UKGBC Energy Performance Targets for Offices: a case study in why over-ambition is not SMART.

In this long format article I will explore why a knee-jerk response to the climate emergency can lead to well intentioned but counterproductive consequences. I have heard it said that we are living in a time where political reality is approximating scientific reality – at last policymakers are beginning to grasp what science has been saying for many years. This article explores another critical dimension, which I will call engineering reality, where I believe that much of the hard work and tough choices around climate change will be focused. The broader themes in this article are absolutely central to our success or failure and are offered not as a criticism of one specific response, but as a broader lesson to all those who can influence our responses to climate change.

The climate emergency is real and requires a rapid and effective response. Our success in delivering fast decarbonisation of our economy depends on myriad decisions taken in every sector based on our knowledge of the technologies, skills and finance available. These decisions are intricate and complex, not helped by a large number of uncertainties about the future, inconsistent data and conflicting visions of how to achieve Net Zero emissions.The climate emergency is real and requires a rapid and effective response. Our success in delivering fast decarbonisation of our economy depends on myriad decisions taken in every sector based on our knowledge of the technologies, skills and finance available. These decisions are intricate and complex, not helped by a large number of uncertainties about the future, inconsistent data and conflicting visions of how to achieve Net Zero emissions.

Those of us who have been in the business of sustainability for a long time[1] crave a John F. Kennedy moment: “we will put a man on the moon by the end of the decade”. We fancy the notion of a mobilisation of all resources available to limit climate change, to adopt a state of war where combating climate change become the overwhelming priority in everything we do. We can’t wait to see the many barriers we have faced in the past come tumbling down.

So, we are in a uniquely important moment in time. City after city, organisation after organisation, sector after sector are acknowledging the need for rapid decarbonisation. Folks are declaring ‘climate emergencies’, with varying target dates to reduce emissions to nil. By July last year, over half of all local authorities had declared climate emergencies. The declaration, however, is the simple part. It’s easy to draw a curve on a graph, science-based or not, and set that as the ‘pathway’ for improvement.

The difficult thing is to deliver. Just as putting a man in the moon required an army of engineers and scientists to solve countless problems and reconcile conflicting options, attaining zero emissions will depend on the expertise and nuanced decision-making of everyone involved. The devil, as they say, really is in the detail – specifically what actions society can rightly demand of emitters in each sector.

In this article I want to take a deep dive into one specific response to the climate emergency which I think is mistaken and counterproductive. This is the UK Green Building Council’s definition of net zero in building operations[2] and, specifically, the related energy performance targets for offices[3] which have been recently published. Now I must emphasize that I am a great supporter of the work of the UKGBC. I have spoken at several international GBC council events including the inaugural meeting in the Czech Republic and also shared a platform with Jane Henley, CEO of the World Green Building Council at the Dubai Sustainable Cities conference in 2016

No, this blog is not intended as a criticism of the UKGC – or indeed of the many fine consultants and bodies that contributed to the development of these targets. Indeed, I applaud the UKGBC for setting out specific targets. I passionately believe that it is only through authoritative, detailed, independent guidance that we can provide the necessary clear, specific and incontestable actions so that folks know what is expected of them in the current emergency.

It is because I think the targets, as conceived, are plain wrong, and yet are critically important, that I am raising my head above the parapet to pen this blog. I want these office targets to be right so that they can be a part of the solution to the emergency which we can all get behind. I do hope that this piece will be received with this intention in mind.

I will need to get into quite a lot of detail to in order to draw out key lessons – do please bear with me. Not only is this detail relevant to understand why the office targets are misconceived, but also to draw out wider lessons for other sectors setting targets in response to the climate emergency. We will see that the detail behind setting things like performance targets really does matter and that notions of ambition can impede our ability to deliver effective, practical responses. 

So, let us return to the UKGBC’s definition of net zero in building operations. Central to this definition is the fact that virtually no building today is net zero (unless it is shuttered up, unused, and even then, it is likely to consume some energy for frost protection or security and suchlike).

The definition places the onus on first reducing energy demand (i.e. improving efficiency), then meeting the remaining energy demand in a less emissions-intense way (i.e. increasing renewables). Finally, as a last resort, the residual emissions can be offset through high-quality, verified projects, which demonstrate additionality – in other words the project would not have happened without the funds provided by the building. Offsetting, I know, is controversial, but if we genuinely prevent a ton of carbon dioxide (or other greenhouse gasses) entering the atmosphere, or, better yet, remove a ton, then that is good, right?

Here I should declare my involvement in this particular subject. I have worked with one of the UK’s most progressive property companies, Peel Land and Property, for many years on energy efficiency, policy and compliance. Peel became the first UK business to certify 11 of its properties[4] as net zero in operation using this UKGBC definition, a process I was privileged to help with. I hasten to add that this article represents my views on this subject, not Peel’s.

