Despite coming into effect on April 1st, the UK’s new minimum energy efficiency standards (MEES) for 2023 are no joke. Are the changes just par for the course, or do they signal a larger shift in governmental priorities?
Many countries around the world enforce national standards for energy efficiency within buildings. In the UK, almost all buildings must have an EPC, or Energy Performance Certificate which provides buildings with a rating between A and G. In the US, there are a number of different legislations in places such as Local Law 97 in New York, BERDO in Boston and BEPS in Washington.
Although, while the criteria and methods may differ for each of these standards, the goal remains the same: to ensure buildings are as energy-efficient as possible.
As of April 1st, 2023, it became illegal for any UK property with an EPC rating below E to be let or rented, unless it is registered as a valid exemption. This is predicted to affect around 10% of London’s existing office space, and over the coming years the rating requirement is expected to increase to B which, by some estimates, would mean over 70% of existing offices would become unleasable. This indicates a clear – and welcome – focus of the government’s environmental priorities. Landlords must now implement the right changes, and soon, or risk stranded assets. As you may expect, this change is set to impact older commercial buildings more than newer developments, as modern buildings should have been designed with energy efficiency in mind.
How can you reduce your building’s energy consumption?
Landlords, especially in the UK, can struggle to know what the true performance of their building is, making it far harder to know how to improve. Yet, if they don’t make effective and efficient changes, they risk fines of up to £150,000 ($186,996), as well as the lost revenue of a stranded asset, the CapEx cost of remediation and, increasingly, the serious damage to their reputation. Although the MEES legislation puts this challenge front-of-mind in the UK today, it is clear that all other mature markets globally are moving in the same direction, driven by a combination of occupier expectation and top-down legislation.
There are three steps to effectively respond to these challenges:
- Implement technology to gather data to understand the granular performance of a building.
- Use technology to process and analyze that data, and
- Build suitable technological solutions to improve the building’s energy efficiency.
Bringing smart technology into a building allows for the accurate measuring and reporting of performance data. Implementing a comprehensive data architecture, underpinned by smart meters and connected building systems, which results in performance dashboards and automation routines will enable the building operators – and the building itself – to make swift and informed decisions on how to lower their energy consumption. In fact, research by Prescriptive Data (2022) showed that buildings equipped with smart technology could expect a 6% energy reduction – and, anecdotally, we are hearing from our clients that the benefits can far exceed this. This supports the real, quantifiable proof we are starting to see across the industry.
Smart technology in action: CIM’s PEAK Platform
PEAK is a best-in-class building analytics SaaS platform created by WiredScore Accredited Solution, CIM. It continuously monitors building equipment for inefficiencies, alerts teams to equipment issues and creates reports that allow users to benchmark their progress around energy consumption, CO2 emissions, air quality and much more.
By acting on this information, users of the PEAK Platform can ensure the energy efficiency of their building, saving thousands on energy costs and exceeding government targets. For example, one use case resulted in €62,000 ($67,886) of realized energy savings and the optimization of 139,930 sq. ft. of office space. Another reduced their annual energy consumption by 874 MWh across seven sites.
Setting up for sustainability: ICONICS
One of the benefits of smart solutions is their ability to work collaboratively with other systems. WiredScore Accredited Solution, ICONICS, has worked with Microsoft and MacDonald-Miller to provide medical centers in Seattle with a customized platform to gain visibility into their energy usage and carbon footprint. Thanks to these new insights, the client was able to save just over $350,000 in energy costs over 12 months.
“Prior to ICONICS, neither [the medical centers] nor MacDonald-Miller had the tools in place to continuously, and proactively, monitor and diagnose the health of the building; it’s a game-changer.” – Ruben Canas, Project Director-Healthcare Construction at MacDonald-Miller Facility Solutions.
Another ICONICS use case enabled their client to reduce the annual energy consumption of three buildings by 15%, or 2.5 GWh, per year. Future plans for this project will reduce the energy footprint further by a total of 10 GWh – which is the equivalent of switching off a 40-floor building with 2,000 users.
Looking to the future…
Changes in legislation, like those to MEES in the UK, are set to continue. Plans are already in place for further updates in 2025, with the regulatory cut-off expected to increase Grade C and then further to Grade B in 2030. It is anticipated that this will be reflected by similar regulations globally over the coming years as government policies adapt to the ongoing climate crisis by reducing energy usage and CO2 emissions.
As things stand, existing real estate, especially older buildings, will struggle to meet these targets. It is increasingly important for landlords and developers to understand the performance of their buildings in detail, and implement targeted and impactful interventions – and at the core of this needs to be a strong tech strategy. While this may seem like a large undertaking, it will more than pay-off in the long term by avoiding the need for additional retrofits in the future.
Colliers, ‘10% of London’s office stock may become unusable in 2023 due to low EPC rating’, 2021
React News, ‘Over 50% of central London offices “unlettable” from 2027 under green regulations’, 2023
Gateley, ‘MEES Regulations from 1 April 2023: the next chapter for commercial landlords’, 2023
Prescriptive Data, ‘Evaluating the Performance of HVAC Optimal Control Based on Real-time Floor-by-Floor Occupancy Data’, 2022
CIM, ‘Burlington leverages data to improve comfort and streamline workflows with PEAK’, 2023
CIM, ‘CIM drives financial and sustainability performance for LaSalle through digitised property operations’, 2022
Microsoft, ‘MacDonald-Miller drives sustainable smart-hospital solutions using Microsoft Power BI’, 2020
Microsoft, ‘Intesa Sanpaolo improves real estate and facilities operations, reduces carbon footprints with Azure’, 2021
Evening Standard, ‘Turning London’s office blocks green will cost £30 billion, says Savills’, 2022
BBC News, ‘Climate change: England not ready for impact’, 2023