When is the perfect moment to rejuvenate a wheezing, nondescript office block? Probably around the time the old heating, cooling and air-conditioning system is carried out in a coffin.

An upgrade to an efficient and appropriately sized HVAC system, coupled with a full analysis of where electricity is being extravagantly wasted in a building, can lead to dramatic savings in power bills. But oftentimes uninterested landlords will forego a rigorous virtual test of scenarios and solutions and buy a new system that works pretty much like the old one.

They shouldn’t, says Team Catalyst director PC Thomas, whose modelling work for the landlord of a six-storey Wollongong building resulted in power bills being halved – and a NABERS upgrade from 2.5 stars to 5.

It’s hard to argue with a result like that, but Thomas laments the type of forward analysis simulation work required to get such a result is deemed too much effort.

“We always propose that we’d like to build a model, so that we can test some options,” he says. “[But] until a customer has it in his head that’s a good way to take it forward, we always find that to be a bit difficult.”

Sophisticated clients who apply a lifecycle cost analysis principal to large capital expenditure items are the ones likely to “get it”, he says.

The cost of end-of-life replacement can be significant. A new HVAC system (which includes chiller, boilers, pumps and cooling tower) might represent an investment of $2.5 million, he says, and a calculation on payback won’t be straightforward. “Even though we halved the energy bills [for the Wollongong project] — his saving is $120,000 a year — you put that into a simple lifecycle analysis and it won’t stack, if you’re talking 20 years or something like that.”

When an HVAC system must be replaced anyway, an analysis of the differential in ongoing costs between like-for-like and an energy-efficient alternative will make the investment decision more obvious and ensure a better outcome – and “possibly” a lower capital cost, he says. “The only cost you’re going to bear is the cost of the analysis.”

The building is owned by fund manager Folkestone and leased to government tenants, who are required to rent spaces performing to 4.5 NABERS star level. But the project beat that target to achieve 5 stars. “The performance exceeded everyone’s expectations,” Thomas says.

Simulations will test how well equipment will perform when the going gets tough. Mechanical engineers design systems to manage worst case scenarios, or very hot days, 1% of the time. This means for 99% of the year systems will have more capacity than is required. “If you want to make the building energy efficient then it’s all about trying to ensure your system performs as efficiently as possible in those times of low load operation.”

Simulations are fine for working out overall control strategy but cannot always be relied on for finer control strategy. “Simulation in practice and reality are somewhat different,” he says. “You can do a lot of what-if type options with simulations.”

Air-conditioning plant operation is hard to model, he says, and it is common to underestimate the energy used by the chilled water plant in an air-conditioning system. “People don’t pay a lot of attention to the quality of an installation or to spend money on buying better equipment.” The reason for this, of course, is the split incentive problem; the developer will put in a cheap system, flog the building, and then it’s the tenants’ problem.

The Wollongong project got a boost from dehumidification of air before entering the AC system, he says. “That’s one of the reasons it’s doing so well,” because Wollongong is humid and “you’ve got to know your climate to be able to come up with the right HVAC configuration”.