Modern buildings are notoriously energy-intensive

Copyright: David Lawson - first published Financial Times November1995

When Ug dragged a pile of branches to block the wind whistling into  his cave, he probably got no more reaction from the rest of his tribe than a reputation as an eccentric. They knew it was easier to burn the wood instead.  Only when  the forests began to disappear did they wonder whether it might be worth sweating a little to build rudimentary doors.

  Little has changed in 5,000 years. Some of the most sophisticated modern buildings are notoriously energy-intensive, but the costs fade before other charges.  Occupiers have had little inclination to go hunting for branches. Annual service charges on a top-quality office building in central London, for instance, are around £5.60 a sq ft (less than £61 a sq metre) compared with rents which  top £30 a sq ft and went to twice that level in the boom years. In fact,  overall property costs are generally a minor component of most firm's outlay, falling well behind staff overheads.

  But the recession sent companies scurrying through their accounts looking for ways of reducing costs and an awareness dawned that energy could be among the most cuttable of costs. It tops the list for the kind of energy-greedy office block which has become a standard in city centres around the world. Even less sophisticated buildings pay a heavy toll, however.  In the UK, for instance, property consultants Jones Lang Wootton calculate that energy makes up more than a fifth of service charges for air-conditioned blocks. Only the staff-intensive costs of security exceed the 13 per cent slice in other buildings.

 Inroads are being made into this outlay. Energy costs in air-conditioned buildings  have edged downwards recently after rising almost 50 per cent in the last decade, says the JLW annual report on service charges. But the minor scale of change implies there should be more to come."It is possible that savings by energy management measures have not yet been fully developed,' says the study.

 A more radical solution to ameliorating the impact of air-conditioning is being championed by some architects and engineers, however - giving it up altogether. This might also provide spin-off benefits, such as eradication of the increasing problem of 'sick buildings', which appear to harm the psychological and physical health of staff.

 The whole idea of "stepping back" to naturally ventilated buildings has been ridiculed by some as idealistic and impractical. Yet one of the world's leading study centres, the Building Research Establishment (BRE), is taking it seriously enough to construct a life-size energy-efficient office along these lines at its site near Watford in England. This is a joint venture between the government-backed centre and leading industrial suppliers aimed at testing various energy-saving ideas to mould the model office block for the 21st century.

  "This will be a naturally-ventilated building which will be energy-efficient and comfortable," says Mr Mike Clift, the project sponsor. Just as important, it will be constructed in a way that can be widely copied. There are numerous examples of such buildings around the world but they tend to be one-off designs, often dismissed by developers and occupiers as too expensive or radical.  "We will be using a number of innovative ideas and technologies but the basic philosophy is to be simple," adds Mr Paul Davidson, a BRE energy expert.

  The aim is to cut energy consumption by a third but still produce practical space for both cellular and open-plan offices. It will be ventilated via fresh air coming in through wall ducts and windows and the stale escaping through rooflights, chimneys and vents. Natural circulation - aided by fans on still days - should be enough to drive the system.

  Other innovations include underfloor water pipes which draw heat from boilers or cold from a borehole, depending on the season. Corrugations in the concrete floor will increase  increase surfacer area and direct airflow. Energy-efficient lighting will also be locally controlled, as will heat and air  - an important psychological factor for staff. Even the computerised system controlling dampers will have manual overrides.

 New buildings are less important than existing ones, however - particularly when development has all but ground to a halt across most of the western world. These require solutions to ameliorate costs of around £1bn a year for heating, lighting and ventilation. Offices alone are estimated to consume an eighth of the UK's bills once transport used by staff is included.  Good management could cut costs by a quarter, according to a series of studies by the BRE for the government's Best Practice awards. many involve no capital expenditure. Up to a fifth can be cut from bills merely by turning off lights and computers when unused. The average PC consumes 800kW of energy a year and requires almost half as much again to disperse the heat.

 There are many similar simple steps which can have a significant impact but the BRE saw little practical advice  available to ordinary businesses. Two management aids have been developed to help. The Office Toolkit, designed by the BRE and PA Consulting Group, and road tested by eight major sponsors including the BBC and Prudential produced some remarkable results.

 This uses a points system to grade different activities. Managers can therefore determine which actions would have the biggest payback - a vital factor when justifying them to the board, according to Mr Paul Bartless, head of environmental assessment at the BRE.

 "Without such as system, environmental campaigns tend to be picked at random,' adds  Mr Tony Bishop, PA Consulting environment services manager.

  Following Toolkit guidelines can cut the average office worker's consumption by 5 per cent a year. As these average £4,000 (including business travel) a year, that saves £200 per person, says PA.

