OPINION: The policy world has always been a source of intrigue and frustration; black holes of time for occasionally brilliant outcomes but often not.
The current National Energy Performance Strategy consultation has the potential to be a great leap forward by our still shiny federal government. The fairly concise paper asks all the right questions, it will be the degree of joined up thinking in the response that determines the level of success.
Our input to the discussion has focused on changes to the residential sector, advocating for greater ambition in energy performance and the need for a retrofit strategy. The 7-Star changes in the National Construction Code 2022 are moving in the right direction but are still too little, too slow.
We have been inspired by recent developments in Scotland where they have identified a robust, proven, scientific approach to new buildings that will dramatically reduce energy use, address the cost of living crisis, create jobs, reduce inequality and reduce carbon emissions.
From 2024, all new builds in Scotland will need to meet the Passivhaus, or Passive House standard.
While we are not surprised at their choice to use the Passivhaus standard, the surprising aspect is how they got here: a non-government bill brought forward by a member of the Scottish parliament – Labour Party member Alex Rowley – which the ruling party is now supporting.
It was introduced to parliament by Patrick Harvie who is the Minister for Zero Carbon Building, Active Travel and Tenants’ Rights, whose portfolio sounds inspirational in its own right.
Listening to the 18 minutes of discussion in the Scottish parliament has been a highlight (so far) of 2023. Alex Rowley’s own questions to the minister immediately swung to verification, there is no point having a standard if there is no framework to ensure it is met. To see this raised and the positive response from the minister gives hope that they will deliver on the ground.
When asked the inevitable question on the cost implications of the policy, the minister acknowledges that building has become more expensive in recent years, and rightly identifies it as a cost-of-doing-business crisis as much as a cost of living crisis.
He admitted they hadn’t looked at costs yet they’re barrelling ahead, no cost-benefit analysis done! His introductory remarks may give a clue as to why, as he lamented past building standards “if we had done what some other northern European nations have done, our retrofit challenges now would be far more manageable”.
The Scottish sequence of events may hold the key to policy success: decide and agree the policy outcome and then return to work out how to pay for it later.
The debate over the shift to 7-Star NatHERS illustrated the problems faced by cost-benefit analysis, widely panned for its inflated cost assumptions and skinny looking benefits.
It is possible our government’s current strategy on the Voice is similar to that of Scotland, keep out of the weeds while agreeing the overall direction.
The 2022 paper Empirically grounded technology forecasts and the energy transition shows how all projections for the costs and development of new technologies have been massively underestimated.
This heavily skews every government projection of the impacts of policy change, making it look much less attractive. At a smaller scale this happened when California effectively banned single glazing and the costs of double glazing fell; projections are wrong, and humans are an inventive species!
This forms the crux of the decision of our government: mandate better quality, higher performing, healthier buildings now or deal with the retrofit challenge later.
Industry is well aware that 7-Stars in its current form is not the end goal yet, with a 3-year NCC cycle, we are already locked into another half a million homes to add to the retrofit list.
The arguments about costs are inevitable but to delay the housing quality we need just delays the costs, these will be amplified by the need to retrofit relatively new homes.
A key driver of the retrofit market (when we eventually get one) will be to resolve the inequity created by the current system.
Energy efficiency standards are not created equal
Retrofits will be driven by energy performance of the home rather than against a NatHERS star band as the focus will be shifting to resilience. How long can I stay warm in a Ballarat (Victoria) house in a cold snap if the grid goes down in my all-electric home?
Many people may not be aware that current energy efficiency standards are not created equal. A 7-Star home in Ballarat can legally use five times the energy of one in Sydney, while those in Thredbo can use double that of Ballarat.
We’ve been asking around as to how these structural decisions came to be. Our current understanding is that it was a political decision, so as not to require too much change within industry when the current system was being developed, typical of all policy decisions perhaps?
The shift to absolute performance – kilowatts per square metre – regardless of climate, is inevitable as it is the only way to deliver resilient, healthy buildings.
Our recent True Net Zero Carbon Challenge competition entry, Little Pot of Gold, looked at the embodied carbon implications of doing this across all the state capitals of Australia while also delivering the Passivhaus standard.
We found that even though varying insulation values were needed depending on climate, the impact on embodied carbon was small when bio-based materials were used. Only about 25 per cent of a home’s embodied carbon is related to thermal performance, this means that increased performance does not necessarily require extra carbon inputs.
The research also showed that similar performance can be achieved using more carbon intensive materials but there is minimal relationship between them. Yes, thermal mass helps but only a small amount in a high performance home.
If we are serious about energy productivity, then we need to stop building homes that are not fit for the future climate we face and start retrofitting the poorly performing ones that we already have.
The National Energy Performance Strategy represents an opportunity to set the direction for the residential sector, the benchmark we need for the future climate we face and a strategy for retrofitting the poorly performing homes we already have.
We have a carbon budget, we need to be using it wisely. As to how, well let’s just agree on the direction first: although building and retrofitting social and community housing would be a great start to catalyse the market.