The impact of energy performance certificates on the rental and capital values of commercial property assets: some preliminary evidence from the UK

This paper focuses on the effect of energy performance ratings on the capital values, rental values and equivalent yields of UK commercial property assets. Of which a small number are also BREEAM rated, the study is based upon 708 commercial property assets held in the IPD UK Universe drawn from across all PAS segments. Incorporating a range of controls such as unexpired lease term, vacancy rate and tenant credit risk, hedonic regression procedures are used to estimate the effect of EPC rating. The study finds no evidence of a strong relationship between environmental and/or energy performance and rental and capital value. Bearing in mind the small number of BREEAM rated assets, there was a small but statistically significant effect on equivalent yield only. Similarly, there was no evidence that the EPC rating had any effect on Market Rent or Market Value with only minor effects of EPC ratings on equivalent yields. The preliminary conclusion is that energy labelling is not yet having the effects on Market Values and Market Rents that provide incentives for market participants to improve the energy efficiency of their commercial real estate assets.

Energy performance ratings and house prices in Wales: an empirical study

This paper investigates the price effect of EPC ratings on the residential dwelling prices in Wales. It examines the capitalisation of energy efficiency ratings into house prices using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC band (and EPC rating) on a large sample of dwelling transactions. The second approach is based on a repeat-sales methodology to examine the impact of EPC band and rating on house price appreciation. The results show that, controlling for other price influencing dwelling characteristics, EPC band does affect house prices. This observed influence of EPC on price may not be a result of energy performance alone; the effect may be due to non-energy related benefits associated with certain types, specifications and ages of dwellings or there may be unobserved quality differences unrelated to energy performance such as better quality fittings and materials. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated properties were not traded at a significant discount, suggesting different implicit prices of potential energy savings for landlords and owner-occupiers.

Energy performance ratings and house prices in Wales: an empirical study

This paper investigates the effect of Energy Performance Certificate (EPC) ratings on residential prices in Wales. Drawing on a sample of approximately 192,000 transactions, the capitalisation of energy efficiency ratings into house prices is investigated using two approaches. The first adopts a cross-sectional framework to investigate the effect of EPC rating on price. The second approach applies a repeat-sales methodology to investigate the impact of EPC rating on house price appreciation. Statistically significant positive price premiums are estimated for dwellings in EPC bands A/B (12.8%) and C (3.5%) compared to houses in band D. For dwellings in band E (−3.6%) and F (−6.5%) there are statistically significant discounts. Such effects may not be the result of energy performance alone. In addition to energy cost differences, the price effect may be due to additional benefits of energy efficient features. An analysis of the private rental segment reveals that, in contrast to the general market, low-EPC rated dwellings were not traded at a significant discount. This suggests different implicit prices of potential energy savings for landlords and owner-occupiers.

The Energy Performance of Buildings: Promises Still Unfulfilled. Egmont Paper No. 78, May 2015

EXECUTIVE SUMMARY All observers agree that energy efficiency must be the cornerstone of any serious EU energy strategy. In this general context, the EU building sector is critical. It represents about 40% of EU final energy consumption (residential houses, public/private offices, commercial buildings, etc.) and approximately 36% of EU CO2 emissions. This is massive. The EU has certainly not been inactive in this field. The Energy Performance in Buildings Directive 2002/91/EC (EPBD) was the first and the main instrument to address the problem of the energy performance of buildings. It has established numerous principles: a reliable methodology which enables the calculation and rating of the energy performance of buildings; minimum energy performance standards for new buildings and existing buildings under major renovation; energy performance certificates; regular inspection of heating and air-conditioning systems; and, finally, quality standards for inspections and energy performance certificates. They were strengthened in 2010 by the recast Directive 2010/31/EU. This directive also introduces a decisive concept for the development of the building sector: ‘nearly zeroenergy buildings’. In 2012, the new Energy Efficiency Directive 2012/27/EU dealt with other aspects. In the building sector, three of them are particularly important. They concern: (1) the establishment of long-term strategies for mobilizing investment in the renovation of the national building stocks; (2) the introduction of energy saving schemes for ‘designated’ energy companies with a view to reducing consumption among ‘final consumers’ by 1.5% annually; and (3), as an option, the setting up of an Energy Efficiency National Fund to support energy efficiency initiatives. This paper also briefly examines the different instruments put in place to disseminate information and consultation, and the EU funding for energy efficiency in buildings. Results, however, have remained limited until now. The improvement of the energy performance of buildings and the rhythm of renovation remain extremely weak. Member States’ unwillingness to timely and properly transpose and implement the Directives continues despite the high degree of flexibility permitted. The decentralized approach chosen for some specific aspects and the differentiation in the application of EPBD standards between Member States do not appear optimal either. Adequate financial schemes remain rare. The permanent deficit of qualified and trained personnel and the inertia of public authorities to make the public understand the stakes in this domain remain problematic. Hence the need to take new initiatives to reap the benefits that the building sector is meant to bring.

