In this article, taken from our latest ebook Creating Sustainable Precincts, Terry Leckie lists the seven rules needed for precinct sustainability.
An innovative approach to finance, delivery, management and operation of sustainable infrastructure and services in precincts can make it affordable to build green.
Key to overcoming market, regulatory, political and technical barriers – which have historically prevented the take up of sustainable solutions and systems in new developments – is an innovative business model.
This model needs to:
- keep the long term benefit within the community
- extract value where there would typically be cost
- avoid a dependence on financial incentives or positive policy frameworks
To begin a trend towards sustainable precinct development, there are seven rules the industry and government authorities can follow:
1. Think outside the building boundaries
Precincts lend themselves to sustainable development because of their size and mix, their ability to control product lifecycle, influence behaviour change, extract value from waste products, and because of their total purchasing power of the community.
While sustainability can be achieved in individual buildings, it’s the economies of scale and the defined boundaries of precincts that make them deliver – big enough to allow for the sharing of services and pooling of resources that can bring down costs, but small enough to facilitate innovative green technologies and systems. The mix – or combination of residential, commercial and community buildings – is also essential, allowing demand/supply models to be balanced. For example, too much commercial stock compared to residential leads to a lack of wastewater from which to generate recycled water. The right mix of uses and producers is required to deliver financially viable low carbon energy solutions.
2. Don’t accept BAU cost/benefits
Analysis of many precincts globally over the past two decades reveals a reliance on government financing or seed funding for project viability. There are now opportunities to rethink economic modelling around the delivery and management of essential services that can remove the dependency on a subsidy-based approach.
Soon you won’t build a precinct without an energy and water solution onsite – but it’s not just about sustainability; it will be driven by cost savings. And there are now enough global examples to demonstrate precinct development will not be viable without onsite energy and water production.
If you look at the business as usual energy and water infrastructure, it’s not adding value for anyone – consumer, environment or government.
Centralised water and energy infrastructure costs too much to install and maintain, and is not easily adaptable to sustainability. In addition, public utilities are not prepared to give away their profits to do things differently.
What needs to be calculated is the benefit of precinct approaches to essential services. If you consider the full lifecycle management of products from procurement to disposal it gives you greater control over waste, water, energy and telecommunications systems. By controlling what goes in and what comes out of a community, it is possible to improve efficiencies. Waste products quickly become resources.
By mirroring nature’s own recycling patterns, communities are able to live with minimum waste or carbon impact.
To demonstrate the effectiveness of this approach, we have to create examples, and then let the markets follow. It’s not about the legislation; it’s about the economics. You have to create an economic model that creates a sustainable solution for the long term.
Precincts permit synergies between sustainable technologies. For example the energy–water nexus – energy solutions are more cost effective coupled with recycled water, driving down costs.
Think about trigeneration. It increases the local demand for water, just as local water production increases the energy demand. Doing both is self-supporting. By having energy and water operated in synergy within a precinct, you can optimise the use of both resources. For example, if there is excess solar generation in the middle of the day, but the sewage peaks in the morning and late afternoon, you can manage your water production to take best advantage of the solar power when it is available.
Traditional thinking separates the management of each of these resources, but in precincts you can think about them together for greater efficiency.
4. Set KPIs that define true value – sustainability, liveability, happiness
Many studies from heat island effect to sustainable design, prove the benefit of thinking wider than the financial KPIs of building communities. For example, studies in Melbourne looking at the relationship between the heat of a city and the health of constituents show a major impact of sustained heat on rates of death in our community. The most effective solution is urban design that incorporates tree shade, increasing the amount of water in an environment to create a cooling effect and using soft rather than hard surfaces. Here is an example of how a KPI around healthier communities can reduce heat-related deaths and improve health outcomes. Other studies focus on the benefit of communal gardens, the walkability and greening of a community as factors enhancing liveability and happiness.
Allowing for broader KPIs will guarantee innovation and can cement sustainability for future precincts. In Huntlee – a new sustainable precinct in the NSW Hunter Valley – a free renewable energy model will entice electric vehicle owners to visit the town centre for free charging. It’s hoped this green driver initiative becomes a honeypot to other opportunities: consider carbon neutral public transport powered by renewable energy
5. Ensure long term value is weighted against risk
Precinct business models focus on long-term gains traded against short- term returns. They factor in additional values beyond financial, such as enhanced liveability, ecology, innovation and future proofing, and they often rely on future revenue streams to achieve viability. Importantly, they rely on the self- sufficiency of the community to extract value. For example, waste products like wastewater can deliver commercial rates of return on recycled water. Recycled water can then be used for up to 70 per cent of household needs.
Precincts populations have unique purchasing power allowing a reduction in costs for proven sustainable technologies and services that would not stack up in smaller developments. This power also extends to community investment models, which allow shareholdings in renewables, capable of generating income from sales to the grid into the future. Here, homes and workplaces become generators of energy and water at a scale that can drive greater returns.
Once you generate energy and water in a precinct you are creating a revenue stream, which provides you with the opportunity to create a different community model. This could translate into property value.
A community business that homeowners have shares in, selling excess water and energy, can generate dividends for the entire community in the long-term.
6. Don’t wait for government targets – build it and they will come
In the UK and Middle East, where utilities and provision of infrastructure is completely deficient, the self-sufficiency model has thrived. Here developers cannot wait for government to supply infrastructure, so they have turned to onsite generation.
Other drivers such as a desire for renewable energy and greater control has led to the establishment of local green infrastructure: Woking in the UK is a global best practice example of this. Here a community decided it wanted to produce its own energy; bills were too high and the energy was carbon intensive. A local renewable energy network was set up to supply homes. This is a bold, sustainable best-practice precinct that demonstrates the power of leaders to drive change without government legislation.
Visionary public authorities have also led the way in Australia by putting in precinct infrastructure such as a waste plant or district heating system; they can then connect other local authority or council buildings to the system guaranteeing early adopters and revenue streams. This can inspire developers to follow suit. For many local councils this is the only approach as they have little authority to mandate. So they lead by example and persuade developers, utilities and companies to join in the vision.
Even with enabling regulations or legislation, sustainable innovations are often ahead of the regulators. Looking at the sustainable water and energy market in NSW, linking new sustainable systems to existing centralised systems and buildings is challenging governments and regulators. It’s a bit like the Google driverless car. As they introduce it to new counties, government scrambles to control it. As a result of Google lobbying, though, four US States have passed laws allowing driverless cars with the first licence for an autonomous car issued in 2012.
Linking precincts means you don’t have to overinvest to create redundancy in each community. If you are producing excess in a community, you can help other communities – by interlinking and sharing you reduce upfront spend and risk. You increase efficiency, remove redundancy and create communities that work as a whole. It’s not about us and them. It is about us together.
Terry Leckie is founder and managing director of Flow Systems.