Buildings which interact with the energy grid in Australia will be critical as the nation transitions to a clean energy future, a new discussion paper says.

Published by the Green Building Council of Australia (GBCA), the paper argues that ‘grid-interactive buildings’ will play an important role as Australia seeks to increase the share of renewable energy generation from 36 percent of the National Energy Market (NEM) to 82 percent of the NEM by 2030.

GBCA CEO Davina Rooney said the importance of grid interactive buildings should not be underestimated.

This is particularly the case as buildings account for around half of Australia’s electricity use – a portion which increases to 77 percent during peak load periods.

Rooney says that shifting energy use within buildings to times when energy supply is cheaper, cleaner and more readily available could help to reduce energy costs, alleviate strain on overburdened networks and facilitate the transition to clean energy sources.

“Put simply, grid-interactive buildings hold the key to transitioning our built environment from net zero to zero emissions,” Rooney said.

“By shifting a portion of the energy usage in buildings for a few hours each day, five days a week, Australia could cut down greenhouse gas emissions by 0.6 percent – equivalent to the impact of 180,000 homes.

“This reduction can be achieved without decreasing energy usage and would also lead to a substantial cost reduction of $1.7 billion in supplying electricity to Australian buildings each year.”

As defined the American Council for an Energy Efficient Economy, grid interactive buildings have two features.

First, the buildings themselves are energy efficient, fully electrified and are ‘smart’.

On the last point, this means that they are able to use equipment, sensors and controls to optimise energy use based on occupancy, weather, and other factors.

Beyond this, however, such buildings are connected to the local grid system in a two-way flow of information that enables the building to become a flexible resource for grid managers.

Such buildings can employ a range of strategies to either match their peak energy demand with anticipated times of peak (and cheaper) energy supply and to reduce their demand on the grid during peak load periods.

This could include drawing on energy storage when the grid is in peak use or reducing load during peak times through either lighting control or reducing HVAC energy consumption.

In another example, air conditioners could be used to pre-cool buildings before the late afternoon peak in temperature and corresponding peak in wholesale prices. (Of course, this requires buildings to be energy efficient and so to retain the effects through measures such as insulation and shading.)

The report highlights four examples of this being done in practice.

In one example, the Sydney Opera House has a power purchase agreement that ties its electricity demand to the output of solar and wind farms in regional NSW.

The Opera House is also exploring ways to match its demand to renewable energy production using fire-grained forecasts of demand and supply.

On Sunday 7 May 2023, for example, renewable energy generation was forecast to be plentiful in the morning before dropping off in the early afternoon after 12pm. In response, management programmed the building automation system to pre-cool and dehumidify three venues (Joan Sutherland Theatre, Studio and Drama Theatre) during the peak generation period between 10:30am and 12pm. After midday, load was then shed during the period over which renewable generation was forecast to drop by allowing conditions to gradually return to normal setpoints over the three-hours between 12pm and 3pm. At 3pm all overridden control points were released back to automatic settings.

Joan Sutherland Theatre, Sydney Opera House

Another example is Grosvenor Place – a 44-storey commercial office tower in Sydney’s George Street. This has an all-electric HVAC system that includes a large thermal storage plant (ice and hot water) that facilitates the shifting of electrical loads from peak to off-peak.

In one recent example, building management scheduled chillers to run as heat pumps from 10:30am to 3pm on a Sunday. This generated hot water to help with the usual warm-up on Monday morning.

Such a measure saved energy because the Sunday was a sunny day during which a large volume of solar power was generated relative to demand. In fact, for much of the period when the chillers were in operation, the wholesale price of electricity in NSW was zero or negative.

Even after allowing for a small amount of heat loss overnight, this saved around 5 tonnes in emissions of carbon dioxide compared with what would have otherwise been the case had the team instead chosen to make the same quantity of hot water before 7am on a Monday.


Grosvenor Place, Sydney

In its paper, GBCA argue that the benefits of grid enabled buildings will be significant.

These include:

  • Greater stability in the electricity system in the face of more intermittent energy generation.
  • Savings in energy and operating costs as buildings are able to use more electricity when prices are lower.
  • Greater returns on investment for renewable energy providers.
  • Lower carbon emissions in buildings as energy use is more effectively matched to renewable generation.

In its paper, GBCA has called for policy action in three areas.

First, it says that building codes and standards should be reviewed to accelerate the deployment of grid-interactive technologies as the grid decarbonises.

This would include introducing new requirement into the National Construction Code for electric solutions for heating, cooling and hot water in buildings. It would also involve exploration of potential further NCC requirements for grid-interactive technologies such as demand controlled air-conditioning systems in future NCC updates.

Next, efforts to decarbonise the energy grid and to enable grid-integration should continue.

This includes exploring how ratings systems such as NABERS may be used to incentivise electrification and grid-interactive solutions. It will also include development of a digital strategy that will enable the more effective integration of buildings as distributed energy nodes in the electricity system through better use of data flows and appropriate software to best direct renewable energy generation to points of optimal use.

Finally, ongoing effort and investment is needed in terms of applied research and provision of information and tools to industry.

Rooney says the principles outlined in the paper will also be used by GBCA to guide its own actions.

“The principles in this paper underpin the new grid resilience credit in our new Green Star rating tools,” Rooney said.

“They will guide our advocacy and education programs in the coming years, as grid interactivity becomes an increasingly critical objective for decarbonising the built environment.

“By incorporating grid-interactive strategies into building design, operation, and management, we can create a sustainable and resilient future for the built environment, ensuring a smooth transition to zero-carbon buildings.”


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