Modeling the Diffusion of Energy Performance Contracting

The Portuguese Energy Policy considers the development of a commercially viable and competitive market for energy performance contracting (EPC) as a main mechanism to achieve the objectives of energy efficiency improvement. This paper proposes a study to investigate how to achieve widespread adoption of energy performance contracting by means of system dynamics modelling and simulation. To explore and gather insights on this question, a system dynamics model representing the system of the Portuguese EPC market at industry level will be created. The simulation of that model will provide a helpful basis for analysing and explaining the development of key variables, and accelerating learning on the managerial, organizational and political adaptation processes that foster the diffusion of EPC adoption. The first phase of this research project aims at identifying and analysing the key factors and critical cause-effect relations that drive the adoption of EPC. With this purpose, a qualitative content analysis on relevant documents was performed and a set of interviews was conducted. That data was analysed to capture the critical variables and its interrelation to formulate a preliminary representation of the system structure as stock and flow diagrams.

Improving buildings energy performance: comparison between simple payback period and life cycle costs analysis

The building sector is one of the Europeâ s main energy consumer, making buildings an important target for a wiser energy use, improving indoor comfort conditions and reducing the energy consumption. To achieve the European Union targets for energy consumption and carbon reductions it is crucial to act in new, but also in existing buildings, which constitute the majority of the building stock. In existing buildings, the significant improvement of their efficiency requires important investments. Therefore, costs are a major concern in the decision making process and the analysis of the cost effectiveness of the interventions is an important path in the guidance for the selection of the different renovation scenarios. The Portuguese thermal legislation considers the simple payback method for the calculations of the time for the return of the investment. However, this method does not take into consideration inflation, cash flows and cost of capital, as well as the future costs of energy and the building elements lifetime as it happens in a life cycle cost analysis. In order to understand the impact of the economic analysis method used in the choice of the renovation measures, a case study has been analysed using simple payback calculations and life cycle costs analysis. Overall results show that less far-reaching renovation measures are indicated when using the simple payback calculations which may be leading to solutions less cost-effective in a long run perspective.

Major mite allergen Der f 1 concentration is reduced in buildings with improved energy performance.

BACKGROUND: Environmental conditions play a crucial role in mite growth, and optimal environmental control is key in the prevention of airway inflammation in chronic allergic rhinoconjunctivitis or asthma. OBJECTIVE: To evaluate the relationship between building energy performance and indoor mite allergen concentration in a cross-sectional study. METHODS: Major allergen concentration (Der f 1, Der p 1, mite group 2, Fel d 1 and Bla g 2) was determined by quantitative dot blot analysis from mattress and carpet dust samples in five buildings designed for low energy use (LEB) and in six control buildings (CB). Inhabitants had received 4 weeks prior to mite measurement a personal validated questionnaire related to the perceived state of health and comfort of living. RESULTS: Cumulative mite allergen concentration (with Der f 1 as the major contributor) was significantly lower in LEB as compared with CB both in mattresses and in carpets. In contrast, the two categories of buildings did not differ in Bla g 2 and Fel d 1 concentration, in the amount of dust and airborne mould collected. Whereas temperature was higher in LEB, relative humidity was significantly lower than in CB. Perceived overall comfort was better in LEB. CONCLUSIONS: Major mite allergen Der f 1 preferentially accumulates in buildings not specifically designed for low energy use, reaching levels at risk for sensitization. We hypothesize that controlled mechanical ventilation present in all audited LEB may favour lower air humidity and hence lower mite growth and allergen concentration, while preserving optimal perceived comfort.

Final architecture diploma projects in the analysis of the UPC buildings energy performance

A partir de maig de 2003, per iniciativa del Vicerectorat adjunt d’Edificacions de la UPC, el Centre Interdisciplinari de Tecnologia, Innovació i Educació per a la Sostenibilitat (CITIES) treballa en l’elaboració i la implantació del Pla d’Eficiència en el Consum de Recursos (PECR), amb l’objectiu d’establir polítiques i definir línees d’actuació per a l’estalvi i l’eficiència en el consum dels recursos energètics i d’ aigua en els edificis de la UPC.El PECR contempla, en una de les primeres fases, la realització d’avaluacions energètiques en les edificacions de la UPC per valorar l’estat actual dels edificis i poder establir uns indicadors del seu comportament energètic a partir dels quals establir els objectius d’estalvi i d’eficiència. Per fer aquestes avaluacions, es va crear una línea de projectes finals de carrera (PFC) per a estudiants de l’Escola Politècnica Superior de l’Edificació de Barcelona (EPSEB), sota la coordinació de professors tutors de diferents departaments y amb la col•laboració indispensable de totes les unitats de recolzament de la UPC.Aquesta publicació és la ponència presentada al IV Congrès "Sustainable City", a Tallinn, en el que es va presentar aquest projecte com a una eina de treball amb l'objectiu de reduir l'impacte ambiental dels edificis universitaris en les ciutats.

