Szyman, sustainability manager at F&C Property Asset Management, is also concerned that EPCs are not a very reliable piece of information, and he has been conducting some pilot EPC ratings on six of his buildings.

"For one building in central London I have had two consultants give us three different EPC ratings. The first gave us an E rating. We were surprised by this because we had just spent £9 million refurbishing it, so we questioned the consultant, he agreed to come back, and gave us a grade higher. Then we thought we might as well get a third opinion from another consultant, and this time we got a B rating! So one building has gone from an E to a D to a B."

And with that degree of flexibility comes confusion. Szyman concludes, "Our view is that EPCs are probably going to make very little difference to the value of a property, certainly in the short term. An occupier wants to occupy a property primarily because of its location."



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