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Heat & Buildings Strategy – Commercial Properties

After much delay, the Government this week has published its long-awaited  Heat & Buildings Strategy guide to take the UK towards net zero by 2050. The bulk of the reporting following its release has focused on grants for domestic heat pumps and observation of considerable funding for public sector building projects. But what about the commercial sector? Today we take a deeper dive into the documentation and highlight what this means for those operating commercial buildings.

The Government’s commercial Heat & Buildings element of the  report clearly states the scale of impact commercial and industrial building stock has on the environment, with around 1.5 million commercial and industrial buildings accounting for “around one-third of UK emissions from the total building stock.” The report states that reducing carbon emissions from these buildings will therefore be key to:

  • Meeting the 2017 Clean Growth Strategy ambition to enable businesses to reduce energy use by at least 20% by 2030, which would save businesses £6 billion per year on energy bills
  • Achieving our Nationally Determined Contribution of a 68% reduction in greenhouse gas emissions (compared to 1990 levels) by 2030
  • Meeting the Government’s carbon budgets
  • Delivering Net Zero by 2050

The demands are clear then, but how is this to be achieved?

Regulating For Intensive Energy Use

The impetus for commercial organisations, as set out by the strategy, is the substantial savings on energy bills, and the creation of safer and healthier working environments. The provision of safer and healthier workplaces should already be enshrined in corporate policy, and reducing operational costs is clearly logical, but it is safe to say that current generation low carbon technology and direct electric, certainly when it comes to domestic hot water (DHW) provision is more expensive than gas-based systems. So, the onus is really going to be one of corporate social responsibility in the near term.

The strategy report does recognise the complexity of the sector, pointing out the huge variety across the commercial and industrial building stock in terms of business size, building size (by floor area), use, and tenure

The policy package laid out therefore aims to avoid a “one-size-fits-all approach.” These policies, unlike previous grant packages, will instead be based upon regulatory frameworks “tailored to the size of the building and the businesses operating in that building, function and energy use of commercial and industrial buildings.”

Large Commercial buildings

The report identifies commercial and industrial buildings (above 1,000m²) as the most intensive users of energy commercially, accounting for 64% of the energy consumed by non-domestic buildings in England and Wales, despite only accounting for around 7% of the stock. The government is proposing to introduce a mandatory regulatory requirement for these buildings to obtain a performance-based energy rating based on measured energy data. This will ensure building users are aware of their energy use and where they are on their trajectory to becoming a Net Zero compatible building.

The process to decarbonise heat sources needs to happen through the 2020s. As such, this performance-based framework will work alongside proposals to prohibit new fossil fuel installations in large commercial and industrial buildings which are not connected to the gas grid.

If your business operates in a building over 1,000m2, the Government’s proposed performance-based energy rating will recognise measured reductions in actual energy use and carbon emissions. Accurate metering of usage and data assessment is going to become a necessity if all the factors influencing building performance are to be understood. The strategy believes this approach will help “optimise existing services and systems, drive behavioural changes, and see installations of improved equipment or investment in the building’s fabric efficiency or low-carbon heat.” The proposal would require building owners and tenants to obtain and publicly disclose a rating on an annual basis.

The strategy paper proposes a phased roll-out, starting with commercial offices in England and Wales. The government’s proposal is to use the performance-based approach to set sector-by-sector energy reduction targets which will be in line with the reductions required to meet Government carbon budgets.

These mandated regulations are said to “recognise and reward” actual improvements in energy and carbon performance for the first time.  How businesses will be rewarded, beyond suggested energy savings remains to be seen. Mandated annual publication of investment in energy reduction will almost certainly be used by third-party organisations with climate change manifestos to hold businesses to account in a very public forum.

Evolving The Energy Savings Opportunity Scheme

The strategy document also highlighted the UK-wide Energy Savings Opportunity Scheme (ESOS), which currently requires large businesses to measure their total energy consumption every four years. This process requires an audit covering energy use from buildings, transport and industrial processes. ESOS recommends practicable and cost-effective energy efficiency measures for saving energy in an organisation’s buildings.