I do not have any criticism at all of the broad definition document. It achieves a good balance between flexibility and practicality, whilst at the same time laying down some great, non-negotiable expectations about reporting and verification. My experience of using the framework – and indeed on piloting the net zero construction methodology – has been very positive. I heartily recommend this approach to my fellow practitioners as a tool to enable building owners to put in place some very useful foundations for continuous improvements, not least acknowledgement of their responsibility for the emissions that their building produces. 

The energy performance targets for offices, which I do take issue with, are meant to reinforce the ‘efficiency first’ approach. These set out the minimum levels of efficiency an office must achieve to be certified as net zero in operation. The intention is to prevent folks from simply playing lip-service to the more difficult efficiency improvements and going straight to using renewables or offsets. By the way, Peel, with its adoption of the energy management standard, ISO 50001 (another first in the UK property sector, which I also supported), has no problems demonstrating it meets this ‘efficiency first’ expectation. Indeed, Peel included data on efficiency investments and results in its net zero reporting[5] for the 11 buildings, going beyond the reporting requirements of the UKGBC templates.

The role of the targets in the net zero operation definition is set out as follows: “the expectation is that individual offices targeting net zero should meet and exceed the performance targets set out by the trajectory before the procurement of renewable energy or offsets”. The targets document then goes on to state that “where the energy performance targets are not achieved, this should be publicly disclosed with an action plan setting out how the targets will be met in subsequent years”. In other words, to enrol an office in the net zero operation certification in the future, you have to achieve or commit to the efficiency target.

So, what is the target? Offices must, by 2050, reduce their energy demand per square metre to just 40% of the current upper quartile for offices as set out in the 2017 Better Building Partnership’s Real Estate Environmental Benchmark (REEB)[6]. In other words, if they are amongst today’s very best performers, they will have to decrease their energy inputs by a further 60%, and by over 70% if they are a ‘median’ i.e. typical office. This improvement is calculated against an initial target energy intensity of 160 kWhe /m2 of Net Lettable Area in air conditioned offices (which I believe is incorrect, as I will explain later).

An impossible target

Now, no one is more in favour of stretching goals that myself, but there is a huge distinction between setting a challenging goal and setting an impossible goal. An impossible target wastes resources and skills, it sets folks up for failure from the outset and reinforces the narrative of the climate change deniers that fixing our emissions problem is too difficult, too expensive and involves too much sacrifice to be worth doing.

Unfortunately, the target is almost certainly impossible for the vast majority of existing offices. Few, if any, of the current office stock will ever be able to achieve that level of energy use reduction, even if we throw any consideration of cost-effectiveness out of the window. That is not just an opinion: the large Building Energy Efficiency Survey[7] (BEES) for the UK government gives the total potential for abatement of energy use in English and Welsh offices as 38%, regardless of the payback. This is considerably less than 60% and is calculated from the mean not the upper quartile of office performance a few years ago. Taking into consideration a payback of 10 years (itself a very difficult business case to make) the potential for abatement falls to around 30% of the mean, less than half the level proposed in the UKGBC target. Scottish offices would find the target even more stretching, because of their greater heating demand. Sure, one could argue that a new technology may emerge to dramatically increase the potential, but that hope should not form the basis for a plan today.

The cadre of offices which would benefit most from the net zero certification is not those top performers in the REEB, it’s the other three quartiles, the 75% of buildings which may not be so actively engaged in responding to the climate emergency. By expecting these properties to sign up for an impossibly high performance commitment, we are effectively barring them from using the net zero framework.

This poses a key question around the purpose of the net zero framework: is it intended as a rating tool to differentiate the ‘best of the best’ or is it a tool to engage with and improve the vast majority of buildings? Indeed, given the level of improvement required, even these ‘best of the best’ folks signing up to the target must be either be unaware or indifferent to the promise they would be making, for reasons I hope will become clear.

Flawed assumptions and calculations

This an entirely unnecessary state of affairs, based on an unlikely assumption of how building emissions can be curtailed. There is a lot of work that shows that buildings can achieve zero carbon through a combination of better efficiency and the decarbonisation of the energy they use. The flaw in the UKGBC office targets is a worst-case mentality that put the annual growth in UK renewable electricity between now and 2050 as just 3.4% per annum (to put that into context, the growth rate between 2008-2016 was over 16% a year). Given the plummeting cost of renewables, the rapidly changing political landscape, the improvement of storage technologies and positive investor sentiment, such a pessimistic projection is wholly implausible.

The methodology used to calculate the target has been published as part of a consultation[8] with UKGBC members and interested parties. I want to go through this in some detail so that we might share the lessons and possibly prompt a rethink.

The technique used in setting the target is very sensible, building on the Dutch Green Building Council’s ‘Paris Proof’[9] targets methodology. In essence, by the target date, 2050 in this case, but potentially earlier, all the energy used by a building must be from a zero carbon source. The steps used in the calculation are set out below.

