ACT’s Journey Towards Net Zero Carbon Emissions

Dr Michael Smith Senior Energy Efficiency Policy and Programs OfficerEnergy Efficiency Improvement Scheme Climate Change and SustainabilityEmail: michaelh.smith@act.gov.au

Phillip Yapp Senior Energy Project OfficerCarbon Neutral Government (CNG) TeamClimate Change and Sustainability

‘Net Zero Emissions’ Discussion Paper

• Proposed new targets:

o Carbon neutral by 2045 or earlier

o Interim targets as milestones, with action

plans for each interim period

• A discussion of options for emission

reductions and climate adaptation

• A sectoral approach

o Transport

o Energy/buildings

o Waste

o Land use

ACT Climate Change Strategies and Programs

Interim Targets

ACT Climate Change Strategies and Programs

0%

22%

61%

7%10%

Medium reference case 2020 emissions

ACT Emissions Profile - 2020

40% below

1990 levels

ACT Climate Change Strategies and Programs

ACT Government Policy & Programs to help

achieve decarbonisation of buildings

• ACT 100% RET by 2020 target and ACT

Renewable Energy Reverse Auctions.

• Energy Efficiency Improvement Scheme

• Next Generation Solar and Energy Storage

Program

• Carbon Neutral ACT Government Program

• Actsmart Programs

ACT Government is:

• Supporting private sector leadership to

create cost effective new residential

buildings/new suburbs such as the

Ginninderry new suburb trial

• Contributing to COAG work - 2019

national commercial building code

increase.

• Supporting ASBEC’s work - to build

consensus on industry preferences for

building code trajectories for 2022 and

beyond.

• Supporting via EEIS private sector

leadership from ActewAGL Retail – who

wants to help customers improve

heating and cooling energy efficiency.

Decarbonising our buildings sector

• Supporting private sector leadership

- to create the largest virtual battery trial here

in Canberra via Next Gen Energy Storage

Program

- to build demand response capability –smart

heating/cooling systems.

• Supporting households, who have invested in

solar PV, by creating new EEIS activities to

help them upgrade HVAC & hot water

upgrades to create schedulable load for PV.

• Developing “deemed” small business heating &

cooling activities via EEIS.

• Support greater private and public sector

investment in heating and cooling upgrades

(EEIS, Actsmart, CNG)

Decarbonising ACT’s buildings sector

Decarbonising our transport sector

• Developing new light rail

network

• EV Strategy launched and

ACT Transport Strategy

being renewed.

• Zero-carbon electricity

supply to help underpin this

transition

Towards Net Zero Emissions – New and Existing Residential

Buildings

4 Examples of Private Sector Leadership

ASBEC (2018) The Bottom Line

Report, states that

“Research shows that “all

electric” (buildings) are currently

more cost-effective than installing

gas connections in new

buildings. This is because

electric heating and hot water

technology is becoming

increasingly efficient, so despite

gas being cheaper per unit of

energy than electricity, electric

appliances have lower running

costs than their gas-powered

counterparts.“

Ginninderry Development has begun construction of its first stage:

- Includes ACT’s first “all electric” mini-suburb trial with solar PV and batteries.

- This is the first 6 star green star certified community in the ACT. https://www.canberratimes.com.au/national/act/construction-begins-on-cross-border-ginninderry-housing-

development-20180427-p4zbzu.html

First geo-thermal heated & cooled mini-suburb - Fairwater near Blacktown, Sydney.

Photo: Wolter Peeters - https://www.smh.com.au/environment/sustainability/geothermal-a-technology-that-blows-hot-

and-cold-in-sydneys-booming-west-20170410-gvherz.html

Examples of Nearly Net Zero New Apartments Pitt and Sherry (2016) Net Zero

Apartment Buildings report• “Using high performance glazing,optimising wall to window ratios, andimproving building thermal envelopefficiency results in significant wholeof system and whole of life costsavings.”