A consultation on ESOS has just closed, with the intent of increasing the number of participants that take action to reduce energy use. Considerations for lowering the threshold for ESOS audit to smaller businesses are being considered, but that is likely to be a post-2023 decision for the 2027 iteration of ESOS. That would address loopholes in the system, with larger organisations arranging building stock under separate small businesses, such as care homes, enabling them to currently avoid ESOS audit.

Those auditing and being audited for ESOS (public sector organisations be exempt) have pointed out the current lack of Net Zero commitment in the current version of ESOS, with 5-10% using the ISO50001 instead. So greater consistency is required moving forward. The concern is that large businesses are not doing all they can at the moment, and are not taking the recommended changes ESOS provides forward, even though they clearly show savings for the business.

ESOS splits peoples’ views, it either being an obligation or an opportunity. The government’s heating and buildings strategy is to use ESOS to increase the carbon and cost savings by extending the number and scope of recommendations taken up by participants. These new, stronger standards, which many hope will deliver greater consistency of audit and streamline carbon reporting would be introduced by 2022 for reporting in 2023. To be successful ESOS needs to demonstrate that the energy efficiency recommendations to businesses do translate to the cost savings the Government is suggesting in the Heat & Buildings strategy. Otherwise, the system threatens to become a burden to commercial organisations.

Smaller Commercial Businesses & Buildings

With smaller commercial and industrial organisations using far less energy per building (17% of all the energy used by commercial and industrial buildings in England and Wales), the onus falls to building owners and businesses to understand and optimise their energy performance, but currently without same need for government regulation. While SMEs can significantly benefit from improving the energy performance of their buildings by decarbonisation, the strategy on heat and buildings recognises that they may struggle to invest due to high capital costs.

BEIS is considering policy approaches to this segment of the non-domestic building stock, including whether to adopt minimum energy efficiency standards similar to the private-rented sector approach. Consultation on owner-occupied buildings is set to conclude by the end of this year.  Long-dated regulatory targets based on the EPC, which requires building owners to invest in the quality of their building’s fabric and services, will be introduced for the 2020s.

Landlords of privately-rented commercial and industrial buildings need to improve their buildings to EPC band B by 2030. The caveat to this policy is that it applies “where cost-effective” and this has significant implementation issues that need to be addressed if the policy is going to be a success. The Government still needs to confirm the enforcement processes but believes this approach will potentially save businesses around £1 billion per year in energy costs by 2030. An equivalent long-dated regulatory target is being considered for owner-occupied commercial and industrial buildings. Consultation on both aspects is to take place in early 2022.

The Government Heat & Buildings strategy document states that “If you are a small or medium-sized business, we plan to provide support to help your buildings become more energy-efficient and adopt low-carbon heat.” The nature of this support remains unclear, previously the government has made funds available through grants and development schemes. At this time there has been no announcement of any such replacement programmes in the near term for commercial operations.

For advice, application design and supply of low carbon options for commercial hot water please speak to Adveco.  

Meeting Regulatory Requirements – WRAS & KUKreg4 from Kiwa

At Adveco we work hard to ensure our products are fit for purpose and meet stringent UK water regulations. To ensure this, our water products are independently vetted and can demonstrate approval from both WRAS (Water Regulations Approval Scheme) and Kiwa Watertec.

The regulations set legal requirements for the design, installation, operation, and maintenance of water fittings, systems, and appliances. They have been designed to prevent drinking water contamination and prevent misuse, waste, undue consumption, and erroneous measurement. As an independent UK certification body for plumbing products and materials, WRAS approvals demonstrate that, in accordance with these water fittings regulations, a material or water fitting is of suitable quality and standard.

WRAS has been the most well-known approval among contractors, specifiers. As WRAS approval certificates no longer involve the water authorities themselves in the decision making, the water authorities refer to a product requiring compliance with Regulation 4. Not specific to WRAS, Regulation4, states that:

“every water fitting should be of an appropriate quality or standard and be suitable for the situation in which it is used.”