The first step is to determine current energy demand, which has been calculated as 944 TWh of electricity equivalent for the UK as a whole. The consultation paper has drawn this conclusion from a variety of sources, with a large over-estimation, in my view, of the figure for “other petroleum use”. If I refer to the 2018 Digest of UK Energy Statistics[10] (DUKES), the actual demand, in electricity equivalent terms and including a wider range of energy sources, is 831 TWh, some 11% lower.

I should mention here, for those unfamiliar with the concept, that electricity equivalent is a handy way of aggregating heat energy with electrical energy into a single figure. The symbol used here is kWhe. Energy supplied as heat, e.g. from a district heating scheme, is converted to its electrical equivalent by multiplying by 0.5, while for other forms of heat energy, such as natural gas, the factor is 0.4. I haven’t dug into the validity of this approximation, but I would observe that a rule of thumb for the Coefficient of Performance for heat pumps in the UK would be 4 (giving an equivalence factor of 0.25) so, even allowing for boiler losses, the conversion seems conservative.

So on to calculation step number two: the renewable energy available to the UK economy in 2050. Here, as I have mentioned earlier, lies the biggest weakness in the numbers used. Although the consultation document acknowledges that the projections of the Committee for Climate Change state the available renewable energy will be much higher, requiring an efficiency improvement of 30%, it then goes on to say that this “represents the lowest ambition for energy savings of the three options and the highest relative level of risk for investors because it does not account for future unknown variables e.g. relative increases in floorspace by 2050.”

Let’s examine this statement more closely. I would argue that, at the level of specific targets, the notion of “ambition”, loaded as the word is, should have no bearing. An engineer should never base a calculation on ambition, but on a careful estimation of risk, uncertainty and probability. An impossible target is not redeemed in any way by being ambitious, it remains impossible.

Climate Change mitigation is serious stuff, requiring us to allocate effort and resources to national decarbonisation rationally given the enormity of the challenge and the pressures on skills and money. Over-specifying effort in one sector does no one any favours, as it may well draw money and people away from other sectors. As for the uncertainty in terms of the growth in office space, this is definitely an input which needs urgent clarification and lead to adjustment of the target over time. But this growth could go either way, as automation reduces demand or economic growth increases demand, something that the consultation acknowledges. The notion that setting a more realistic, cost-effective, rational target based on an in-depth analysis by the Committee on Climate Change represents the “highest possible risk for investors” is incomprehensible. Sure, the CCC’s recommended actions have not been adopted by government, and so can be seen as speculative, but to dismiss these is to assume we will do nothing further to address climate change.

Instead, the trajectory for renewables used in the target has been based on BEIS’s 2017 (2016 data) projections[11] for the UK’s future energy supply and emissions. One immediate concern about using this dataset is that the projections covers only half of the relevant time-frame to 2050, finishing at 2035. Furthermore the following year’s projection, 2018 (2017 data)[12], available at the time of the consultation, forecasts higher levels of renewables. Indeed, BEIS acknowledge that their projections only “take account of climate change policies where funding has been agreed and where decisions on policy design are sufficiently advanced to allow robust estimates of policy impacts to be made”. The projections, in other words, assume the government’s current, insufficient, policy measures will not be improved. Again, implausible.

The weakness of these BEIS projections was acknowledged in the consultation document: “These projections were not originally intended to offer a vision for a net zero scenario for 2050 but they do indicate the current level of policy ambition. This option therefore represents the lowest relative level of risk for investors”. Again, I beg to differ: setting out today on the basis that building owners alone should take on the burden of climate change is a very risky undertaking. The enormous cost the unnecessary additional investments in efficiency, paid for by the tenants, will make these buildings price uncompetitive, reduce yield and asset value. The much less risky and cheaper alternative is to place greater effort on decarbonising the supply side using largely proven technologies.

Another interesting choice emerges from my analysis of how the forecast of 261 TWh was arrived at using the BEIS data. This, so far as I can tell, has been calculated by extrapolating the reference scenario renewable energy supply projection taken from 2016 to 2035 forwards to 2050 (i.e. with one year’s actual data, the rest estimated). If I use the same dataset[13] but extrapolate the full range of years available from 2008 to 2035, I get a higher value of 299 TWh, and if I use 2008 to 2016 (i.e. the actual data available) the 2050 projection is 357 TWh of renewable energy. The most pessimistic projection possible from the data appears to have been chosen.

So where are we to obtain a sensible value for the available renewable energy in 2050, the denominator in our ‘Paris Proof’ calculation? The most detailed option is the CCC’s Net Zero technical report[14], referenced in the consultation document as the CCC Option A. Because this technical report is not accompanied by data tables, one has to extract the key numbers which are scattered throughout the text. Specifically, I have collated the estimates for the Further Ambition scenario, which aims for net zero. This scenario forecasts a zero carbon electricity supply (as final demand) in 2050 of 594 TWh [p21, p26], with the generation of 645 TWh to account for losses.

