THE ECOLIBRIUM

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THE ECOLIBRIUM ANNUALAIRAH AWARDS SPECIAL

EcolibriumTHE OFFICIAL JOURNAL OF AIRAH DECEMBER 2016 · VOLUME 15.11

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ECOLI BR I U M • DECE M BE R 201614

Ecolibrium: What do you mean by saying Australia’s buildings are an untapped resource that could help the country reach its national energy productivity targets and international climate change commitments? What is the low-hanging fruit?

Eli Court: The reason that the environment sector is an untapped resource is because we know, and we’ve known for a long time, that there is a huge amount of opportunity to improve energy efficiency, reduce greenhouse gases and improve productivity through energy efficiency and distributed energy in buildings. But we haven’t seen the activity to capture that opportunity.

As part of the ASBEC Low Carbon, High Performance report, we did a high-level assessment of how much improvement there has been in energy efficiency in the built sector. We found a 2 per cent improvement across the commercial sector, and a 5 per cent improvement across the residential sector in energy intensity over a decade. That really is not capturing the scale of opportunity that we know exists through energy efficiency.

So that’s the reason we call it an “untapped resource”. The potential benefits are substantial. We know that the built environment does already have the technologies available to get to net zero carbon. There are buildings that have already been built that are zero carbon, and in terms of meeting international climate change commitments, we know that nationally we need to be around net zero emissions by 2050, and buildings are the one sector in the economy that we know can get there. That’s a huge opportunity.

The difference again with the built environment sector is that not only does investing in energy efficiency in buildings reduce emissions, it does so while delivering a profit to owners and tenants. The profits are in terms of reduced energy bills, but potentially much more powerfully, improved health outcomes.

You can imagine from heating and cooling homes properly, there are a range of health outcomes that can come from that, and there is a lot of research that is coming out about that now.

In terms of improved productivity – there is a lot of research about how much faster people think, how much faster people work, how much more productive

people are, how much easier it is to attract top talent to businesses that occupy green buildings. So many potential benefits, and really, a lack of progress – apart from in the top-tier buildings, there has been a real step change. Outside that, and across the sector as a whole, there hasn’t been substantial progress.

Ecolibrium: Could you tell us a bit about the major initiatives you’ve worked on? What does the 2050 pathway calculator do?

EC: The major recent initiative I worked on was the Low Carbon High Performance report, which we were commissioned to write on behalf of the Australian Sustainable Built Environment Council (Ed’s note: of which AIRAH is a member).

Ecolibrium editor Matt Dillon breaks bread with ClimateWorks Australia’s implementation manager.

         Eli CourtQ&A

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Eli Court

Zero-carbon buildings can help Australia reach its emissions targets.

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Not only does

investing in

energy efficiency

in buildings

reduce emissions,

it does so while

delivering a profit

to owners

and tenants

This was effectively to develop a policy roadmap to achieve zero emissions buildings. We also did modelling that showed how the built environment in Australia could reach net zero emissions by 2050 by a combination of energy efficiency, distributed energy and switching from gas and other non-electric compliances to electric alternatives.

That is one of the major initiatives that I’ve been working on over the last year. Now, we’re working on one of the policy recommendations that came out of that roadmap project, which is to facilitate an upgrade of the minimum energy performance standards for new buildings in the National Construction Code.

This is the regulation that specifies the minimum standard that new buildings have to meet, and there is a scheduled upgrade to that code in 2019. We are working with ASBEC and the regulator, the Australian Building Codes Board, to make sure that in 2019 that upgrade is ambitious and aligned with what we need to achieve to get us on a trajectory to zero carbon emissions buildings.

The 2050 pathway calculator was something that came out of a previous piece of work which was our “Deep Decarbonisation Pathways” project. Australia was one of 15 countries who participated, along with the world’s largest emitters including the US, and China, India, Brazil, Indonesia, and a number of EU countries. Basically, all the participants were doing the same exercise, which was modelling a pathway to zero emissions energy systems by 2050 which is about what’s required to limit global warming to 2°C. And what we

were trying to do was show, in all those different countries, how this was possible and give governments in the lead-up to the Paris Climate Change Agreement the confidence to go into those negotiations with ambitious pledges for emissions reductions knowing it was possible based on our modelling, and the other modelling of country teams around the world.

2050 is a long time away, and it’s hard to predict what is going to happen, how technology will evolve, how our communities will evolve, and how our environment will change over that time period. What we modelled is just an illustrative pathway, one of many scenarios that could take us to zero net emission by 2050. The calculator allows users to play around with the inputs to see the impact on Australia’s energy consumption, on our emissions, if we stay within our national carbon budget as the Climate Change Authority has defined it. It’s basically trying a simplified version of our model available to the public, to explore different pathways and the potential trade-offs from doing more of one thing and less of another thing, like reducing the amount of energy efficiency in transport and seeing what that does and how much more you might have to do in another sector.