Simulation of the energy performance of maize production integrated to pig farming

The study evaluated the energy performance of pig farming integrated with maize production in mechanized no-tillage system. In this proposed conception of integration, the swine excrement is used as fertilizers in the maize crop. The system was designed involving the activities associated to the pig management and maize production (soil management, cultivation and harvest). A one-year period of analysis was considered, enabling the production of three batches of pigs and two crops of maize. To evaluate the energy performance, three indicators were created: energy efficiency, use of non-renewable resources efficiency and cost of non-renewable energy to produce protein. The energy inputs are composed by the inputs and infrastructure used by the breeding of pigs and maize production, as well as the solar energy incident on the agroecosystem. The energy outputs are represented by the products (finished pigs and maize). The results obtained in the simulation indicates that the integration improves the energy performance of pig farms, with an increase in the energy efficiency (186%) as well as in the use of the non-renewable energy resources efficiency (352%), while reducing the cost of non-renewable energy to produce protein (‑58%).

Evaluation of methods for estimating energy performance of biogas production

This study focused on identifying various system boundaries and evaluating methods of estimating energy performance of biogas production. First, the output-input ratio method used for evaluating energy performance from the system boundaries was reviewed. Secondly, ways to assess the efficiency of biogas use and parasitic energy demand were investigated. Thirdly, an approach for comparing biogas production to other energy production methods was evaluated. Data from an existing biogas plant, located in Finland, was used for the evaluation of the methods. The results indicate that calculating and comparing the output-input ratios (Rpr1, Rpr2, Rut, Rpl and Rsy) can be used in evaluating the performance of biogas production system. In addition, the parasitic energy demand calculations (w) and the efficiency of utilizing produced biogas (η) provide detailed information on energy performance of the biogas plant. Furthermore, Rf and energy output in relation to total solid mass of feedstock (FO/TS) are useful in comparing biogas production with other energy recovery technologies. As a conclusion it is essential for the comparability of biogas plants that their energy performance would be calculated in a more consistent manner in the future.

Biogas production in regional integrated biodegradable waste treatment – Possibilities for improving energy performance and reducing GHG emissions

The greatest threat that the biodegradable waste causes on the environment is the methane produced in landfills by the decomposition of this waste. The Landfill Directive (1999/31/EC) aims to reduce the landfilling of biodegradable waste. In Finland, 31% of biodegradable municipal waste ended up into landfills in 2012. The pressure of reducing disposing into landfills is greatly increased by the forthcoming landfill ban on biodegradable waste in Finland. There is a need to discuss the need for increasing the utilization of biodegradable waste in regional renewable energy production to utilize the waste in a way that allows the best possibilities to reduce GHG emissions. The objectives of the thesis are: (1) to find important factors affecting renewable energy recovery possibilities from biodegradable waste, (2) to determine the main factors affecting the GHG balance of biogas production system and how to improve it and (3) to find ways to define energy performance of biogas production systems and what affects it. According to the thesis, the most important factors affecting the regional renewable energy possibilities from biodegradable waste are: the amount of available feedstock, properties of feedstock, selected utilization technologies, demand of energy and material products and the economic situation of utilizing the feedstocks. The biogas production by anaerobic digestion was seen as the main technology for utilizing biodegradable waste in agriculturally dense areas. The main reason for this is that manure was seen as the main feedstock, and it can be best utilized with anaerobic digestion, which can produce renewable energy while maintaining the spreading of nutrients on arable land. Biogas plants should be located close to the heat demand that would be enough to receive the produced heat also in the summer months and located close to the agricultural area where the digestate could be utilized. Another option for biogas use is to upgrade it to biomethane, which would require a location close to the natural gas grid. The most attractive masses for biogas production are municipal and industrial biodegradable waste because of gate fees the plant receives from them can provide over 80% of the income. On the other hand, directing gate fee masses for small-scale biogas plants could make dispersed biogas production more economical. In addition, the combustion of dry agricultural waste such as straw would provide a greater energy amount than utilizing them by anaerobic digestion. The complete energy performance assessment of biogas production system requires the use of more than one system boundary. These can then be used in calculating output–input ratios of biogas production, biogas plant, biogas utilization and biogas production system, which can be used to analyze different parts of the biogas production chain. At the moment, it is difficult to compare different biogas plants since there is a wide variation of definitions for energy performance of biogas production. A more consistent way of analyzing energy performance would allow comparing biogas plants with each other and other recovery systems and finding possible locations for further improvement. Both from the GHG emission balance and energy performance point of view, the energy consumption at the biogas plant was the most significant factor. Renewable energy use to fulfil the parasitic energy demand at the plant would be the most efficient way to reduce the GHG emissions at the plant. The GHG emission reductions could be increased by upgrading biogas to biomethane and displacing natural gas or petrol use in cars when compared to biogas CHP production. The emission reductions from displacing mineral fertilizers with digestate were seen less significant, and the greater N2O emissions from spreading digestate might surpass the emission reductions from displacing mineral fertilizers.

