The top end of town caught on to the benefits of imposing high standards of energy efficiency in commercial buildings pretty quickly, and now it’s time for the rest of the built environment to get with the program, says Energy Efficiency Council CEO Luke Menzel.

If landlords of mid-tier buildings are wary of paying experts to pursue energy savings that will be passed on to tenants, they needn’t be. Changes to the energy audit standard in Australia and a strong uptake of professional certifications mean investment in energy efficiency pays off, Menzel says.

The drop in the Commercial Building Disclosure scheme threshold next year from 2,000 to 1,000 square metres will have “big implications” for the commercial building and energy efficiency market, he says.

Australia ranks around midway on a scale of developed countries in commercial building energy efficiency and second-last out of 23 when it comes in industrial building energy efficiency.

Menzel describes the Commercial Building Disclosure program as a consumer protection scheme which “doesn’t force anybody to do anything” but disclose energy efficiency of buildings greater than a certain size. With this information in the open, the market can then “do its job”: tenants will look around for better energy value where they can find it and owners who chose to sell will reap a return on upgrades.

The program is supported by the property industry because its members can capture the value of “intangible” investments. A star rating on the front of a building is incredibly easy to communicate, he says.

“We’re bringing in a new cohort of building owners and those who have potentially had less exposure to energy efficiency in the past or who have had less motivation to think about it,” he says. “It’s a very significant opportunity.”

Nevertheless it will be a hard sell to owners of mid-tier properties, many of whom are notoriously disinterested. How can they be convinced to sign up? That’s a tough question, and some landlords might feel overwhelmed by the various bodies at work in the area, which includes the Energy Efficiency Council, the Department of Environment and Energy in Canberra (which runs the Commercial Building Disclosure scheme) and the NABERS program run by the NSW Office of Environment and Heritage. If the motivations of these various bodies are not communicated the right way to property owners, the cause will struggle to find traction. “It’s not appropriate for it to be punitive in any way,” Menzel says.

Spread the word

Encouraging energy efficiency in the commercial property realm is also about connecting owners with professionals capable of squeezing savings out of a building’s operations and procedures. There may also be opportunities for state departments such as the NSW Office of Environment and Heritage or Sustainability Victoria to get involved. “It’s never just one thing when it comes to energy efficiency,” Menzel says. “There is generally no silver bullet.”

Recent changes to the commercial and industrial energy audit standards have cleared up what was an imperfect process, he says, where ambiguous audits would sometimes only inspire the need for further audits. “It ended up being a bit of a snake swallowing its own tail,” he says. “The great concern among many of us was that people were getting audits done and there was nothing actionable in there, and [audit reports] were just sitting on shelves.”

The new standards clear up the process, making it easier to identify energy conservation measures that are relevant and inspire increases in productivity. Sadly, many building owners don’t know the standards have been updated. “There’s a huge opportunity here,” he says.

The biggest question for many building owners, Menzel says, is how to find professionals they can trust. If they felt the greening process was opaque or lacked value in the past, these landlords need to know there has been some significant uptake of key professional certifications over the last couple of years.

A retrofit project on a commercial building is a major undertaking, and can involve business case development, implementation and commissioning. Those who seek tangible results will be happy to know energy savings estimated at the start of the process can be verified at the end, “which is really important for confidence in the sector,” he says. “You need a robust process to demonstrate to a customer that the promised energy savings have materialised.”

Foundations of reform

Menzel came to energy efficiency via a circuitous route, as interests honed during a masters of environmental studies at the University of Melbourne became slowly more focused. “[Renewable energy] is a huge and very complex area. People spend years becoming experts in one discrete part of it,” he says. “There are so many subsets of specialisation, even within energy efficiency, that being an expert on everything is beyond the scope of even the top people.”

He cites Energy Action director, innovation and sustainability Paul Bannister as “an expert” in commercial building efficiency who nevertheless will freely admit the limits of his knowledge when discussing changes to Standards Australia’s energy audit standards with Menzel. He and Bannister are both members of EN001, the Standards Australia committee that has stewardship of energy auditing standards.

The overlap between energy policy and our slow awakening to the long-term cost of casual mistreatment to the environment makes for a kaleidoscopic professional experience, he says.

“It’s been an incredibly challenging time for energy policy over the past 10 years in Australia.” The last year or so may seem comparatively calm, he says, but don’t be fooled. “We’re certainly not out of the woods yet … everyone is catching their breath and asking, ‘what’s next?’”

The National Energy Productivity Plan may have been vaguely derided on its announcement (by some) as a plan to develop a plan, “but at least there is a framework in place,” Menzel says. “All the governments are broadly on the same page as to what the target that that we’re working towards and pulling in the same direction, which is a big change to a couple years before that.”

One quiet achiever has been NSW, he says, where the conservative government’s sensible, workman-like approach has resulted in incremental gains, although policy changes have not been “ground-breaking on an international standard”.

The state is doing a good job by showing support for business, distributing relevant information to the market, setting sensible targets and running stable programs, he says. “What we know from around the world is you don’t need really big flashy initiatives. Flash-in-the-pan stuff can be counter-productive.” Instead, sensible bipartisan policy is what works, “and you just grind at it year after year”.

Germany is consistently rated the most energy efficient nation on Earth because of majority support for what is fairly humdrum policy for 30 years.

“When you’ve got both sides of politics saying, ‘This is a no-brainer; of course we want to use less energy because it means we need to build fewer power plants, it makes our environmental goals easier to meet and it saves us money,’ then that filters through to business.”


Luke Menzel is presenting Building Blocks of Energy Efficiency as part of the Energy Efficiency 1 module at the All-Energy 2016 Conference on October 4 between 1.20pm and 2.40pm.