Energy Efficient Scotland consultation: Making our homes and buildings warmer, greener and more efficient

Non-Domestic Sector Overview

53. There are approximately 200,000 non-domestic buildings in Scotland, including around 20,000 buildings in public ownership. The non-domestic building stock is hugely diverse in terms of construction, size and, in particular, building use ranging from shops and offices to factories, warehouses and hotels.

54. We know less about the energy performance of the non-domestic sector compared to the domestic sector. However, of the 30,000 non-domestic buildings that have an EPC assessment, we know that 5% have a rating of EPC B or better, 22% are rated C or D, and the remaining 73% rated E or worse. ^[9] We are currently developing our understanding of the energy efficiency performance of Scotland’s non-domestic building stock, which will be used to inform the development of the Programme.

Regulation for improvement

55. An initial platform for the assessment and improvement of non-domestic buildings was established to support regulations introduced on 1 September 2016. ^[10]

56. Information on current and planned work to review these regulations and on proposed phasing of future regulations is set out within Chapter 3 of the Route Map document ^[11] which summarises:

• Our intended approach to review and phasing of regulations;
• Developing improvement targets for 2020, including a public consultation on detailed proposals in 2019;
• Investigation into setting a Long-Term Standard; and
• Work plan to 2021.

Our intended approach to review and phasing of regulations

57. We intend to build on the current regulations with a phased expansion over twenty years so that all buildings are covered by the regulations by 2040. We also propose that the current triggers be reviewed to provide a level of assessment and improvement activity that can be spread out over the period of the Energy Efficient Scotland Programme.

58. To further drive change at a sustainable rate, we will also consider the need to introduce ‘back stop’ dates as milestones within the Energy Efficient Scotland Programme. These will define the date when buildings subject to regulation must have obtained an assessment if one has not already been required by a trigger transaction (currently sale or rental).

59. Current estimates place the total cost of improving the energy efficiency of our non‑domestic buildings in line with the Climate Change Plan ambitions at £2-4 billion. It is not possible at this stage to determine the cost of improvement at an individual property level. Options for this, including reasonable payback periods, will be established as part of research to develop 2020 targets.

Developing improvement targets for 2020

60. Setting one standard that would apply to all buildings may not offer the most practical and equitable approach to improvement because of the wide variety of building types and purposes in the non-domestic sector. We are proposing moving towards a benchmarking system where the performance of a building is assessed against a ‘notional building’ specification to identify ‘what good looks like’ for that building. We will investigate the extent to which this specification may have to vary, in response to important building characteristics (such as type and construction).

61. Part of planned Programme work will also be to consider more direct means of presenting and benchmarking the calculated energy use which is already reported by EPCs.

Investigation into setting a Long-Term Non ‑ Domestic Standard

62. Stakeholder responses to the initial high-level SEEP consultation ^[12] called on Government to create certainty and set out a long-term trajectory for improvement to give property owners the confidence to invest in their stock over the longer term. Accordingly, a range of higher levels of performance will be investigated to determine the viability of also setting a Long-Term Non-Domestic Standard for improvement under the programme from 2020.

Consultation Questions

18. Are there specific building characteristics you consider should be included in research to ensure that future improvement targets reflect the diverse nature of our non-domestic building stock? If so, please set out what these are and why they should be considered.

19. What are your views on the way calculated energy use from building assessments are presented and/or benchmarked? We are particularly interested in what arrangements you favour and how you think they would be useful.

20. What are your views on the proposed planned work to review improvement targets?

21. What are your views on our proposals for phasing the regulations from 2020?

The Programme for industrial users of energy

63. Many industrial businesses use significant energy for heating, cooling, ventilating or lighting their premises as well as their productive processes. We believe that our initiatives to support investment in the energy efficiency of buildings should be aligned and joined-up, where possible, with advice and support to reduce energy consumed on sites as a whole. We are working in collaboration with industrial representatives to align measures to invest in the energy efficiency of existing operations with the Energy Efficient Scotland Programme, taking account of the more bespoke needs of industry.

Consultation Question

22. Should advice and support to invest in the energy efficiency of industrial or manufacturing buildings align with wider advice and support on how to reduce energy consumed for productive processes? If so, please suggest how improving efficiency in building and ‘process’ energy could work together, and what opportunities and challenges this might present?

Public Sector Buildings

64. The public sector has a legal duty under the Climate Change (Scotland) Act 2009 to act in the way best calculated to the delivery of national targets when carrying out its functions.

65. The public sector is already an exemplar when it comes to energy efficiency and low carbon infrastructure. The Scottish Government launched the Non-Domestic Public Sector Energy Efficiency ( NDEE) Framework in March 2016. This framework has been designed to support Public and Third Sector organisations procure Energy Efficiency retrofit work. To date, 12 projects have been procured through the Framework, with capital investment of around £15 million.

66. In October 2016, the Scottish Government also established the NDEE Unit, to accelerate the number of public sector energy efficiency projects and support our wider ambitions around energy demand reduction. This is a four year single supplier contract, led by Mott Macdonald with a value up to £2 million.

67. In addition, the Scottish Government is providing support to the public sector through interest free Salix loans. Since 2008, the Scottish Government has invested over £38 million in loan funding for 685 public sector energy efficiency projects through Salix Finance. These projects have produced more than £100 million and 480,000 tonnes of carbon dioxide lifetime savings since 2008. 28 of Scotland’s 32 local authorities have used Salix loan funding for energy efficiency projects.

68. We want to see the public sector continue to be an exemplar with its own buildings and we hope that all public sector buildings will meet their benchmark ahead of 2040. There is a strong pipeline of projects currently preparing for procurement through the NDEE framework in the coming months with assistance from the Support Unit, as well as many public sector organisations continuing to take advantage of the Scottish Government financial loan support (provided by SALIX).

69. We are currently working to establish an accurate non-domestic baseline on energy efficiency and as part of that we will look to gather information on the energy efficiency of stock across the public sector. This will allow us to work with our public sector partners to consider appropriate timescales for achieving the relevant standards for our public sector buildings.

Consultation Questions

23. What more could the Scottish Government do to encourage the public sector to accelerate energy efficiency across their building stock?

24. What more could the Scottish Government do to encourage the public sector to accelerate heat decarbonisation across their building stock?