I have taken a conservative view that nuclear power will only supply 46 TWh of this (compared to today’s 64 TWh, bearing in mind that Hinckley C will produce 26 TWh with the balance of 20 TWh coming from existing plants or new projects at Bradwell or Sizewell C). This zero carbon electricity includes some from fossil fuel ‘peaker’ plants buffering demand which are fitted with carbon capture and storage (CCS). By the way, this scenario is based on existing technologies so potentially significant new sources of zero carbon energy, such as tidal power, are excluded.

A useful aspect of the CCC’s Net Zero report is that it sets out the specific measures in different sectors. They say “In non-residential buildings,” which includesoffices, “our Further Ambition scenario abates all residual CO2 emissions. Gas used for peak heating demand in heat networks is decarbonised by shifting to hydrogen.”[p68]. In fact the Further Ambition scenario adds 270 TWh of zero carbon hydrogen supply to the zero carbon electricity, which gives the CCC a total, by my reckoning, of 702 TWh electricity equivalent (594 + 270*0.4), compared to 645 TWh attributed to the CCC option in the UKGBC target consultation (in fact the consultation document here overstates  the supply as the 645 figure is the generation figure not the final supply of 594, which I have used, which adjusts for system losses).

So, what does the CCC have to say about efficiency? Well, they take into account the cost-effectiveness of the technical measures available and conclude “The energy savings potential resulting from this analysis is lower than the headline result suggested in the BEES, with 25% savings for non-electric heating fuels, 20% for electric heating and 21% of non-heat electricity consumption. This is a result of a combination of excluding savings from industry (which has 46% savings potential) and space heating and our adoption of a conservative approach so as not to assume that the savings from the BEES would necessarily be representative of all non-residential buildings.” [p77]. So, an upper value for the necessary efficiency improvement suggested by the CCC from its sectoral model is 25% (not the 30% as attributed to the CCC Option A in the UKGBC consultation using the ‘Paris Proof’ method, which was an entirely different methodology).

In terms of timing, the CCC see their efficiency savings being achieved well before 2050. They say: “Non-residential energy efficiency. Our central scenario for the fifth carbon budget includes a 5 MtCO₂e [25%] reduction in direct [i.e. not electricity] emissions to 2030 from energy efficiency. This involves energy management and energy efficiency in heat, cooling and ventilation. The scenario also includes a 20.5 TWh reduction in electricity demand from efficient lighting; heating, cooling and ventilation, and other equipment.”[p71]. Furthermore, they say: “In the Further Ambition scenario we maintain our core assumption on replacing biomass boilers by 2050. We assume that buildings using electric and oil heating systems can be fully converted to heat pumps by 2035, based on stock turnover if a policy was swiftly put in place to take advantage of existing cost effectiveness for these segments. This assumption represents a stretch in terms of policy delivery and supply chain development [note the caution in terms of practical issues]. We also make a more ambitious assumption than the Core scenario on replacing gas boilers by 2040. This implies heat pumps becoming cost-effective by 2025 (as we find with optimistic assumptions), or some uptake ahead of this point and/or a small amount of scrappage.” [p94].

It should be noted that OFGEMs decarbonisation action plan[15] places considerable emphasis on the CCC’s Net-Zero-The-UKs-contribution-to-stopping-global-warming[16] report, on which the aforementioned technical report expands. “There is broad consensus on how to decarbonise the power sector. According to the Committee on Climate Change (CCC), low-carbon electricity generation will need to quadruple (to 645 TWh in 2050) to replace existing fossil fuel generation and to meet the expected increased demand from transport and heating.”

There is another independent model of renewable electricity supply in 2050 which provides a sense check for our CCC figures. This is the National Grid’s 2019 Future Energy Scenarios[17], which includes a Two Degrees scenario which, while not reaching net zero, does approach the level of decarbonisation needed, an 80% reduction on 1990 levels. Coincidentally, the FES Two Degrees scenario and the CCC Further Ambition scenario both arrive at exactly the same level of zero carbon energy in 2030 of 295 TWh which further illustrates the inadequacy of the BEIS’ projection of 227 TWh in 2030 as a model of decarbonisation.

The third calculation is a reflection of the first two. Correcting the numerator from 944 to 831 and using a denominator of 702 rather than 261 gives a ‘Paris Proof’ contribution needed from efficiency of 16% ((831 – 702) / 831), which is far from the 60% chosen for the target. If we assume no renewable hydrogen or other fuels, the contribution from efficiency would need to be 28.5%.

