City of Sydney

By Jonathan Prendergast, Prendergast Projects

22 August 2012 — The long awaited NABERS consultation position paper on trigeneration has arrived. It’s a complex issue.

Currently NABERS simply considers the improvement of a building’s star rating due to installation of low emission trigeneration within the building. The consultation position paper sets out the proposed approach in a case where a trigeneration system services more than one building.

To assess this paper, we first need to consider how we got here, the importance of NABERS, the benefits of a precinct or district approach to energy efficiency, and the limitations that the consultation position paper’s recommendations could result in.

So, how did we get here?

The National Australian Built Environment Rating System was created in response to Australia having some of the world’s biggest energy guzzlers in its buildings, despite its temperate climate. Such buildings place undue pressure on our electrical networks, consume too much energy for normal operation and contribute to Australia having the worst emissions of greenhouse gas emissions per person in the world.

Under NABERS, buildings – primarily large commercial office buildings, are rewarded for investing in energy efficiency, to reduce energy use, peak demand and GHG emissions, by receiving a higher star rating.

Simply put, NABERS star ratings are calculated by tallying up a building’s energy consumption of electricity and gas, divided by the size of the building, and benchmarked against other buildings. The best buildings receive six stars – and a certificate to prove it.  The simplicity of the system is part of its brilliance.

The first projects under NABERS saw more efficient cooling systems installed, new lighting systems and improved insulation.

Due to the high carbon intensity of Australia’s electricity grids, due to the use of coal, property owners soon realised that drastic GHG emission reductions could only be achieved by considering where the electricity comes from, not just how much is used by the building.

It was deemed that simply switching to green power should not see a higher star rating, because (I assume) it is not a long-term efficiency measure, and the green power may not continue to be used if a building was sold to another owner, or even if an existing owner or tenant has a change in heart. But to reward such initiatives, NABERS certificates include acknowledgement of the use of green power. This is a key point for considering how offsite generated low emission electricity may be appreciated by NABERS. Read on.

Next step: Trigeneration, the simultaneous production of electricity, heating and cooling using gas fired electricity generators and heat recovery that uses the waste heat to produce heating and cooling. Many trigeneration systems have been installed in large commercial office buildings throughout Australian (see our Australian District Energy Database) to increase their NABERS ratings to attract tenants and higher yields.

Installing a trigeneration engine sees a reduction in use of grid electricity, but an increase in gas use. The net effect is reduction in GHG emissions and increase in energy efficiency overall.

This industry is now quite mature and wide-spread, with cogeneration and trigeneration systems in commercial offices, hospitals, hotels, aquatic centers as well as industrial applications around Australia.

Why is NABERS so important – the value equation

Often, projects related to GHG emissions reduction, the environment or sustainability, rely on the goodwill of an organisation or its objective to promote itself as a “green” company. It can be a struggle to convince the powers-that-be that there is value in such initiatives.

NABERS has become a mechanism that provides a direct connection between GHG emission reduction initiatives and commercial drivers for property owners.

Sustainability, into dollars and cents.

It is now widely accepted that buildings with high NABERS ratings get higher rents and have lower risk of vacancy. This is due to tenants, especially government and large corporate tenants, being attracted to energy efficient buildings.

It has also shone the spotlight on the benefits of energy efficiency, and that it can reduce ongoing energy costs, or outgoings, for tenants, making it even more popular. It is now compulsory for large commercial office buildings to calculate and state their NABERS rating when leasing or selling office space under the Commercial Buildings Disclosure scheme.

To this extent, the NABERS program has been a success. While the reasons Australia’s electricity usage has dropped in the past two years are complex, programs like NABERS must take some credit for a shift in the cultural attitude of how we design and operate our built form and how we use our energy.

However, building-by-building, trigeneration has its limitations. Firstly, trigeneration engines either run or they don’t. They are not suited to loads any less than 70 per cent of their capacity.

For this reason trigeneration systems have to be designed much smaller than the overall building demand, for fear of oversupplying in low demand times, for example, 20-degree days or when a building is not fully tenanted.

If a system does oversupply electricity and feed back up into the grid, it can trip grid fault devices. This limits the economies of scale and GHG emission reduction potential for a building-by-building approach. Additionally, thinking long term, it is not a logical energy solution to have thousands of small generators scattered through our cities and towns, each requiring their own management and upkeep.

