Opportunity Knocks: Accelerating energy efficiency in our cities

Australia’s cities are built on untapped opportunities – in fact, up to 80,000 untapped opportunities that need government support to meet their potential.

This is the message from a broad coalition of industry associations and local governments that have developed a new policy framework to realize new sources of energy efficiency and reliability for Australia’s mid-tier building stock, using existing policy levers.

Opportunity Knocks: Accelerating energy efficiency for mid-tier buildings is supported by a broad coalition of industry associations and leading local governments, including the Green Building Council of Australia, Property Council of Australia, Australian Institute of Refrigeration, Air Conditioning and Heating (AIRAH), Energy Efficiency Council, Facility Management Association of Australia, City of Sydney, City of Melbourne and CitySwitch.

The report finds that up to 80,000 buildings in Australia are classified as ‘mid-tier’ – that is non-A Grade or non-Premium Grade – and that these buildings are a powerful mechanism to help better manage our increasing demand for new energy.

“Mid-tier buildings account for around 80 percent of Australia’s office buildings and 50 percent of floor space,” says Jonathan Cartledge, Head of Public Affairs for the Green Building Council of Australia.

“We know that high performing buildings in Australia consume around a third less electricity and produce a third fewer greenhouse gas emissions than the average mid-tier building – so we are talking about a massive opportunity to improve efficiency and cut emissions,” Mr. Cartledge says.

Opportunity Knocks proposes a new policy framework and five immediate actions for governments:

Reduce the threshold required to disclose energy performance of buildings
Expand disclosure requirements to new sectors with a focus on tenants
Support business through targeted tax incentives for building upgrades
Governments to lead by example through higher efficiency requirements for their own tenancies and offices
Invest in research to improve our understanding of energy opportunities across the building sector.
Mr. Cartledge notes: “Many are familiar with the challenges of improving the performance of the older building stock across our cities. But these challenges will only be met through a combination of measures delivered through government leadership and with industry support.”

Mid-tier or sub-prime buildings are typically constructed between 1960 and 2000 with outdated and inefficient technologies, resulting in buildings operating well below their potential. The sector is highly fragmented and characterized by varied ownership structures that contribute to market failures including split incentives between owners and tenants, and a lack of information and awareness among building owners and operators.

“The market failures characteristic of sub-prime buildings make them a natural priority for governments to lead practical policy interventions that will deliver real benefits across the economy,” says Francesca Muskovic, Policy Manager – Sustainability and Regulatory Affairs at the Property Council of Australia.

Ms. Muskovic adds: “Currently, the mid-tier sector is poorly positioned to deliver greater energy efficiency or help reduce peak demand for energy, both of which are increasing priorities for governments.”

“The recommendations put forward in this report provide an appropriate mix of regulatory oversight to deliver greater transparency, and tax incentives to encourage action on the ground,” Mr. Cartledge adds.

“This is a policy win-win. A prudent, evidence-based approach that will reduce the burden of these buildings on the energy network, and deliver benefits for business productivity.”

The collaborating organizations invite governments to work with them to realize these opportunities and accelerate energy efficiency for mid-tier buildings.

“With government leadership through progressive policy and ongoing collaboration with industry, we can transform our built environment and leave a legacy of healthy, efficient and resilient buildings,” Mr. Cartledge concludes.