• It significantly reduces the size of the requiredapartment air-conditioning plant capacitiesresult in:o Cost reductions in air-conditioning system

installation and operational energy costs.o Spatial reduction in extent of condenser

banks.o Reduction in substation size, capital cost

and connection cost. “

Government

Energy retailer - apply target to individual sales and undertake

activities

Target (for all of ACT) Eligible activities

Amount of activity Type of activity

Community

Retailer funded

implementationRepaid through energy bills

Community savings

worth more than

implementation

costs

Incentive for

innovative low-

cost delivery

Existing Residential Buildings – Role of the EEIS

Energy Efficiency Improvement Scheme (EEIS) – a retailer obligated scheme

ACT Energy Efficiency Improvement Scheme

Energy savings in approximately 71,000 households and businesses

Over 18,000 of these were priority low income households

Over 1.2 million energy savings items installed

390,000 tCO2-e saved

Savings of around ($5.00 p/week for participating households, $57 p/week

for participating businesses)

Extension to 2020 broaden participation and expand eligible activities

Current activities being delivered commercial lighting, heating/cooling and

(soon) hot water upgrades.

Household and Business lifetime energy bill savings ~ $240 million to date.

Benefits of Energy Efficiency Obligation Schemes

EEIS heating activities have the best marginal cost of

abatement

EEIS activities with marginal cost

below $0

Residential Heating – Comparative Analysis

Heater Type Stars Energy cost to meet

load*

Central heaters

Ducted gas heater 4.3 $2,915

Ducted higher efficiency gas heater 6 $2,528

Ducted variable speed electric split

heat pump

2.5 $1,116

Room heaters

Gas flued wall heater 2.1 $1,097

Gas flued wall heater 4.4 $875

Non-ducted ”electric” split heat pump 2.5 $376

Non-ducted efficient “electric” split

heat pump

5 $287

Sources: EEIS Priority Household Target 2017 Regulatory Impact Statement http://www.legislation.act.gov.au/ri/db_56930/current/pdf/db_56930.pdf

[1] * Assumes 18.304c per kWh for electricity and 2.8c per MJ for gas. The cost of running a gas heater includes some electricity for the fan unit. This is conservatively estimated at $107 per year for ducted systems and $11 for wall units, and has been included in the total. Costs associated wi th using the units for cooling are not included.

• 2017-2018 – ACT Housing/EEIS/

ActewAGL Retail trial heating upgrade

program was run in >220 homes.

• 2018 ACT Budget announced a new 3

year ACT Housing energy efficiency

upgrade program.

• Approx. 2000 existing public housing

homes will receive energy efficiency

upgrades.

New ACT Housing Energy Efficiency Upgrade Program

Towards Net Zero Emission – Existing

Commercial Buildings

EEIS Stakeholder forum– New Activities

Expansion of Space Conditioning Activities into

Business Applications for 2019

EEIS is developing and consulting on 4 X new “deemed”

commercial heating and cooling upgrade activities:

– Replacing inefficient central space heating

– Relacing inefficient room space heating

– Replace a central heating and cooling system

– Replace an inefficient room heating and cooling

system.

These replacements are to efficient reverse cycle heat pump

packaged unit(s) (ducted or non ducted) up to 65 kW heat

capacity per commercial heating space.

NB. The GEMS/E3 database goes up to 65 kW currently for

heat pumps.

EEIS is about to consult on these proposed new deemed activities.

In this consultation EEIS is also seeking expert AIRAH member

advice on what other potential “deemed” or “measurement and

verification” commercial heating and cooling activities could be

added to the EEIS? For instance, should EEIS consider;

– Adding a new “deemed” activity for replacing standard 4 pipe

gas boiler chiller systems with high efficiency heat pumps? Or

should such an activity be done using baseline measurement

and verification methods (M&V)?

– Adding a new activity to incentivise upgrading gas boiler

heating systems to hybrid heat pump options using M&V

methods?

– Adding a new EEIS activity for commercial HVAC tuning with

M&V?

