What next for the Energy Performance of Retail Buildings?

29 July 2019

After the initial success of the Energy Performance of Buildings Directive (EPBD) and the widespread introduction of the Energy Performance Certificate (EPC) into property transactions, what can we expect from the proposed revisions of the EPBD?

Since its introduction more than a decade ago the EPBD has raised awareness of energy consumption and has also improved the energy performance of buildings across Europe.


With buildings responsible for 40% of energy consumption in the EU the EPBD has some ambitious targets, including ensuring that all new buildings are nearly zero energy rated by 2020. As part of the drive to achieve this, consultation on proposed changes to the EPBD has begun.


The changes are designed to promote the use of smart technology in buildings and to streamline the existing rules. The most noteable changes include the introduction of eco-mobility infrastructure requirements. These will see all new non-residential buildings with more than 10 parking spaces and non-residential buildings with more than 10 parking spaces which are undergoing major renovation having 1 parking space per 10 equipped with recharging points.


In addition, the use of building electronic monitoring, automation and control will be reinforced with a goal of streamlining (and, ultimately, reducing) physical building inspections.


The implications for the UK's buildings are unclear, particularly in light of Brexit and the UK's imminent departure from the reach of EU legislation.


Notwithstanding Brexit, it is likely that the UK Government will have similar carbon reduction goals and may take inspiration from EU legislation, given that the UK has already invested time and money complying with the EPBD to date.


For retailers operating out of large shopping centres or out of town retail parks, initiatives such as eco-mobility could be a sign of things to come in the future and the initial cost implications of providing eco-mobility solutions at these retail environments could very well be passed down by institutional landlords to retail tenants. Ultimately such costs may, as is often the case, be passed on to the consumer.


Notwithstanding this, retailers should consider the potential long term benefits of making buildings (and the wider retail environment) more efficient. For example, with the UK Government coming under increasing pressure to remove tax incentives for diesel cars and to offer consumers compensation to enable a switch to greener alternatives, shoppers could be drawn to environments which support alternative fuels such as electric cars.


In addition, with traditional high street retailers coming under increasing cost pressure and competition from internet providers, smart buildings which offer greater energy efficiency and therefore lower service charges could, in the long term, prove a more attractive option to retailers and, ultimately, customers who benefit from a healthier shopping environment and cost savings which could be passed on.


Whatever the outcome of the EPBD changes and Brexit, it is clear that both retail tenants and landlords will need to have an eye not only to transport trends but also the potential cost savings of increased energy efficiency and be ready to adapt. 

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