Compulsory energy ratings for office buildings, will New Zealand follow Australia?

Thursday, 23 August 2018

The IAG building in Show Place, Christchurch, has a 5.5 star energy rating driven by Australian tenant, insurance giant IAG.

The New Zealand Green Building Council is lobbying the Government for compulsory energy efficiency ratings for commercial buildings as has been mandated in Australia.

The organisation was founded by large corporates and businesses in New Zealand to promote the benefits for businesses and consumers of healthy and sustainable buildings in New Zealand.

It has some 450 members including property owners, energy and construction companies, engineering specialists and architects.

It looks enviously across the ditch and sees a shining example of what can be achieved when Government and property owners get in behind these objectives.

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Andrew Eagles chief executive of the NZ Green Building Council is lobbying for mandatory energy efficiency ratings for office buildings.

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Last year Australia made it compulsory for commercial space of 1000 square metres and more for lease and sale to have an energy efficiency rating, lowered from 2000sqm and more previously.

New Zealand Green Building Council chief executive Andrew Eagles said the Australian example was a good place to start. Commercial space of 1000sqm and more would capture most commercial buildings in New Zealand.

The ratings tool the green building council used was NABERSNZ, developed in Australia, adapted for New Zealand, and licensed by the Government for use in New Zealand.

In New Zealand ratings are voluntary and in five years since NABERSNZ was introduced about 100 ratings have been done which includes buildings which have had more than one rating. It scores buildings' energy performance from zero (very poor) to six (aspirational) stars.

Eagles said there was a lot of opportunity to improve.

15 Stout Street, in central Wellington, with a market-leading energy efficiency 5-star rating is home to the Ministry of Business, Innovation and Employment.

While there could be provisions for older buildings where it was harder to upgrade energy systems, 'a line in the sand' needed to be drawn.

The Government seemed 'warm' to low cost mechanisms to improve productivity and improve energy efficiency.

'At the moment we've got a failure of the market in that people are going out to rent buildings and they don't know how that office is going to perform, whether it's energy efficient or healthy or those kinds of things.

'The owner having to display this (a rating) to people coming to rent that space will greatly help the business community make decisions about office stock that's appropriate for them.'

'What we would also call for is the Government to lead by themselves, saying for instance that we are not going to lease anything that's below 4-star from a certain period.'

Connal Townsend, chief executive of the Property Council of New Zealand, said there are more important issues for its members than energy-efficiency ratings like problems in the construction industry and infrastructure funding.

New Zealand was lagging compared to other western countries. Energy efficiency ratings had been required in the 28 countries in Europe since 2005, in Australia since 2009 and in the 25 largest cities in the US.

NABERS had not only saved Australians millions of dollars in energy costs but also generated greater productivity and well-being for people at work.

A 2015 Australian report, 'Commercial Building Disclosure', estimated A$44 million in energy savings and A$168m in productivity gains from NABERS.

'We have a lack of leadership from Government themselves. They had a clear directive from the National Government to not progress this type of thing.

'And then we have a lack of leadership from the Property Council of New Zealand who aren't standing up for the environment or wellbeing in buildings.'

The Property Council has about 550 members representing commercial property owners owning more than $50 billion of property.

Eagles said in Australia compulsory NABERS ratings were driven by the Property Council of Australia and businesses weighed in behind that. At every event they held they were championing green and healthier buildings.

'The Property Council of New Zealand have not had this subject at their events, nor are they championing it or lobbying for it, or in case studies or in their magazines. There's just no engagement,' Eagles said.

Nearly 50-year-old Aorangi House in Wellington was revamped last year to achieve a 5-star NABERSNZ rating.

The Property Council of New Zealand was holding its National Conference soon in Rotorua but there was no mention of green buildings in the programme.

'And nobody is going to talk about how property needs to get to zero carbon for all our new buildings and all our existing buildings and the fact that our buildings are making us sick,' Eagles said.

Even if building owners did not want to get an energy-efficiency rating, it was going to happen.

'We can't reach our zero carbon goals without doing this.'

'The future is about measurement and reducing.'

There was 'a tidal wave' of international investors requiring energy ratings.

'In five to 10 years you are going to be embarrassed if you don't have a rating and are doing well, and millennials won't want to work there.'

Responsible property owners like Kiwi Property, Argosy, Stride and the Auckland Council were energy rating their office buildings because they knew they would benefit by saving energy costs and attract better clients who paid more and stayed for longer, Eagles said.

Property Council chief executive Connal Townsend said the council had no view on whether NABERSNZ should be mandatory and had not sounded out members on that. He agreed the council was not championing energy efficiency.

But he suspected members would rather the property council focus on the future of the construction industry, infrastructure funding, planning reforms and seismic ratings for buildings.

While the council shared a logo with the Property Council of Australia and they occasionally attended each others conferences the Property Council of New Zealand did not follow the advocacy of its Australian counterpart.

Townsend said the council had always regarded the NABERSNZ and Green Star ratings tools as a private sector initiative.

The council supported NABERSNZ and could see it had a good level of take-up in the absence of data to the contrary.

The new Government had little to say when asked about its position on making NABERSNZ mandatory and taking a lead on energy efficiency.

'The Minister is not considering making this (NABERSNZ) mandatory,' a spokesperson for Energy and Resources Minister Megan Woods said.

'EECA (Energy Efficiency Conservation Authority) has commissioned work on studying NABERSNZ further but this was not commissioned by ministers.'