27 August 2013 — The City of Newcastle has joined the environmental upgrade agreement bandwagon, and the potential for the city’s unique mix of industrial and commercial properties looks promising.
Finance is being provided by NAB and ANZ through partnerships with The Clean Energy Finance Corporation and Eureka Funds Management.
“EUAs are an important tool that will help us to achieve our Newcastle 2030 plan for best practice energy and water efficient buildings and infrastructure for the city,” said Future City director Judy Jaeger.
“Projects delivered under a EUA will improve the value and quality of buildings around the city and also make an important contribution to the environment.
The council decided in March last year to accept a $200,000 grant from the state government to help understand and analyse whether EUAs would be suitable for the market.
Extensive research was conducted to determine the market size and characteristics of building stock suitable for retrofits through EUAs.
The data revealed there was a high degree of interest from building owners in making their buildings more sustainable from both an economic and environmental perspective, though the standout reason for improving performance was to increase value.
The council’s building owner survey found the key drivers were:
- Operational and maintenance cost savings (75 per cent)
- Improved capital value of building (61 per cent)
- Improving a building’s environmental performance (60 per cent)
- Anticipated utility price increases (58 per cent)
- Access to finance (53 per cent)
The survey found that two thirds of Newcastle’s building stock was either commercial office space (around 250,000 square metres) or industrial. The high number of industrial properties in Newcastle’s CBD (39 per cent of buildings compared with 25 per cent that were commercial) set it apart from other cities, and provided unique opportunities for upgrades through EUAs.
Most people were interested in lighting upgrades and HVAC upgrades, but a council source told The Fifth Estate that enquiries about financing solar were increasing rapidly. Large roof space on industrial estates was a key opportunity for financing solar through EUAs, they said.
The council’s survey found the following environmental upgrades were being considered by building owners:
- Lighting equipment: for example, compact fluorescent lamps and LEDs (64 per cent)
- Lighting controls: for example, motion sensors and time control systems (43 per cent)
- Heating, ventilation and airconditioning systems (36 per cent)
- Water and waste water facilities: for example, water efficient taps and toilets (29 per cent)
- Solar photovoltaic panels (21 per cent)
A major driver for the project was a recent Property Council of Australia market report, which found there was a high percentage of low-grade building stock in need of urgent renewal, with the average Newcastle building being older than 30 years.
It also found Newcastle had a very high demand for A-grade and B-grade building stock, with the lowest vacancy rates in the state.
With little new stock in the pipeline, there was a compelling reason for the city to promote EUAs as a solution.
The council said that research had also found that the global financial crisis had adversely impacted the ability of building owners to secure finance for upgrades, with information from the ANZ and NAB showing banks were cautious about providing loans for longer than three to five years.
In this context, the council said, the time was ripe for EUAs. In June it resolved to offer EUAs in the Newcastle Local Government Area as a 12-month pilot program continuing through to next June.
The program will focus on establishing the framework required to administer EUAs, raising awareness of the benefits, and engaging in extensive stakeholder consultation.
It will be delivered in collaboration with Lake Macquarie City Council, with a council source saying a whole of Hunter-based approach would be taken.