My investigations of the final calculation have also thrown up a number of questions. This is the fourth step which overlays the percentage improvement on the known energy intensity of the office stock today. The UKGBC target has proposed that the upper quartile REEB intensity figure of 160 kWhe/m2 NLA for air conditioned offices should be used as the starting point. This is probably an error as the upper quartile total energy figure is 189 kWhe/m2 NLA (I am guessing the published UKGBC target mistakenly uses an upper quartile electricity figure of 159 kWh/m2 NLA – rounded to 160 – forgetting the thermal and fuels energy). It is important to note that the ‘Paris Proof’ method works on total energy in a sector, so should always use the average figure. The notion of using an upper quartile is something that was introduced by the consultation authors but was never mentioned in the consultation document itself.

I mentioned earlier that the REEB intensities may also be flattered by the self-selecting nature of the sample, which may not represent the UK office stock as a whole. The contributors to the REEB[18] are mainly big property funds: Land Securities, British Land, Legal & General, Canary Wharf, M&G Real Estate and Aviva Investors together account for over half of the total energy consumption – and a greater proportion of the office space as the dataset also includes retail portfolios such as intu. I would guess that these portfolios largely comprise of bigger category A prestige offices. It is a fair assumption, too, that these offices are well managed in terms of energy as is evidenced by the fact that the energy consumption fell[19] 22% in the five years from 2010 to 2015. Indeed, some of these buildings may be reaching the limits of cost-effective abatement which is hinted to by the fact that the latest benchmark reported a like-for-like energy consumption increase of 0.6% and the fact that we can see a significant tapering off of improvements over the whole benchmarking period.

I would expect, for example, that most energy management and lighting opportunities would have already been implemented in these portfolios. These are the two biggest abatement measures in the BEES, accounting for over 60% of the practicable (less than 10-year payback in my definition) opportunities [taken from Table 4.2]. Unfortunately, the BEES data tables do not distinguish between air conditioned and non-air conditioned offices, so, despite the questions over their representativeness, the REEB benchmarks are the best we have to go on at the moment.

So, we have a combination of the most ambitious performance benchmark coupled with the most pessimistic policy scenario, leading to this impossibly high target.

Lessons for future consultations.

The consultation on the target offered respondents a CCC-based ‘Paris Proof’ 30% target improvement (option A), the 60% improvement target based on the BEIS projections (option B) and a ‘compromise’ option of a 50% improvement (option C). Although the responses to the consultation have not yet been published, the published target indicates that option B was selected.

I think that this may reflect the best of intentions on the part of the responders: we are in an emergency, so nothing less than a dramatic response will do, so let’s choose the highest “ambition” target we can.

Unfortunately, the consultation briefing did not describe the limits of efficiency, cost-effectiveness and the intention to use upper quartile performance as the starting point, which may well have altered the responses. Option B, not based on a decarbonisation pathway, was given the same weight as Option A which is. Indeed, the text, like the numeric analysis, was quite biased, describing the CCC option as “high risk” and the BEIS option as “the lowest relative risk”, when I believe exactly the opposite is true. Deciphering the practicality of the options has taken me considerable effort and I start from long experience in energy efficiency in buildings, so I do not blame responders for not having the time to dig into the data in the way I have and instead relied on the narrative in the consultation.

The overzealous target chosen fails all stakeholders. For investors it is high risk given that the targets are almost certainly unachievable and commit to very high costs which will drive down asset values needlessly. Tenants will end up paying far more that they need to. Policymakers will have a false expectation of what can be achieved through efficiency and so may miscalculate the contribution that offices can make to their decarbonisation goals. Limited engineering skills will be diverted into squeezing ever smaller marginal improvements in one sector of the economy when they could be much better deployed elsewhere.

The presumption underlying this choice is that government will do nothing more, whereas what is needed is for all stakeholders – investors, occupiers, policymakers – to turn to government and say “realistically, the most we can deliver through efficiency is a 25% improvement, we need you to put in place the policies and incentives to provide at least twice the zero carbon energy you are currently forecasting so that we can decarbonise the balance of our energy requirements”.

I recall the mnemonic that helps us set targets in any field: they should be SMART:

• Specific (clear in the intended outcome)
• Measurable
• Achievable (in the sense that they can be delivered technically),
• Realistic (in the sense that you can muster the resources and effort needed), and
• Timely (have a clear timeframe).

The chosen option fails spectacularly on Achievable – it is not technically achievable; and Realistic – there’s no way I believe a practitioner such as myself could make the case for this target to an informed decision-maker.

As soon as a light is shone on the costs and implication of the target, it will become clear it is unfeasible. If the UKGBC intend to publish similar targets for the retail sector (which is represented in the REEB data) or other sectors, then I would advise the team to put greater weight on the practicality of the targets. While the targets remain voluntary in nature, they rely on knowledgeable in-house or external practitioners to articulate their costs and benefits to decision-makers. Over-ambitious or unrealistic targets are setting up the entire net zero in operation framework for failure, and could damage the credibility of the UKGBC.

