Launched at this week's All-Energy event in Glasgow, Savills Energy has developed a full Energy bureau and brokering service that captures and manages a user’s energy data to drive out efficiencies in consumption and cost.
“We are seeing decentralisation of supply, more on-site generation, developments in energy as well as a digital revolution focussing on capturing data allowing additional opportunities to be identified, developed and executed," said Savills Energy Director, Stuart Campbell. “In addition, proactive management — with consumers taking more control — is creating a new breed of informed consumer: the ‘prosumer’.”
According to Campbell, the next logical step in this drive for efficiency and cost saving is the introduction of Energy Savings Companies (ESCO) Energy Saving Agreements, which will offer third party funded energy efficiency/savings upgrades to clients. This is not just for owner occupiers, but also relevant to the landlord/tenant commercial space.
“Such innovation has further to go and will centre around energy storage, aggregating and pooling distributed generation for market sales, peer to peer energy trading and, ‘blockchain’ (securely recording and tracking each kilowatt of power)," he said. "The speed of change means regulation and government strategy is struggling to keep pace. Development of this Energy Saving Agreement is desperately needed particularly with the Minimum Energy Efficiency Standards (MEES) legislation coming into force in less than 12 months — this presents a real need to find a solution to upgrading F and G EPC rated property.
Putting it into practice
So how might this be put into practice? Campbell explains: "Take a commercial office tenant who is happy with the accommodation he is renting for his business but the lease is approaching a break clause point with five years left on 15-year tenancy. The landlord has identified a requirement for £2.5m of energy upgrade work, to make sure the office achieves an acceptable EPC rating, as well as to upgrade what is becoming a slightly tired building. Without an ESCO Energy Saving Agreement approach the tenant would be inclined to exercise their lease break clause rather than incur an unbudgeted £2.5m hit, knowing that they may only gain five years of benefit.
"With the ESCO Energy Saving Agreement approach, the £2.5m is funded by a third party, and the costs are smoothed over a ten-year contract period, enabling the tenant to allocate the cost as operational expenditure. The landlord has a happier tenant, and there is no reason why discussions on extending the lease and possible landlord contributions could not take place leading to a win/win for the landlord and tenant."