Buildings with the highest U.K. performance ratings are using far more energy than those with the lowest ratings, according to recent data. It’s a disparity that shows the limitations of current green building standards.

There’s a secret dogging British buildings with some of the most coveted environmental ratings: On paper they’re green, but scratch the surface and they’re red hot. Buildings that have received the highest rating in the U.K. — an A Energy Performance Certificate — use more energy than some of their peers rated C, D, E or even F.

This disparity between how buildings are designed and what their actual emissions are is widespread in the U.K., according to recent findings from the Better Buildings Partnership, which analyzed 2020 self-reported energy data provided for more than 1,100 commercial properties.

It found that commercial buildings regularly use more energy than their sterling eco-friendly labels would suggest. In fact, the analysis finds, the ratings are so far off that the median energy intensity for all B-rated buildings is higher than for C-rated buildings.  

“We did the research and there’s very little relationship, if any at all, between the Energy Performance Certificates and the actual energy usage of buildings,” said Sarah Ratcliffe, the CEO of the Better Buildings Partnership, a nonprofit coalition of commercial property owners in the U.K.

The new data is not comprehensive, as it only includes commercial buildings from real estate companies that are members of the Better Buildings Partnership and voluntarily submitted energy use. Still, the findings point to a hole in green building policies and practices that will be essential to fill in order to hit emissions targets, say experts.

The problem: Just because buildings meet some of the most prized environmental building design standards doesn’t mean they’ll meet emissions goals.

A spokesperson for the U.K.’s Department for Business, Energy, and Industrial Strategy said the department is “already looking at ways the system can be improved” through an EPC Action Plan, but that the certificates provide useful guidance on efficiency in a “simple and comparable manner.”

March 2021 government paper exploring alternatives to the current EPC ratings put it more bluntly: “In large and complex buildings in particular, the evidence is showing that there is almost no correlation between a building’s EPC score and its actual energy and carbon performance in practice.”

The findings on U.K. properties build on past evidence that green building certifications based on predicted energy use don’t necessarily translate to energy savings. Several studies have questioned whether LEED certification — a widely adopted international building standard — actually yields better energy efficiency, with some finding that certified buildings use more energy than non-certified buildings. But the U.S. Green Building Council, which manages the ratings, has maintained that its own research shows certified buildings are overall more efficient.

One thing is clear for both ratings systems: Many individual buildings have turned out to be far less energy-efficient than their ratings indicate.

This can be the result of improper building management, lack of data sharing, or an arms race of heating and cooling systems fighting one another for dominance.

“People move into a building and the first thing they do is turn the systems over to manual and undo all the work the system engineers put in place. It’s like buying a hybrid car and only running it on petrol,” says Simon Crowe, managing director of the Low Carbon Alliance, a British group that advises on sustainable buildings. “You see people bringing fans into buildings with climate controls, installing air conditioners. It disrupts the whole thing.”

Disparities in the rating system are also an inherent limitation of assessments that only predict potential energy efficiency, and don’t measure real-world energy use.

“Energy efficiency isn’t as simple as you think,” says David Coley, professor of low carbon design at the University of Bath. “In fact, there’s often very little connection between modeled energy use and actual energy use of the building. Even in brand new buildings we struggle to make predictions.”

Buildings and construction currently account for nearly 40% of global carbon emissions in any given year, so improving their efficiency is fundamental to reaching net zero. But, at present “there is no consensus on what a net-zero building is,” according to Paul Stepan, director of sustainability solutions, EMEA, at real estate services firm JLL. He says rating systems that obscure true emissions only add to the challenge of decarbonization.

Design vs. Actual Use

Energy Performance Certificates, the most commonly cited proof of sustainability in the U.K., were introduced in 2007 to give owners and tenants information about their buildings’ efficiency that they could then use to make design improvements.

Today, the consequences of a bad rating are primarily economic and reputational. For offices, higher EPC ratings can translate to higher property valuations, and a very low rating can mean trouble selling a property. For homes, a higher rating can also be required to qualify for a green mortgage that offers lower rates. The U.K. government projects that the financial value of these ratings will increase in the coming years.

In the future, the British government has also committed to set a minimum efficiency standard, aiming for commercial buildings to have a B rating or higher by 2030. But this could be too little too late. Crowe estimates that to meet the U.K.’s legally binding sustainability targets, all buildings would need to reach EPC band B five years sooner — and actually deliver the intensity that’s expected for band B.

Unfortunately, Energy Performance Certificates rely on potential energy efficiency, not how much energy the building emits each year. There are alternatives, known as Display Energy Certificates, which provide a year-by-year snapshot of a building’s energy usage, but they’re not required for private buildings.

Data show the flaws of measuring only potential efficiency: In 2020, there were commercial properties rated A in the U.K. that had an energy intensity score far above many rated E, according to the Better Buildings Partnership data. That’s not to say the ratings communicate nothing at all: Buildings in band A do, on average, perform best. But in the lower bands, the Better Buildings Partnership finds that the relationship between the ratings and efficiency is far weaker.

“It is widely known in the industry that EPCs do not well reflect the actual energy use or carbon emissions of a building once built,” said Simon Ebbatson, a principal at Elementa Consulting, which advises on green building design. “They are basically a black box calculation which is used for building regulations compliance and for generating EPCs for when building transactions occur.”

In 2018, the U.K. government put out a call for evidence on EPCs with survey questions to stakeholders, and only 3% of respondents said they believed the reliability of the ratings to be good.

An Energy Performance Certificate is issued by an energy assessor, who will visit a building for about 1 to 2 hours to measure factors like the property’s dimensions, ventilation systems, heating, lighting and the construction materials used. In particularly complex cases, computer modeling may be used and multiple certificates may need to be issued.

