24 January 2013 — The Australian Institute of Refrigeration, Airconditioning and Heating has released a draft discussion paper for transition to a low greenhouse gas emission heating, ventilation, airconditioning and refrigeration industry. Among its long list of issues include some of the most controversial in the industry.

For instance, how is passive design handled in view of the potential conflict of interest for the consultant in specifying less intensive HVAC & R systems?

Are future climate change related heat loads incorporated into current specifications for systems, given that they are expected to be around for 20 years or so?

And what about leases clauses that use guides such as from the Property Council of Australia that specify airconditioning access times or temperature set points, contrary to optimal performance?

Feedback on the Draft Discussion Paper, Transition to Low Emissions HVAC & R, Issues and Solutions, sent to more than 400 stakeholder associations including related professional bodies in the US and UK, will be open until 1 February.

On passive design, the paper says: “Changes that reduce the size and complexity of HVAC & R equipment will reduce revenue for the industry. Fees for ‘low carbon’ advice and analysis need to be separated from HVAC & R design activities,” the paper suggests.

“This is an important issue to consider.  If the industry cannot broaden the range of revenue streams, it may attempt to block such change, which would increase pressure for regulation.

“Partnerships with suppliers of high efficiency building products, materials and low heat generation equipment, energy storage and management systems, as well as development of more advanced design capabilities and cross-disciplinary processes that can be charged for could contribute to replacing lost revenues.”

The paper says while passive design generally requires a longer payback and requires more education on each participant in the supply chain, “providing a comprehensive and accurate return on investment calculation method for investors and providing education and training to building occupants are important components for successful outcomes”.

Other key of issues addressed in the paper include:

Need for transition

The industry needs to make this transition to low emission practices and technologies because “governments are demanding it, the environment needs it, and society is expecting it”.

“The sector is a significant consumer of energy and a significant contributor to greenhouse gas emissions.

“The HVAC & R sectors are responsible for a significant portion of Australian national emissions and (it is estimated that) 24 per cent of Australia’s emissions are directly attributable to the built environment in which HVAC & R is a significant consumer – 30 to 50 per cent.”

Systems designs are critical, not equipment

The paper says that while the introduction of Minimum Energy Performance Standards program was to increase the average energy efficiency of equipment sold in Australia – increasing energy productivity and competitiveness, reducing energy bills for consumers, and reducing greenhouse and other environmental emissions – there had been “perverse outcomes”.

These were “a resulting consumer and designer focus on equipment rather than systems”. However energy efficiency must focus on systems and sites rather than individual components, the paper says.

Environmental Upgrade Agreements

It also touches on Environmental Upgrade Agreements, as an antidote to “the split incentive market failure” which occurs, particularly in the tenanted commercial building market, when considering energy efficiency interventions.

“An emerging tool that has been designed to address the issue of split incentives is the use of ‘Environmental Upgrade Agreements’ which provide a financing mechanism that can be used to split the costs of energy efficiency upgrades between owner and tenant.

“These agreements provide a finance path to fund the improvements and a mechanism to ensure that the energy savings generated by projects can also be used for funding.”

The paper says one of the biggest barriers to energy efficiency interventions in existing systems and buildings is financial.

“Some finance models such as Low Carbon Australia and Environmental Upgrade Agreements are available however uptake is limited.  If a model can be developed to provide genuine low interest, below CPI, finance to energy efficiency projects across the board industry uptake would be much higher.

The Green Building Fund was successful but the follow up incentive scheme ‘Tax breaks for green buildings’ didn’t eventuate.

“Energy Performance Contacts and/or Environmental performance contracts are an emerging way for owners to offset some of the financial risks.

Minimum lease standards may not lead to good outcomes

“Leases that make reference to specifications such as the Property Council of Australia Office Quality Matrix, or specific airconditioning access times or temperature set points may inadvertently limit the ability of a building operator to optimise HVAC energy use.  More flexibility may be required within lease agreements.”

Climate change

The paper also tackles climate change.

“An HVAC & R system could be expected to last a minimum of 20 years in operation.  Should HVAC & R design engineers be morphing climate data to climate change scenarios to account for future external design conditions?

“Do current design guides, load estimation programs and building simulation programs accurately cover the Australian climate, internal heat loads, occupant densities, design set points?

“Are there sufficient current design guides available that accurately cover the HVAC & R design strategies and options, control options (and) current construction methods. Do design guides include evaluation strategies for selecting different types of HVAC & R system approaches?”

The paper says it is generally recognised in the HVAC & R industry that system and building commissioning is often not performed correctly or optimally.

“There are many reasons for this that are widely acknowledged; including lack of time, lack of understanding, lack of empowerment, an emerging skills gap in the industry due and a poor transfer of system knowledge through the entire building design-construction-handover-operation process.

“However, if the HVAC & R industry is to be able to meet the energy efficiency and performance expectations of the 21st Century this will have to change.

“The vast majority of the industry agrees that inadequate commissioning of building services is a major barrier to optimising a buildings’ energy and water efficiency. Legislation is seen by many as the best way to ensure a level playing field for building/system commissioning.  Commissioning certification or accreditation schemes have also been suggested.”


The paper says while still in its infancy within the Australian HVAC & R industry the Building Information Modelling process “promises improved integration of the design/installation process, improved construction efficiencies through new delivery methods, more complete and more accurate building simulations and better or more complete documentation and information deliverables at project handover and throughout the operational life cycle”.

“Many HVAC & R technical service providers and end users do not fully understand the impact of time of use tariffs and dynamic peak pricing or how to match their HVAC & R system usage or control settings with this new electricity pricing structure.

“Education and awareness campaigns are important as consumers will often take the ‘easiest’ option even if it costs more.”

The HVAC & R industry can help influence grid emissions intensity including through active participation in demand side management, the correct implementation of co-generation and tri-generation systems, the use of thermal energy storage systems and the use of new materials such as phase change materials, the paper says.

There is also a range of new or alternative technologies that the industry might adopt in the search for low emission engineering solutions for HVAC & R.

“There will be no single solution and a variety of technologies, design strategies and implementation techniques will make up the eventual low emission HVAC & R picture.

“The HVAC & R industry needs better information to provide co-generation feasibility studies and to plan, design, install and operate systems so that the full benefits can be unlocked.”

The paper also says while some HVAC & R sectors have been slower to adopt alternative techniques, technology and innovation often needs to be driven by the client, generally by accepting some of the risk and providing additional capital expenditure.

This was due to the “highly litigious and low fee world of HVAC&R (where) designers tend to be risk averse and avoid systems with which they are not familiar”.

Feedback will be open to 8 February 2013. Contact vince@airah.org.au

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