As the world’s focus on sustainability intensifies, industries are taking significant steps to align themselves with Environmental, Social, and Governance (ESG) principles. In the industrial sector, this transition has brought forth a myriad of changes, especially in terms of energy consumption and supply. One of the key shifts is the move towards fully electric solutions, in line with the increasing energy performance certificate (EPC) standards.
However, as we embrace this green revolution, we must also recognise the practical challenges that come with it. An essential aspect often overlooked in this transition is the electric power supply. With landlords eagerly adopting electric heating systems, electric car charging points, and other energy-efficient upgrades, there’s an underlying assumption that the grid can support these changes seamlessly. Unfortunately, the reality can be quite different.
Industrial facilities commonly rely on three-phase 100-amp power, which might seem substantial. Yet, as witnessed in some scenarios, this power capacity can quickly be outstripped by the cumulative energy demands of electric heaters, car charging stations, lighting, and other equipment. The unintended consequences of such situations can lead to power supply limitations and operational disruptions.
A telling example is the increasing installation of electric heaters to achieve the coveted A or B EPC rating. While these heaters contribute to the reduction of carbon emissions, they also add considerable strain to the electricity grid. The energy transformation is about more than just replacing gas with electricity; it’s also about ensuring that the grid can accommodate the amplified demand that accompanies this transition.
Furthermore, the costs associated with energy consumption are soaring, prompting businesses to explore alternatives to conventional energy sources. While the promise of going green is enticing, the practical implications need careful consideration. Tenants seeking new industrial units should take note of landlords’ decisions to replace gas heaters with electric ones. It’s crucial to negotiate and establish the adequacy of the power supply before committing to such transitions.
In some cases, tenants are even finding themselves responsible for setting up the necessary electric infrastructure due to grid limitations. The fact that the national grid might be unable to support immediate power demands for years is a stark reminder of the hurdles in our journey towards sustainability. Operational businesses must be reminded of these challenges to ensure a smooth transition.
As stakeholders in the real estate and industrial sectors, it’s our responsibility to question and evaluate the readiness of our shift towards greener practices and green lease clauses. The environmental benefits are undeniable, but we must not overlook the practical intricacies that come with these changes. Moving away from gas is a commendable objective, but it requires a comprehensive approach that encompasses not only equipment upgrades but also grid infrastructure enhancements.
In conclusion, the industrial market’s preparation for meeting ESG requirements, particularly the transition from gas to electricity, is a multifaceted endeavour. While strides are being made, there is a critical need to assess our energy infrastructure’s ability to support the growing demand for electricity. Businesses, landlords, and regulators must collaborate to ensure a sustainable and functional transition that aligns with our environmental goals. Learn more about how the collaboration approach can help enhance property’s EPC rating.
Are we ready to go green?
The answer lies not only in our intentions but also in the careful consideration of the practical challenges that lie ahead.
We are acquiring industrial units throughout the UK to support the growth of our clients and are happy to share our knowledge on this topic. (Find out more about our Commercial Acquisitions)
DO GET IN TOUCH WITH US FOR YOUR ACQUISITION NEEDS:
T: 02382 355799
Nella Pang, Director
T: 07738 625 431
Jonathan Trice, Director
T: 07725 900 415
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About Omega RE
Omega RE is a commercial property advisory firm based on the South Coast. Providing expert advice to Landlords, Occupiers in the industrial, office and retail markets.
Omega RE is always thinking ‘Outside the Box’ in our advice to clients and the way we do business. We don’t settle for mediocre, we challenge the norm and are dedicated to finding solutions that is best for our clients.
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