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30 April 2030 – The City of Sydney’s Sustainable Sydney 2030 plan has set itself tough environmental targets that its own senior executives say will be hard to meet.

This article, based on extensive interviews with council staff and written reports, profiles the major strategies that will lead the council’s efforts – including its pitch for green energy infrastructure and its battles to scale the institutional barriers.

While global leaders wrangle over emission trading schemes and Australia’s federal politicians stare down each other over who has the biggest great big tax, major cities involved in the global C40 initiative are supposedly getting on with the business of showing by doing. While most experts still agree that a reduction in global emissions needs to be addressed using some so-called big-picture mechanism like an ETS or carbon tax, it is equally clear that a great deal can be achieved by concentrating on measures that are within reach, here and now. Think global, act local.

Remember that old chestnut? Well, many of our major cities say they doing just that.

Sustaining the Emerald City

The City of Sydney’s Sustainable Sydney 2030 plan has an overarching target of a 70 per cent reduction in total emissions by 2030, based on 2006 levels, and a 20 per cent reduction in council’s own emissions by 2012. To deliver the plan the council says it will use a three-tiered strategy.
First, to lead by example by trialing and implementing substantive measures designed to reduce the carbon footprint of its own building portfolio. Second, to reach out to its residents and businesses through educational and incentive programs that encourage them to adopt measures that are proven to reduce greenhouse gases. Third, to address the need for green infrastructure in partnership with the sector responsible for the largest output of Sydney’s greenhouse emissions: the commercial property sector.

So how is the strategy playing out?

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Retrofitting

The council has a commitment to achieve a five-star NABERS rating in its portfolio at an estimated cost of $18 million. This would equate to a 28 per cent reduction in energy consumption and a 48 per cent reduction in greenhouse gas emissions from its properties by 2012. It recently claimed to have already reduced energy use by 14 per cent, which equates to a reduction of 3417 tonnes a year of CO2.

The council also claims reductions are being achieved through a progressive retrofitting of council’s portfolio of more than 200 properties, including libraries, community centres, swimming pools, public toilets, town halls, depots and commercial offices. In its most energy intensive building, Town Hall House, for example, it reported a 25 per cent decrease in emissions from switching to energy efficient lightbulbs, regulating the times at which lights and computers are switched on and off, and improving airconditioning.

Other measures include replacing inefficient plant and equipment; installing solar and heat-pump hot-water units, and using skylights to reduce the need for artificial lighting. The city has installed a number of solar electricity generating systems – among these the retrofit on Town Hall – and solar hot-water systems. The cost of the Town Hall’s 240 solar panels was $586,000, resulting in a peak output of 48 kilowatts.

Council executives say public lighting accounts for about a third of the city’s electricity use and is a significant
contributor to greenhouse gas emissions. There are about 20,000 street and park lights in the City of Sydney; 12,000
are maintained by Energy Australia and 8000 by the City of Sydney. In 2008-09, council sources report, the city spent
$3.5 millionon electricity for these lights and an additional $2 million on maintenance and upgrades of the lights it
maintains.

Council is intalling 250 sustainable street lights in the CBD and urban centres. A trial involves a range of 200 LED
lighting products at four locations – Martin Place, Circular Quay, Darlinghurst Road and Alexandria Park and 50
Cosmopolis street lights at Bourke Street, Surry Hills, as part of a trial with Energy Australia. The expected energy
savings from these new street lighting systems is between 30 to 40 per cent.
City Switch

The council says that the voluntary City Switch program, which it initiated and which is now national, has been a major plank in its sustainability program.

To date, 225 tenancies covering more than 1210,000 square metres of office space have been committed to City Switch nationwide. Each participating council has a target of 20 per cent of total net lettable area signed up to the program by July 1, 2012. Sydney CitySwitch Green Office has achieved 73 per cent of this target 75 tenancies and 57 signatories have committed, representing 680,000 sq m,or 15 per cent, of Sydney’s net lettable area (NLA) of 4,684,723 square metres.

