Savills Energy Bureau and Brokering service launched at All Energy

11 May 2017

The UK energy market is undergoing a major transformation, with ‘disruptive innovation’ becoming increasingly apparent.  For existing major energy suppliers this evolution  threatens their pre-eminence, but for commercial energy consumers it presents a real opportunity to drive down costs, while opening the  door for new entrants into the energy services market.

Recognising the growing value of good data in this fast-changing sector, Savills Energy has developed a full Energy Bureau and Brokering service:  the service captures and manages a user’s energy data to drive out efficiencies in consumption and cost. 

Stuart Campbell, Director Savills Energy said:  “We are seeing decentralisation of supply,

more on-site generation, developments in energy as well as a digital revolution focussing on capturing data and allowing additional opportunities to be identified, developed and executed.

“In addition, proactive management - with consumers taking more control - is creating a new breed of informed consumer: the  ‘prosumer’.

According to Campbell, the next logical step in this drive for efficiency and cost saving is the introduction of Energy Savings Companies (ESCO) Energy Saving Agreements, which will offer third party funded energy efficiency/savings upgrades to clients. This is not just for owner occupiers, but also relevant to the landlord/tenant commercial space.

He said:  “Such innovation has further to go and will centre around energy storage, aggregating and pooling distributed generation for market sales, peer to peer energy trading and, ‘blockchain’ (securely recording and tracking each kilowatt of power). The speed of change means regulation and government strategy is struggling to keep pace.

“The development of this Energy Saving Agreement is desperately needed particularly with the Minimum Energy Efficiency Standards (MEES) legislation coming into force in less than 12 months. This presents a real need to find a solution to upgrading F and G EPC rated property. 

“So how might this be put into practice? Take a  commercial office  tenant who  is happy with the accommodation he is renting for his business but the lease is  approaching a break clause point with five years left on 15 year tenancy. The landlord has identified a requirement for £2.5m of energy upgrade work, to make sure the office achieves an acceptable EPC rating, as well as to upgrade what is becoming a slightly tired building. Without an ESCO Energy Saving Agreement approach the tenant would be inclined to exercise their  lease break clause rather than incur an unbudgeted £2.5m hit, knowing that they may only gain five years of benefit. With the ESCO Energy Saving Agreement approach, the £2.5m is funded by a third party, and the costs are smoothed over a 10 year contract period, enabling the tenant to  allocate the cost as operational expenditure.  The landlord has a happier tenant, and there is no reason why discussions on extending the lease and possible landlord contributions could not take place leading to a win/win for the landlord and tenant”.

 
 

Key Contacts

Stuart Campbell

Stuart Campbell

Director
Energy & Infrastructure

Savills Margaret Street

+44 (0) 203 107 5465

 

Louise Rose

Louise Rose

Director
Rural

Savills Margaret Street

+44 (0) 79 6755 5817