Never mind government targets and legislation; the risk that energy supplies may simply dry up is becoming the key driver in the sustainability agenda, says James Gray
As in most industries, sustainability is now at the heart of construction. In a bid to cut emissions, government legislation and reduction targets have led to the development of a range of sustainability measurements and assessment methods. From developers through to property investment companies and occupiers, sustainability is no longer an optional extra. And while such awareness is on the increase, particularly among large corporations, there is doubtless still a significant minority for whom sustainability is nothing more than a way for the government and Europe to interfere.
Similarly, many businesses are now acutely aware of the complex issues surrounding energy security, ie the realisation that energy supplies may simply dry up. The larger the business, the more likely that it will have processes designed to protect the resources upon which it relies (although it is hard to see how even the most defined and rigid processes will facilitate anything close to normal business operating conditions with energy supply issues). However, for those businesses with little awareness of energy security, and minimum resources to commit to consider it, there seems to be little guidance.
A comprehensive approach to sustainability measures is now a necessity in a world where energy security is no longer guaranteed. The global financial crisis, tough environmental targets, increasing gas import dependency and the closure of ageing power stations have combined to cast doubt over whether the current energy arrangements will deliver secure and sustainable supplies. Ofgem estimates that the cost of the investment needed to secure energy supplies and meet Britain’s climate change targets could be as much as £200bn between now and 2020.
The UK faces a unique combination of challenges in the next few years. It has to replace its ageing energy infrastructure, which comprises coal-fired generation and nuclear plants, and become a net importer of natural gas. Unless there is a revolution in how we obtain energy, we will become increasingly reliant on other countries. If only from a geopolitical perspective, this must be of concern to all decision-makers.
All these factors combine to mean there is more pressure than ever before on building users to reduce energy consumption - not because of the success of any particular campaign, but simply because of the need to save energy in light of security issues (and increased costs). It is at least possible that energy security is now a key driver in pushing sustainability up the business agenda.
Indeed, the perceived lack of impact on capital and rental values of energy efficient and carbon reduction measures has been a barrier for many within the property industry. Legislation, whether from Westminster or Brussels, has been necessary as a driver for change. However, energy security is helping to focus minds.
The use of “A”-rated appliances and plant, decently insulated properties, energy-efficient heating and cooling systems all have a part to play in low-carbon economies. However, these measures still rely on existing forms of energy production. Yes, some are from renewable sources but the bulk are not.
By producing energy on site, businesses can go some way to solving the problem of energy security. Feed-in tariffs were designed as a way of encouraging the adoption of renewable energy sources. Introduced in 2010, solar photovoltaic panels, hydroelectricity, wind turbines and other electricity-generating technologies could all attract a premium government payment for their electricity.
To many in the property industry, sustainability simply makes good business sense. The ability to meet energy needs, while ensuring targeted reductions, will remain a hot topic. However, energy security forces the issue more than any other factor. Sustainable development is about managing economic, social and environmental issues long term, enhancing business growth and prosperity. Legislative compliance is a given but issues surrounding energy security are the shocks to the system we really need.
James Gray is head of the project and building consultancy division at Cluttons