A number of success stories have emerged from the CitySwitch program:

  • PricewaterhouseCoopers signed up in February 2008 and has since achieved a 29 per cent reduction in lighting energy demand in its 31,800 sq m of office space (for an investment of $800,000) by introducing automated lighting control.
  • DTZ, one of the world’s largest real-estate advisers and the first corporate tenant to join CitySwitch, has achieved a 40 per cent reduction in its energy costs using technology upgrades.

Green shoots indeed, say the sceptics, but the program organisers say the challenge is to draw all of the city’s commercial tenants into the program, especially given the relatively low cost of investment to potential savings. With mandatory disclosure about to force the owners of offices of 2000 sq m or more to disclose their energy consumption at the point of sale or lease, the CitySwitch program is one that can expect a much bigger take-up over the next few years, the organisers contend.

According to frequent council claims, help from the federal level in providing substantive incentives for programs of this kind have been slow or absent. Before the federal election in 2007, the Capital Cities’ Lord Mayors’ Group met with the then Prime Minister, John Howard, and the then Opposition Leader, Kevin Rudd, to lobby for a support for a diverse range of solutions to reducing greenhouse gas emissions. They left empty handed. Progress under the Rudd Government has been similarly restrained.

Commercial property owners
The commercial property sector is the LGA’s largest consumer of electricity. Existing commercial and public sector buildings are responsible for 52 per cent of the city’s CO2 emissions, and half of these buildings are owned by 12 landlords. The council plans to engage these property owners to deliver major reductions in CO2 emissions across the LGA.

Another council initiative is the Better Buildings Partnership, a joint venture between commercial building owners and council, based on a model developed by the London Development Agency. While the Sydney program is still being developed, council has identified a list of potential participants: Brookfield Multiplex, AMP Capital Investors, DEXUS, Colonial First State, Macquarie Capital Funds, Mirvac, Investa, Stockland, ING Real Estate, ISPT (Industry Superannuation Property Trust), Lend Lease, and GPT.

The broad aim is to improve the environmental performance of existing commercial building stock, but there are still some obstacles to be overcome if the scheme is to bear fruit. The London experience suggests building owners may be wary of investing in green initiatives, especially capital works, when the benefits of any savings could primarily accrue to occupiers alone by way of decreased energy consumption and costs. Occupiers, on the other hand, may find it difficult to invest in a building where the asset improvement benefits flow to the owner. However, some of these issues could well be solved through changes to leasing terms and conditions.

Allan Jones
Allan Jones

Mandatory reporting
Allan Jones is the council’s chief development officer recruited after developing green energy solutions in Woking and London in Britain. Jones maintains that the BBP could substantially decrease greenhouse gas emissions.

“Through industry collaboration,”  Jones says, “the program would see the acceleration of energy efficient retrofitting and use of greener energy supplies.

“As a result landlords would benefit from cost savings through reduced electricity bills, the ability to retain higher occupancy rates and increased brand awareness and recognition as a leader within the commercial property sector committed to positive environmental outcomes.

“Property owners would also receive promotion and recognition of their activities through initiatives, similar to that already utilised in the City’s CitySwitch program.”

Council monitors and reports the total energy use, by sector, in the City’s State of the Environment reports.
The looming big stick of mandatory disclosure should provide a further incentive for property owners to reduce their carbon footprint and integrate the costs into their business models. In 2008 the Federal Government introduced mandatory, annual reporting of greenhouse gas emissions in its National Greenhouse and Energy Reporting System. Entities with greenhouse emissions of 125,000 tonnes of CO2 equivalent or more are required to have reports audited.

Green infrastructure
The sweeping introduction of green energy infrastructure holds the key to long-term reductions of greenhouse gas emissions. In a speech given at the Intelligent Grid Conference in Sydney last November, City of Sydney Council chief executive Monica Barone said that, “even if business as usual was contained, and even if the council did achieve all these actions, we are still forecasting a 17 per cent deficit; that is, we are still 17 per cent short of our 70 per centtarget”.

Asked about this shortfall, Allan Jones revealed that a number of contingency measures were being taken to address the projected deficit.