Ecolibrium: Please tell us about the industry roadmap to zero carbon buildings. What does it involve?

EC: We developed 32 recommendations grouped into five key themes. These themes are a national plan towards 2050 zero carbon buildings, with all the necessary governance arrangements to ensure that plan and targets are delivered. Currently, we do have the National Energy Productivity Plan with a number of measures in energy efficiency in the built environment. What it doesn’t have are some of the things that are reasonably well recognised as important elements of an efficient, effective plan. It doesn’t have targets for the built environment sector. It has a target to increase energy productivity by 40 per cent by 2030, but it doesn’t have targets for the built environment sector. It doesn’t have terribly clear governance and accountability for delivering the various measures in that plan, and

here are a huge number of different government and private sector stakeholders as well as community stakeholders that need to be involved, and that plan doesn’t really provide the glue needed to coordinate the activities of those various players.

But it could be adapted to perform some of that role. It also doesn’t have strong public reporting requirements. There is a public report required on progress towards meeting the energy productivity target only in 2020, which is a long way away. And if we haven’t had much progress before then, we want to know because there are huge missed opportunities in terms of financial savings we’ll miss out on and in terms of emissions reduction. That’s the first element in the roadmap – an effective national plan. The second is strong minimum energy performance standards for new buildings and appliances and towards the end of the decade to be introduced for existing buildings. And really, that’s the regulatory option. It’s fairly well recognised that an effective policy response requires regulatory “sticks” – a mandatory, regulatory driver like a minimum standard as well as a carrot – an incentive.

That’s the third policy in the framework: a range of targeted incentives and programs. We’ve identified a range of incentives to stimulate the market. There is no justification to regulate for more than a minimum standard, but we don’t want people going for a minimum standard. We want people doing their best to achieve more than the minimum, which is where the incentives come in. In this category we also put programs to work intensively with some of the market segments that are harder to move, and those are segments like mid-tier or small offices, small retail, and low-income and vulnerable households. There is a need for a dedicated effort to address those sectors.

The last two measures in our five key policy solutions are around enabling people and businesses to respond to the regulatory stick and the carrots or incentives. First, energy market reform, which is really about creating a level playing field. The price people pay for electricity that they purchase from the

ECOLI BR I U M • DECE M BE R 201616

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grid and the ease with which they can

connect distributed energy systems into

the network, all affect the incentive for

people to reduce their consumption or

the business case to install an energy

system on their roof-top or other new

technologies.

We mostly focused on solar PV

but there are other new technologies

they could implement on their site.

Getting the market structure right

to create a level playing field so energy

efficiency and distributed energy can

compete with more traditional sources

like big power stations.

The last is a whole lot of things relating

to research, data, information and

training that are needed to make sure

we can have an effective and rapid

private sector response to scale up

energy efficiency and distribute energy

solutions. There is a lot in that bucket.

Eco: What’s your definition of zero carbon buildings? What’s holding us back from going zero carbon with our buildings right now?

EC: In our report, we looked at zero carbon operations. We call a zero carbon building a building that results in no net greenhouse gas emissions in its day-to-day operation. What we didn’t look at is the emissions resulting from the construction of the building – such as trucks coming on and off the site – we didn’t look at embodied emissions, the emissions that are put into the atmosphere in the creation of the materials that go into the building. That is potentially very substantial but not in our scope of work. We also didn’t include the deconstruction emissions that are involved with taking apart a building at the end of its life. Those are all really important caveats to be aware of that were not included in our modelling. We are just talking about zero carbon operational buildings.

What’s holding us back? We did a review of the barriers to mainly increased energy efficiency in buildings at the moment. There is a pretty extensive analysis and report about what these barriers are. We grouped them into three categories: motivation, capability and financial attractiveness.

In some cases, it’s not financially attractive to do some of the measures that could improve the building’s efficiency and that may be because the technology is not at a stage of maturity where it has become cost-competitive with other things. There is a role of policy in driving those cost reductions. It’s worth noting, however, that everything we modelled in our report, all the energy efficiency opportunities, are already either profitable or on the path to profitability. That’s less of a barrier to the things we modelled. We know without any technological breakthroughs, we could get to zero carbon. But technology breakthroughs could reduce the cost or open up new opportunities.

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Capability is about whether the relevant decision makers have access to the right information and expertise for a project.

