Calls for the UK Government To Introduce A “Smart Building Rating”

A cross-industry coalition of energy and building specialists is urging the government to introduce a Smart Building Rating (SBR) scheme for the UK. The calls for the SBR are being led by the Centre for Net Zero (CNZ) research unit, which has been founded by Octopus Energy and the Energy Systems Catapult. Backed by Rt Hon Chris Skidmore MP OBE, Chair of the Independent Net Zero Review, the “Smart Building Rating” is designed to encourage energy demand flexibility at scale across the UK and to complement a reformed Energy Performance Certificate (EPC).  

Mr Skidmore said: 

“Decarbonising homes is at the heart of the UK’s journey to net zero. The future energy system will need buildings to be both energy efficient and able to provide energy flexibility. In placing a value on a building’s capacity for energy flexibility, the Smart Building Rating can help us to achieve this. It is a prime example of forward-thinking policy-making that aligns with a data-driven, digital future energy system.”

The cross-country coalition supporting the SBR includes E3G, Energy Savings Trust (EST), the UK Green Buildings Council (UKGBC), the Royal Institution of Chartered Surveyors (RICS), the Association for Renewable Energy & Clean Technology (REA), Nesta, the Association for Decentralised Energy (ADE), the MCS Foundation, Thermal Storage UK, and Good Energy.

The SBR is part of a suite of metrics that can help drive the UK toward a more efficient and smart building stock. The introduction of the SBR builds on consumer flexibility trials that took place last winter which saw over a million households get paid to switch around the time when they used energy. The research unit believes that the SBR will help balance the supply and demand of renewable energy for use in UK homes which would help the UK to cut carbon from powering and heating homes. 

The SBR measures a building’s capacity for flexibility or “smartness”, putting a value on flexibility that will engage consumers and incentivise property upgrades. The future energy system will require buildings to be both energy-efficient and able to provide energy flexibility. A combination of the two will mean that households can use less energy overall and choose to use energy at times when it is abundant, clean, and cheap. This will help to cut energy bills and reduce energy costs for everyone. The Centre for Net Zero (CNZ) research unit and the Energy Systems Catapult will be collaborating on the development and trial of a proof-of-concept SBR to demonstrate its policy value. 

Lucy Yu, chief executive of Centre for Net Zero, said: 

“Flexibility is not optional; it is essential to a net zero energy system. Whilst it comes in many forms, consumer flexibility is the lowest-cost way of keeping supply and demand in balance - but the current landscape is not conducive to rapidly scaling it. The Smart Building Rating is designed to confront this challenge head-on, ensuring that we can unlock the benefits that a flexible energy system affords - from cheaper bills to cleaner, more secure energy.”

According to figures from the Carbon Trust and Cornwall Insight & Smart Energy (GB), demand flexibility could save the system between £9.6 to £16.7 billion in 2050 and save individual households up to 52% on wholesale electricity costs in 2040. To get buildings ready for electrification, they need to be equipped with low-carbon technologies capable of delivering demand flexibility, such as EV chargers, heat pumps, smart thermal stores, and solar PV. The benefits of demand flexibility are clear, but no policy mechanism exists yet to drive the transformation needed.

The Centre for Net Zero research unit put forward proposals for the rating system to be used as a tool to assess a building’s performance on several different factors, including its ability to generate and store renewable energy, its energy efficiency, and its demand response capabilities to prioritise the use of cheaper and cleaner power. It’s expected that any SBR rating would be based on an estimate of a building’s capacity for energy flexibility as opposed to the actual level of energy consumption used. The CNZ report said that the initial SBR methodology would most likely evolve over time in line with developments in technology.

The Centre for Net Zero (CNZ) and Energy Systems Catapult want the government to work with them to introduce a new measure of demand flexibility and to work with the industry to effectively implement it, alongside reforming EPCs. 

Guy Newey, CEO of Energy Systems Catapult, said:

"The Smart Building Rating would enable businesses, government, and other stakeholders to better target and incentivise uptake of the technologies needed to achieve flexibility from homes. It would also help to stimulate innovation, boosting the market for new flexible products and services, where the UK has some of the most exciting and high growth-potential companies. At Energy Systems Catapult, we look forward to working with Centre for Net Zero and others to develop this proposal further, so we can build an energy system that is inclusive, affordable, and clean."

The report from CNZ said that the proposal for a metric for smart buildings could complement any plans to reform the EPC scheme that is already used to rate the energy efficiency of homes. The report went on to say that this metric would help to drive the UK towards building a more efficient and smart building stock as well as potentially incentivising the development and supply of renewable energy systems that can generate and store greater amounts of energy from renewable sources.