Despite promises to the contrary, the government continues to delay raising EPC standards for non-residential buildings. In a column in the February issue of Energy in Buildings & Industry, Andrew Warren, chair of the British Energy Efficiency Federation, shares his frustrations about the cost of inaction and highlights some of the other potential health and environmental benefits that remain neglected.
The costly consequences of EPC delay
Here is a policy now worth £12.2 billion in economic growth terms for UK business. Introducing it will add not one penny to Government expenditure. Actioning it simply requires a signature.
That windfall figure is not based upon some academic theory. It is an entirely official calculation. It is drawn from that most rigorous holy of holies, an economic impact assessment actually created by and published by Government itself.
In a sane and logical world, genuinely concerned to stimulate economic growth, these benefits should have long since been rolling in. That they haven’t is entirely due to unprecedented Ministerial dithering and delay, endured now for approaching seven years.
Because these calculations were undertaken for a public consultation held way back in 2019. That set out a proposed timetable to require increased minimum energy performance certificate standards (EPC) standards for all new contracts in leased non-residential buildings.
Since 2018 all such lettings have to be of minimum E standard. All this is under legislation introduced by the Coalition government in 2011, with intended changes reconfirmed within the Conservative government’s Clean Growth Strategy published in 2017.
Strengthening this was deliberately designed to address split-incentive “market failures that lead to under investment in energy efficiency….the sector is not delivering savings required to meet the mandated UK carbon budgets”.
The timetable is to improve these EPCs to a C rating by 2027 and to a B rating by 2029.
Back then, the official economic assessment reckoned the changes would deliver an NPV (net present value) gain to business of £8.4bn in 2014 money.
In the interim, according to the Bank of England calculator, inflation has increased by 45.3%. Real energy prices have risen even more. Meaning that the original calculations of the growth benefits that would accrue to UK business has grown right up to that massive £12.21billion.
But these start only once implemented. Since that public consultation, there has been absolutely no official statement whatsoever regarding confirmation or denial of either proposal or timetable. Total omerta.
This inertia has been raised regularly in Parliament. In 2022 MPs were told to expect decisions later that year. In 2023, a commitment was given to publish all responses received, both to the 2019 and a further related consultation held in 2021.That never occurred.
In 2023 a decision was again promised “shortly”. A year ago concern at this absurd tardiness was raised by Liberal Democrat energy spokesperson Pippa Heylings MP. But Business Minister Sarah. Jones then responded by saying yet again, “responses ….are being reviewed”. This review was apparently “with the aim to publish in the early part of 2025”.Another deadline hopelessly missed. Again.
Understandably, the British Property Federation has long had enough of the dithering. “The sector has a critical role to play in tackling climate change, yet the government continues to keep owners and investors in the dark about future minimum energy efficiency standards,” Rob Wall, assistant director told The Times a year ago. “Lack of response to the consultation is hugely frustrating and making a tough situation worse. We support higher minimum standards. We are seeing improvements in the EPC ratings of commercial buildings, but progress is slow. We need clarity from government now.” A year later.
this month Wall was quoted again in the Times , furious that “ministers have kicked the can down the road again.”
Last summer Daniel Zeichner became the seventh different Government Minister to claim, yet again, that “we are currently reviewing the policy situation” It remains unclear why it was down to the(then) agriculture minister – rather than a buildings, industry or even an energy minister – to undertake this review.
Members of my Federation were repeatedly formally assured last year that the new timetable decision would finally emerge as part of the ( long promised ) Warm Homes Plan. Finally issued last month, that contained welcome policy decisions regarding higher EPC standards for rented homes. But absolutely nothing at all about rented non-residential buildings. Because, guess what, the energy department press office is still repeating this February that “we will update in due course”.
It is worth recalling that this remarkable £12.21bn growth includes no calculations regarding the whole range of other benefits accruing – beyond saving businesses in leasehold buildings’ lots of money on fuel bills.
The Government acknowledges Implementing this policy would provide Identified, but curiously not financially evaluated, a whole string of health and productivity benefits. Including air quality improvements. For landlords, there will be increases in tenant satisfaction, hence reductions in void periods and in maintenance costs- all making subsequent lettings both more valuable and easier to achieve. And definitely an ESG plus.
The economic assessment did consider the implication of changing how EPCs are calculated. But “if emission factors are updated in line with the continuing decarbonisation of the electricity grid… (the outcome) would not change substantially”, it concluded.
And in energy policy terms, reductions of 49.5 million tonnes of CO2 equivalent. Increases in security of energy supply. And many more jobs in the construction industry.
The property industry is fed up with the appalling uncertainty this appalling delay is causing them .So is Pippa Heylings: “This is a thoroughly nonpartisan sensible measure which will benefit everyone. It is yet another example of a government that talks big about improving efficiency. But continuously fails to implement identified policies that would save, on their own estimate, £ billions of waste, whilst improving working conditions.”
Energy in Demand - Sustainable Energy - Rod Janssen 