Regulation 4(2) provides options to demonstrate compliance, such as CE Marking where applicable, appropriate British or European standards, and also a specification approved by the regulator. This approval is demonstrated with the KUKreg4 approval mark, issued by Kiwa and has become an accepted way of demonstrating compliance for several years for water authorities, specifiers and contractors, who gain assurance that the product in question has undertaken the required testing, and meets the necessary design requirements for its use. Similarly, approval granted by WRAS means the product is of suitable quality and standards to avoid water contamination and minimise waste when installed properly.

Anything from pipes, fittings, taps, showers, washing machines, dishwashers, to coffee machines, boilers and toilets, all need to comply with the Water Supply (Water Fittings) Regulations and bye-laws. If a product in your property is found to be non-compliant with these regulations, a replacement can be demanded, with all the associated unplanned costs. Should unregulated fittings be deemed dangerous then prosecution is also possible. The regulations impose a legal duty on everyone to use suitable water fittings when connected to public water supplies. So, ensuring products meet regulations with the correct approvals in place is important.

Whilst approval is not mandatory, the testing of the products is. It is worth remembering that not all products sold have been appropriately tested although most buyers understandably assume that anything sold to them will meet legal requirements. So looking for the appropriate WRAS or Kiwa approved statement or logo is time well spent. Water authorities are regularly using the terminology that products must be ‘Regulation 4 compliant’, contractors and installers still need greater visibility of KUKreg4 in the industry. But they should recognise its validity and be able to communicate that with clients who may be unfamiliar with the certification. Regulation 4 compliant testing is undertaken in an ISO 17025-accredited laboratory and complies with ISO 17065 product certification.

For reference, KUKreg4 is not only accepted across Europe, but it also offers two levels of compliance – level 3 and level 1+. Level 3 is the equivalent service offering of WRAS (initial testing, no annual audits and a full re-test after five years). Level 1+ involves initial testing, but no full re-test after five years is required – assuming there are no significant changes to the product – as certification is maintained via annual audits of the manufacturing facility.

It is also worth noting that WRAS approval may restrict how a product may be installed and used. To help installers, every water fitting approved is listed with one or more “requirement and installation notes.” These explain any installation conditions, which must be followed, which were applied as a condition of each WRAS Approval.

All water installations in the UK need to comply with the Water Supply (Water Fitting) Regulations. This is important for public health, for safeguarding water supplies and promoting the efficient use of water within premises across the UK.

Further Information

Click here for more about WRAS

Click here for more about Kiwa


Complying with UK water regulations: Adveco commercial heating and hot water systems. With Adveco products conforming to UK water regulations, you can be confident on their compliance as well their effectiveness.

For more information on our commercial heating and hot water systems, call Adveco on 01252 551 540.

Navigating Regulations & Application Design for Commercial Hot Water Systems

There are huge expectations placed on building services engineers and sustainability consultants to be experts on the regulations for the built environment and the ever-developing technologies employed to meet them. The most important systems and features of the building, such as its fabric, power, heating and cooling systems are well understood and can be confidently dealt with when specifying and delivering a project. Designs including non-traditional and secondary systems are where engineers can be at a disadvantage due to the vast amount of changing information that they need to know. These systems can include domestic hot water (DHW), renewables plus the control of them, and gas appliance flueing.

These secondary systems on commercial hot water projects are therefore a perfect opportunity to lean on more specialist application design services so that consultants can place their focus on the mainline elements of a building project. At Adveco, we have supplied specialist design support for the past 50 years, ensuring typically bespoke applications meet regulatory demands and best practice to sensibly manage capital expenditure while ensuring system longevity for better operational life.

In recent years we have come to recognise three prime ways that specialist application design becomes truly advantageous to a commercial building project. The first is in supporting mechanical and public health engineers deliver comprehensive and highly efficient DHW systems. The second is aiding sustainability consultants in the integration of renewables. The third is in helping engineers and D&B contractors to address the complex regulations surrounding the installation of flues for gas-based systems.

