“Buildings are no longer simply consumers of energy- no longer just hungry end points in the energy network. Our buildings are now integral to our shared electricity infrastructure”. These are the words of Smith Mordak, Chief Executive of UKGBC, in a foreword to UKGBC’s excellent guidance on renewable energy procurement.
Unquestionably, the built environment does have a critical role to play in decarbonising the grid via procurement, and there are ever increasing moves in this respect. More and more building owners are exploring on-site energy generation (typically rooftop solar PV panels), but also alternative structures (e.g. off-site generation via PPAs) where that is not available. Take wind-powered Canary Wharf or Scottish solar energy supplier, and London landlord, Derwent.
For me, there are a couple of themes to note. On one hand, landlords aspire to develop, own and operate buildings with ever increasing ESG credentials - energy procurement is part of that, particularly where the owner, rather than the occupier, retains responsibility for procurement e.g common parts. Investors and lenders are, without doubt, driving that. Yet in addition, are we starting to see renewable energy provision as a differentiator for ESG conscious occupiers? If a landlord can, and is willing to, deliver renewable energy to site, surely that is a key plus for prospective occupiers (and inevitably, some occupiers will start expecting landlords to commit to renewable energy as part of service charge regimes). The UKGBC bronze, silver and gold “Rating your electricity strategy”, currently at “beta” stage, is perhaps one to watch.
I sense some building owners are at risk of being behind the curve - now, if not already, is the time to start exploring renewable options, and so the UKGBC guidance is all the more timely. Plus of course there are potential opportunities here for some landlords to diversify income streams…