To try and step beyond this issue, developers, property owners and councils are now considering precinct approach, which would achieve economies of scale by servicing more than one building.

But a tricky question arises: if several buildings are connected to one centralised system for electricity, heating and cooling, how do you apportion the energy efficiency and GHG reduction to each building?

Each building is still importing “externally supplied” electricity, from the nearby centralised system, despite it now being low emission electricity.

Is it just like green electricity, and worthy of a note on a building’s NABERS certificate, but no increase in star rating? Or is building connected to a precinct system worthy of an increased star rating, just like it would if it had installed trigeneration in its basement?

The benefits of a precinct scale energy efficiency approach

The potential benefits a precinct approach to energy compared to a building-by-building approach include:

  • Less limitation on sizing so it will not interfere with the grid
  • Larger economies of scale for up-front and on-going costs
  • Capital cost efficiency by servicing a variety of loads that have peak demands at different times, for example commercial office versus residential
  • Centralisation of technical capability required to run such plant efficiently
  • Incentive for a central operator to maximise energy efficiency and revenue as energy generation is its core business
  • Transfer of plant operation risks, such as Legionella, from building owner to central operator
  • Greater energy efficiency due to a larger system and better utilisation of plant, such  running hours
  • Greater GHG emission reduction

Precinct systems in Australia are not just currently limited to the City of Sydney project that was noted in the NABERS consultation position paper. Such projects, at various stages, from planning to operation, are happening throughout Australia, including four in Victoria, three in NSW and two in Western Australia, ACT, South Australia and Queensland.

Additionally, we now have Prime Ministerial support for Distributed Generation as a way to help control spiraling electricity costs, see, and the Green Building Council of Australia has released its Precinct Green Star tool.

The NABERS Consultation Position Paper – and what it means

NABERS’ answer, in its consultation position paper, is when calculating the star rating, linked to the CBD program and financial benefits for property owners, that low emission electricity from such a centralised system should be treated the same as much dirtier grid electricity, but can be noted on the NABERS certificate.

Building owners may see some star rating uplift through the use of low emission heating and cooling from a precinct system, but not from the electricity.

In other words, a building’s NABERS rating can be drastically improved by installing a small trigeneration system in the basement. But, if two or more owners of existing buildings decide to co-invest in a shared trigeneration system, they will get a note on their certificate, but no financial benefits of having a higher star rating.

For new developments, it also means that if a developer wants to achieve high future NABERS ratings for its buildings, and is building more than one building, they will have to install trigeneration in each building.

This approach is likely to see precinct scale energy efficiency projects limited in Australia, and the continued development of small systems in individual buildings.

We need a coordinated approach to improving the energy efficiency of our cities, rather than a very limited building-by-building approach.

The time for industry to be part of this important issue is now.

My submission will recommend that for precinct trigeneration systems, the NABERS ruling should:

  • Include offsite supply of low emission energy from a precinct or district system in the star rating assessment
  • Have flexible apportionment of the carbon emissions to electricity, heating and cooling from trigeneration, but that this must be consistent for each building and system and justified by the precinct system operator
  • Require precinct operators to provide connected buildings with apportionment on their monthly energy bills of carbon emissions for the electricity and thermal energy consumed
  • Annually audit precinct operators, in a process organised by NABERS and paid for by precinct operators, to ensure gas use, energy generation, waste heat utilisation, energy efficiency and other parameters is equated to the claimed apportionment of emissions for all energy sold
  • Require that buildings must be either in a “deemed precinct” or connected to thermal services from the same system, to be able to include offsite supplied low emission electricity as part of their NABERS Star Rating improvement
  • That NABERS build the necessary capacity over time to deal with precinct and district energy systems

In energy efficiency  terms, NABERS has been around a while. But in geological terms, it’s brand new. For NABERS to be a long-term relevant tool for guiding the property industry through energy efficiency, it must continue to adapt over time.

The NABERS framework should support whatever is the best energy efficiency and GHG emission reduction solution in each case, and not be limited to a single approach.

Submissions are open until Friday, 24 August.

Jonathan Prendergast is the director of Prendergast Projects, which provides energy technical and commercial advisory services for existing built form and new development projects.

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