  The other management tool involves an assessment of whole buildings, commonly known as BREEAM testing. This can advise potential occupiers  how well various alternative accommodation performs in ecological terms. It can also prove a checklist for action for businesses looking at existing premises.  Ug would have approved. He always knew that branching into energy management was better than burning away your assets.

CASE STUDY 1

Environmental demands of the Nineties - and the next century - had to be met in a confines of a 20-year-old shell when a new building management system was ordered for 99 Bishopsgate, the landmark block in the City virtually destroyed by an IRA bomb. Siebe is manufacturing a building management system designed by FHP which also matches the new trend for multi-letting such giant buildings.  Landlords Hammerson will be able to break down bills for occupiers because the building is zoned in quarters and  floor-by-floor Special motor controllers for the fan coils will also reduce energy consumption by as much as half.

CASE STUDY 2

NatWest Bank customers should excuse any indication that their local manager may be acting rather cooly. It will save them money in the end. He could be reacting to a remarkable campaign which is proving the worth of taking energy management seriously.  The bank was one of the first big UK groups to adopt a formal energy policy under encouragement by the Energy Efficiency Office in 1991. It  set a five-year target to cut costs by 10% in real terms and last year alone reduced fuel consumption in its 850 largest European buildings by almost 7%.  In just four years it has saved a remarkable £28.2m at today's values.

  An energy management matrix designed by government scientists has proven invaluable, says NatWest principal engineer Mr Steve Heritage. He used it to assess which parts of the group was falling short of potential, picking out marketing and investment. 'I was then able to demonstrate to senior management where we needed to make improvements,' he says.  He is now profiling each "business unit", making them responsible for meeting individual energy targets. In other words, cooling off bank managers.  But at least the savings may feed through to overdraft rates. If not,  it will take comfort that the world will be a better place: CO2 output has reduced by the equivalent of 500 NatWest Towers.

CASE STUDY 3

 People and paper, cars  and  Kit-Kits. Not an intuitively  common grouping, perhaps, except that they are all riding along at the leading edge of energy technology. Building design and management have limits. They can only work well where the energy source is efficient. That role is increasingly being filled by combined heat and power (CHP) units, if the number of people shouting about them is any judge of success. CHP is a form of self-help. Many high-demand consumers are finding they can produce their own energy cheaply from these  efficient gas engines. Sometimes too much, according to Nedalo, a Dutch engineering group which has linked with Eastern Electricity in the UK. But in a privatised market, they can sell it on at a profit.

    Stockport Council has a different solution. It installed two Nedalo CHP units to provide heat, water and lighting to almost 500 homes in four tower blocks and three low-rise developments. But the 300kW from each engine was more than residents needed. So it laid cables through the streets to serve the town hall. Weekends and evenings, however, it sells the surplus to the National Grid.

  Other users are more interested in savings rather than earnings. Land Rover's  plant at Solihull shows the sheer scale of some users' bills as it has installed 10 units producing 800kW to satisfy just a quarter of the site's needs. But the Nedalo units will save the company  £6m in over the next decade. Energy manager Paul Ellen says he is getting power at half-price - and the heat is free.

  Zeneca Fine Chemicals has made an even bigger bet on CHP, through a £10.6m combined cycle plant which will produce 16Mw when combined with exiting steam turbines - the whole electricity and steam requirement for its Huddersfield site. The outlay will pay its way quickly, according to  AHS Emstar, the French-owned company which has taken a leading energy management role in the UK. Zeneca projects manager Mr David Armitage estimates savings  at £2.5m a year.

  Nestle has taken a similar path on its Rowntree site in York. Countless Kit-Kats, Smarties, Polo mints and Black Magic chocolates  require ludicrous amounts of energy - such as 30 tonnes of steam an hour and between 12mW and 17mW of electricity. Twin gas turbines installed by BP Energy, the UK's top CHP operator, churn out all the site needs, operating at 85 per cent efficiency compared with a conventional power station's 35 per cent. Savings will be the equivalent to the cost of powering a town of 5,000 homes.

  Not all the giant consumers walk in industrial circles, however. More than £6m is going into an Emstar scheme to serve Leeds Infirmary and University. A new wing for the hospital and worries over emissions from the boiler house led to a  CHP plant  linked with existing generators to produce 15mW of power. This will  reduce energy costs by almost £700,000 a year

  Finally, if it is hard to believe the paper some of these figures  are written on, consider the £55m scheme by Powergen to build what is claimed to be the world's most efficient CHP plant in Kent. A multi-million-pound partner in the project  is one of the major local consumers - UK Paper. 'The plant dramatically reduces the environmental impact of our business and helps conserve energy,' says director of environmental management Mr Tom Scott.