Energy efficiency – Mind the gap
Designing and constructing energy efficient buildings has never been more important. But there is increasing focus on how buildings perform in practice, and why there is often a gap between the estimated performance at design stage and the actual data once the building is in use.
It is common for buildings to be hindered with a litany of issues relating to this, including poor acoustics, poor energy efficiency and primarily the issue of consuming more energy than expected. So why is it still so commonplace for the performance of a building to differ so greatly between the design and construction stage and once it is being operated?
What is the issue?
Part of the issue is how buildings and systems are handed over. With the dash to complete and occupy a building being pushed by the developer, contractor and tenant, the time needed to effectively commission and test the building's operation is often compressed. This is often due to the usual pressures on construction projects: time and money. Often insufficient time is allowed for the critical handover stage of a construction project and knock-on effects of this, although not apparent at handover, is the lack of occupier training to effectively run the building as it was designed.
The ability for a building to achieve the applicable energy efficiency regulations is different to the building adhering to these throughout its lifespan. The focus of regulations is on the design and construction stages, with little emphasis on the operational performance of the building going forward. Assuming that buildings perform as designed is clearly incorrect, and operational performance (evidenced by performance data) is likely to be a more important issue for tenants going forward.
What can be done?
Much focus has been put on the Australian NABERS rating scheme, a system to measure the operational efficiency of commercial offices that has been in place since 1999. The scheme is widespread across Australia and brings the transparency that the UK market misses.
The BSRIA Soft Landings Process and the BREEAM post-occupancy evaluations offer similar measures in the UK, however the take up of either is limited. It is therefore in all parties' interests, especially occupiers', to warn of the consequences for not taking up such schemes.
Aside from parties adhering to voluntary schemes, there may be need for contractual solutions. One such fix would be the introduction of incentives and penalties in relation to a post-occupancy evaluation, with retentions held and released at appropriate years after the handover of the building. Another approach would be involving the occupier in a greater capacity in the design and handover processes, although this may not be favoured by design teams themselves.
Further, the approach to appoint a Clerk of Works may go some way to solving the problem. The Clerk of Works can provide ongoing inspections, reporting back to the occupier or building owner directly, to ensure that the energy efficient designs are being adhered to strictly and stringently.
The London Plan 2021 and 'be seen' monitoring
The new London Plan 2021 goes some way to encourage the increase in efficiency for buildings in London. As the aim is for London to become a zero-carbon city by 2050, energy efficiency of buildings is being scrutinised and the importance of detailed energy strategies for future developments is being highlighted. To comply with this aspect of the new London Plan, 'be seen' energy monitoring is being introduced to understand operational energy performance of buildings post-completion. The 'be seen' policy introduces a requirement for major developments to monitor and report on the actual operational performance of buildings for a period of five years after completion. This will help collect information on the the gap between design theory and actual operational performance, and ensure buildings are set up to collect the necessary performance data.
It is no surprise that there is a risk of disputes emerging out of commercial contracts. The reasons are straightforward - cutting edge technology and complex building systems may be hard to deliver in practice. Adding a multifaceted supply chain and a keenness for quick results amount to a number of risk factors that can lead to disputes.
Where there are no contractual issues, there may still be the risk of claims in negligence. Risk factors include fraudulent misrepresentation, new commercial relationships, interested third parties, issues with the supply chain and linked emerging areas of the law. Cases like Okpabi or Vedanta point to the issue of substantial groups of claimants trying to assess liability of parent companies as to environmental and sustainability risks. There are types of claims that could be born out of this new area, namely claims for damages due to negligence linked to climate change, public nuisance or breach of statutory duty.
Shareholder actions may appear around 'greenwashing', climate action and ESG. There is also scope for claims of breaches of directors' duties. Finally, public law actions challenging legislative provisions or government actions can affect businesses that are active in the relevant space.
It is clear that the gap that is apparent between the design and construction phases of a project and the handover to the occupier is creating a significant issue for the UK building industry, and in turn the UK's efforts to mitigate climate change risks. Short term fixes, such as appointing appropriate facilities management contractors, may help reduce the issue, but until the UK market adopts common practices to solve the issue, the performance gap will remain.