Ground zero

In the first of a new series of articles, Sunil Shah discusses the challenges involved in delivering the government’s net zero emissions target, and what FMs can do to improve their buildings’ performance

The government’s net zero emissions law provides a significant driver for energy efficiency in the UK. This is an opportunity for the FM sector to step up and claim a voice in how their organisations can help to deliver the government’s goals. This article addresses energy performance and optimising buildings; future articles will examine strategy, target setting, culture and procurement and supplier impacts.

Optimising buildings for energy efficiency has been discussed for many years. The Probe studies from 1995 helped to identify and quantify the challenges with existing buildings (1), but little has progressed. Many of the issues raised in these reports are common across the building stock standing today, so there are few surprises about the ongoing challenges. But business as usual is no longer good enough – we need a different approach.

While net zero legislation has made a difference, the greatest driver has been investors who are demanding more of an evidence-based approach – including an understanding of risk. The issues of energy and, more importantly, climate change are impacting on investment decisions. Regulations and schemes such as the Energy Savings Opportunity Scheme (ESOS) and Streamlined Energy and Carbon Reporting (SECR) raise the need for accurate data and public reporting by some 11,000 UK organisations (2). This introduces a greater level of exposure, increasing reputational risk and potentially damaging the chances of being selected for bids and tenders.

Organisations at a senior level need to have a better understanding of the data and information provided from an enterprise risk perspective. FMs can help their organisations understand how energy is used and why. This requires a joined-up approach to data collection and reporting (3).

WHAT DOES GOOD LOOK LIKE?
The growth of digital technology has led to increasing disruption of the business-to-business or customer model as seen in Uber and WeWork. The internet of things and machine learning is helping to deliver efficiencies by looking at more variables and co-ordinating insights into outputs. For example:

• DeepMind saved 40 per cent of energy in Google data centres (4).
• At The Edge in Amsterdam, 28,000 sensors track items such as desk use, power use, water, meeting rooms, temperature and coffee. Data is used to allocate space for staff, provide targeted cleaning, vary lighting and AC levels, and produce maintenance schedules (5).
• ABB Copenhagen utilises actuators on lighting, heating, audio and blinds (although FM sets the priorities).
• Disruptive technologies from companies like Ravti, OpenSensors and Demand Logic are transforming predictive maintenance. The key differentiator is to enable constructive decision-making by the end user. Savings in the region of 20-40 per cent (cost and carbon) can be realised from the use of such technology, with payback substantially less than some renewable energy and low carbon options.

According to the BEIS committee report ‘Energy efficiency: building towards net zero’: “The barriers to uptake are well documented: a lack of information; a lack of access to capital; high upfront costs and long payback periods; misaligned incentives between tenants and landlords; disruption to normal business activities; and competing investment demands within companies resulting in other business growth investments taking precedence.” (3) Development of a business case and early engagement is critical to align the organisation’s energy programme with the business goals and help overcome these barriers.

When determining whether or not a building can be optimised, there are four key areas to consider.

1 Legacy (6)
Understanding the original intent of the building, the changes that have been made and the current use of the building will help determine whether it is fit for purpose. An older building will naturally have more changes, but there are common issues related to heating and cooling demand, lighting provision and the accuracy of the building management system across all buildings, regardless of age. Remember, predictive maintenance tools typically produce a 20-40 per cent improvement.

2 Skills
The skills of building occupants are often at odds with the complexity of the systems in new buildings. Where offices have previously employed technicians, now skilled facilities managers on high salaries are needed to look after new high-tech buildings. A lack of competency will damage the ability to maintain a building’s performance, regardless of the sophistication of the controls.

3 Contracts (7)
Clients have various departmental responsibilities, from cost pressures and supply chain metrics through to wellbeing and environmental reporting and compliance. Each of these areas has different drivers and typically requires different contractors to deliver. Having a common goal and set of requirements agreed by all parties can reduce the potential for conflict: higher office temperatures will improve wellbeing, but also increase energy costs.

4 Internal barriers
Client engagement is vital – many case studies are illustrating scenarios where aspects are paid for but not necessarily fully delivered. An engaged client is more likely to recognise this. Education and awareness are important – the optimisation of the building as a concept is set at management level, but measured at operational level. The role of the FM enables informed decision-making to be made.

The first step is to understand where your organisation stands in respect of each of these areas. A light touch approach to energy performance can be taken. The development of a business case will depend on the organisation’s business goals and objectives. Most organisations have publicly stated carbon reduction goals, and any business with over 250 employees will need to provide a directors’ report as part of the SECR. The key impacts revolve around disclosure, inability to bid and the resilience of the business.

The next article will look at developing a strategy and plan from the business case.

Sunil Shah is Director at Acclaro Advisory and Global Chair of the RICS Responsible Business Forum.