Imagine a kind of ‘energy utopia’, with secure and reliable supply, bills that everybody can afford, and a well-regulated, efficient and sustainable system.
With our national electricity grid needing urgent attention, this scenario may seem unattainable, but it’s not a complete fairy tale. Addressing the so-called “energy trilemma” of secure supply, affordability and emissions reduction is at the heart of the independent review into the National Electricity Market (NEM), chaired by Australia’s Chief Scientist Dr Alan Finkel.
The Australian Sustainable Built Environment Council (ASBEC) has lodged one of about 360 submissions received by the review panel, and describes the enormous potential of Australia’s built environment to advance all three of the review’s objectives.
The building sector has the means to provide cost-effective opportunities for emissions reduction and energy productivity – as detailed in ASBEC’s Low Carbon, High Performance report. Buildings account for nearly half of our electricity use and produce nearly one-quarter of our emissions, so increased energy efficiency could mean a significant reduction to the demand on the grid and overall emissions.
Low Carbon, High Performance shows that savings in energy costs from a low carbon building sector could reach $20 billion by 2030, if the right suite of policies was put into place.
The current dialogue is centred on the supply side of the energy equation, but a focus on the demand side provides the fastest and cheapest way to get results. It offers a ‘win-win-win’ situation, benefiting all three parts of the trilemma – less demand leads to a reduced burden on infrastructure, lower bills for consumers and reduced carbon emissions.
The benefits of increased energy efficiency in the building sector are powerful and widespread, bringing cost savings and increased well-being to households, businesses and governments. Low carbon buildings are more comfortable places to work, live and learn, providing more natural light, airflow and comfortable temperatures. This has been shown to create homes where occupants sleep better, allow more effective learning in schools and increase productivity in offices.
Lower energy costs are particularly important to households at the lower end of the socioeconomic scale, where an energy bill consumes a much higher proportion of the budget. With household energy bills having risen an average of 50 per cent in the six years to 2014, this has put significant pressure on low-income families.
We have the technology to achieve zero carbon buildings right now, and emerging technologies and price reductions offer exciting opportunities for better, easier and cheaper solutions for the future. Australia is already a world leader in solar rooftop penetration with more than 1.5 million systems installed – and the increased uptake of battery storage systems will unlock huge potential. Increased production is rapidly reducing the cost of solar PV and battery systems and this is projected to continue and drive strong growth. Other emerging technologies and opportunities include low-cost sensors, building-integrated PV modules, smart thermometers, smart glass and real-time feedback on energy use.
Market-leading Australian property companies have already demonstrated the potential for energy efficiency. Lochiel Park in suburban Adelaide, South Australia, is a high-performance environmentally sustainable residential estate. Each of the 100 homes on the estate has high-efficiency appliances and equipment, smart controls and displays, and rooftop solar electricity and hot water, providing a 60 per cent saving in energy consumption and associated greenhouse gas emissions compared to the Australian average.
Stockland property group’s Shellharbour Shopping Centre in New South Wales has one of the largest single rooftop solar PV systems in Australia. Installed in 2015, it generates more than one-quarter of the centre’s daily base building power requirements and Stockland sells electricity directly to the retail businesses in the centre. The system offsets 1,700 tonnes of CO2 annually, and is projected to pay for installation costs within seven years.
For all our current and emerging technologies and the possibilities they provide, review and reform of the NEM is a formidable task. Progress is restricted by competing objectives and a range of barriers across the sector. The processes that determine electricity tariffs, connection to the grid and retailer licensing requirements are extremely complex and limit the ability of non-technical stakeholders to prioritise consumer interests.
Also, minimum energy performance standards for Australia’s buildings lag far behind best practice, and urgently need to be reviewed and updated in the National Construction Code, with a trajectory for future upgrades set in place.
The key to reform is strong policies to address existing barriers, set mandatory standards in place and accelerate actions. ASBEC’s Low Carbon, High Performance report sets out five policy solutions to support a transition to high performance buildings. These involve:
- A national plan toward 2050 zero carbon buildings
- Strong mandatory minimum standards for energy performance of buildings and appliances
- Targeted incentives and programs to motivate and support higher performance in the short- to medium-term
- Energy market reforms, to remove market distortions that undermine the business case for energy efficiency and distributed generation
- Enabling data, information, research and education measures
It’s not impossible to make that ‘energy utopia’ a reality. The NEM Review provides real prospect for change, and our sector offers exciting opportunities to help create a sustainable and more productive built environment and increase wellbeing for us all.