The building sector, along with government and consumers, has spent a lot of time discussing energy efficient buildings: how to build them, what technologies they should employ and who should pay for energy efficiency measures. Perhaps we should consider this in the context of productivity.
It’s obvious that productivity is important when it comes to maximising bang for buck on a building site. The same is true on a bigger scale for the energy we use – as a sector and as a nation.
Of course, controlling your overheads will help to bring expenditure down and improve overall productivity. Right now, Australia has the opportunity to do just that with our national energy bill, and the building industry is well placed to be front and centre of this effort.
Buildings are one of the major contributors to Australia’s greenhouse gas emissions. Emissions from power used on sites, together with the emissions involved in creating all the materials used by the industry, contribute around 23 per cent of Australia’s total emissions. Emissions from transport make up another 40 per cent, and a substantial subset of these are caused by transporting materials used by the building industry.
A recent report by the International Energy Agency shows there are already several cost-effective options to reduce both energy consumption and emissions, many of which have payback times of less than five years. Current innovations include integrated facade systems for office buildings, which optimise performance of day lighting while minimising heating and cooling, artificial light and peak loading; and a greater focus on air sealing of buildings.
Obviously a reduction in emissions will assist Australia in lowering our total contribution to climate change, but improving our energy productivity is also a crucial way of boosting our economy.
According to a recent report by ClimateWorks, “Improving energy productivity is an increasingly important approach to increase the overall productivity of an economy.” In just ten years, Australian energy costs have grown by a massive 67 per cent. The cost of powering our country has grown from around $72 billion a decade ago to now around $120 billion every year – that’s 8.2 per cent of our total GDP. To put it in perspective, it’s the same as the entire bill for all the labour done in the state of Queensland for a year.
Reading those figures, it’s not hard to see that improving our energy productivity will help improve our overall national productivity.
The world’s biggest economies are already on board with this idea, seeing energy productivity as a major priority. The G20 Energy Efficiency Action Plan says that energy efficiency is a serious concern for G20 member states. As consumers of 80 per cent of the world’s energy, they know that improving energy productivity “can drive economic activity and productivity, strengthen energy security and improve environmental outcomes. It can also cut costs for businesses and households [and] drive business efficiencies.”
Our government is on the case too, with the soon-to-be-released Australian Government’s Energy White Paper. This will set out the government’s vision for an “integrated approach to energy policy to reduce cost pressures on households and businesses, improve Australia’s international competitiveness and grow our export base and economic prosperity”. With the building sector producing nearly a quarter of emissions and boasting the lowest cost for emissions reduction, it’s obvious that this policy will have important ramifications for the building sector.
ASBEC has used the combined expertise of leaders from across the building sector to identify the things Australia needs to do to improve energy productivity. Here’s a summary of our recommendations:
1. Drive energy productivity
There is potential for improvements in the energy productivity of Australia’s built environment of more than 15 per cent. The technologies that deliver these savings are often highly cost effective, but market failures prevent the optimum level of investment. To unlock the full potential for a more efficient, productive building sector, we need tax incentives and public investment for green building retrofits; a national white certificate scheme; higher standards in the Building Code of Australia and enhanced minimum energy performance standards (currently termed “Greenhouse and Energy Minimum Standards”).
2. Remove the barriers to distributed generation
Our electricity market was designed around an electricity system made up of large generators, with the power they produce moved around via extensive transmission and distribution networks, but this system creates barriers to the uptake of distributed generation. To overcome these and maximise investment in distributed generation, we need to maintain the Renewable Energy Target; appoint a Distributed Generation Commissioner, and simplify the process for connecting distributed generation to the grid.
3. Enhance Workforce Productivity
The tangible benefits of investing in energy use equipment, energy efficiency and distributed generation are already being experienced in parts of Australia’s built environment sector. Skills gaps, however, limit the capacity of the sector to realise these opportunities more broadly. By better coordinating existing initiatives and creating new ones to target critical skills gap that are not currently being addressed, we can create a workforce that is ready to embrace energy productivity measures.
Improving our energy productivity will help us achieve a truly sustainable building sector, with buildings to match. More than that, it will help us improve our economy, skill up our workforce and create a more prosperous nation.