COAG’s call for the expansion of NABERS and Commercial Buildings Disclosure in the National Energy Productivity Plan has been welcomed by the NSW Office of Environment and Heritage, which owns and administers the nation-wide NABERS scheme.

“We are very pleased to see that COAG is interested in expanding the role of NABERS as an instrument to enable government energy efficiency policy and market transformation,” Tom Grosskopf, director of Metro Branch of OEH, said.

“Over the past 15 years, NABERS has partnered with local and state governments, as well as the Australian Government, to deliver some of the most successful public energy efficiency initiatives.

“NABERS will continue its work with all governments across Australia building innovative energy efficiency programs.”

While NABERS could not comment on the expansion of the CBD program, an analysis of its impact for last year’s NABERS annual report found it has led to major improvements in energy efficiency, and not just at the top end of town. Smaller, non-premium buildings are also making positive changes.

The report found that the CBD program captured segments of the office market that previously had limited engagement in energy efficiency. Many of the buildings that obtained their first NABERS Energy rating since CBD was enacted were smaller in size, a greater proportion were outside capital city CBDs, and they performed worse than the rest of the office market in terms of energy efficiency.

Since CBD was introduced, the incentives to improve energy performance have not been limited to premium buildings, and transformation has been felt all across the market, the report said.

At the high end of the market, the number of individual buildings with a NABERS Energy rating of five stars or more increased from 77 in 2010/11 to 264 in 2013/14. In the mid-tier, the percentage of office floor area lower than four stars has almost halved, from 60 per cent of the total floor area rated in 2010/11, to just 32 per cent in 2013/14.

WT Sustainability director Steve Hennessy told The Fifth Estate that extending NABERS to other buildings and also extending the CBD program would be positive for the second tier of the market between 1000 square metres and 2000 sq m that is currently not subject to mandatory CBD.

He said NABERS had been a phenomenal success by any measurement, with the highest rating of five star – initially seen as aspirational – now achieved so frequently the system had to move to six stars as the top rating.

“No self-respecting developer will put up anything [new] less than 4.5 stars,” Mr Hennessy said.

One of the challenges he can see with extending mandatory ratings to smaller, mid-tier buildings under an extended CBD is the need for education of owners, managers and tenants of mid-tier buildings.

Mr Hennessy said the early adopters in the top tier were motivated by recognising the scheme had reputational benefits in terms of corporate social responsibility, and also risk management implications. A high NABERS rating was a way for these companies to ensure their claims around environmental performance were matched by the office, he said.

He questions whether the mid-tier building sector is as conscious of these drivers.

“There is a huge second level of buildings, but this level is possibly not as sophisticated as the major players. A lot of these smaller buildings haven’t been rated – there hasn’t been that drive.”

He said there will need to be explanations for owners, managers and tenants of what the difference between two star NABERS and four star actually means in terms of outgoings and energy use. In some cases owners may choose to upgrade energy efficiency if “tenants vote with their feet”.

The business case is probably the clincher.

Mr Hennessy said that in a typical Sydney all-electric commercial office building of around 5000 sq m, when energy-efficiency upgrades take it from two stars to four stars, there are savings of around $88,000 a year in base building energy costs.

It makes good business sense to pursue better NABERS ratings, he said, but it’s a question of “whether the other end of town has quite grasped this”.

A tenant has a say in how they run their own tenancy in terms of energy use, but they have no say in how the owner runs the base building. A NABERS rating gives them an idea of whether the owner is running it in a way that means low outgoings for energy, or higher ones, Mr Hennessy said.

He said he would also like to see NABERS applied more in the tenant space, as a way of ensuring occupants of buildings can be accountable for their energy use. This includes large corporate tenants that are in high-rated buildings where the rating reflects base building use, not their own actual tenancy power use.

Data on the energy split between base buildings on tenancies used to show 65 per cent of power was used by the base building, 35 per cent by tenants. Now that has shifted to base buildings using on average less than 50 per cent of the whole building’s energy use due to owners focusing on energy efficiency.

In energy management circles, Mr Hennessy said the tenancy energy use was seen as the “sleeping giant” in terms of energy-efficiency opportunities.

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