“The city has put in place high targets for carbon emission reductions,” Jones says, “and we are committed to achieving them. It is anticipated that additional advancements, such as LED street lighting, electric vehicles and the introduction of larger and more efficient trigeneration systems, would significantly reduce and potentially eliminate the 17 per centdeficit.”

A key measure in the City of Sydney’s green infrastructure program is the substitution of coal-fired energy generation with more sustainable options such as trigeneration energy production. Trigeneration systems burn gas (natural gas to begin with, to be replaced later by renewables like biogas or methanol/hydrogen) to make electricity, then convert the resulting heat to generate even more electricity and, finally, cool the heat through an absorption process so it can be used to aircondition buildings. Natural gas is cleaner than coal but the real benefits come from maximising the use of the initial burning through the three-stage process.

“Over the long term,” Jones says, “330 megawatts of power will be required from trigeneration plants. The city has plans under way to install these systems in five of its swimming pools and the Town Hall precinct. Tenders have been called for the projects.”

In 2009 the City of Sydney commissioned a report from the University of Technology, Sydney’s Institute for Sustainable Futures (ISF) to identify obstacles to, and solutions for, the introduction of trigeneration technology.
The ISF study identified a number of technical and institutional obstacles. The report concluded that “there are no insurmountable technical barriers to trigeneration, in that the technology is technically feasible and, in many cases, apparently economically viable”. The effects of a mass take-up of trigeneration technology on the price of natural gas is not explicitly dealt with.

However, the report identifies significant institutional obstacles, including network connection and grid export/import issues, licensing and standards, complex approval procedures and pricing barriers.
On the matter of energy distribution, for example, the power grid infrastructure required to distribute locally produced trigeneration power belongs to Energy Australia. The ISF report advocates a “virtual private wire”, whereby trigeneration users import energy locally (as opposed to electricity originating from a coal-fired power station source) across the existing grid at the local level.

Trigeneration could be made more financially viable if transmission costs controlled by Energy Australia were cut. If these costs are not cut, a vital emissions reduction measure could be stymied.

Britain’s Office of Gas and Electricity Markets adopted a similar concept in March 2009. It is yet to be determined if Energy Australia will agree to exempt the City of Sydney from charges on a trial basis as it rolls out trigeneration projects.

Significantly, the roads, footpaths and other public domain and community land that will be required to install new green infrastructure, now and into the future, are largely owned and managed by local government. This has implications for energy providers, who are well aware of the need to transition from coal to renewable forms of energy generation.

Council sources report that work is continuing with Energy Australia to develop the framework, or enabling agreement, that would allow the city to trade surplus electricity from its trigeneration plants using the public wires distribution network to supply itself with low-carbon electricity. Energy Australia has advised that the city can generate electricity to supply it own operations, and that this would require an exemption from transmission charges and other expenses that are normally levied on large-scale electricity producers. Energy Australia has advised council it would support such an exemption.

However, should the city wish to supply other organisations with electricity, changes to the regulations in the Electricity Supply Act NSW would be required. Similar changes have been approved in Britain that allow broad adoption of decentralised energy production.

The City of Sydney’s trigeneration project has been included in Energy Australia’s smart grid project, for which the state government is seeking Federal Government funding, council sources say

For localpower generation to be successful over the long term, state governments will need to make regulatory changes.. Jones believes that NSW regulatory bodies will adopt the British model. But there’s an elephant in the room: substantive reductions in emissions can only be achieved by weaning the city off coal-firedelectricity generation and replacing it with green alternatives and localised infrastructure.

This is the kind of talk the NSW Government might choke on. Given that the Government owns Australia’s largest greenhouse gas emitters – coal-fired power stations – it remains to be seen how it deals with this issue in an election year. Soaring revenues from coal exports, trade union interests, the battle over the privatisation of electricity, the electoral surge of the Greens and ever increasing power costs for consumers could make this issue one of the hottest for Premier Kristina Keneally.

The shift from fossil-fuel energy to green alternatives requires a change in the way we think and talk about energy consumption, in much the same way as during the early 1990s when we were required to change our language and behaviour concerning the distribution of information and the rise of the internet. That change was driven at the consumer level, with governments and business struggling to keep pace The smart money is on green energy following a similar course.