However, this is a snapshot of the building’s potential at a given time, and when the assessor packs up, everything can change. Commercial certificates typically last for a decade, during which time “potential” and “actual” can drift ever further apart.

Defining the Problem

One of the biggest reasons estimates get energy use wrong is human behavior: Even buildings designed to some of the highest prevailing standards depend on how the property is used.

Property management can play a big role in this. Carefully designed climate control systems, installed to balance efficiency and comfort, are either simply turned off or disrupted, Crowe explains. The timed raising and lowering of window shades, designed to compensate for light levels and seasonality, is overridden when desks are moved. Large decorative fish tanks might be installed, or kitchens added for staff catering. New tenants might even move in and use the building in ways the designer never envisioned, like a bank installing an energy-sucking trading floor. Short-term meddling brings about long-term inefficiency, which, aggregated over the entire building stock, adds up.

On the flip side, even older buildings that weren’t designed to be green could lower their emissions by focusing on behavior and management. Windows can be used for ventilation and computers can be switched off. Putting the right thing in the right place is crucial: A colder room might be perfect for data banks, a warmer one, a group meeting space. Working around the rhythms of the natural world and the tempo of the building is essential, says Crowe. In the work-from-home era, it may be more economical to keep employees at home during particularly hot or cold periods, as managing extremes is an energy-intensive business.

“Expecting all buildings to be usable all the time is a farce, even more so as the climate changes,” Crowe said.

David Matthews, a director at property management and estate agency Dutch & Dutch, says that as long as a building manager knows what the property is being used for and understands their tenants, they should be able to maximize efficiency. “In a traditional office building you should be able to predict actual energy use, if you’re doing your job properly,” he said.

But Coley’s research shows how the human behavior problem goes far deeper than building management: Despite improvements in efficiency, design and technology, many new buildings have roughly the same energy usage per square meter as those built 20, 50 or even 100 years ago. This is because as more energy becomes available via efficiency gains, people simply demand more energy. That’s why he argues that no small gains in efficiency are going to get the world substantially closer to its emissions goals.

Leaders at the U.S. Green Building Council have made a related argument for why LEED-certified buildings sometimes have higher overall energy use: Green buildings are simply in higher demand. “Anecdotally, we sometimes hear that renovated green buildings often are used much more than previously,” Green Building Council Senior Policy Counsel Elizabeth Beardsley told Utility Dive.

Model Policies

One obvious alternative to the current efficiency rating that’s been explored in the U.K. and elsewhere: Measure actual emissions rather than just potential ones.

In Australia, a program known as NABERS rates buildings from 1-6, based in part on actual energy usage. The rating is mandatory for all new buildings over 2,000 square meters, as well as those up for sale or lease. And NABERS says it has provided energy usage ratings for 78% of Australia’s office space.

The U.K. recently adopted a modest version of this idea, NABERS U.K., but the program, which so far only rates offices, is not mandated or overseen by the government. Though the project has won support from major commercial real estate players like British Land Co., it is far from widespread adoption.

Display Energy Certificates, which require buildings to show a summary of their actual energy use, are another option already required for public buildings in the U.K. and adopted by other countries in the European Union. Coley believes that mandating DECs for commercial buildings in the U.K., and exposing some of the offenders’ high energy use, could provoke a “moral reaction” that could kick-start emissions-cutting behaviors.

In New York City, a law passed in 2019 goes further than DECs, assigning buildings over 25,000 square feet a mandatory annual emissions cap, which will gradually be reduced. Starting in 2024, those found to be over the cap for Local Law 97 could face fines running into the tens of millions of dollars. The law comes after years of monitoring data about buildings’ energy use and providing owners with information about how they could improve, according to Donna De Costanzo of the Natural Resources Defense Council. “The law represents a necessary evolution in approach,” wrote De Costanzo in a 2019 analysis.

The U.K. government has committed to move to a performance-based approach for some buildings, including a “new and innovative” performance energy rating for large commercial buildings, but is still fleshing out the details. It is also pledging to make improvements to Energy Performance Certificates. “EPCs will need to move from a reflection of the features of a building (fabric, services and installed improvement measures) to a true measure of ‘in use’ building performance,” reads an EPC action plan from September 2020.

But Coley believes that the only way to really reduce buildings’ impact on the planet is to require buildings to be net-zero or passive house, a high design standard that relies on airtight insulation and other alternative energy requirements to get buildings as close as possible to zero energy.

“EPCs are fantasy land,” Coley says. “You have to take it all the way. Doing 90% of the job literally gets you nowhere.”

New Doesn’t Equal Green

Another barrier to decarbonizing buildings is the pervasive view that newer means greener, which both Crowe and Stepan say is erroneous. There is growing consensus that retrofitting existing buildings uses far less energy than building new ones. And yet, massive structures are popping up around the world claiming “green” status. As architect Carl Elefante put it in an oft-quoted phrase, “The greenest building is the one that is already built.”

The thinking that new equals good is often reflected in EPC ratings, where older properties with thick, solid walls are given lower ratings than newer ones with cavity wall insulation, even though they may be as good or even better than cavity walls at preventing heat loss. They can also be easier to adapt because they work with nature rather than relying on gadgetry to keep them temperate. These considerations aren’t yet priced into valuations, where newer builds receive the vaunted “green premium” that can add to property values, despite their “premature obsolescence,” according to Crowe. “Do banks understand this? Very little. Do investors understand it? Not at all.” he says.

For existing structures, the high upfront cost of retrofitting prevents most consumers from taking it on, especially those who bought highly rated new buildings with the expectation that they wouldn’t have to invest again for some time.

“In order for the market to act, it needs information across the sector that is comparable,” said Ratcliffe. “Basically all they have now are EPCs, and they aren’t good enough.”

Source : Bloomberg CityLab + Green