Operational cost building performance guide

Operational Cost: The Part of Building Performance Nobody Designs

10 July 2026

There is a quiet irony in how commercial buildings are delivered. Enormous care goes into fabric performance, glazing ratios and plant selection, all in pursuit of the operational energy targets set out in frameworks like the RIBA 2030 Climate Challenge. Then the building is handed over, and the single decision with the largest effect on the occupier’s actual energy spend is made in an afternoon, usually by whoever happens to open the renewal letter.

Energy modelling predicts consumption in kilowatt hours. Bills are paid in pounds, and the two are connected by a unit rate that varies enormously depending on when a contract was signed and how widely the market was tested. Wholesale gas prices move daily, and for most commercial buildings the wholesale element makes up roughly half the delivered price of business gas. A building that outperforms its design targets can still cost more to run than a mediocre neighbour that simply bought its energy at a better moment.

This matters for anyone advising on whole-life cost. The performance gap between a building’s commercial EPC rating and its in-use consumption is well documented, but the procurement gap rarely gets the same attention, despite being cheaper to close. No retrofit is required. Renewal figures from Warrington consultancy Purely Energy suggest occupiers who tender across the market rather than rolling over typically pay 15 to 30 per cent less than the offer they were sent.

Designers cannot control what happens after practical completion. But a handover pack that mentions procurement alongside the O&M manuals would do more for many clients’ running costs than another decimal point on the U-values.

Frequently asked questions

Why do two identical buildings have different energy costs?

Because the unit rate paid for energy depends on when and how the contract was agreed, not just how much the building consumes. Two buildings with the same fabric and plant can pay very different prices per kilowatt hour if one contract was tendered across the market at a favourable point and the other was rolled over at renewal or left on out-of-contract rates.

Does a good EPC rating mean lower energy bills?

Not necessarily. An EPC measures the theoretical efficiency of the building fabric and services, not the price the occupier pays for each unit of energy. A building with a strong rating can still carry high bills if its supply contract is poorly priced, which is why performance and procurement need to be considered together.

When should a business review its energy contract?

Most commercial contracts can only be re-tendered in a window before their end date, typically six to twelve months out. Reviewing early gives time to test the whole market and, where prices are favourable, to lock a rate in advance rather than being forced to sign whatever the market offers in the final week.