Opinion: Hywel Davies

oPinion: rEgulaTIoNs hoW DAtA couLD eAse coMPLiAnce conceRns The European Commission has warned the UK that it may not be complying with legislation concerning display energy certificates. Hywel Davies considers the implications Hywel Davies, technical director of CIBSE www.cibse.org Each month, the European Commission (EC) publishes a list of infraction cases where it considers that member states are not correctly implementing EU legislation. In June, the UKs arrangements for the display of energy certificates featured on this list.1 The Commission reported that it had received a complaint regarding a potential lack of compliance by the UK for the issuing and display of Energy Performance Certificates [EPCs] in public buildings. Under the Energy Performance of Buildings Directive (EPBD), member states must ensure that certificates are issued and displayed for certain categories of buildings. Announcing the infraction proceedings, the Commission stated that the system of penalties and controls for the display of the Energy Performance Certificates introduced by the United Kingdom appears insufficient to ensure compliance with the obligations of the Directive. Therefore the Commission sent a reasoned opinion2 to the United Kingdom asking to fully ensure that certificates are displayed in accordance with the Buildings Directive. The UK now has two months to notify the Commission of measures taken to remedy the situation, or the Commission may refer the case to the EU Court of Justice. A reasoned opinion is a legally privileged document, and CIBSE did not make the complaint, so we do not know the details, but there is concern that the system of display energy certificates (DECs) based on metered energy-consumption data is at risk. Analysis by CIBSE and others indicates that the current system of metered DECs is robust. The justification for this bears setting out in detail to reassure all involved with DECs that these concerns appear to be unfounded. The original Directive defined an energy certificate as a certificate recognised by a member state that indicates the energy performance of a building or building unit. The UK chose to implement this using EPCs for calculation of energy ratings for construction, sale or rent, and DECs for assessing public buildings based on actual annual energy consumption. This was done to avoid the significant costs of producing EPCs for large hospital and university sites. DECs provide energy managers on these sites with annual updates on performance to incentivise and inform better energy usage, to reduce spending of taxpayers money on energy bills, and to free up that money for front-line service delivery. A detailed regulatory impact assessment showed significant cost benefit from the DEC approach for the public sector in 20073. energy certificates in the Directive The recast Directive, Article 2(12,), renames the energy certificate as an energy performance certificate, or one recognised by a member state indicating energy performance as calculated using a methodology in accordance with Article 3. Article 3 requires the methodology to be in accordance with Annex 1, which says that the energy performance of a building shall be determined on the basis of the calculated or actual energy that is consumed. This removes any basis for questioning the validity of the DECs based on annual energy consumption data. Article 12 requires certificates to be issued when a building (or building unit) is constructed, sold or rented to a new tenant, and for buildings where a total useful floor area of more than 250m2 is occupied by a public authority and frequently visited by the public. (The 250m2 limit came into effect on 9 July 2015). The requirement for a certificate on rental only applies for a new tenant, and not for a lease renewal, according to Article 12 (1) (a). Finally, Article 13, display of certificates, requires that any certificate for a public building issued under Article 12 (1) must be displayed in a prominent place clearly visible to the public. It also requires this for any building public or private which has a certificate issued under Article 12 (1) and is frequently visited by the public. In England, Wales and Northern Ireland, this means DECs must be prominently and publicly displayed; EPCs for buildings frequently visited by the public including shops, leisure centres and public buildings recently constructed, sold or rented to the There is no connection between registering a sale or rental transaction with the Land Registry, and lodging an EPC for the building government for the first time should also all be on public display. The logic for separate EPCs and DECs, based on calculation and annual consumption respectively, seems to be fully in line with the Directive, and the cost benefits of DECs assuming compliance and action to implement the cost-effective measures identified in the DEC Advisory Report were clearly articulated in 2007. So it seems unlikely, after all this time, that the Commission is challenging this approach. compliance Article 27 requires member states to lay down the rules on penalties applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all measures necessary to ensure that they are implemented. The penalties must be effective, proportionate and dissuasive. Given the Commissions announcement that the system of penalties and controls introduced by the UK appears insufficient to ensure compliance, it would appear that compliance is the concern. Replacing annual DECs with one-off EPCs for public buildings will not address this concern, and would undermine the UK governments claims to be managing energy use in the public estate wisely. What is more likely is that the government will need to look again at enforcement arrangements but there is scope for a quick and innovative win here. At present, each local authority has responsibility for enforcement in its patch, through trading standards officers (TSOs), with only the Landmark register of lodged energy certificates to support them. The new business secretary has committed to extending the Primary Authority scheme, which allows businesses to form a partnership with a single local authority, which then provides advice to other councils when dealing with issues such as non-compliance. It should quickly establish a Primary Authority for those organisations that need publicly to display an EPC in a building. The government has asset registers of its estate, so knows which buildings are more than 250m2. It also has the Landmark database, so could very simply identify which buildings need and have a DEC. It could do this in the two months that the Commission has given it to respond to the reasoned opinion. This would deliver better compliance, give the public sector better energy-management information and resolve the Commissions concerns. There is another big data opportunity. At present, there is no connection between registering a sale or rental transaction and lodging an EPC for the building. If an entry on the Land Registry required a valid EPC (or confirmation of exemption), it would remove the need for TSOs to enforce EPCs. Using existing data in this way would deliver better regulation, reduce enforcement costs, and provide an effective and proportionate means of ensuring the issue of certificates. cJ RefeReNCes: 1 eC June infringement package: key decisions 2 Infringement notice 20144002, by reasoned opinion issued on 18/06/2015 to the UK, for the implementation of the Energy Performance of Buildings Directive, relating to the issue and display of EPCs in public buildings. 3 See the explanatory Memorandum issued with SI 991/2007, in particular Annex C on DECs. Buildings more than 250m2 and occupied by a public authority and frequently visited by the public such as St thomas Hospital, London must have a DeC