Retrofitting mid-tier buildings

Retrofitting mid-tier buildingsFurther market segmentation and targeted programs are the only ways to tackle energy efficiency in the mid-tier office sector, says the Property Council’s policy manager Francesca Muskovic.Muskovic (pictured), the Property Council’s sustainability and regulatory affairs specialist, says ‘mid-tier’ buildings – those classed as non-A Grade or non-Premium Grade- account for around 80 per cent of Australia’s office stock.”The challenge we face is how we reach out to this very diverse and disengaged audience,” she says.”Although the pure economics of deep retrofits stack up, we don’t yet have a mature market for bundled solutions – such as chillers, lighting and fans – that makes it easy for building owners. “Large players in the sector have embraced energy efficiency, because they understand the benefits and have in-house teams looking at the opportunities across their entire portfolios. But it’s a different story for individual building owners and small property groups.”Last week, Muskovic took part in a panel discussion at the National Energy Efficiency Conference, which explored how retrofitting office stock can help Australia meet its climate change targets.”Even though there are carrots in some schemes, there was a strong consensus that this alone isn’t going to crack the mid-tier,” she explains.Muskovic says the term ‘mid-tier’ itself is no longer useful to describe this vast section of the market.”It was good to draw attention to the issue of the mid-tier, but using it as a catch-all for quite disparate groups is no longer useful – the incentives for a private owner-occupier are very different to those required for an international investor or a family-business owner, and bundling them up together will never get the outcomes we need. “We need tailored messaging and outreach for these different groups, highlighting the benefits that energy efficiency can bring to their businesses.”Coinciding with the conference, Sustainability Victoria released Energy Efficient Office Buildings: Transforming the Mid-Tier Sector which finds that energy savings of up to 29 per cent can be achieved across the mid-tier office building sector through building tuning and energy efficiency measures.The report estimates that improving the energy efficiency of Victoria’s older commercial buildings could cut carbon emissions by 540,000 tonnes a year, the equivalent of taking 135,000 cars off the road.Sustainability Victoria’s work follows a report from the Australian Sustainable Built Environment Council (ASBEC), High Performance, Low Carbon, which has found emissions in buildings can be eliminated by 20, using existing technologies. Implementing all energy efficiency opportunities identified by ASBEC could deliver more than $20 billion in financial savings by 2030.Owners of Premium and A Grade office stock were early adopters of energy efficiency because the combination of incentives, market demand and regulation with disclosure were right, Muskovic says.”Sustainability Victoria’s work with the Energy Efficient Office Buildings program is a great example of what is possible when a building owner is engaged and understands the benefits of retrofitting and tuning. Lowering the threshold of the Commercial Building Disclosure scheme will capture a lot more buildings and we need to seize this opportunity to engage those building owners in a positive way.”Muskovic says the city councils of Sydney and Melbourne have good segmentation data, but “we still don’t have a clear idea of the broader market across Australia – and this means we’re stabbing in the dark trying to establish policies that respond to their diverse needs.”She points to the work of one local government which is creating a 3D map which identifies NABERS ratings for base buildings and tenancies. “A map like this can highlight the biggest opportunities for energy efficiency providers and allow them to target their business offerings effectively. “If we invest in good data collection and make it open source, and combine this with a business model for aggregation, we could see more tailored programs targeted at the building owners with the most to gain from energy efficiency,” Muskovic concludes.