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On why the government cares, it really really cares… A bit

On why the government cares, it really really cares… A bit.

News from the front desk Issue No 447: PM Scott Morrison has announced he will tackle plastic recycling. Good. It’s ugly. It’s also a politically safe topic thanks to the rapid escalation of concern that a single program, the War on Waste managed to churn up among the mums and dads of everywhere.

The PM, a populist, entertaining, baby hugging, beer-swilling, cap wearing pollie to the last, is marketing savvy enough to know this is safe ground to prosecute his version of environmental activism.

We are not complaining. Beggars cannot ask for miracles.

Beggars can also not ask for miracles on energy. But we can hope for improvement. We hear that the even more slippery on climate than Morrison, energy minister Angus Taylor, has likewise picked the safe harbour of energy efficiency as something he could well ramp up and support. (Just don’t mention the other war… coal versus solar and wind power).

So post election there’s some stirring of interest and Eveready optimism that’s built deep in the DNA of this industry around energy efficiency. And yes, it’s possibly the most unsexy, unglamorous topic in sustainability, but also one of the most important.

Here’s a job for the marketing gurus: How do we make energy efficiency the latest must have, on a par with organic vegan bath salts or fake meat?

Money is a good start.

The stream of international pension funds liking premium Aussie commercial property for its good bones and good environmental behaviour is starting to reward the band of hard working people who have pioneered smart energy efficiency.

In other sectors though Australia still has a long way to go.

PC Thomas of Team Catalyst, who is one of the Aussie originals in the field, has no doubt the nation does very well in energy efficiency.

“We’re doing extremely well in Australia and it’s why we’re seeing the international super funds buying into our buildings.”

This is long term investment talking, he says, and it can see that in the long term operational costs are likely to be nicely contained if there’s a 5 Star NABERS attached to the asset.

He wants to see the benchmark expanded further into other sectors such as hotels and shopping centres, and the City of Sydney’s Sustainable Destinations program is playing an interesting role in that.

But it’s not easy to penetrate those larger assets, he says.

More luck might be forthcoming from a recent industry pivot to how to improve the sustainability and energy efficiency of housing.

His company has been doing quite a bit of work for some of the bigger property players on how to achieve net zero housing.

Interestingly the Feds also seem to be quite keen on the space, he says, and have been running a series of seminars on the topic, including one in Sydney last week and another in Queensland on Wednesday.

The Sydney seminar was packed he says, with about 50 people from low cost housing providers, not for profit institutions, the lighting industry and a few sections of the property industry.

It’s early days, he says, but the project seems to be about the government wanting to understand how the success of energy efficiency through NABERS in the existing commercial space could be replicated in the residential sector. Because it’s the existing stock in resi that is the biggest concern, accounting as it does for 50 per cent or so of total building industry emissions.

The big questions include how you can trigger an energy efficiency requirement in a renovation and what does a renovation consist of. How do you finance it, and what skills are needed? Do we need a new rating system?

Hopefully the job won’t be as hard as stimulating serious upgrades in energy efficiency for the B and C grade commercial buildings.

There are so many structural impediments for this. One is the disparate and often small investor profile of ownership, one that’s typically reluctant to spend money on upgrades preferring to wait for capital gains to provide the value uplift.

But another is the very real cost barriers involved. Thomas explained that a new chiller, for instance, might cost $150,000 or $200,000 for the kit but by the time you crane it in, and take out the old one for scrap, it can cost a lot more.

“I guess the question becomes, that you need to do it but how do you make the funding available and create the financial model.”

Thomas says he hopes that a few owners will trial the latest idea from his team to do the fine tuned engineering forecast first, because if you get that right then you know how much energy you will save, how much it will cost you to achieve the upgrade and how much payback you can expect.

When that’s done right you can take the figures to the financier and be on solid ground. It’s when the projected savings don’t eventuate that programs for energy efficiency get a bad wrap, he points out.

There must be funders around who are willing and able, you’d think. Well, it’s no so easy. The Clean Energy Finance Corporation, for instance, has money for energy efficiency programs but it’s not really interested unless the numbers are upwards of $20 million, Thomas says.

What’s needed is a funder willing to get involved for $500,000 say, which would take care of an HVAC upgrade on a smaller building.

Interest in London grows and vice versa

In London – and the US – eyes are turning to Oz and the skills and analytics that leaders in the field have been cooking up.

The UK government seems interested, despite its Brexit woes and whatever its new PM Boris Johnson will bring (see our UK correspondent David Thorpe’s early assessment).

And preparations underway to bring NABERS to the UK are fuelling the embers.

Companies such as Switch Automation, Envizi, Buildings Alive and CIM Enviro are in the UK or the US (or both) and expanding there, while EP&T has been in the UK for several years. And Envizi recently agreed to be lead sponsor on an industry event in London in September.

Others such as Dr Peter Mallaburn, director of policy and impact at the UCL Energy Institute, said in his recent visit to Sydney that some people believe Australia is 15 years ahead of the UK in energy efficiency.

An advantage the Aussies have is the strong emphasis on data and analytics, says NABERS director Carlos Flores who recently spent some time in London to nurture the NABERS deal. “It’s amazing how much analytics has developed in Australia.”

It’s also amazing because the UK market is “a highly professional highly skilled market”.

The information and knowledge sharing goes both ways, with the UK very good at new buildings and indoor comfort levels and Australia good at existing buildings and how to improve them.

Flores says the UK people are interested in how Australia has used NABERS in a wide context such as in leasing for instance and the way the CBD disclosure program has evolved to help reduce energy consumption.

What it’s created is what he calls an “eco system” where the learning continues and evolves.

“If you’re a consultant and someone hires you to get a rating of five stars and you don’t get there you learn very quickly by your mistakes.”

In the UK, by contrast, there is a bigger disconnect between the design and construction of the buildings because a lot can get changed after a project leaves a designers’ hands and the designer has no way to track where things went awry.

It’s hard to know for instance, if a building uses more energy because the UK system measurement – kilowatt hours per square metre – is harder to understand than a star rating system.

Flores says the UK looks like a natural place for Aussies to work because of the many people who work across both countries and familiarity with the culture.

What’s very different is the way almost the entire focus of commerce and population is in London. While in Australia a portfolio can be spread across vast geographical (and climate) zones in London there can be huge portfolios of properties and all the buildings might be in London, he says.

That’s an element that might make market penetration easier and even more attractive to the Aussies.

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