As I said earlier, targets matter. They articulate society’s expectation of the emissions performance of a given sector. They have a way of becoming embedded in planning. They will inform expectations of many stakeholders. They have to be right.

Recognising this, I feel I should set out what I believe is an appropriate target, reflecting the urgency of the climate emergency and the need to set out clearly society’s current expectation of the energy efficiency needed from offices to achieve net zero.

A new target

Taking into account the CCC’s sector-specific recommendations on the non-residential building efficiency improvements needed, an efficiency improvement for offices of 25% is adequate and realistic. It is better than the bare minimum 16% suggested by the revised ‘Paris Proof’ calculation above; it is low risk as it is in line with the most widely accepted and up to date decarbonisation plan “Achieving Net Zero” from the CCC; it is a target that is technically feasible and it is fair to tenants, who will have to bear the costs. This target will need to be delivered in a decade.

As mentioned previously, the correct intensity to use is the median value, not the upper quartile, as this properly reflects the necessary contribution by offices to the wider national decarbonisation goal in both the “Paris Proof” or CCC methods of calculation.

Given this, in an air conditioned office, the immediate target will be to achieve the median intensity of 258 kWhe/m2 in 2020, decreasing to 225 kWhe/m2 by 2025 (that has a nice alliterative feel) and then 193 kWhe/m2 by 2030. Of course, this is very unlikely to be a linear improvement and external factors like weather will affect individual year’s performance, which would need to be taken into consideration in the net zero operations standard reporting.

This target represents the maximum cost-effective efficiency improvement available today (according to the CCC and the BEES) in about as fast a timescale as practicable. Consequently, this does, I think, meet the definition of an ‘ambitious’ target for those who feel we need to act quickly.

The REEB benchmark numbers I have referred to above are the ‘whole building’ targets and separate numbers are provided for ‘base building’ and ‘tenant energy’. I would caution against using the arbitrary allocation used in the targets document, or the arbitrary Gross Internal Area conversion of 0.8 for that matter, as the actual ratios will vary significantly in real life. Always start with the Net Lettable Area intensity and adjust it as needed.

The UKGBC targets also offer an option to use Display Energy Certificates and UK NABERS ratings as alternative performance indicators. I haven’t considered the suitability of these targets, so can’t comment on them except to caution users that these may be significantly over ambitious if they are in line with the intensity target. There is also a proposal that these ambitious targets should apply to new buildings, and here I would accept that a higher performance may be warranted given that new build have many more degrees of freedom to improve efficiency such as orientation, fabric, thermal mass and so forth, compared to existing buildings. I note the government’s Clean Growth Grand Challenge[20] to at least halve the energy use of new buildings by 2030, but it will be important to assess the feasibility of this and the scope (e.g. is it a SAP calculation or an operational calculation), before assuming a percentage improvement of 50% for new build. My observations on the targets in this document are limited to existing offices participating in the net zero operations definition.

By means of comparison, the table below shows the new targets, alongside the targets set out by the UKGBC.

Now I must address the fact that a quarter of REEB offices are already achieving the revised 2030 target – the upper quartile REEB figure is 189 kWhe/m2 NLA, after all! From the perspective of sectoral decarbonisation, that is not a problem, as we need to move the existing average to the target level to deliver the sector-wide 25% improvement. That is the function of the target – to give the energy intensity that offices should meet in order that they converge with the available renewable energy supplies in 2050. That some offices have already achieved this is to be celebrated, and provides evidence to those further back in the process that the target is realistic. What better evidence to put in front of an unconvinced decision-maker! 

Those offices that already meet the proposed target are, in a sense, ‘pre-approved’ to get themselves certified as net zero in operation using the UKGBC definition, and I would warmly encourage them to do so and celebrate their accomplishments with tenants and other interested parties. Their participation will add momentum to the adoption of net zero in operation across the sector. Once reporting annually in the net zero process, I am sure that they will not sit back on their laurels but will continue to look for further improvements, helping to drag the sector average lower and to maintain the distinctiveness they so richly deserve.

Nor, for a moment, would I suggest that 193 kWhe/m2 NLA is the lowest intensity that an office can achieve. The distribution in office energy use is large, for example the range of intensity between the 10th percentile and the 90th percentile in the BEES data is a factor of three. Offices which are fortunate to have been well-designed in efficiency terms should be encouraged to go lower. After all the intensity metric is available to all interested parties and no doubt those offices with a better figure will be more attractive to tenants and investors, because the energy cost is lower and the building is less likely to need expensive investments in the future. The net zero in operation framework confers a powerful marketing benefit which is strengthened by a building performing even better than target.

Presenting the target

We can articulate the office sector’s commitment to decarbonisation as: “we shall ensure that, over this decade, we get all offices to achieve today’s best practice energy use intensity, which is will lead to zero emissions by 2050, as long as the government enacts policies to at least double the zero carbon energy supply by that date, or earlier, as recommended by the Committee on Climate Change”.