New EEIS Business HVAC Activities –

Consultation Process

The Carbon Neutral Government Program

Towards Net Zero Emission – Government

Buildings

Carbon Neutral Government Fund

• 0% interest loan to government agencies for initiatives

that reduce emissions at source

– Loan repaid from utility savings

• Initially targeting 6 year payback

• $13.6 M spent on 25 Projects

– $1.9 M annual cost savings

– ~10 GWh annual electricity savings

– ~9 TJ annual gas savings

Carbon Neutral Government Fund

Projects• LED lighting upgrades

• LED lighting and solar PV combined

• Solar Thermal - HHW

• Boiler Burner upgrades

• Building Tuning

• Heat Pump HVAC

• UVC Cooling Coil Cleaning

Transition to Heat Pumps – Technical

Considerations• Required HHW temperature

– 50 - 55˚C ideal for heat pumps

– 70 – 80˚C for ammonia heat pumps (investigating)

– 70 - 80 ˚C typical temperature for natural gas

• Climate challenges

– 5˚C common in ACT Climate forwinter warm up period

• Heat recovery

– Integrate thermal systems

– Datacentre; Cool rooms; or Geothermal

Technology

Water Temperature

~55˚C ~85ᵒC150ᵒC

Steam

Air Cooled Heat

PumpYes Limited No

Investigating

Hybrid Options Yes Yes Limited

Transition to Heat Pumps – ‘North

Building’• North Building is a mixed use facility

– Art Gallery, office and community uses

• Art gallery requires archival conditions

– Humidity control can call for both heating and cooling

• Full refurbishment of mechanical systems

– Chillers and boilers replaced with multiple 4 pipe heat

pump system

• 50˚C HHW

– Additional $650k vs like for like

– <8 year ROI

– AHUs, VAVs and BMS upgraded

Transition to Heat Pumps – ‘North

Building’• Commissioned on 8 September 2017

• Significant reduction in energy consumption in 9 months to May 18

– 2,300 GJ Gas,

– 80,000 kWh Electricity,

– 2,600 GJ total energy avoided

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

North Building - Energy Consumption (GJ)

Gas (GJ) Electricity (GJ) Avoided Energy (GJ)

Transition to Heat Pumps – New

office assets• Challenges in procurement due to atypical approach

• Perception of technological risk

• Perception of cost risks (utilities and maintenance)

• Risk of Canberra climate reducing capacity of heat

pumps in winter warm up

– Reduced COP and de-rated capacity at low ambient

– Heat pumps cycling through defrost cycle

– Additional building systems required to manage the risk of tenant

condition

• Higher capital cost, but improved building performance.

• Risks around NABERS ratings with NSW emissions factors

Balancing CNG and LSR

• 100% renewable grid removes emissions motivation

from electricity saving projects

– Reduces ability to access CNG Fund

– Reduces attractiveness of ‘embedded’ Solar PV

– Somewhat balanced by increasing utility costs

• Subsequent emissions savings require fuel shift of gas

consuming equipment

– Generally require transition to heat pumps

– Most effective when coupled with electricity demand

reduction

– Potential for integration of electrical initiatives like

solar PV, pump/fan VSDs and LED lighting upgrades

The CNG rolling fund helps overcome upfront cost barriers. Are there private sector finance

equivalents?

Private Sector - Potential Opportunity for Financing to

Overcome Upfront Cost Barriers for HVAC upgrades?

• Energy Performance Contracts (EPCs) – There some

ESCOs working with finance institutions to provide HVAC

upgrades with EPCs.

• Energy Efficiency Council lists ESCOs with experience in

EPCs - http://www.eec.org.au/for-energy-users/find-a-

provider?service=energy-performance-contracting

• EPCs could help overcome upfront cost barriers for larger

HVAC upgrades.

• ROI can be improved by maximising synergies with

investments in commercial building hybrid electric HVAC

upgrades, waste heat recovery and solar PV.

• What other barriers are preventing HVAC upgrades in ACT?

Conclusion• Post 2020, buildings relate emissions will contribute

approximately 20% to overall ACT greenhouse gas

emissions.

• ACT Government policy and programs are seeking to

compliment private sector leadership to support the lowest

cost pathways to achieve net zero emission buildings by

2045.

• EEIS is broadening the scope of eligible activities in 2019 to

support efficient upgrades of heating systems for

businesses. EEIS is engaging with and seeking AIRAH

member advice.

• Contact details – michaelh.smith@act.gov.au and 02

62074576