28 June 2012 – Following are highlights of a speech delivered by Parliamentary Secretary for Climate Change and Energy Efficiency Mark Dreyfus to the Built Environment Meets Parliament Summit on Wednesday,
While the carbon price is a necessary centrepiece of an effective emissions reduction plan, we also need to address other barriers to action. The Clean Energy Future Plan includes a range of measures to complement the carbon price, including measures to improve energy efficiency.
Energy efficiency is regarded as the “low-hanging fruit” for most businesses and it’s where innovations are expected to emerge in the early stages of the clean energy transition.
In fact, there is evidence that this innovation is already starting to happen. A recent (March 2012) Investment Property Databank/Property Council of Australia report showed that buildings with higher NABERS ratings provide superior returns and stronger capital growth. Overall rates of return on buildings of four to five stars were more than double those of buildings rated 3.5 stars or less.
So, energy efficiency investments make good business sense.
There are some fantastic examples of buildings that have been designed to be highly energy efficient:
- Grocon’s Pixel Building in Melbourne is reported to be Australia’s first carbon neutral building.
- The innovative Nishi Building in Canberra is a mixed residential and office building has been designed to achieve an average eight-star NatHERS rating for the residential apartments and provide a six-star NABERS rating for the office building.
Efficient design is tremendously important. After all, most buildings will be standing as long as their designer.
But designing new buildings is not the only way to achieve great results. There are many opportunities to improve the efficiency and value of an existing building.
The building at 215 Adelaide St in Brisbane has improved its NABERS rating from 2.5-stars to 4.5 stars in less than a year, cutting costs by around $70,000 per year.
Many of you are of course well aware of the benefits of investing in energy efficiency and a number of the groups here today are leading exponents in the development of innovative approaches in this area.
Creating energy savings
The Australian Government has designed a package of programs in consultation with stakeholders to ensure they best address the barriers to investment in energy efficiency.
To help drive the necessary investment in clean technologies, the Government’s plan includes a new $10 billion Clean Energy Finance Corporation – again using revenue from the carbon price. This will drive innovation by making commercial investments in clean technologies through loans, loan guarantees and equity investments.
The establishment of the Clean Energy Finance Corporation will act to overcome market failures by providing financing for Australian based renewable energy technologies, low-emissions technologies and energy efficiency projects.
It is clear that while the carbon price will provide an incentive to invest in clean energy, new technologies face a range of obstacles in attracting financing. The government will provide $2 billion in funding per annum for five years, and any interest earned will be available for reinvestment.
The corporation will apply a commercial filter when making its investment decisions and will focus on projects and technologies at the later stages of development. This is to ensure that the corporation will invest responsibly and manage risk while also making sure the corporation values any positive externalities which are generated by financing.
Establishing the corporation will mean that we have taken a very large step towards reducing Australia’s carbon emissions.
Other countries, including Germany and the United States, have similar financing arrangements for renewable energy and clean technologies.
The CEFC will also be able to draw on the experience of Low Carbon Australia. This government funded company is already assisting building owners to improve their energy performance through innovative financing mechanisms.
The Australian Government also established the $200 million Community Energy Efficiency Program, to work with councils and community organisations to implement energy efficiency measures across local communities, and the $40 million Energy Efficiency Information Program, to assist industry associations and non profits provide practical, tailored energy efficiency information to small and medium enterprises and community organisations.
Greg Combet, Minister for Climate Change and Energy Efficiency, and I recently announced the successful applicants under round one of the Community Energy Efficiency Program, with over $42 million to be distributed to 63 recipients across Australia, including local councils and non-profit community organisations.
Standards and information
Increasing energy efficiency performance standards and empowering people with information to make good decisions are critical to the ongoing market transformation.
Energy efficiency requirements were first incorporated into the Building Code in 2003. And the first commercial energy efficiency standards were adopted in 2006.
The National Building Energy Standard-Setting, Assessment and Rating Framework
The National Building Energy Standard-Setting, Assessment and Rating Framework will drive significant improvement in Australia’s building stock by establishing a pathway for future increases in minimum building standards to 2020. It will also improve the approach to assessing and rating buildings.
We are doing this to provide certainty for our industry partners and give them time to come up with creative and innovative methods and products to become more energy efficient.
This will also create the right incentives and regulatory framework for Australian industry to design, build and operate buildings as energy efficiently as possible.
There is much to be gained from the ongoing improvement in standards for new buildings, and not just in terms of reducing our carbon pollution.
New standards drive innovation in design and construction through improved technologies, greener equipment, new materials, and innovative building management systems.
Planning for the future through the framework will require innovative approaches to how low and zero emission technologies are utilised in the built environment.
The framework will also be capable of being extended over time to cover broader sustainability issues including the level of greenhouse gas emissions generated and water used by homes and commercial buildings.
I encourage you all, as leading industry professionals, to engage with this framework and make submissions on how to facilitate the use of building and rating technologies in innovative ways into the future.
On the information front, the Building Energy Efficiency Disclosure Act, which has been running for more than a year now, provides credible and reliable information on building energy efficiency to potential buyers and lessors of commercial office buildings.
Over 850 commercial office buildings nationwide have now obtained a Building Energy Efficiency Certificate. These certificates are providing purchasers and tenants with valuable information about potential energy operating costs of a commercial building, helping them to make decisions that make their businesses more productive and competitive.
For every one-star increase in an office building’s NABERS rating…
there is an estimated 15 per cent saving
in energy costs.
Recent independent studies have shown that making public information on energy efficiency has real value for the market. For every one-star increase in an office building’s NABERS rating – a key component of the Building Energy Efficiency Certificate – there is an estimated 15 per cent saving in energy costs.
The business case for improving energy efficiency in commercial buildings is growing stronger, with more evidence that it increases income returns, capital values and occupancy rates for commercial office buildings. It also improves the comfort and productivity of people working in these buildings.
These positive results show that energy efficiency disclosure is providing great incentive for the commercial building sector’s move towards energy efficiency as standard practice.
Disclosure of information relevant to the residential property market is progressing.
In 2009, COAG committed to phase in the mandatory disclosure of residential building energy, greenhouse and water performance as part of the National Strategy on Energy Efficiency, subject to the results of regulatory impact analysis.
This proposed measure would require the owners of houses, flats or apartments to provide energy, water and greenhouse performance information about the home at the time it is offered for sale or lease.
The key objective of this proposed measure is to ensure that credible and meaningful environmental performance information is publicly and readily available to housing market participants to assist them in making purchase and/or leasing decisions.
We are currently working with all states and territories on finalising the outcomes of the public consultation process.
In addition to information being provided at the point of sale and lease, the lack of effective information is a key barrier to the uptake of energy efficiency in buildings more generally.
For the residential sector, the ‘Your Home Technical Manual’ and ‘Living Greener’ websites provides designers, builders and the public with credible and accessible information about how to design, build and operate an energy efficient building.
For the commercial sector a range of publications have been produced, including the Heating, Ventilation and Air Conditioning guide that provides a guide to best practice maintenance and operation of HVAC Systems.