Minimum Non-Domestic Energy Efficiency requirements in Scotland
Summary
In addition to the current EPC regulations, as of September 2016, new energy regulations requires further action to assess and improve energy efficiency and reduce the associated greenhouse gases for large buildings over 1,000 sq m. The target to reduce emissions will be met by identifying and implementing improvement works to meet targets set in an action plan. The Action Plan will be in addition to the EPC, and the improvement work measures must be legally met. These new regulations will have implications when selling and letting property.
Why force further action for energy efficiency in existing large buildings
Research conducted in 2014 by Consumer Focus shows that only 17% of those who have received an EPC have acted on the recommendations. EPCs were introduced to reduce energy use and CO2 emissions, and a lack of action by building owners has led to further requirements.
The relevant S63 Action Plan legislation
Climate Change Act Scotland 2009 (section 63) and The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016.
Under Section 63, ‘Energy Performance of Non-Domestic Buildings’ of the Climate Change (Scotland) Act 2009,” owners" of qualifying buildings are required to improve the energy performance of and reduce emissions. The new regulations are generally known as the ‘Section 63 regulations’.
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Climate Change Act Scotland 2009
Climate Change (Scotland) Act 2009 (in particular section 63) provides the legal power for the Scottish Ministers to make regulations for “…the assessment of the energy performance of non-domestic buildings” and related matters.
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The Assessment of Energy Performance of Non-domestic Buildings (Scotland) Regulations 2016
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Energy Performance of Non-Domestic Buildings’ of the Climate Change (Scotland) Act 2009
Action Plan exemptions
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- Buildings with a floor area less than 1,000 sq m.
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- Properties have met or exceeded the equivalent energy standards of the 2002 Scottish building regulations. This may exempt older buildings that have undergone comprehensive upgrades to improve their EPC rating.
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- Temporary buildings – Intended life of 2 years or less.
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- Workshops and agricultural buildings meeting the “low energy demand” rule.
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- Buildings participating in the Green Deal scheme. This exemption was originally provided, but the Green Deal scheme ended in Scotland for practical purposes years ago and is technically still listed, but extremely rare in practice.
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- Prisons and young offender institutions.
Effective
Trigger point
The trigger point for section 63 of the new legislation would be a sale or new lease.
A sub-let is understood to require an EPC and would therefore require an Action Plan if the requirements were met. A lease renewal to the same tenant is not considered a new lease.
A lease assignation is not listed as an exemption.
Specific advice should be sought from your legal representative.
Multi-let buildings may create complexities regarding “unit” vs “building” assessments, but this depends on how the building is sub-divided.
What the regulations require
Where the regulations apply, the building owner must undertake further assessment to produce an ‘Action Plan’. This document identifies targets to reduce the building's carbon consumption and energy performance and how these targets would be met through physical improvements to the property.
Action Plan types
There are two types of Action Plans; a "Prescriptive" and "Alternative".
An alternative Action Plan can be tailored to meet the target rating by choosing different improvement works. Once an Action Plan is in draft, the owner can choose to improve the building by implementing the improvement measures to create a ‘Section 63 compliant building’ or defer the improvements by reporting operational energy ratings. The action plan is then lodged.
Deferring an Action Plan
An operational rating is the actual measured energy use via a Display Energy Certificate or ‘DEC’ annually. All Action Plans and DECs are lodged in the Scottish EPC Register. As with an EPC, the Action Plan must be made available to prospective buyers or tenants and provided to the new owner or tenant.
A registered ‘Section 63 Advisor’ will produce an Action Plan.
Energy & Emissions target
The energy performance target for a building or building unit is the amount of energy, which is the estimated energy consumption of the building or building unit if the identified improvement works were to be carried out. The emissions target for a building or building unit is the estimated level of greenhouse gas emissions from the building or building unit if the identified improvement works were to be carried out.
Implementing the Improvement Measures
The maximum permitted timescale for the improvement works is 42 weeks from the lodged action plan.
The energy performance data relating to the action plan must be lodged with the register before the Action Plan is made available to a prospective buyer or tenant.