With DHW applications the primary issues are always going to relate to correct sizing based on the demands generated by a building’s occupants and choice of system. These can be based on application, energy source, suitability, and integration with carbon saving technologies,

Oversizing DHW systems inherently come from a lack of understanding of hot water demands within the building, diversity, and length of the peak period. Oversizing is exacerbated by the false belief that the building uses more hot water than it really does, and an attitude of ‘better too much than not enough’. Sizing programmes, often employed for a quick sizing early in the design then never reviewed, do not deal well with the many variables and decisions on diversity leading them to oversize to prevent hot water problems. Traditionally the problems with oversizing, such as increased standing losses, increased outlay costs, increased pipe sizes, and increased space use may have been minor in terms of the cost of the whole building, but it now has another important knock-on effect. If the hot water consumption is overinflated, it falsely increases the expectation of the building’s carbon emissions. This then requires greater employment of renewables to reduce emissions which do not actually occur. This can come at great cost and complication and provide little benefit to the building. Access to realistic sizing tools and having the experience to interpret results requires both expertise and time, which specialist application design can bring to a project.

The integration of renewables, such as commercial air source heat pumps (ASHP), heat recovery and solar thermal, will further increase the complexity of a system. Renewable technologies are going to be selected early in the design process to secure the Part L approval, once modelled successfully it is not wise to start changing things too severely. Small changes, such as revising the manufacturer of an appliance is going to make little difference within Part L, but if you have to add, remove and replace a technology, then you are going to be back at the beginning, and will almost certainly need to resubmit your Part L calculations. These early selection decisions increasingly reside with the sustainability consultant before the design engineer is involved, which means they need a broad knowledge of building services systems beyond the renewables themselves. Working together with specialist application design means they can better advise on selecting the right type of renewable to ensure it will integrate with the rest of the system and be controlled to work with traditional technologies. It is very important that renewable heat sources, particularly those that provide low-grade heat, are not held off by traditional boiler systems providing high-grade heat to high-temperature systems. This is not purely a controls issue but one that requires an in-depth understanding of the complete system arrangement to set it up effectively.

Finally, a regulatory issue that continues to impact consultants, engineers and D&B contractors has been the change to flue and gas standards.

IGEM/UP10 Edition 4 is an Institute of Gas Engineers and Managers utilisation procedure which attempts to address two major points of confusion: safe horizontal termination and the definition of a group of appliances. Adveco applies this document in all relevant plant room design since limits on horizontal termination through a wall terminal at low level is clearly important from a safety perspective. Many designers and installers remain unsure how to apply it correctly which can have a major impact on commissioning if the termination is not found to meet the current regulations.

Under UP/10, groups of terminals are defined by a mathematical formula which sets a corresponding dimension. Terminals that are within the calculated dimension of each other are k,89a group regardless of type or location. A group of terminals with an input over 70kW (net) that terminate horizontally must now be tested against a risk assessment provided within UP/10; this could therefore include terminals from appliances with outputs below 70 kW that previously would not have been considered if their terminals conformed to BS5440. The IGEM procedure will potentially allow up to 333kW (net) to be exhausted at low level if it is deemed risk free (such as a windowless wall looking over open fields) but will not allow 70kW to be exhausted at low level if deemed unsafe (such as an internal corner, or adjacent to openable windows, walkways, or a playground). Despite holding British Standard (BS) equivalency and being published for more than five years, UP/10 remains underused in the early design phase where it should be used to determine when flues must terminate at high level so that they can be included in the installation budget.

Faced with an ever-widening range of technology and regulations, access to a specialist design for these secondary systems is an extremely useful asset, one that can be both an independent sounding board and an extension of the in-house design function. That saves valuable time, delivers a better project specification and helps avoid problems that can halt final commissioning of a system, delaying or even preventing a building’s final handover to the new resident.


Enquire about sizing your projectNavigating Regulations & Application Design for Commercial Hot Water Systems.

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