This brings me to two non-numeric commitments that I would incorporate into the net zero operation. First, I would ask offices to “actively support and encourage policy makers to significantly increase their level of commitment in terms of renewable energy supply”. Secondly, I would include a requirement for every office that “by 2035 at the latest, we will either electrify our heating or connect to a zero carbon heat network”, unless there is an exceptional reason why this cannot be achieved (such as in a heritage building). This is in line with the CCC’s prediction that heat pumps will be cost effective (or supported by a relatively small scrappage incentive) by 2025. Most buildings will undergo one major refurbishment in this timescale, so that is realistic – but building owners need to plan for this in advance, hence baking in the commitment today.

All offices should also sign up to the notion that the targets may tighten further in each 5-year period, in light of changing forecasts for net zero hydrogen, nuclear, CCS and other renewables; as a result of growth or contraction of total office space; and to compensate for the exceptions mentioned above. It may also be the case that other sectors of society could struggle to decarbonise, meaning that a greater burden must fall on offices, which no doubt will be signalled in future CCC reports. Those course-corrections will be much easier to achieve and effective if we have a large cohort of offices participating in the net zero operation definition with medium to long-term efficiency improvement plans.

Because the revised targets require the efficiency improvement are achieved in just a decade, they are compatible with other net zero pathways which aim to decarbonise much earlier, such as Manchester’s 2038 net zero target[21].

Another important aspect of this target is that it meets the definition of a science based target[22] using a sectoral decarbonisation pathway compatible with a 1.5 degree C warming as set out by the Committee on Climate Change. I am sure that many organisations would welcome having consistency between their overall carbon targets and those of individual buildings. Indeed, UK-specific sectoral decarbonisation pathways are tough to develop, as I have found on a number of client assignments in this area so this analysis will add a valuable resource to support practitioners helping clients make sense of the implications of net zero.

Within portfolios it may be the case that the owners decide to allocate resources so that they achieve the targets over the whole portfolio, so investment can be diverted away from buildings where opportunities for technical improvements are limited, or from building scheduled for demolition in the near future, towards those assets where the longevity or opportunities are greater. Some careful though would need to be given whether a portfolio could report their total net zero operations performance on an aggregate basis.

It’s all about delivery

I suspect that some folks may think that the approach and target proposed is overly cautious. An emergency requires that we act boldly and set ourselves goals that we are not sure we can meet (back to the moon shot). “It’s not realistic” is one of the commonest excuses for blocking change.

I understand that perspective. But an effective response to the climate emergency requires the participation of everyone. By setting a demonstrably achievable goal based on the most realistic and authoritative estimation of what society expects, we can apply much greater pressure for decision-makers to participate. Tenants who want to act on the climate emergency have a powerful lever to encourage their landlords because the targets are realistic and based on an independent opinion, that of the CCC. Over time, net zero operations must become the norm, not the exception.

I personally believe I could create a convincing case to my clients to commit to these targets. They are stretching and will require folks who are not already invested in energy efficiency or have comparatively inefficient offices to start to measure and analyse their energy use in order to plot a pathway to the 258 kWhe/m2 average in the short term. Those who have good energy management and are close to the average performance can formulate a long-term plan to get to 193 kWhe/m2 or better within a decade as well as decarbonise their heat by 2035. Current over-achievers can plan to maintain their distinctiveness and competitive advantage. Everyone involved can work through UKGBC and their tenants to apply maximum pressure on government to double projected renewable energy supplies, as a minimum.

The targets will be revisited regularly, and if the recommendations of the CCC change then they can be modified accordingly. Decarbonisation is a marathon not a sprint. We also need to bear in mind that big improvements will depend on the lifecycle of buildings as large improvements in many offices may rely on vacant possession to make the bigger changes to the big core systems, in particular the Heating, Ventilation and Air Conditioning (HVAC) systems. The net zero targets will allow these changes to be incorporated into the building’s life-cycle and for building owners to work towards a clear destination.

Not only do the targets enable longer-term planning but they also open up other ways that office owners can take control of the decarbonisation process. From the analysis above, it is clear that offices, as with all buildings, will not be net zero until their energy supply is decarbonised. One obvious way to be net zero before 2050 is to electrify heat and then pay for a solar PV installation and storage to meet the buildings electricity needs. In other words, to have a ‘do-it-yourself’ energy supply decarbonisation strategy. So long as this electricity is either behind the wire on a private network or is grid-connected and not receiving subsidy and not included in national renewables accounts, then that would fulfil the additionality requirements of the standard. At some point this is likely to be much less expensive than further marginal energy efficiency investments and should be the route for folks who want to realise their net zero ambitions well ahead of the overall availability of renewables supported by government. The development of suitable power purchase agreements (PPAs) could rapidly accelerate the availability of renewable energy for buildings and complement the pressure on policymakers to make system-wide changes. This is an area that the UKGBC could have an important role in setting out standards and processes.

