11 October 2012 – Investa’s Craig Roussac has weighed into the debate on Sydney’s plans for a trigeneration network with radical claims about the extent of energy savings possible in commercial building:  Investa has proved it can save nearly 50 per cent of energy, and other owners will soon do the same. The City of Sydney is the most progressive government in Australia, he says, but what’s at stake could be investment in “chunky” infrastructure that is over-specified, reports Lynne Blundell.

Commercial buildings will cut their energy consumption by half once energy use data is made available in a clear and usable format, easily understood by property portfolio managers and others who make spending decisions about sustainable building upgrades, says Craig Roussac, general manager sustainability, safety and environment with Investa Property Group.

And it will not require expensive infrastructure such as trigeneration plants to achieve this – just regular reporting of building energy use data in a clear format so that people can change their energy use behaviour, along with the upgrade of outdated building technology.

Roussac has evidence to back up the assertion – Investa’s latest building data shows that the property group has cut energy use in its 10-building portfolio by 47 per cent over the past eight years. And that’s the average – for some buildings it is much higher.

He is adamant that Investa can do even better than this and that other building owners will achieve the same results once they start using data more effectively.

“There is no doubt others will replicate these results. Charles Darwin worked that one out – it is the survival of the fittest –  bad practice will become obsolete because we all have to compete in the market,” Roussac says.

The numerous studies revealing that energy efficient buildings are now worth more, both in capital value terms and their potential to earn higher rents, will ensure building owners strive for energy efficiency. And then of course there are rising electricity and gas costs.

The power of transparent reporting

Investa recently shifted to continuous reporting on the environmental performance of buildings in its office portfolio, saying this is a first for the Australian property sector. In essence, continuous reporting provides more frequent reports of a building’s water, electricity and gas use, which Roussac says brings a new level of transparency and immediacy for tenants, investors and industry.

It is this transparency that will push change in the way buildings are managed and used, Roussac says.

“Investa was the first in the property industry to publish standalone sustainability reports back in 2004. Back then we were almost defensive in presenting our case because we needed to communicate the business case for sustainability for those who weren’t convinced. Now we don’t need to tell anyone why it makes business sense. They want to see the results.”

Continuous reporting means more regular but smaller reports. Sustainability reports, Roussac says, have been getting bigger and bigger, which has meant the focus has become more on reporting and less on doing.

“Reporting can take you away from your day job and a lot of people are reflecting on what adds value. Continuous reporting allows us to disclose details of the key metrics of individual buildings and it means you can’t hide behind averages. Averages take away accountability for individual building performance and the people responsible for certain assets don’t feel a sense of responsibility, or conversely, a sense of pride when they achieve good results.

“It also makes it harder to pin-point specific areas that require attention,” Roussac says.

Investa’s continuous reporting provides:

  • Quarterly figures of the electricity, gas and water use per square meter of the portfolio, nine months earlier than is typical
  • Separate Building Scorecards for  buildings within Investa’s office portfolio, quarterly, in the public domain
  • A window into the day-to-day tuning of buildings for research purposes and sector improvement.

Investa also has strong credentials in providing data on building performance to the wider industry through its Green Buildings Alive website and online digital tool, Pulse, which allow users to update building information in near real-time.

“Over a decade of experience in measuring and acting on sustainability has taught us that helping people make smart choices is what keeps the indicators tracking downwards,” Roussac says.

The company believes that the new reporting approach better connects the daily activities of the facilities management team to the experience of their customers, in this case, commercial tenants.

“We’ve been testing the impact that frequent, meaningful data can have on the performance of our building managers. Our new building insight tool Pulse encourages constant system tune-ups and allows the building operators to continue to push the limits of good performance,” Roussac says.

“Most people at operational level feel accountable for their building’s performance but this can be impacted by lack of investment in sustainability improvements by those at senior level, who are usually more removed from the daily operations. Fund managers have to make the decision on whether to invest in sustainable upgrades. When they can see exactly how actual buildings are performing they will be engaged in the discussion of how to address it.

“That is the power of this type of reporting.”

The City of Sydney and its trigeneration plan

Craig Roussac, right, at The Fifth Estate salon dinner for Jerry Yudelson 2012, pictured with Andrew Aitken

It is his belief in the potential for building users to cut energy consumption that is behind Craig Roussac’s opposition to the City Of Sydney’s distributed energy network proposal.

As a member of the Property Council committee that prepared the submission to the City arguing for a focus on energy efficiency rather than a trigeneration plant and distributed energy network, Roussac believes that the council’s plan is flawed in its underlying assumptions. He sees this as a result of poor advice on the options and the pricing rather than as a direct fault of the council.

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“The City of Sydney is the most progressive government in Australia. I have a great deal of admiration for them but this distributed energy plan is just a component of the City’s plans and I don’t want to see them lock in to trigeneration prematurely.

“This is an infrastructure investment – a long-lived, chunky piece of infrastructure. I would liken it to toll roads where you need to do feasibility studies on future usage, including traffic forecasts and future servicing needs.

“There has been an optimism bias in toll road feasibility studies. Various factors built into the reporting method mean they have overestimated by around 40 per cent on the positive side. This has meant that many projects have gone broke,” Roussac says.

Feasibility studies about future demand must be applied to district heating systems and the forecasts need to be right. The City is taking a considerable risk because of the underlying assumptions in its plan about future demand for a distributed energy network in the Sydney CBD, Roussac says.

What it hasn’t factored in, he believes, is the dramatic fall in energy use over the next few years if building owners follow Investa’s example.

“The city of Sydney is one of the best places to live and work and a lot of that is to do with climate. But the buildings currently don’t reflect that because of the over-emphasis on airconditioning and high energy use.

“I believe this is about to change. We want to ensure that our experience across our 10 buildings is replicated by others. And it will be.

“Council has to make a judgement about what future demand will be. Maybe through efficiency alone the city can cut energy use by half. This could mean distributed energy is not necessary.”

Green technology such as photovoltaics would also contribute to future energy efficiency, with the cost per unit dropping dramatically in the next few years. This trend has well and truly begun, Roussac says, and the focus should be on renewables which could make technology such as trigeneration and co-generation plants obsolete.

“In 2003 I was running a project where we integrated 23 kilowatts of photovoltaics in a building. It was the biggest at the time and it cost $15 per kilowatt at peak use. Now it costs $2 to $3. The prices of renewable energy are going down tremendously.”

An analysis of the City of Sydney’s pricing for the trigeneration network, Roussac says, shows that the costs of the infrastructure, including pipes for carrying hot water from the trigen system to buildings and the absorption chiller needed to cool this water, will outweigh the benefits, particularly if energy consumption drops significantly in the next few years.

“If we just continue to do what we’re doing [using electricity to cool buildings] we could cool buildings for half the price of what the council is proposing, and we won’t have the cost of the infrastructure.

“The grid is becoming greener, particularly with the Federal government’s renewable energy target. By using 100 per cent green power you could also achieve zero emissions.”

Ultimately it will be people’s behaviour that will determine the future of energy use. Up until now it has not been possible to put a figure on how much human behaviour impacts on energy use in buildings because of the lack of available data.

Roussac points to influential reports such those from Intergovernmental Panel on Climate Change, which have not been able to quantify this human behavioural impact in its chapters on buildings and energy use.

“We’re hoping this will change with projects like our Green Buildings Alive and Pulse. Just by providing people with daily feedback on how they impact on energy use behaviour changes. It’s Charles Darwin again – people learn and adapt,” Roussac says.