Driving transformation

Could the Better Buildings Partnership’s emerging Design for Performance rating be the answer to the energy performance gap in commercial property? Stephen Hill thinks so

It’s no secret that there is a significant ‘Performance Gap’ in the UK commercial market – a gap between buildings’ intended and actual energy performance. However, there is evidence of a gradual move towards more market recognition of the importance of operational performance. The WELL standard includes a requirement for on-going environmental monitoring, and BREEAM 2018 took a step in this direction with an optional Verification Stage. I and others have long argued that the lack of an operational energy performance metric in the UK represents a big missed opportunity in terms of delivering energy efficient buildings. Finally, with the proposed Design for Performance rating, we may be about to grasp that opportunity.

The UK government’s 2017 Clean Growth Strategy commits to ‘Develop a package of measures to support businesses to improve their energy productivity, by at least 20 per cent by 2030’. This is part of the Government’s overall strategy to achieve its legally binding targets to reduce the UK’s carbon emissions, which in turn is part of the UK’s commitment to the 2015 Paris Climate Conference (COP21). Improving the energy efficiency of commercial property clearly has an important role to play in delivering on this commitment. In the Clean Growth Strategy, the Government cites both ‘voluntary building standards’ and ‘requirements for businesses to measure and report on energy use’ as potential delivery mechanisms. The Design for Performance project aims to tackle both these opportunities, by creating an operational energy performance rating scheme for the UK commercial property sector.

Taking inspiration from the NABERS scheme
The Design for Performance rating is based closely on the successful Australian NABERS scheme (National Australian Buildings Energy Rating Scheme). The principle behind the NABERS scheme is simple – early in the design stage for a new building, an energy performance target is agreed. This is converted to a star rating on a one to six scale, the rating corresponding directly to energy intensity. The target is subject to a binding ‘commitment agreement’ between the client, design team and contractor. The target rating is validated around two years after the building has been completed, by comparing the target energy intensity with actual performance. This is then the basis of the building’s actual star rating.

The interesting aspect of the NABERS rating is the impact on property value. The NABERS rating was first introduced as a voluntary scheme, which was then adopted as a requirement for Government property, and finally became mandatory for all commercial property. What has caught the eye of people in the UK and around the world are several studies that have demonstrated a clear correlation between a building’s NABERS rating and property value. One study, in 2014, by the Investment Property Databank demonstrated a 21 per cent increase in a property’s asset value associated with a high NABERS rating.

Probably the most startling fact is that the vast majority of commercial property in Australia currently has a NABERS four-star rating or better. This indicates that commercial property is now nearly twice as energy efficient on average as it was when the NABERS scheme was first introduced. In the UK, over roughly the same period, energy labelling has driven a similar transformation in the white goods market (when did you last see a B rated washing machine?) But the energy efficiency of commercial property has remained largely static.

Responding to energy performance demands
The big question for the UK is whether the Design for Performance rating scheme will be able to drive the same kind of transformation that NABERS has achieved in Australia. There is a feeling among advocates of building performance that the UK is crying out for a rating scheme that reflects a building’s true energy efficiency, with the tantalising prospect of creating a market demand for energy efficient property. The reality is likely to be more challenging – the market for sustainability ratings is more mature than in Australia, and there are a number of new ratings schemes jostling for position around the dominant BREEAM. However, there are some positive signs, not least the seven leading commercial developers that have signed up as ‘Developer Pioneers’ for the transition phase of the Design for Performance project.

The Design for Performance project has been running since 2015, led by the Better Buildings Partnership and supported by a range of industry stakeholders. At Arup, we have acted as technical advisors and supported The Crown Estate in delivering one of the pilot projects. The results of the pilot phase were published in October 2018, and clearly demonstrated the need for, and potential transformative effect of an operational energy rating scheme. The Transition Stage of the project, launched in October 2018, aims to develop a fully functional voluntary rating scheme for the UK commercial property sector.

At Arup, we have signed up as a ‘Pioneer Delivery Partner’ for the Transition Stage of the Design for Performance project. Arup’s commitment is to work with our clients to embed Design for Performance into our commercial projects, as well as working with the Better Buildings Partnership and other partners in the development of the rating scheme. Arup has long been committed to designing buildings that perform and by supporting Design for Performance we hope to demonstrate to our clients that the process is deliverable, whilst also encouraging others to participate.

A change in mind-set
As well as designers and contractors, it is important that this process embraces facilities managers and maintenance contractors, who have a critical role to play in delivering operational performance outcomes. Throughout the property supply chain from design right through to operation, a change in mind-set is needed to deliver the operational energy performance outcomes on which the Design for Performance rating is based. Whilst there is plenty we can learn from the Australian experience, there is much we will need to learn for ourselves before we can really claim to have closed the Performance Gap.

Stephen Hill is an Associate Building Performance Consultant at Arup. Arup is the creative force at the heart of many of the world’s most prominent projects in the built environment and across industry. Working in over 140 countries Arup has more than 14,000 planners, designers, engineers and consultants delivering innovative projects across the world with creativity and passion.
www.arup.com

More information on the Design for Performance project can be found here: www.betterbuildingspartnership.co.uk/our-priorities/measuring-reporting/design-performance