On the subject of offsets, I would definitely not phase these out, as they provide a price signal to the building owner and provide resources that would not otherwise be available – assuming they pass the additionality test – for global efforts on decarbonisation. Indeed, the whole notion of ‘net zero’ requires that there is a mechanism to eliminate these residual emissions.

Rather than phase out the offsets, I would instead suggest a double or, maybe, triple ‘multiplier’ for emissions arising from energy use above the current target level, and a single multiplier for emissions due to energy use below the target. This will provide an additional incentive for office owners to bring their performance down to the target level as quickly as possible. It may also make offsite renewables PPAs the better route than offsets. One minor detail, I would definitely remove the reference to the Clean Development Mechanism (CDM) as a source of offsets – it is riddled with highly suspect projects and the Certified Emissions Reductions in the CDM are far too cheap given their oversupply.

Finally, another way to encourage the energy efficiency first approach is to incorporate efficiency investments and results in the net zero mandatory reporting template. I refer the reader to Peel’s reports which offer an example of what this may look like. An annual statement of the investments made in efficiency and the results achieved would add to the robustness of the report and keep folks focused on reducing demand wherever possible.

This has been a detailed analysis and no doubt there will be figures and assumptions that I have made which are incorrect or subject to a different interpretation, and I would welcome feedback and dialogue on these. I am happy to share my numbers and calculations.

I hope that for the wider readership there are some useful learnings around why we need to be considered in developing the specific responses to the climate emergency.

The fundamental question comes down to theories of change – will we achieve our goals through revolutionary change or evolutionary change. Revolutionary change is fast, often messy and carries a risk that the goals will not be met or other unintended consequences, evolutionary change tends to be slower but more irreversible. Revolutionary change often doesn’t much worry about the precise destination and is willing to make bigger sacrifices in return for a more radical transformation, evolutionary change requires that folks believe in the destination they are heading towards.

I don’t yet detect an appetite for aiming for the impossible, but I do sense a great hunger for a practical, stretching, fair and effective response to climate change. I salute the UKGBC and all those who worked on the consultation for the development of the net zero framework and targets which are sorely needed.

[1] I have been working in this field for over thirty years, primarily in energy efficiency and have participated in many large scale programmes for corporations such as BP, Unilever and Hilton International. I am a Fellow of the Energy Institute, a Chartered Energy Manager and author of a leading text-book on energy and resource efficiency.

[2] https://www.ukgbc.org/ukgbc-work/net-zero-carbon-buildings-a-framework-definition/

[3] https://www.ukgbc.org/wp-content/uploads/2020/01/UKGBC-Net-Zero-Carbon-Energy-Performance-Targets-for-Offices.pdf

[4] https://peellandp.co.uk/news/peel-lp-buildings-become-the-first-in-the-uk-to-achieve-net-zero-carbon-status/

[5] https://peellandp.co.uk/responsibility/

[6] http://www.betterbuildingspartnership.co.uk/sites/default/files/media/attachment/REEB%20Benchmarking%202017_0.pdf

[7] https://www.gov.uk/government/publications/building-energy-efficiency-survey-bees

[8] https://www.ukgbc.org/energy-performance-targets-for-commercial-offices-consultation/

[9] https://www.dgbc.nl/themas/paris-proof

[10] https://www.gov.uk/government/collections/digest-of-uk-energy-statistics-dukes#2018

[11] https://www.gov.uk/government/publications/updated-energy-and-emissions-projections-2017

[12] https://www.gov.uk/government/publications/updated-energy-and-emissions-projections-2018

[13] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/666265/Annex-j-total-electricity-gen-by-source.xls

[14] https://www.theccc.org.uk/publication/net-zero-technical-report/

[15] https://www.ofgem.gov.uk/system/files/docs/2020/02/ofg1190_decarbonisation_action_plan_web.pdf

[16] https://www.theccc.org.uk/wp-content/uploads/2019/05/Net-Zero-The-UKs-contribution-to-stopping-global-warming.pdf

[17] http://fes.nationalgrid.com/media/1432/fes-data-workbook-v30.xlsx

[18] http://www.betterbuildingspartnership.co.uk/sites/default/files/media/attachment/REEB%202017%20Snapshot.pdf

[19] http://www.betterbuildingspartnership.co.uk/sites/default/files/media/attachment/BBP_Real%20Estate%20Environmental%20Benchmark_A%205%20Year%20Journey.pdf

[20] https://www.gov.uk/government/publications/industrial-strategy-the-grand-challenges/missions

[21] https://www.manchester.gov.uk/news/article/8138/manchesters_zero_carbon_plan_to_fight_climate_change_moves_forward

[22] https://sciencebasedtargets.org/sda/