The business of greener buildings

The last decade has seen mounting interest in cleaner energy systems. This shift that can be traced back to rising energy costs, environmental leadership by property companies and the wish to move away from our reliance fossil fuels, especially coal.  There is growing awareness about alternative energy, and the cost savings and carbon abatement opportunities they can provide.

For this interest to lead to practical change, the industry needs to see that an attractive business case exists for clean energy systems.

Currently, businesses must embark on lengthy negotiations with their local electricity network provider in order to connect to the national electricity grid. Grid connections can take up to three years, during which time projects can incur growing costs.  Due to the lack of relevant information, it is difficult to allow applicants to produce early feasibility assessments. These barriers are considerable deal breakers for businesses, local councils and the community to explore alternatives to centralised systems.

In April 2012, the Property Council, ClimateWorks and Seed Advisory submitted a proposal to the Australian Energy Market Commission to facilitate a more efficient and cost effective connection process for embedded energy generators (on-site alternatives to centralised energy).

Two years later we have finally secured an outcome that will significantly reduce flaws in the connection process and deliver more certainty and efficiency in line with industry needs.

This reform, which will come into effect on 1 October 2014, will implement a standard connection process for embedded energy generators to connect to the national electricity grid. Property developers and owners who wish to use sustainable energy systems will also be empowered with more rights and critical information in the new connection process.

As a result of the reforms, more connections should be successful within the next six to twelve months, depending on the size of the energy systems. Customers will also be empowered with:

  1. A clear map of and guidance on the new connection process.
  2. Time bounded connection stages. Previously, they were open-ended.
  3. No ‘stop the clock’ option for electricity network companies to consult third parties. Beforehand, they could stop the clock without time restrictions during the connection application stage. These features take the past ‘guess work’ out and will speed up connections.
  4. Standardised forms by electricity network companies will cut down applicants’ ‘green tape.’
  5. Information packs by electricity network companies, including technical standards, costs, application details, timing and a model connection agreement. This will allow applicants to produce early feasibility assessments with little expense, previously difficult to achieve due to the lack of relevant information.
  6. Location specific network information by electricity network companies. This will help applicants find out very early where the potential ‘no go’ zones are (network capacity constraints that require costly infrastructure upgrading if applicants proceed).
  7. Registers of completed projects with details of previously connected equipment by electricity network companies for systems larger than 5MW. This will make it easier for applicants to identify opportunities and examples of what has been approved.
  8. A more balanced set of mutual obligations, including a description of applicants’ and electricity network companies’ obligations.
  9. A clearer dispute resolution process to be used if parties cannot agree.
  10. More time and flexibility for applicants to accept electricity network companies’ offers. In the past, applicants had 2-3 days to comb through extensive contracts. They will now have 20 business days, and the option to extend this if required.

At the Property Council’s 2014 Sustainable Development Conference, attendees will be able to learn these changes will mean for businesses looking to maximise their investments in clean energy. As the shift away from conventional, brown electricity grid continues, these energy reforms will allow green grids to evolve into localised, self-sufficient clean energy power stations. They will also provide a green light to the property industry to do what it does well – promote the uptake of cleaner energy investments through the business of greener buildings.