Facing the future: energy performance certificates and commercial property

Purpose – The paper aims to present the findings of a “situation review” of the Energy Performance of Buildings Directive (EPBD), focusing on energy performance certificates (EPCs) to highlight areas of specific importance for the UK property investment community. The paper is based on research commissioned by the Investment Property Forum (IPF) and funded through the IPF Research Programme (2006-2009). Design/methodology/approach – Interviews were undertaken with experts from the fields of property investment and building engineering. The interviews were undertaken with to identify: the current knowledge of EPCs in the property investment sector; key issues with practical implementation of the legislation; and perceptions of the potential impacts of legislation, particularly in relation to value stakeholder and behaviour. Findings – The paper finds that, although the regulations have been published, there is still a need for clarification in the marketplace with regard to some of the detail of regulations and the certification process. The following areas are of most concern to property investors: costs of surveys; potential difficulties with the process; and a shortage of assessors. With respect to these impacts it is becoming clear that investors who have not yet started considering the EPBD and its requirements within their strategy are likely to face difficulties in the short term. The most significant value-related impacts of EPBD are expected to be value differentiation of properties and “price chipping” against the rental or capital value of the property, where an occupier or potential purchaser will use the recommendations contained within an EPC to force a reduction in value. The latter is expected to emerge in the short term, whereas the former is expected to be realised over the medium to long term. Both these impacts have potentially significant implications for property investment holdings and also future investment behaviour.

Characterising the energy performance of centralised HVAC&R systems in the UK

Heating, ventilation, air conditioning and refrigeration (HVAC&R) systems account for more than 60% of the energy consumption of buildings in the UK. However, the effect of the variety of HVAC&R systems on building energy performance has not yet been taken into account within the existing building energy benchmarks. In addition, the existing building energy benchmarks are not able to assist decision-makers with HVAC&R system selection. This study attempts to overcome these two deficiencies through the performance characterisation of 36 HVAC&R systems based on the simultaneous dynamic simulation of a building and a variety of HVAC&R systems using TRNSYS software. To characterise the performance of HVAC&R systems, four criteria are considered; energy consumption, CO2 emissions, thermal comfort and indoor air quality. The results of the simulations show that, all the studied systems are able to provide an acceptable level of indoor air quality and thermal comfort. However, the energy consumption and amount of CO2 emissions vary. One of the significant outcomes of this study reveals that combined heating, cooling and power systems (CCHP) have the highest energy consumption with the lowest energy related CO2 emissions among the studied HVAC&R systems.

Post-occupancy evaluation studies in recently refurbished office building: energy performance and employees' satisfaction

Existing buildings contribute greatly to global energy use and greenhouse gas emissions. In the UK, about 18% of carbon emissions are generated by non-domestic buildings; sustainable building refurbishment can play an important role in reducing carbon emissions. This paper looks at the performance of a recently refurbished 5-storey office building in London, in terms of energy consumption as well as occupants’ satisfaction. Pre- and post-occupancy evaluation studies were conducted using online questionnaire surveys and energy consumption evaluation. Results from pre-occupancy and post-occupancy evaluation studies showed that employees, in general, were more satisfied with their work environment at the refurbished building than with that of their previous office. Employees’ self-reported productivity improved after the move to Elms House. These surveys showed a positive relationship between employees’ satisfaction with their work environment and their self-reported productivity, well-being and enjoyment at work. The factor that contributed to increasing employee satisfaction the most was: better use of interior space. Although the refurbishment was a success in terms of reducing energy consumption per m2, the performance gap was almost 3 times greater than that estimated. Unregulated loads, problems with building control, ineffective use of space and occupants’ behaviour are argued to be reasons for this gap.