Do you spot a few connections?

The similarity in name might be a coincidence, but we’re talking about Horizon House — the Environment Agency’s new corporate office in Bristol, which was recently awarded the highest ever BREEAM score for an office in the UK.

And the reason for mentioning it is that it perfectly illustrates a big win for the building’s occupiers that we’re happy to draw attention to: the huge upside in running costs to being in a sustainable office building.

The Building:

Horizon House is the Environment Agency’s new corporate office in Bristol. It occupies the city centre site opposite the Central Library (this map is still showing the previous building that was demolished).

It’s part of a mixed use development that also includes apartments and further office space, and is due to be occupied by the end of 2010. It’s bang in the middle of the city, and has been called a new milestone in sustainable design.

The Award:

The big deal about Horizon House is that it scored a superb 85% under BREEAM (the Building Research Establishment Environmental Assessment Method). BREEAM measures the sustainability of buildings, assessed across multiple categories: energy, materials, waste, water, ecology, pollution, transport, management, and health & wellbeing.

That’s the highest ever score for an office in the UK, with points spread across all the categories, including the harder-to-achieve ratings.

Euan Creswell, managing director of the building’s developer, Westmark, said: “We’re very proud of Horizon House – not only because of its highly sustainable features, but because it’s being delivered to a competitive budget in a city centre location.

“[The award] will help us spread the word that going green doesn’t have to cost the earth and can create city centre offices that are great places to work.”

The big win for the occupiers?

Aside from the fact these premises are an obvious fit for the Environment Agency, what will the current and future occupiers gain from moving in to Horizon House?

A lot more than a CSR halo or a badge of greenness. According to Graham Ledward, the EA’s Director of Resources: “By relocating to Horizon House, the Environment Agency will save around 10% every year on operational costs — an estimated £180,000 saving per year.”

How to make substantial cost cuts through environmental awareness

There aren’t many ways you can save 10% on your costs in business without resorting to P45s. Until there are more commercially viable buildings that also have the highest environmental standards, what can businesses do in the meantime?

Here are two suggestions:

1. Most of the savings at Horizon House will come about thanks to lower business utility bills, particularly from reduced use of electricity—and there are steps that any commercial building owner can take now to reduce their energy use.

Whenever we carry out a commercial EPC in Bristol, there are always great energy saving suggestions on offer. Of course, a weak point of EPCs is that the outgoing occupier rarely benefits from any incentive to make changes; any action on these recommendations is usually left up to the incoming occupier. However, as demand for sustainable spaces increases, a good EPC score may be higher up the wishlist.

2. There’s also the renewable electricity feed-in tariff, a way for small-to-medium-sized businesses to make money generating their own energy. Typically, but not always, this comes from solar electricity (an important feature of Horizon House).

To make a saving you first need to spend a bit on installation, but the feed-in tariff pays you back per unit and over 20 years this can offer a tempting return on investment.

Is this the future we see on the Horizon?

It’s easy to be impressed with Horizon House, an achievement that points the way for a new wave of commercial buildings that will save you money.

And we’re not cross at them for borrowing our name, really. Instead, perhaps we’re a little envious of all that low-cost sustainable energy…  perhaps we’ll simply move in there one day?

From April this year, a scheme will be launched that encourages British homes and small businesses to generate renewable electricity by paying you to produce it.

That means paying you for every unit you produce, up to 5 MWh a year — even what you use yourself.

It makes £0 energy bills a reality, and turns solar panels and wind turbines into an investment that can potentially generate you an 8% return.

“Clean Energy Cashback” is what Ed Milliband calls it. It’s not a new idea: elsewhere it’s called a Feed-In Tariff, and has boosted wind and solar electricity production in Germay, Spain, Denmark and elsewhere. Many said it wouldn’t happen in the UK: with 63 other schemes in place worldwide, we’re playing catch-up. But a look at the plans reveals that we’re getting a scheme with a few differences.

So let’s look at our new way of selling energy to ourselves. Is it good for homes, for businesses, and if not, why do we need it?

First, some basics.

What is a Feed-In Tariff?

Feed-In Tariffs (FITs) are a way to encourage low-carbon electricity to be generated by users.

They work by rewarding your upfront investment in renewable generation technology by paying you back for each unit you produce.

Yes, you get paid even when you use it all. When you make surplus electricity, you can sell it to the National Grid at a slightly higher rate. When you don’t produce enough, you can still use grid electricity produced elsewhere.

Why are feed-in tariffs necessary?

They’re necessary to make renewable energy growth happen.

Whereas fossil-fuel and nuclear power need large centralised plants to feed the grid, renewables are the opposite. The most obvious renewable resources, wind and solar energy, are spread out. You need a network of small producers to capture it all.

By incentivising those of us willing to invest in clean energy, and providing a way to interconnect our production capacity and store the surplus, it solves a national problem of how to produce more clean energy. On a technological level it works too, because renewable energy needs to be stored. Batteries aren’t feasible on that scale, so where better to store it than the National Grid?

You could compare it to the Internet and cloud computing: many small users forming an interconnected two-way network with huge power.

British feed-in tariff: particulars

Our “clean energy cashback” scheme will be introduced for qualifying renewable electricity generation from April 2010. Here’s a rundown of what we know so far:

• Install a qualifying system:
• solar PV, wind power, hydro power or anaerobic digestion biomass, with a capacity up to 5MW, or
• a domestic CHP (combined heat & power) plant up to 2kW capacity
• Earn a guaranteed rate of payment for all generated electricity
• Earn an optional guaranteed export price for surplus electricity sold to the National Grid.

There are differing bands of payments, depending upon the technology and installed capacity, of up to 36.5 pence per kWh. An additional 5 pence per kWh could be paid for any surplus exported to the grid.
» View the tariff details (downloads a .doc file)

Small businesses: how does a zero electricity bill sound?

Since the scheme allows capacities up to 5MW, this should appeal as much to businesses as to domestic customers.

The eye catching part is the opportunity not just to weigh the savings on electricity bills against the
The feed-in tariffs would be payable for 20 years (25 for solar), which in theory should give you a return on investment.

Questions:

There are lots of questions to tie up before the launch, though. Here are some of mine:

• Will the return on investment be high enough for businesses to consider the upfront cost?
• Will we need two meters? This means paying tax twice (VAT on power in, Income tax on power out) compared to using one (net metering)
• Will the cost of technology come down as the scheme gets going, benefiting those who wait — or will the incentives decrease over time, as they have done elsewhere in Europe, benefiting the early adopters?