A report is urging industry experts to be aware of the major energy challenges being faced by industrial and logistics developers, investors and occupiers, in the context of ensuring energy resilience and achieving the UK Government’s Net Zero targets.
Law firm Burges Salmon launched its study stating that industrial and logistics buildings are playing “a key role in the running of the post-pandemic economy”.
The report also said the boom in e-commerce has seen distribution centres become "the backbone of the economy, acting as intermediaries in the supply chain". This extra demand has brought about increasing pressures on energy supply.
It says that “due to their sheer size, buildings can often expend huge amounts of energy due to heating, lighting and general operation".
Whereas previously, energy costs formed “a low proportion of overall running costs and energy provenance was less of a concern, spiralling prices and mounting public awareness of environmental issues has led to increased worry about energy security, affordability and sustainability”.
The authors state that for continued success, “the industrial and logistics sector must manage these concerns, whilst future-proofing its assets to meet tenant demand and achieve the UK’s 2050 Net Zero targets".
Burges Salmon’s analysis addresses the challenges faced by the sector and also uncovers the opportunities in on-site generation and how developers and investors can adapt their strategies to benefit from this. The insights from the firm’s interviewees show that although there is no magic formula to enable energy resilience, on-site generation can play a key part in future-proofing such sites so that they meet the expectations of future tenants and increasing energy regulation.
Ross Polkinghorne, Burges Salmon’s lead for Net Zero in the built environment sector, said: “The challenges faced in the development of industrial and logistics buildings are tangible. All businesses are acutely aware of the need to do something about their Net Zero agendas and there is a high degree of uncertainty both in terms of capacity and cost in accessing power from the grid. However, future-proofing is essential. Many have already started this journey (particularly with investment in on-site renewable energy production and storage) and there is real momentum at the moment amongst developers, investors, funders and occupiers to meet the UK’s Net Zero targets.”