Brexit and smart buildings: looking beyond energy efficiency

UK environmental policy has come a long way in the last forty years. Once colloquially known as the ‘Dirty Man of Europe’, Britain’s policy makers were renowned for their purely reactive rather than forward-thinking approach to environmental protection, only drafting policies to combat existing and serious problems. It’s possible that attitudes would have changed independently as environmentalism became a more mainstream concern, but it was the UK’s membership of the EU in 1973 (then the European Economic Community) that brought many directives into place for the first time, including those on the energy efficiency and environmental impact of buildings.

On the face of it, then, the recent ‘Brexit’ result could have a significant knock-on effect for energy efficient building projects, particularly the growing interest in self-regulating ‘smart buildings’ and networked Internet of Things (IoT) devices. There might not be such a clamour for investment in long-term projects to regulate temperatures and turn off lights at a time of economic unrest. But what tangible impact will this have, and is there more to smart buildings than saving energy?

What is the current government’s position on energy efficiency?

The UK government has clashed with EU interests on many issues in the past, and environmental protection is no different. In 2011’s autumn statement, chancellor George Osborne slammed ‘green directives’ as an unnecessary and costly burden on businesses. He even went as far as to offer £250m in rebates to the country’s most energy intensive companies. This was followed in 2012 by a successful UK-led push to lower EU Energy Efficiency Directive (EED) targets from a 20% improvement in efficiency to 17%, and the downscaling of the Energy Efficiency Partnership for Buildings (EEPB).

On paper, leaving the European Union frees the UK from much of this legislation, including the EED, Renewable Energy Directive (RED) incentivising renewable energy generation, and Energy Performance of Buildings Directive (EPBD) setting high efficiency targets for new building projects. And recent policy decisions aren’t much more promising, with the scrapping of Green Deal subsidies for efficiency improvements in 2014, and cuts to solar panel incentives after the most recent general election. With popular rhetoric around EU ‘red tape’ and more pressing concerns of appeasing worried business owners and investors, there’s enough evidence to suggest that the UK government may put energy efficiency on the backburner.

Why smart buildings are about more than saving money

One of the primary considerations when investing in smart buildings and IoT devices is often the conservation of resources. But smart buildings have an influence on more than just spreadsheets. The importance of saving energy shouldn’t be underestimated, but statistics show that companies spend ten times as much on real estate as energy, and 100 times more on the workforce. Through all the best laid plans and efforts to cut costs, happy employees drive successful companies. The network of sensors in smart buildings are an easy and innovative way for businesses to tailor the working environment to each individual’s preference and needs. Optimising the workplace to your employees could be a potential gamechanger for productivity and job satisfaction across a broad range of industries.

Research published in the Harvard Business Report demonstrates that ‘knowledge workers’ given a degree of control over when, where and how they worked “were more likely to be satisfied with their jobs, performed better, and viewed their company as more innovative than competitors that didn’t offer such choices.” Facebook is used as an example of a business that allows employees to tailor their working environment, with adjustable office layouts, desk heights and configurations, as well as the availability of services facilitating time and life management.

The proliferation of smart buildings and ongoing improvements in sensor technology and learning algorithms hint at a democratisation of the technology. These improvements are no longer the preserve of high-end tech companies, but something that could soon be a common-sense solution for businesses in the digital age. From locating and designating free conference rooms on the fly to intelligently sharing data across rooms and devices, the capabilities of smart buildings are extending beyond just regulating the physical space, and into a seamless network of the people and devices within it.

Keep calm and carry on conserving

Despite prevailing government policy, there may still be a considerable incentive for both businesses and government to prioritise energy efficiency. In the worst case scenario, the UK’s removal from schemes like the Energy Union project and a weaker Pound could lead to rising energy prices, making efficiency a far more pressing concern. Complacency about currently low energy prices is likely to be short lived.

On the other hand, the government is likely aware of this threat, and as such may move to counter it, putting in place their own strict targets and funding for energy projects. In either scenario there remains a considerable economic imperative for businesses to improve the efficiency of their buildings, and for those providing smart devices to continue to flourish.

It is also wishful thinking to expect that the UK can avoid all of its promises on energy efficiency and emission reductions. While the Climate Change Act of 2008 and Low Carbon Transition Plan of 2009 are not sacrosanct, it would be unusual to amend them, and the UK is still bound to multiple international agreements, including the Kyoto Agreement and United Nations sanctioned Paris agreement. Even if the government reduces its incentives and requirements for businesses to be more energy efficient, it would have to make the difference up elsewhere to meet these crucial targets.

It’s still worth considering that nothing will change for at least two years while the UK continues to negotiate its relationship with Europe; existing efficiency projects were never going to be at risk. But there should be some positivity surrounding the long term direction of energy efficient projects and the overwhelming benefits of smart buildings for job satisfaction. Developments such as the ability to transmit power over ethernet cables to IoT devices and increased compatibility between brands continue to make smart buildings a more convenient and efficient proposition for everyone – one of the smarter investments in a period of general instability.

MCS is a technology firm focused on integrated real estate, facility and workplace management software solutions for large private or public organizations.