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News from the front desk: Issue No 270 On COAG, the Property Council, shopping centres, Luke Menzel (EEC), Paul Bannister, Indonesia, Germany, and the weather

Energy, let's use it wisely
Energy, let's use it wisely

Let’s not get over-excited now. After all we’ve seen this kind of thing before: a rising of the tide, a momentum for change. From consumers, the industry and in global politics.

But this time, let’s stick our necks out and say that for energy efficiency at least, this Cinderella industry is waking up and getting ready to go to the ball.

At the COP21 climate talks in Paris just concluding, buildings, energy efficiency and cities were a huge focus of attention. The headline agreements coming from the pollies are also positive.

In Australia we have the Council of Australian Governments in its National Energy Productivity Plan 2015-2030 strongly supporting:

  • Expansion of NABERS disclosure, known as the Commercial Buildings Disclosure program
  • Mandatory disclosure of energy for houses (say what?)
  • Increasing standards in the National Construction Code

In the property industry we have the industry starting to swing strongly behind the expansion of the CBD, of particular note and impressively, the Property Council.

Here’s what it said:

“The Property Council of Australia supports the Commercial Building Disclosure (CBD) program. This has been our long-standing position.

“We note the ACIL Allen review into the CBD scheme and support the recommendation for lowering the threshold for mandatory disclosure from 2000 square metres to 1000 sq m on the basis that the measure provides a net benefit to owners, tenants and the community.

“It will provide further information about a property’s energy efficiency that is good for its operating costs, investment and the overall built environment.

“The Australian property industry has some of the most sustainable practices in the world and the expansion of the CBD program will ensure we remain a global leader.”

Now this is good coming from the Property Council, which might reasonably be expected to try to prevent for its members anything that causes a spot of bother.

Of course, the key members of the PCA are the top tier people who are doing okay on energy efficiency and everything else. It’s the owners of the sub-prime buildings that need stirring, and we don’t see a property association representing them just yet.

The Shopping Centre Council of Australia scotched the expansion of CBD to its patch as soon as the Abbott government was elected. Within seconds, it seemed. Reasons are something along the lines that it’s a bit hard and a bit unfair. Oh dear… when will the shopping centre industry rise to the challenge of the level playing with other asset classes?

Why the special treatment: we need more energy, more water, more landfill space, more crap than everyone else? If you can’t handle the heat get out of the kitchen, as they say on the tele.

The shopping centre industry has for forever and a day been calling for equal treatment when it comes to protecting its own big wig interests. By this we refer to the conniptions they throw when a big box retailer or discount outlet wants to set up near a Westfield shopping centre. The call is for a “level playing field” in planning rules.

Okay. What about a level playing field in sustainability and energy efficiency?

Watch them lobby to stop COAG doing whatever COAG wants to do… On behalf of the public interest. Do we need a new HIA and MBA (the housing lobby groups who throw the equivalent of a toddler tantrum every time there is a whisper of improving any standards in resi)? No, we don’t.

Here’s a response from a SCCA spokeswoman on the suggestion that the CBD program could be extended to its patch:

“While we are consulting with our members, our position hasn’t changed.

“The Shopping Centre Council has and will always engage constructively on discussions about the future of rating and disclosure schemes.

“Our job in these discussions is to highlight that shopping centres cannot be considered on a ‘like for like’ basis with other commercial asset types.

“A program which may work for one asset type will not necessarily translate to the shopping centre context. CBD is a good example of this.

“Shopping centres have unique built forms, are geographically dispersed and operate in a different regulatory environment to, for example, commercial offices. These issues can’t be oversimplified and all need to be taken into consideration.”

In the UK, they are busting for a NABERS type arrangement

Paul Bannister, a key developer of NABERS, has just come back from six days of back-to-back investigation and consultation with an industry hungry to get a share of the action.