Finally, motivation is really important in many cases for energy. Energy isn’t a major priority for decision makers, so while implementing an energy-efficiency project may deliver a financial return, it won’t deliver enough of a financial return to warrant that person putting the time and effort into working out what to do, how to implement the project, selecting a service provider to help them or doing the research to make sure they have the right service provider. All these things are interrelated.

If a project is only marginally profitable, and it’s really hard to understand what the business case is, and it’s hard to find a service provider you can trust and get the data you need to make that business case, it all compounds and becomes too hard.

One of the biggest challenges is finding ways to make it easy, because the very

big companies – the top-tier property companies – have already worked it out. They’ve been able to allocate the resources to set up the good data management in their portfolios. They have a sustainability manager dedicated to investigating energy efficiency opportunities, dedicated to overcoming the hurdles they face, finding creative ways around the issues and going through rigorous processes to select service providers.

Smaller “mum and dad” owners don’t have the resources to do that, so we have to find ways to make it really easy, and that’s one of the biggest challenges.

Ecolibrium: Do you have a favourite zero-carbon building?

EC: There are some really interesting and exciting things that people are doing with passive houses. The idea is that you can design a house that doesn’t need any mechanical heating or cooling through smart design, selection of good materials,

orienting the building so it’s not getting too much heat gain from the sun in summer but it’s maximising heat gain from the sun in winter and sealing the house properly so you don’t lose heated or cooled air through gaps in the house.

And while I don’t have a specific example in Australia that I could point to, if people started to experience what living in a house like that would feel like, how much more comfortable it would be, how much of a more habitable environment that could be, they’d see we are missing out on big opportunities.

For hundreds of years we’ve been living and working in buildings that have not really changed much. People need some proof and lived experience that there is a better way, and then we will see people getting better building practices.

There is good research that we can build low-emissions buildings for little additional cost. The change will come when people realise these are just better.

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Low-emissions buildings are just better. They are better quality, more enjoyable to work and live in, and it’s exciting to think we’ll get there sometime soon.

Ecolibrium: What role do you see for the HVAC&R industry in implementation of the roadmap?

EC: Heating and cooling is the largest energy consumer in buildings, so obviously they are critical. One of the big opportunities is around selling the case for improved energy performance of buildings, because the industry is out talking to people.

Day in, day out they are talking to people about decisions they are making about equipment being installed and replaced. That makes them a really important touch point for communications with home owners and building owners.

There is some really interesting stuff that companies are doing where they are trying to articulate more innovative

solutions than just whacking on a massive air conditioning system on top of a building to make sure the indoor temperature is able to be maintained throughout the year.

Rather, they are actually thinking through and presenting people with alternatives to downsizing that massive heating cooling system and taking the savings . . . and putting them into

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A zero-carbon building is one that results in no net greenhouse gas emissions in its day-to-day operations.

insulation, improved weather proofing – measures that can potentially have the same effect in terms of the internal comfort, sometimes better, without the ongoing energy costs.

I see the role of that industry as being a really important channel of communication to the end consumer.

Ecolibrium: There still seems to be some opposition in some quarters (the radical right wing, for instance) that climate change even exists, and that action needs to be taken. Is that frustrating for you?

EC: At ClimateWorks, we’ve always started from the position that the science is pretty clear and we are working on the solution. Effectively all nations have now signed up to the Paris Climate Change Agreement limiting climate change to less than 2°C/1.5°C. With the massive shift in investment that we are seeing towards renewable energy, that’s a good place to be now. The focus now is shifting from “will we do something” to “how will

we do” it, and that’s the space where we are involved in and continue to focus on.

Ecolibrium: Do you see a role for nuclear in Australia’s energy mix?

EC: ClimateWorks is effectively agnostic about technology. If it gets us to zero emissions, we will investigate it as feasible option.

In our Deep Decarbonisation project we looked at three scenarios for Australia’s energy supply mix. One scenario allowed for the potential for nuclear, and that could be one way or part of a mix for Australia getting to zero emissions.

We also modelled a scenario that was 100 per cent renewables. In both those scenarios, renewables still accounted for the bulk of Australia’s energy supply just on cost alone. Even when we allowed nuclear into our modelling to compete with renewables, the projected reductions in tech costs for renewables still meant renewables accounted for the majority of energy supply.

While we are agnostic, I would add that it does look like most investment internationally and innovation internationally is happening in the renewables space. So that’s probably quite telling about which horse is going to win that race. And there are obviously a range of other risks associated with nuclear – the transportation of radioactive material, the storage, the disposal – so there are obviously some risks associated that we haven’t looked into in great detail because our focus is on emissions.

Eco: Where to from here Eli?

EC: I’m focused at the moment on getting a good outcome in the next scheduled upgrade to the National Construction Code.

When it comes to the built environment, that’s my main focus. ❚