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Sapoa heads to court over building energy performance certificates

Commercial property owners have applied for an urgent high court interdict, suspending the implementation of a National Energy Act regulation that requires non-residential building owners to have energy performance certificates (EPCs) for their buildings by 7 December 2022.

Those who don’t manage to secure a certificate in time face a significant fine or imprisonment.

SA Property Owners Association (Sapoa) CEO Neil Gopal said the application was lodged and delivered to the Department of Mineral Resources and Energy (DMRE) and the South African National Energy Development Institute (Sanedi), which administers the national building energy performance register, earlier this month.

Gopal said the matter is enrolled for hearing next Tuesday (29 November), adding that the DMRE and Sanedi had until 9 November to give notice of their intention to oppose the application, and no notice was received.

In terms of the National Energy Act, owners can face a fine of up to R5 million or up to five years’ imprisonment, or both, for failing to obtain EPCs for their buildings.

Gopal said despite commencement of litigation about the deadline, Sapoa is still attempting to resolve the matter amicably, and is continuing with its efforts to reach a suitable arrangement in the best interests of both sides.

He said Sapoa has been engaging the DMRE since before the publication of the regulations and increased its efforts once the regulations were published.

Practical issues

Gopal said a number of meetings have been held to highlight the practical issues experienced by members that make compliance with the regulations difficult, or may even prohibit members from obtaining EPCs.

These include that:

  • To date only nine inspection bodies have been accredited, with the most recent having been accredited as late as 12 September 2022;
  • The portal for the uploading of EPCs on Sanedi’s website is currently non-operational, which means it is impossible for landlords to submit their EPCs as required.
  • Only a limited number of EPCs have been issued to date – just 331 as at 20 October – and considering a conservative estimate of the number of buildings still requiring EPCs,

    the nine accreditation bodies will each have to issue at least 472 certificates a day, seven days a week, before the 7 December deadline, which is clearly impossible.

Sapoa has also highlighted that a number of technical problems, including the manner in which premises are used and how energy is consumed within them, are often outside the control of the landlord and will have a major impact on the calculation of energy performance.

If, for example, a tenant routinely leaves a building’s lights on overnight even when there is no one inside, this will negatively affect the energy consumption figures in respect of such building – but is outside the control of the landlord.

In addition, Sapoa said the applicable standards require an EPC to be based on 12 months’ energy consumption figures.

Sapoa said not only is it uncertain which 12 months’ figures are to be used, the figures may be skewed in light of the Covid-19 lockdown and the delayed return to the workplace of many employees.

Read: European retailers could learn energy saving from SA

Gopal said in light of the looming deadline and the havoc that could be created if the regulations are enforced, despite the problems it has highlighted, Sapoa sought an undertaking from the DMRE that the implementation would be postponed until the technical committee has been able to make proper recommendations to alleviate most of these problems.

“Despite initially indicating that a recommendation would be made to the minister to extend the implementation date … no such proposal was ever gazetted, and Sapoa then placed the department on terms to postpone the implementations of the regulations.

“As a result, we have unfortunately had no alternative but to resort to litigation,” he said.

Sanedi said last week more than 450 certificates have been issued to date, but this represents only a fraction of the 250 000 to 350 000 buildings it needs to ensure are compliant.

The DMRE and Sanedi both confirmed they had consulted building owners, inspection bodies accredited by the SA National Accredited System (Sanas), and relevant stakeholders on the compliance status and challenges being faced in issuing and displaying EPCs.

They said most building owners requested that Minister of Mineral Resources and Energy Gwede Mantashe consider extending the compliance deadline by at least three years – and that this request is being considered.

Read: DMRE considering extending the deadline for building energy performance certificates [Oct 2022]

The regulations form part of the goals set out in the post-2015 National Energy Efficiency Strategy, which aims to get owners to reduce the energy consumption of their buildings by 16% by 2030 and make them aware of the consumption levels of their buildings.

Sanedi EPC lead Nqobile Ngcobo said improving the efficiency of buildings is becoming urgent, particularly because buildings alone contribute about 30% to 40% of the world’s carbon emissions.

“Therefore, it is imperative that the government promotes energy efficiency and climate change consciousness through the measurement of buildings’ energy performance, which can then assist the building owner or accounting officer in implementing energy efficiency interventions,” he said.

Read: ESG funds seen underperforming broader market in 2023: Survey

A shopping mall or centre is not required to acquire an EPC under the current regulations.

The occupancy classes that are subject to the EPC process are: entertainment and public assembly; theatrical and indoor sport, places of instruction; and offices.

Specifically, the process applies to:

  • Public sector buildings greater than 1 000m2.
  • Private sector buildings greater than 2 000m2.
  • Buildings that have been in operation with a particular use for a minimum of two years.
  • Buildings with no major renovations carried out for the past two years of operation.

 

Listen to Suren Naidoo’s interview with GBCSA CEO Lisa Reynolds in this episode of The Property Pod, on the exponential growth of green building (or read the highlights here):


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