The adoption of sustainable principles in the commercial property sector has opened vast new economic universes, but as the market matures in Australia, there is strong agreement that retrofitting older existing buildings will be the major growth area for start-ups and new techniques.
Robin Mellon, executive director advocacy and international at the Green Building Council, says new buildings have reached their potential in many ways and we’ll now see the tax breaks from the Green Building program ramp up in older buildings.
In other trends, Mellon sees that “BIM (building information modeling) is really becoming much more sophisticated and integrated to bring huge advantages over coming years”.
He also sees greater rigour in the application of innovations, as third party certification schemes such as GECA, EcoSpecifier and similar measure technologies protect buyers and cut through greenwash.
Paul Cooper of the University of Wollongong’s Sustainable Buildings Research Centre agrees BIM is achieving critical mass and that new enterprises will emerge with technologies surrounding modularity. Wall elements will become more sustainable with more pre-fabrication. Lighting will also receive greater attention.
The recently released World Economic Forum report, A Profitable and Resource Efficient Future: Catalysing Retrofit Finance and Investing in Commercial Real Estate, which includes major Australian input, says nearly half of energy use could be cut in existing buildings and energy savings can exceed the cost of upgrades in five years or less.
In further evidence of a move to a new information age, Investa’s Craig Roussac says the big lesson from overseas is a shift from building attributes to data to inform building performance very precisely.
“It’s about the relationship between the people and the technology that run the building. This interface has allowed us to gain 10 percent savings on what were already 4.5 Star NABERS sites without any capex. Data was the word from everyone at Green Build – shifting from monitoring bricks and mortar to measuring performance.”
Will this shift from physical measures to include measurement and calibration be supported by future incentives and energy reduction initiatives allowing entry to start-ups?
Financial retrofitting
The need in existing buildings has triggered another type of inventiveness – financial. Old economic structures have proved less suited to retrofitting than the buildings themselves – a big barrier that slowed uptake of new technology.
Low Carbon Australia (LCA) was established by the Federal Government in 2010 to follow the former Green Building Fund, with its first revolving injection of $100 million for energy efficiency and carbon reductions focused on commercial building space.
For deployment of commercially available technologies, new finance vehicles remove upfront capital costs and take the cost of energy efficiency ‘off balance sheet’ to be treated similarly to any other leasable equipment or technology such as IT – paying from the cost savings generated from reductions in energy bills.
This particularly suits lighting upgrades with their rapid technology change, and larger equipment like new chillers and even cogeneration plants are being brought in through LCA financing in major shopping centres, retail chains, local councils and commercial car parks.
CEO Meg McDonald sees the accelerating retrofit of building stock as the driver for demand for new technology.
LCA finance models include environmental upgrade agreements (EUA) with NAB and Eureka Funds Management, a world first where technology can be financed ‘on bill’ through council rates in NSW and Victoria, home to 40 percent of Australia’s commercial stock.
“This scheme has been recognised by the World Economic Forum as the catalyst for more retrofitting than any similar program elsewhere in the world.”
Other models include a partnership with Origin Energy, again on bill, so that the latest equipment can be installed early and paid for with the energy savings achieved, which are guaranteed.
Mellon says that while yet to be fleshed out, the Clean Energy Future Package with the carbon tax should mean a more cohesive structure of incentives – $1 billion in tax breaks, a National Strategy on Energy Efficiency (NESI) the Prime Minister’s Task Group will integrate with the Mandatory Disclosure scheme and the further development of NABERS tools.
He sees limitations now that the next levels of energy savings will be more reliant on information technologies working with physical measures.
“A weakness is there is still a big emphasis on energy efficiency. The Green Building Council wants to see wider focus to include sustainability in much broader terms to take in water waste, emissions and transport factors.”
Machines over ideas and technology
Mellon’s observation is immediately appreciated by former Antarctic atmospheric physicist Malcolm Lambert, whose Rocksolver technology came up against this narrow focus.
“We applied for a Climate Ready grant (AusIndustry), but because our system is software based, they wanted to see a physical embodiment of materials.
“Business development help for start-ups, mainly from state government, is quite good, but once you want to fund a prototype you hit barriers, the money dries up and usually kicks in again when there’s a commercial product. There is little funding for R&D.
“The detail of available assistance schemes has meant that, even with excellent help, a good 10 percent of the five years I’ve spent on the project has gone to learning what’s available. There’s enormous complexity – the array of schemes is always changing so it’s hard to negotiate and stay informed.”
With US, Australian and European patents established, and commercial release next year, Lambert’s Rocksolver concept allows efficient building with unprocessed local stone, saving 90 percent over concrete or brick at just 10 percent of emissions and the cost of production and transport of building material.
Lambert says the research and development tax offset is very limited when a company is small, worth only about $20,000 pa, but he is pleased this will now go to 45 cents in the dollar, making it almost equivalent to a dollar-for-dollar grant.
Further down the enterprise track, Direct Energy, founded in 2009, won the green category of this year’s StartUpSmart Awards for its geothermal heating and cooling systems, which effectively extracts free energy from the earth.
CEO Justin McFarlane says his firm benefited indirectly from incentives and government sponsored finance schemes (Victoria’s Four Seasons Energy Program and the Green Building Fund) used by their clients to enable technology installation.
He agrees that the big barrier remains finance. “More than in other countries, it comes down to money. Better financing will lead to the transition to sustainable technology.”
LCA’s McDonald says that with Australian business asking for grant programs to be brought forward “it’s a sign that industry is looking to have the rules clear and to be able to move quickly. Streamlining the whole transaction and reducing complexity in financing would take the risk out for building owners.”
Mellon says it’s not really possible to back one or a few technologies for the future. “It’s now more the way we’re putting them together. Buildings are being seen as producers, less reliant on external services, they’ll be carbon or energy positive, water positive or materials positive.”
