Retrofitting of commercial buildings has emerged as a key strategy for improving energy efficiency in Australia according to a new report.

Released earlier this week, a report published by the Climate Change Institute in conjunction with General Electric says small improvements in energy productivity across a range of sectors will yield significant results. It says the construction sector has the potential to cut its own energy use by four per cent by the end of the decade while energy costs in commercial buildings could be cut by more than a third.

Drawing on earlier data published by ClimateWorks Australia in May, the report says if all of the identified potential savings in energy are realised, total energy savings of 37 per cent across the nation’s commercial building stock could be achieved by 2020, resulting in savings of at least 16 million tonnes of carbon dioxide.

Key to these savings is the retrofitting of efficient HVAC, refrigeration systems, ovens and electronic equipment.

Meanwhile, through process and design improvements in areas such as conveying, mixing and handling equipment, the report also says the construction sector itself could cut its own energy use by four per cent.

However, it warns that based on current trends, less than half of these savings will be realised as barriers such as a limited availability of internal capital, short payback thresholds for investment, risks associated with interrupting operations or key production lines and long decision cycles hold the sector back from achieving its full energy efficiency potential.

Construction a nd commercial buildings potential energy savings

In order to address these barriers, the report says four key policies are required:

  • Expanding state-based energy saving schemes into a robust Energy Saving Initiative covering the whole country, enabling investments in energy efficiency to generate saleable certificates, increasing capital availability and shortening payback periods
  • Implementing ambitious rising efficiency standards for vehicles, equipment and other products
  • Implementing pricing that more accurately reflects the true costs of energy use
  • Maintaining the carbon price mechanism, which the report says shortens the payback period for investments

Speaking more broadly, Climate Change Institute chief executive officer John Connor says potential gains from even small investments in energy efficiency across Australia should not be underestimated.

“If Australia improved its energy efficiency by just an extra one per cent each year it would generate an additional $8 billion in GDP by 2020 and $26 billion by 2030” Connor says. “This is an important contribution to improving Australia’s productivity, as well as cutting our energy bills and carbon pollution,” he says.

Outside of commercial buildings and the construction sector, the report nominates manufacturing, resource extraction, processing and freight and air transport as key industries where significant energy efficiency gains could be achieved.