11 March 2010 – For many people NABERS, the performance rating tool managed by the NSW Government, is a relatively straightforward way to measure energy use in a building – or water, waste or indoor environment quality, for that matter.
Nothing particularly controversial, you might think.
In fact the birth of NABERS was probably one of the most contentious events in the history of commercial property. Its commercialisation – or distribution to the industry – by the NSW Government caused even more fireworks.
The tool started out innocently enough. Perhaps.
Its inventors, Roger Fay and Robert Vale, nutted out a system that could measure the impact of any human structure on a piece of land. Essentially it rated the overall impact of a building on land which had been previously undeveloped. It measured everything from embodied energy to how many carbon miles would be needed to get to work. So you could earn full points for a fully sustainable building, for instance, but lose significantly if the workers in the building needed to travel long distances to get there.
The Federal Government spent four years and about $600,000 to further refine the tool. The property industry watched and became concerned. Chief executive officer of the Property Council of Australia, Peter Verwer, was particularly critical. He questioned the incorporation of tenancy environmental performance in the overall score. He was scathing about some of its features, such as how waste would be measured.
The Green Building Council, then headed by Maria Atkinson, suggested it would be more useful as an academic research tool.
In August 2004, NSW Government won a tender to take over further development and commercialisation of NABERS – against a determined pitch from the Green Building Council of Australia, with the tussle played out in daily newspapers.
Today, NABERS reveals barely a trace of this early baptism of fire.
The industry has not only accepted NABERS, but embraced it.
NABERS manager, Matthew Clark, manager built environment for the Department of Environment, Climate Change and Water, says more than 60 per cent of the Sydney CBD and 50 per cent of all Australian CBDs have NABERS ratings. That’s 10.5 million square metres of rated commercial space in more than 1000 buildings.
In the period from its first iteration the rating system was fundamentally transformed and today bears little resemblance to its origins. The first component, NABERS energy essentially a rebadged Australian Building Greenhouse Rating system.
Subsequent tools were based on the ABGR methodology and measure waste, water and indoor environment and today they can be applied to offices to hotels and shopping centres, and soon to schools, data centres and hospitals.
Many of the early issues, such as separation of tenancy and base building, were ironed out and industry suggestions adopted, so that separate ratings can be obtained.
The biggest win for the industry was that the tool now measures the performance of a building against benchmarks based on “actual industry performance and achievable targets,” says Clark, instead of a rating against an idealised outcome, such as undeveloped land that underpinned the original version of NABERS.
But why is comparison to a peer group useful if the peer group has a low average performance?
The beauty of the tool, says Clark, is that it not only allows a practical comparison to be made from which improvements can be measured, but it sets a “stretch target” so that the building owner can aim to outperform the average. It “plays on the competitive nature of the market,” he says.
And it’s working.
Clark says most building owners and tenants who re-rate their buildings tend to produce better outcomes the next time –achieving an average 13 per cent improvement, or 200,000 tonnes of carbon savings a year. And the stretch target of five stars is also having an impact.
“It’s not a matter of course to get to five stars. It’s not an easy achievement. We’re only just now starting to get to that five-star operating outcome, and now newer buildings are starting to push beyond it. It’s transforming the market from within,” Clark says.
Time for a review
But now that NABERS has notched up the gains, it’s time for a review and consultants have been engaged to analyse the options. A draft report is already in and a final report is due in a few months.
The momentum has come partly because NABERS will be the tool used by the Mandatory Disclosure legislation, which will require all buildings of more than 2000 square metres to declare their energy use at the time of sale or lease. And partly because of industry concerns about inconsistencies in the methodology, which suggest that a particular star rating does not mean the same thing across state boundaries.
The concerns have some merit says Clark. NABERS was set up on the framework established by the ABGR, with 2.5 stars signifying an industry average. But because standards were different in each state, the benchmark of 2.5 stars also varied state to state.
So it is possible that in Victoria the average rating could be around half a star higher than NSW, and in Queensland half a star less, he says.
However, Clarke says the variations are most apparent in the mid to lower range of the rating.
“It’s less of an issue at 4.5-star to five-star. It’s pretty consistent at five-star but the variations get bigger as you move away from that.
“If we change to the national average, we may see the lower ratings go up a bit in some states, and in others go down a bit.”
The review will also examine if there is a need to go beyond five stars, says Clark.
“When we set the five-star point and did the energy simulation, it was almost ten years ago. Knowing what we know now about energy simulation, do we need to change what we understand?
“One option is to extend the scale – keep five-star where it is and adding stars. It would mean less of an impact on current ratings.”
Another issue is to decide what happens to existing ratings if the underlying algorithms get a shakeup.
One solution might be to have NABERS Version I and Version II.
“So we’re looking at the technical and theoretical basis of NABERS.”
There will be no change to NABERS role as a comparative tool: “We want NABERS to compare one building against its peers,” Clark says.
But all questions are up for discussion.
“Once we’ve got the [final] reports, we will go to a full industry consultation and make it clear how this will impact.
“We need consultation.”
Quite separately and coming after the review was commissioned was the initiative to sign a memorandum of understanding between the Green Building Council and NABERS to work towards a more harmonious approach.
Clark says the idea was to create “a formal way to engage with each other, so that we’ve got an arena to work with each other, rather than dealing with issues on an ad hoc basis.”
And that’s just the way the NABERS team prefers it.