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NZ: NABERSNZ boom expected, and mandatory disclosure on the horizon

Vanessa McGrath

The uptake of NABERSNZ ratings could soon see a sharp upswing and may even become a driver for mandatory disclosure of commercial property energy performance, according to New Zealand Green Building Council’s manager of ratings tools Vanessa McGrath.

The NZGBC administers and manages the rating system on behalf of NZ’s Energy Efficiency and Conservation Authority, which recently renewed its licence to use NABERS. In the two years the tool has been available, 30 ratings have been issued, with an average rating of 4.5 stars across all the participating buildings, compared with the market average of 2.5 stars.

The highest ratings awarded to date have been 5.5 stars out of a possible 6 for the Meridian Building in Wellington and the NZI Centre in Auckland.

“We’re seeing a definite inclination for the first ratings off the block to be the top-end properties. This will of course shift as awareness across the market grows,” Ms McGrath said.

“It’s an owners market right now in both Auckland and Wellington but forward-thinking owners see NABERSNZ ratings as a way of future-proofing their assets. The main driver for owners to date is maintaining positive tenant relationships.

For tenants, she expects a focus on “wellbeing and wellness” to lead to an increased interest in energy use and NABERSNZ ratings. While e energy efficiency was not currently seen as a priority for tenants’ commercial space, thermal comfort was. This created the potential for a win-win scenario, where improvements to a building’s thermal performance could be coupled with improvements to energy efficiency, she said.

The Auckland office market is likely to see a shakeup in the near future, with a “huge increase” in the amount of office space on the market soon to occur as a number of commercial developments reach completion, Ms McGrath said, which would see people working hard to keep tenants.

“People are dipping their toe in [to ratings] but are not in a full competitive market yet – but it’s just around the corner.”

The NZGBC is already aware of some owners who have negotiated with tenants for a higher NABERSNZ rating in order to secure a longer lease agreement.

In Christchurch and Wellington, Requests for Proposals put out by government agencies for new office space have included a NABERSNZ rating of four stars, aiming for 4.5, on the preference list. While it’s a step short of mandating it as a benchmark requirement, Ms McLaren said it was a step in the right direction and should have an influence.

Buildings rated behind the scenes

There are also some owners of a number of premium and A-grade commercial property that are working on rating their entire portfolios, she said, but not “going public” yet.

That would happen soon, she said, when the first major owner feels “comfortable” with where their portfolio sits in terms of average energy performance.

There have also been some properties that have obtained extremely low ratings, Ms McGrath said, which have driven energy efficiency improvement activities as a result, such as HVAC adjustments.

There has also been a strong trend of building owners using the self-assessment tool to gauge where their building sits, and doing “behind-the-scenes” work to improve performance before pursuing a formal rating.

“The self-assessment tool has had very high use,” Ms McGrath said.

“In around half of NZ office buildings, metering does not adequately separate base building and tenancy energy use – so there is a lot of preparatory work under way to make these buildings rateable. For example, all listed portfolio owners have undertaken, or are undertaking, work to improve metering.”

Green buildings that aren’t so green

There have also been owners confident that their building – including some Green Star-rated ones – was performing well, but have found out as part of a NABERSNZ assessment it was not energy efficient.

“They might have a Green Star rating on a base building, but there is a whole lot of education [of managers and occupants] that needs to happen for people to use it properly,” Ms McGrath said.

The weak link in the chain is often facilities managers, who have not received enough upskilling, she said.

The building might be designed to function with more efficient set points for HVAC, for example, but no one explains that to the FM, so “they just do what they know” and use less efficient business-as-usual set points.

Ms McLaren said in another case one developer-owner that has started down the ratings process discovered a need to change how HVAC systems and fans were labelled in the building.

“There is a need to monitor [energy use] at a detailed level,” she said.

The NZGBC aims to address the knowledge gap of FMs with two workshops on energy efficiency in buildings in Wellington and Auckland next week.

WT Sustainability’s Steve Hennessy will be delivering training for FMs that will cover topics including HVAC and energy efficiency, developing an energy savings action plan, optimisation opportunities, cost-benefit analysis of opportunities and recognising the internal management challenges to implementation of energy efficiency initiatives.

“The course is aimed at property and facilities managers on the essentials of energy performance – and improving it. This will be a very digestible and practical workshop, to help bridge the gap between property and energy professionals,” Ms McGrath said.

Why it’s hard to get traction

There are two factors that contribute to a sluggish uptake of energy efficiency as a priority.

Ms McGrath said electricity costs for businesses in NZ were very low by international standards, so there have not been the same drivers for energy efficient building design.

“Also because around 75 per cent of NZ’s electricity is from renewable sources, there is not the same carbon impact of electricity use,” she said.

“One example to illustrate this is electric reheat. In Australia the building code won’t allow it, yet in New Zealand it is common and still being incorporated into commercial buildings. So there is some re-education required.”

Other common issues that see energy wasted in buildings include narrow deadbands that cause over-cycling of HVAC plant; fighting heating and cooling systems; and after hours energy use, caused, for example, by BMS controls that have been in inefficient settings for years and providing HVAC on weekends and into the night.

“These are not hard to fix and can dramatically improve efficiency,” Ms McGrath said.

Is NZ heading towards mandatory disclosure?

Ms McGrath said there was not yet much momentum around mandatory disclosure of energy performance at point of sale or lease, but that “it’s still very early days”.

“As in Australia we expect discussion around mandatory disclosure to build once the tool has been embedded for longer,” she said.

“It’s only been two years and our experience and uptake closely mirrors Australia’s first few years.”

She said two milestones that drove uptake of NABERS in Australia were first, public sector tenancies specifying it in lease agreements and second, the introduction of mandatory disclosure, “which happened quite a bit later”.

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