Energy efficiency for buildings: the business case in five points
So are you ‘In’ or ‘Out’? No, not another article about Brexit, I’m actually referring to energy efficiency – energy efficiency within buildings no less, so let’s get switched on (sorry!) for a moment.
According to the International Energy Agency, global demand for oil and liquid fuels averages circa 96,000,000 barrels per day. I crunched some numbers: this consumption equates to circa 2,228,544 Olympic sized swimming pools of oil and liquid fuels per annum. Built end-to-end, that many Olympic swimming pools would stretch around the world almost 2.8 times, and that is before we consider other fossil fuel consumption. Not all this fuel is used in buildings of course, but I think this clearly illustrates the sheer rate of resource use that we incur ‘just doing what we do.’
Mat Lown, Partner at Tuffin Ferraby Taylor LLP wrote an excellent article in August 2014, where he highlighted that ‘globally, it is estimated that 30% to 40% of energy is consumed in buildings’ and that ‘DCLG estimated that in 2009, buildings accounted for circa 43% of all UK carbon emissions.’
So what’s the business case for energy efficiency? Here’s our top five points:
Business Opportunity One: Quantify Consumption and Reduce Procurement Costs
If you can’t measure it, you can’t manage it. Quantifying what you use enables you to compare your usage against benchmarks typical for your building / sector which gives you more leverage when looking to purchase cheaper energy supplies or switch to a more competitive supplier.
Business Opportunity Two: Increase Efficiency, Reduce Expenditure
The cheapest kilowatt hour is the one that you don’t use. By treating energy as a resource requiring proactive management you will make the working environment more attractive for staff, reduce the cost of ongoing equipment and HVAC maintenance and realise financial savings.
Business Opportunity Three: Enhanced Staff Engagement
Having better working conditions as a direct result of being energy efficient and drawing upon staff expertise will have a positive effect on the attitude of your workforce. When people are emotionally invested, they want to contribute more.
Business Opportunity Four: Enhanced PR
Energy efficiency is a positive step towards greater environmental responsibility. Corporate responsibility is important in many organisations, and being seen as ‘green’ enhances your organisation’s reputation amongst customers and stakeholders.
Business Opportunity Five: Risk Reduction and Business Future Proofing
The Energy Efficiency Directive (EED) drives many of the governmental energy efficiency initiatives currently implemented within the UK such as the Energy Savings Opportunity Scheme (ESOS) for larger organisations (with fines issued for non-compliance). Similarly, the Energy Performance of Buildings Directive (EPBD) mandates a 20% reduction in carbon emissions in the built environment by 2020 with 20% of this provided by renewable sources and is responsible for market-based incentives such as the Feed in Tariff (FiT) and the Renewable Heat Incentive (RHI) that have presented businesses with good renewable energy and economic investment opportunities over the last six years. Additionally, the Minimum Energy Efficiency Standards (MEES) make it unlawful for landlords to grant a new lease of properties that have an Energy Performance Certificate (EPC) rating below E, from 1 April 2018, which presents a serious incentive to landlords in both the commercial and domestic sector to improve understanding of (and in many cases improvements to) the energy efficiency of their building stock with risk of serious financial penalties for non-compliance.
By becoming more energy efficient you insulate yourself from the volatility of energy price rises, allow yourself to take advantage of energy savings and investment opportunities and position yourself securely in the market to react to legislative requirements proactively rather than reactively.