As we found in our London salon on climate bonds (ebook on the way), the banking world wants the kind of certification and assurance that NABERS can provide and so do a bunch of other financiers looking to get a slice of the ballooning demand from institutional investors for clean/green assets.

So what did Bannister tell us?

“In the UK there is a massive level of enthusiasm” for a NABERS type product. So far no one to actually run the thing.

“The argument in favour was made a lot stronger while I was there because I discovered that the way they operate their prime office space is fundamentally a disaster because what they do is the tenants get a shell and core space.”

What happens next, he says, is the tenants puts their own fan coil (aircon) system in the floor and run their own systems independent of the base building. So: no communication between the base building and the tenancy area.

The result is boilers and chillers run 24/7.

Bannister went to the UK on behalf of the UK Better Buildings Partnership working on the project with Bill Bordass of Usable Buildings Trust and Robert Cohen from Verco.

On the chances of getting anything like we have in Oz (bless our little cotton socks), Bannister says forget it.

“The government is a waste of space, so the question is not, ‘shall we wait for the government?’ but how can we get a NABERS-like scheme to operate without the government. Industry wants it and is very actively involved in pursuing that.”

Indonesia is interested

Bannister gets around. He also recently spent time in Indonesia where he detects “a little bit of interest” in a performance measure of energy. A workshop he attended recently, organised by ClimateWorks, focused on collaboration between Oz and Indo.

“People were interested in a performance-based rating and it came up as in the top-rated initiatives to pursue by the Green Building Council of Indonesia and the Jakarta Property Institute”.

The Energy Efficiency Council certainly says things are looking up.

Chief executive Luke Menzel told us this week there’s a lot of optimism around the industry following the COAG statement and certainly after the change of tone at the federal level after the PM switch.

“Australia has the opportunity to get back on track and I welcome the government’s renewed commitment to work with the energy efficiency sectors,” he said.

The CBD expansion plan, while not a decision, is a “quite positive statement” and suggest we’re going to get some good outcomes on that front.

“CBD has been incredibly effective as consumer protection at the top of the market. There is a very strong case to extend that consumer protection to other parts of the market.”

Menzel said he had “not heard anything in particular” in relation to retail property.

(Strange…)

On institutional buildings, he thinks a new tool will soon emerge there but given these buildings don’t actually change hands often the case for disclosure will be not as strong. (Except, we say, that it’s usually public money being flushed down the coal-fired electricity pipes).

We think that’s plenty of rationale for disclosure. And by the way, Victorian government, where is that restoration of the Greener Government Buildings Program? No time for shyness now.

Germany does it really well

Mendel recently spent time in Germany, much of it asking how the hell they managed to get such seriously embedded energy efficiency processes and outcomes in just about everything they do.

The common response, he said, was stability of intent and bipartisan support over a decade.

Germany has as many barriers to energy efficiency as us, Menzel said, but because they have that framework progressives and conservatives say it’s a no brainer so they make steady progress over time.

Ahh, the delirious beauty of logic and reason. Quite heady stuff.

In Oz it’s a rare and closely guarded elixir, sampled by only the few.

The weather gets it

In Sydney on Wednesday night there was a storm – a vicious concentrated little thing that ripped out trees and left powerlines dangling. At one place we know, near TFE central, the firies and State Emergency Services came out in force to protect some precious residents (yep, we know them). We couldn’t help wondering at around midnight, when the SMS pix came in showing the powerlines and TV aerial dangling near this particular balcony, who was paying for all this much valued work.

On Thursday there was an announcement from NSW Treasurer Gladys Berejiklian that there would be a new property tax to cover such ahem… property related disasters.

The levy will apply to all property owners from July 2017 replacing a tax on insurance companies. This spreads the cost to those who don’t insure their properties.

According to the Property Council, the new tax is not spread evenly and widely enough. For instance car owners are not included in this new levy yet account for 17 per cent of emergency costs.

Okay, unfair. But even more unfair is what climate will do to people. How about we spend more time on the root cause?

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