EPC 2030: Energy Efficiency Standards
If you’re an office manager or a facilities manager, you may have heard something about EPC 2030, and how it will cause widespread disruption in the office market. You may be aware that it’s an update in the building energy efficiency regulations coming into effect in 2030. However, you’re not sure exactly what it is, why it matters, and how it will affect you. If this sounds like you, then keep reading, because that's exactly what we're going to go through today.
Every week, we speak with potential clients about their workspace strategy and design needs. Ever since the proposed updates were announced in 2021, EPC 2030 has been a consideration when assisting clients with workspace strategy and design. In this article, we’ll break down exactly what EPC 2030 is, and why it matters to you as a tenant. We’ll also cover some of the key changes that many buildings will need to undergo to reach the required standard.
What Does EPC Mean?
EPC stands for energy performance certificate. It's a measure of the energy efficiency of a building. The scale runs from G to A, with A being the most energy efficient. The rating of a building is calculated by multiplying the energy consumption of a building by its carbon dioxide emissions factor. This gives a “carbon dioxide equivalent emissions” (CO₂e) rating, which is used to determine its EPC rating. Buildings with a CO₂e rating of 150+ are rated G, while a building must have a CO₂e score of less than 25 to be rated A. Net zero buildings are rated A+.
First introduced in 2007, the EPC system is used for all buildings, both commercial and domestic. Currently, non-domestic buildings must have an EPC rating of E or better. In 2021, the government announced that from 1st April 2030, all non-domestic buildings must have an EPC rating of at least B. This is part of the UK government’s agenda to reach net zero by 2050. Given that 80% of London’s offices do not meet this standard, this will cause significant disruption in the London office lease market over the next few years as landlords refurbish their buildings to bring them in line with the new regulations.
Even if 2030 seems like a long way away, you need to be considering its implications for your business now. Legally, the responsibility falls on the landlord to ensure their buildings meet the new EPC requirements by 2030. However, these changes will have a significant impact on you as a tenant, so you should be aware of the potential changes and their implications. Here, we’ll go through what this means for your workspace strategy in the next 10 years.
4 in 5 of London’s offices will require extensive refurbishment in the next 6 years. This means that if your office is not B or A-rated, your landlord will probably terminate your lease in the next 3-5 years to update the building. This means you will almost certainly have to relocate your company before then – to an EPC B+ rated building.
Even if you are planning to move offices anyway, EPC 2030 is still important. The average office lease term in the UK is 6.4 years, which means your next workspace project should be done with EPC 2030 in mind – especially if it’s a refurbishment.
Moving to a more energy-efficient building will almost certainly increase your annual lease costs per square foot. This is because it has several benefits for you as a tenant (which we'll explain shortly). Many landlords will also take the opportunity to make other upgrades to the building, which will further increase rental costs.
Landlords will also be looking to recoup the extensive investments they have made to meet the new regulations. Exactly how much more expensive will vary, due to the other upgrades. However, Savills estimate that most spaces will require moderations costing over £40 per square foot. Landlords will look to recoup this over the course of several years.
However, the costs incurred to make your office more energy efficient will also make your office much cheaper to run. Operational costs are much higher than many people think, costing around 25% of lease costs. Making your space for energy efficient can create significant savings for your company.
Air conditioning often accounts for around 40% of a company’s total energy usage. Modern HVAC systems are up to 50% more efficient than systems from 10 or more years ago. This can create a 20% saving in your total office energy costs. Such savings will help to offset the rise in rental costs.
Higher Quality Utilities
Modern utility systems are not only much more efficient than systems in many offices currently, but they are also higher quality. LED lighting is now much better designed to mimic natural daylight, which is much better for productivity. Newer HVAC systems also have better filtering and fresh air capabilities, which will improve the air quality throughout your office.
The drive for energy efficiency will also create other benefits. For example, many offices will reduce the need for artificial lighting by maximising the natural light available. This not only reduces your operational costs but improves the quality of your space and the wellbeing of your people.
The crucial driver behind the EPC 2030 programme is the UK government’s goal for the country to be carbon neutral by 2050. Commercial buildings consume a huge amount of energy, so reducing this is a crucial part of improving sustainability at a country-wide level.
This will also improve your carbon footprint as a company. If you’re a professional services firm with no manufacturing facilities, moving to EPC A or B-rated offices could reduce your energy consumption by up to 25%.
How To Achieve EPC B Rating
There are a number of ways many office buildings will have to be upgraded to reduce their emissions. If you own your own office building, it's important you assess these in detail to understand how your building can meet regulations. As a tenant, it’s important to look for these features in any building you may relocate to.
Before making any decisions about your office, you should understand exactly what its current EPC rating is. To do this, speak to your landlord. They should have a 3rd party report from a qualified consultant. This will detail the energy efficiency of the building and give an official EPC rating.
This step is crucial. Otherwise, you are making costly decisions based on shaky assumptions. You could lease a building that doesn’t meet the minimum requirements. This may cause significant disruption for your company if you have to relocate again before 2030, or carry out costly upgrades.
The most cost-effective way to improve the energy efficiency of a building is to improve the insulation. By upgrading the insulation in the walls and ceilings, less heat will be wasted, which will reduce your HVAC energy consumption.
In older buildings, upgrading the windows to ensure they are all double-glazed sealed units will also create substantial energy savings. Even things as simple as ensuring all air leaks are sealed will reduce the heat loss in your office and reduce energy consumption.
Nearly all offices have LED lighting. However, if your office still has fluorescent lighting, upgrading this to LED will be essential to achieving an EPC B rating. LED panels use much less energy and have a much longer lifespan than fluorescent lights. They can also be optimised to create a softer light that is much more similar to daylight.
Intelligent lighting systems can further reduce energy consumption. Occupancy sensors reduce usage by turning the lights off when no one is in the area. Daylight harvesting systems can change the intensity and colour of the lighting based on the current natural light, further reducing electricity consumption.
Air conditioning typically constitutes 40% of an office’s energy use, so minimising this is a crucial part of energy efficiency. While insulation will reduce the demands on the system, there are also further steps you can take to reduce the energy consumption of your HVAC system.
Depending on the age and efficiency of the current system, it may be worth upgrading entirely. A system that is 50% more efficient will have a very short payback period. It will also help your EPC credentials. If you’re leasing an office, you should look at the age of the HVAC system, as well as its service history and efficiency. Another consideration is captivity, as a system with too large or small a capacity will waste energy, reducing the EPC rating.
While it’s possible to achieve an EPC rating of A simply through having a very efficient building, to reach A+, your building needs to be net zero. This will require running schemes to neutralise any carbon emissions your building does create, and using renewable energy.
You could achieve both by moving to an office that has solar panels or geothermal heating systems. Alternatively, you could purchase your energy from a sustainable provider. Before making the switch, you should consider the cost and availability of renewable energy, as well as making use of any government incentives.
Future Proof Your Office
The EPC 2030 regulations update will cause major disruption in the office space market, as 80% of offices will require extensive modifications. It is highly likely that you will have to move offices in the next 3-5 years to enable the landlord to carry out the required work.
However, there are several key positives for your company. Moving to a more energy-efficient building will improve your company’s sustainability credentials, as well as reduce your office operating costs. You can also use it as an opportunity to create a workspace that maximises the performance of your company.
To learn more about preparing your office for the future, read How to Future Proof Your Office Design. There, we’ll go through some major trends in office design, as well as how you can set your workspace strategy up for future success. If you feel you need more help to prepare your workspace strategy, we’d love to hear from you. As workspace designers and consultants, setting companies up for future success with their workspace is a key part of what we do, so to explore how we can help you, contact us today.