Old buildings are like cars. Look under the bonnet and you may be horrified by what you see – a dirty contraption that is expensive to run.
Norman, Disney & Young’s new global director for sustainability, Tony Arnel, sees this as an opportunity. When the carbon pricing mechanism kicks in on July 1 forcing many building owners to scrutinise their energy consumption, his engineering firm will be ready, tools in hand, to fix the “guzzlers”, as he refers to most of the building stock in the large cities.
“We see a big market in the ‘retrogreening’ of existing buildings, the 20-, 30-, 40-year-old commercial buildings in Melbourne, Sydney and Brisbane,” Arnel says. “And there are plenty of them. They’re all old technology and they’re energy guzzlers. I see a lot of buildings around Melbourne as energy guzzlers. The reality is, building owners, asset managers and gross lessees are going to be trying to figure out where they can make savings.”
National emission reduction targets have been set of 5 per cent below 2000 levels by 2020 and 80 per cent below by 2050. So cutting energy usage in building stock will be as crucial as increasing renewable power generation.
So-called retrogreening can save up to 40 per cent of a building’s energy consumption, Arnel says. The changes can be funded by Environmental Upgrade Agreement schemes, under which a building owner gets commercial financing and repays via an agreed council levy on the property, at a better interest rate and over a longer time than otherwise.
Melbourne has about 1200 buildings in the city centre and only between 5 and 10 per cent of those are new, energy-efficient sites. Brisbane and Sydney have similar proportions, he says.
“People get very excited about new green-star buildings and that’s fine,” says Arnel, whose former positions include chairman of the World Green Building Council and Victorian Building and Plumbing Industry commissioner. “But the big gains are going to be made by dealing with what we describe as the existing building stock.”
The July 1 introduction of the carbon pricing mechanism – which will require companies to pay a fee of $23 for each tonne of greenhouse gas they produce – will only increase the impetus for this. The extra costs incurred throughout the chain are likely to push up the capital cost of a building by about 2 per cent.
“You break that down into what that 2 per cent stands for and a lot of that’s in labour and the embodied energy in materials – glass, steel, aluminium – and direct electricity costs on sites,” he says.
Arnel says operating costs are also likely to rise by 2 per cent, of which about 60 per cent will be the result of increased spending on energy.
“Where does that lead you? It’s going to mean that building owners, investors and asset managers are going to become a lot more discerning about their designs and use of materials,” he says. “It’s also going to accelerate the uptake of new technologies.”
And that, he says, is exactly what the new rules aim to do.
“This is what a carbon pricing mechanism is all about,” Arnel says. “It’s about changing behaviour. This is all about moving into a new world of efficiency.”