Accelerating the transition
Gone are the days of a one-off technology upgrade, believes Nick Keegan. Now, building efficiency will need to continually adapt to changing usage requirements
At the recent ESTA Conference shadow energy minister Alan Whitehead MP and Mike Thompson from the Committee on Climate Change made it clear that our sights should now be locked on net zero emissions by 2050. Consequently, there is an urgent need to make significant progress as soon as possible to have any hope of the UK playing its part in limiting global heating to 1.5⁰C.
To achieve this target they outlined the considerable upheaval required to our energy systems. Let’s put this into context. Around 30 per cent of the UK’s emissions come from heating. Decarbonising will require a paradigm shift from our fossil fuel sources to heat pumps, green gas and hydrogen. Transitioning to electric vehicles, expected to take around 100Mt off our current 500Mt annual emissions, will also have a profound impact, with recharging becoming an inherent part of what our buildings should cater for. Alongside this, considerable emissions reductions must come from building energy efficiency. Unlike the other examples, which are focussed around permanent technology shifts, building efficiency will need to continually adapt to changing usage requirements and take a holistic approach. Gone are the days when technology upgrades will cut it by themselves.
Such a fundamental transition will lead to a constantly changing landscape of regulation, incentives, taxes and technology. To react to these evolving conditions, organisations will need to bolster their energy management teams and/or find effective ways of working with external service providers. There are existing examples of the latter that have proven to be highly beneficial when implemented with a firm focus on verified performance. At EEVS, for instance, we work in an external assurance role for two FTSE 100 companies, which are achieving multi-million-pound energy savings by engaging their FM provider to optimise control settings, incentivising them to drive continual improvement in energy use through a performance contracting commercial structure.
However, the market is not yet fully embracing these opportunities. In a recent energy efficiency services survey, conducted as part of the Horizon 2020 funded QualitEE project, only 45 per cent of UK respondents reported growth in their Energy Performance Contracting (EPC) orders, and the majority of those indicated that growth was slow.
The 2019 results – published in November at https://qualitee.eu/market-research/ – allow for comparison across 15 European countries and evaluation of market trends against similar surveys conducted in 2013, 2015, and 2017. Over the years, UK respondents have consistently reported that “complexity/lack of information” is one of the main factors constraining market growth. ESTA’s Energy Services Contracting group (ESCg) is taking steps to address this. Recently, the group launched its energy services contracting guide (https://estaenergy.org.uk/groups/escg/) that offers a concise introduction to the concepts and success factors, alongside a directory of experienced service providers among ESTA’s membership.
In the survey, “complexity/lack of information” is only topped by “high costs of project development” in terms of perceived barriers. Both barriers link to low standardisation in energy services contracting and no institutionalised scheme for recognising quality. Consumers can exert huge amounts of time, cost and effort giving decision makers sufficient comfort to approve projects as they struggle to find independent information to prove performance, and they often find themselves reinventing the wheel in the project development process. The latter has been resolved to some extent for the public sector which now benefits from standardised procurement processes for EPC through frameworks such as RE:FIT, CEF, Essentia and NDEEF in Scotland.
For our part, the ESCg has been engaging with the QualitEE project, which has published a draft set of quality criteria for the assessment of Energy Efficiency Services (https://qualitee.eu/publications/draft-guidelines-of-european-quality-criteria/).
ESTA is looking to build these into a quality assurance scheme for EPC. The current proposal is to offer a register of accredited service providers assessed on capability and an audit of one project every two years. This is currently under consultation with potential users, and the criteria are being refined through testing in pilot projects. Proposals are being developed for how this scheme could work in conjunction with the Investor Confidence Project (ICP), which the group has also been engaging with. The ICP has developed a standardised documentation process for energy efficiency projects, and its established Investor Ready Energy Efficiency (IREE) certification offers assurance that this has been satisfactorily followed at the underwriting stage.
As EPCs are one delivery mechanism for energy efficiency, part of the criteria can be justified to have been satisfied where a project carries IREE certification, reducing auditing burden and associated fees. The proposed scheme would also complement IREE by offering a verification point for projects in operation.
We hope these activities will contribute to increasing uptake and effectiveness of energy services contracting as a tool to accelerate the energy transition. From the tone of our conference speakers it sounds like we will need all the tools in the box to hit our 2050 target.
Nick Keegan is chair of the ESTA Energy Services Contracting Group and Director at EEVS Insight
