According to a recent analysis from the Australian Sustainable Built Environment Council (ASBEC), 100 per cent electrification is the least expensive and fastest solution to reduce emissions in Australia’s built environment.
The study, Unlocking the Pathway: Why Electrification is the Key to Net Zero Buildings, discovered that electrification would save $49 billion between 2024 and 2050 compared to the ‘business as usual’ combination of electrification, gas, and offsets. Before offsets, it would also save 199 Mt CO2-e.
“The built environment has the technology to decarbonise now, but we must transition the Australian economy at the least cost,” Ken Morrison, Chair of ASBEC’s Net Zero Buildings Task Group and Chief Executive of the Property Council of Australia said.
“This report finds 100 per cent electrification is the lowest cost option to decarbonise our built environment, but lowest cost does not mean no cost. Our detailed analysis by building type, geography and lifecycle reveals that electrification, while necessary, is not always cost-beneficial. Failing to acknowledge and address these costs will significantly impede the transition to net zero building operations.”
For example, electrification of gas space heating in big existing commercial buildings may be limited by physical plant room capacity and incur additional capital expenses that are insufficiently justified in terms of reduced energy usage or emissions.
As a result, governmental solutions will be necessary to overcome this barrier.
Speaking at the launch of the report, ASBEC Executive Director Alison Scotland acknowledged the elevated commitment from Australian governments to act.
“Australia is now taking strong action on climate change, with a national emissions abatement target of 43% below 2005 levels by 2030 and a net zero target by 2050. Australia now has a roadmap to deliver cleaner, more affordable energy to households and businesses,” Ms Scotland said.
“But as our grid decarbonises, we must turn our attention to other sources of emissions. The built environment is responsible for a quarter of Australia’s emissions. This means decarbonisation of our buildings is an essential strategy to cut emissions and strengthen Australia’s future as a renewable energy superpower.”
ASBEC’s report, a result of the Rapid and Low-Cost Decarbonisation of the Built Environment project, is supported by a building-level technical study from DeltaQ and SPR’s modelling of low-cost decarbonisation solutions.
SPR created three ‘plausible but diverging’ decarbonisation scenarios: 100 per cent electrification, a mix of electrification and green hydrogen, and a ‘base case’ comprising electrification, fossil gas, green hydrogen, and carbon offsets.
According to ASBEC, full electrification represents a saving of almost $50 billion relative to a mix of gas, electrification and offsets, which is business as usual. In comparison, electrification and green hydrogen represents a saving of under $22 billion relative to electrification, gas blend and offsets.
In Victoria, New South Wales, and Queensland, the modelling was applied to new and existing residential and commercial buildings (hotels, offices, and retail). The three scenarios were simulated from FY2024 to FY2050.
“ASBEC’s work confirms that relying on a business-as-usual approach to decarbonisation will require investment in offsets. A strategy based on offsets is the most expensive and uncertain option for the economy and the worst outcome for emissions reduction,” Mr Morrison said.
“The report also recommends that electrification, which is available now, should be pursued rather than waiting for green hydrogen to drive transformation. By electrifying buildings now, hydrogen can be reserved for industries with high intensity energy requirements.”
Government action is required to electrify Australia’s built environment, and ASBEC’s study provides six policy suggestions. These include a revision to the National Building Code, a national strategy to phase out fossil fuels, and incentives to overcome capital cost restrictions.
ASBEC also calls on governments upgrade their own assets and embed electrification in procurement standards, to invest in training and education, and to develop strategies that ensure vulnerable communities are not left behind.
“Electrification is the least-cost option to drive down emissions, but it is not a no cost option. The built environment must electrify, and public policy can smooth the pathway so this happens at speed,” Mr Morrison concludes.