The UK warehousing industry’s race for energy

According to the British Government, in the final quarter of 2023, renewable energy production equalled its previous peak from 2022. However, the percentage of electricity generated from renewable sources rose to a new record of 47.3%.

This is a new, positive record for the UK. UK businesses have felt the financial strain of increasing energy costs and the added pressure of environmental goals. Challenges around the supply of non-renewables as a result of the conflict in Ukraine have tightened things further.

While there is some positivity around the use of renewable resources, there are still concerns in the UK logistics sector around access. So where do we go from here?

EPC Regulation

If it wasn’t already, the energy performance of commercial buildings is set to become one of the most critical considerations for landlords and occupiers.

Regulatory changes are looming. By 2030, businesses will face restrictions on leasing warehouses unless these buildings meet stringent Energy Performance Certificate (EPC) standards. Under current plans, the Government will raise the required rating from ‘E’ to ‘C’ by 2027 and ‘B’ by 2030, and at the current rate, 70% of commercial property will not meet this rating, reports Knight Frank.

In practical terms, tighter EPC regulations mean a race to retrofit existing property with alternative energy sources, and that new properties must be planned with energy as a core priority.

Through its partnership with Tritax, Iron Mountain operates an Energy Centre at its Rugby Campus. The £60 million project spans 1 million sq ft across four sites and has been designed to achieve net zero carbon emissions. Iron Mountain is ahead of the curve; the site opens well ahead of the 2030 deadline, as soon as September of this year.

The National Grid

As the UK continues to ‘electrify’ as a way of reaching net zero – in our case deploying more robotics, automation and EV delivery fleets at our Rugby and Magna Park campuses – warehouses need more power, and the National Grid simply can't keep up. There’s a queue of over 700 gigawatts of renewable energy projects waiting to connect. To put that into context, in 2022, the UK only generated 15 gigawatts from onshore wind.

For developers, getting a solid grid connection is tough, with risks of long delays, high costs, and complicated regulations. So, power availability and constraints within the National Grid are increasingly influencing decisions on warehouse locations.

Hotspots such as the Golden Triangle continue to experience growth in popularity. Savills reports, “The East Midlands remains the largest market for total warehouse inventory, having risen 66% and now accounting for 130m sq ft of space, a rise of 51.5m sq ft.”

Balancing access to labour, transport links and now – more important than ever – energy, makes choosing a warehouse location a complex and expensive decision.

Yes, some businesses are managing these future proofing decisions by selecting the best grid location possible, and then hoping the UK as a whole continues to gain momentum with its use of renewables. But it’s not risk free, and certainly a costly approach.

Perhaps a more reliable method of futureproofing is onsite energy on pre-existing sites, or through Warehousing as a Service (WaaS).

Solar and solar photovoltaics

With onsite power in mind, the installation of solar and solar photovoltaic (PV) systems on new warehouses is gaining traction. These systems could become a significant part of the sustainability solution – a way for warehouse-reliant businesses to reduce their costs and carbon footprint. Warehousing accounts for approximately a third of all commercial roof space, meaning the capacity is there, it just needs to be established.

Clare Bottle, Chief Executive of the UK Warehousing Association (UKWA), has been spearheading the campaign for solar energy usage. The benefits are clearly outlined in the report; widespread adoption of this technology would mean the industry reduces costs and emissions, up to £3 billion and 2 million tonnes of CO2 can be saved per year respectively. The report goes on to outline the relevant hurdles that need to be overcome to reach this level of progress.

The installation time required for solar technology can be substantial, and naturally payback periods are something to be considered. Will these timings align with warehouse leases? It’s another challenge for businesses, but something that can be negated through WaaS solutions, such as those offered by Iron Mountain.

Alternative sources

While solar-based energy seems the most obvious route for the industry to take, especially due to the substantial amount of available roof space, there are other renewable technologies that can and should be seriously considered. Namely wind and air/ground source heat pumps.

Like solar, these solutions do present consistency issues in the UK with our seasonal weather. A (frustrating) lack of sunshine for solar, colder months for heat pumps, and stop-start periods of wind might mean that a mix of these solutions is the most reliable approach.

Iron Mountain has achieved exactly this at the Rugby Campus Energy Centre. The project integrates rooftop solar PV, battery storage, and a combined heat and power plant. This system delivers resilient, 24/7 solar electricity, showcasing an impressive commitment to sustainable energy use. By utilising a mix of energy sources and advanced distribution systems, it ensures continuous operation without heavy dependence on traditional power grids, significantly reducing its carbon footprint.

Shaping our future

The evolving landscape of EPC regulations, the constraints of the National Grid, and the increased implementation of onsite energy collectively shape the future of warehouse development. As we head toward a greener future, futureproofing our own infrastructure is essential to overcoming the current energy limitations and fully realise our sustainability goals.

For businesses who might feel the pressure of all these changes, but lack the experience, knowledge, or confidence to take the required steps, working with a specialist like Iron Mountain may provide the answer. With the help of the technologies discussed and several more, Iron Mountain is already guiding its partners on the path to net zero.

To find out more about Iron Mountain’s energy centre and how it can reduce both costs and carbon for its clients, visit…

https://www.ironmountain.com/en-gb/services/warehousing-and-logistics