Australia must build for a zero carbon future

A bright future of low energy, comfortable and resilient buildings with zero carbon emissions awaits – if governments use the National Construction Code to help us get there.

Built to Perform, a new report produced by the Australian Sustainable Built Environment Council (ASBEC) and ClimateWorks Australia makes the case for stronger energy standards in Australia’s National Construction Code hard to resist. The Code sets the standards to which all new buildings must conform – and it’s clear that it needs urgent updating to ensure Australia’s buildings are ready for the zero carbon future just around the corner.

The potential reductions in energy bills are huge. We could reduce the energy new buildings need by up to 56 per cent by 2030, saving up to $27 billion a year in household energy bills – up to $900 a year for every household, with upfront costs more than offset by bill savings, reduced need for airconditioning equipment and network savings. This could be achieved through simple measures such as more airtight buildings, higher levels of insulation, and increased efficiency standards for lights, hot water and airconditioning. If we get this right, we’ll also be creating buildings that are much more comfortable and cope better with temperature extremes.

Australia’s obligations under the Paris Agreement mean we need to transition to a net zero carbon economy by around 2050. The building sector offers us some of the fastest, cheapest ways to do this. First, around half of the buildings that will be standing in 2050 are yet to be built. We’re going to build them anyway, so making them zero carbon ready requires only a small shift. Second, we already have the technology, so no great innovations are needed to make zero carbon buildings a reality. The energy targets in Built to Perform could reduce Australia’s cumulative emissions to 2030 by between nine megatonnes CO2-e (if the electricity sector decarbonises much more rapidly than its current trajectory) up to 21 MtCO2-e if the electricity sector decarbonises more slowly.

The report is clear that the only way to make sure this happens is to use the National Construction Code. It influences both the building envelope and fixed equipment like airconditioners and water heaters – all of which will be in use for decades to come. So even if we’re not building zero carbon buildings today, we can still build them “zero carbon ready”, so it’s easy to upgrade in the future.

It’s not that we don’t know how to build low-carbon buildings. In fact, Australian and New Zealand companies have been outperforming the rest of the world for the past seven years in commercial office sustainability. And there is good momentum with residential buildings. Most parts of Australia require new housing to achieve six star energy efficiency under the NatHERS scheme, but according to data from CSIRO, almost nine per cent of housing designs across Australia are now at seven stars and above.

But the property market just cannot deliver these improvements fast enough in the absence of stronger Code requirements. One of the problems is that we’re not well equipped to work out energy performance, whether we’re home buyers wondering what our annual bills will look like, or business tenants assessing potential workplaces. There’s also the problem of split incentives.

Energy provisions in the Code haven’t really changed for more than a decade. That’s holding Australia back in shifting the way we build our homes and offices. In Denmark, where government made it clear energy performance standards would be tightening over time, the building sector started constructing to the future standards before they came into play. The certainty was crucial in driving better buildings.

A key improvement the Code could deliver is the use of onsite renewable energy generation, like rooftop solar or wind. This is nothing particularly revolutionary. California already mandates on-site renewable energy for some new buildings.

This distributed model of electricity generation, where individual buildings produce energy – instead of relying exclusively on a central generation that then has to be transported to the place where it will be used – will ease the strain on our aging electricity grid. With many of the drivers of increased energy prices coming from the cost of upgrading the grid rather than generating the power it carries, this has the potential to save significant money.

If a single building cuts its peak demand by just one kilowatt – roughly the same power used to run a small oil heater – the report estimates that this will save almost $1000 in money we need to spend on the electricity system’s infrastructure. The potential savings across Australia would be around $7 billion by 2050, reducing electricity prices for everyone.

Buildings could even use batteries to store the energy they generate for later use. Batteries are getting cheaper very quickly, driven by the uptake of electric vehicles and smartphones.

Analysis by the Alternative Technology Association estimates that batteries will become cost-effective for many households by 2020, well before the Code update scheduled for 2022.

Storing power locally would also make our energy more resilient, reducing the risk of blackouts caused by heatwave power surges.

This would be good news for Australian business. With energy prices rising by up to 90 per cent over the past decade, electricity prices for some Australia businesses have doubled, or even tripled, in the past two years alone. If the Code energy performance targets in this report are implemented, $8 billion could be saved across all non-residential buildings between now and 2050.

Low-income households have the most to benefit from improved Code energy standards. That’s because energy expenses hit those with the lowest incomes the hardest. Low-income households spend up to five times more (as a proportion of disposable income) on electricity than higher-income earners.

So what happens if we do nothing? We won’t be on a comfortable path to cheaper energy and more comfortable homes and workplaces. With an estimated 1.1 million homes and 42 million square metres of non-residential floor space slated for construction between 2022 and 2025, leaving the Code the same means we’ll be locking in higher energy bills, higher costs for the electricity network – and of course higher carbon emissions. Just three years’ delay in implementing stronger energy targets could cost households and businesses an additional $2.6 billion in energy bills and lock in nine million tonnes of emissions by 2030.

The necessary changes cannot happen without leadership by governments. Within a broad strategy to deliver a zero carbon building sector by 2050, we need commitment to a Zero Carbon Ready Code, which also includes improving compliance and enforcement with Code requirements, and making appliances more energy efficient.

If we can improve the National Construction Code’s energy efficiency provisions, we’ll be laying the foundations for a better future for Australia.

Suzanne Toumbourou is executive director of the Australian Sustainable Built Environment Council.