All new commercial and multi-residential buildings which are approved within the city of Sydney will need to be net zero in terms of their energy consumption in operation as part of the condition of approval if proposed changes to planning rules within the city are adopted.

Proposed by the City of Sydney, the new laws would set stringent energy performance requirements for new office buildings, hotels, and shopping centres, mixed-use developments and major redevelopments of existing buildings as a condition of development approval within the City of Sydney municipal area.

Under the new rules:

  • Buildings for which development approvals are submitted on or after 1 January 2023 will need to meet a single on-site energy intensity target which is set for the class of asset concerned (see below)
  • Buildings for which development approvals are submitted on or after 1 January 2026 will need to not only meet targets for energy intensity but also generate or procure sufficient on-site/offsite renewable energy to achieve net zero energy consumption.

For these purposes, net zero means that buildings consume no more energy than is provided by a combination of renewable energy generated on-site or renewable energy procured from off-site sources for a period of 5 years.

In this definition, energy includes electricity, thermal energy and gas, and excludes diesel used for emergency back-up generation. Other emissions, such as those from refrigerants, are not included.

The definition also refers to operational energy only – energy which is concerned with transport, waste or embodied energy is not considered.

The targets allow for offsite renewable energy to be purchased in order to achieve net zero in recognition of the difficulty for many buildings in achieving net zero by using onsite generation.

Source: Planning for Netzero Energy Buildings technical project report, City of Sydney, May 2021

The latest proposal represents part of the City of Sydney’s strategy to achieve NetZero emissions by 2035 and to work with other Greater Sydney Councils to help them achieve their net zero objectives.

Across Greater Sydney, building operation account for 55 percent of greenhouse gas emissions, according to a report prepared for the Greater Sydney Commission in 2015 (with the City of Sydney LGA, buildings account for 68 percent of energy consumption).

The performance requirements have been developed following stakeholder consultation which commenced in 2018.

All up, the measures will help to save more than $1.3 billion on annual energy bills.

This includes annual savings of $2,750 per 1,000 square metres of floor area for commercial office tenants and $170 per room for owners/operators of hotels.

Additional benefits in savings on health, energy network and emissions costs are expected to reach $1.8 billion.

The planning controls also support the NSW Government’s renewable energy zones through investment and will create demand for jobs and new skills in energy efficiency.

City of Sydney Lord Mayor Clover Moore said the targets would help to reduce energy consumption and lower greenhouse gas emissions.

“Commercial office space, hotels and apartment buildings contribute 68 percent of total emissions in our LGA,” Moore said.

“If we are to meet our target of net-zero emissions by 2035, we need to ensure this sector is contributing to emissions reduction through increased energy efficiency, on-site renewable energy production and off-site renewable energy procurement.

“We have worked with industry and government to develop performance standard step changes that are ambitious but achievable. We are providing a clear pathway and time for developers to improve energy performance and transition to net zero buildings.

Neil Arckless, Lendlease executive development director, said his organisation supported the new standards – adding that the company recently set its own pathway to net zero carbon by 2025 and absolute zero by 2040.

Stockland CEO Commercial Property Louise Mason also endorsed the new standards and stressed that the developer hoped to achieve its own net zero emissions by 2028.