Disclosure of commercial office building energy efficiency - Update November 2009
The following is an extract from a speech by The Hon Peter Garrett AM MP, Minister for the Environment, Heritage and the Arts, Opening speech at the Energy Efficiency Council National Conference, Rydges Hotel, Melbourne, 12 November 2009
The question often asked about energy efficiency is especially true of the commercial building sector, namely, if it's so good, why isn't everyone already doing it?
Part of the answer is that it is not presently possible for prospective buyers and tenants to easily factor environmental considerations and ongoing energy costs into their decision making.
As office buildings are one of the most significant contributors to emissions from the commercial sector, this is clearly an important gap and one that goes to the heart of commercial property transactions.
So I'm especially pleased to announce today that for the first time, Australian governments have agreed to a new national scheme to improve the energy efficiency of commercial office buildings by introducing regulations that will require owners to provide energy efficiency information when selling or leasing.
This is a signal and highly important measure that will produce immediate and lasting benefits.
Starting in the second half of 2010, any building owner that is planning on selling or leasing office space covering more than 2,000 square metres will need to provide up-todate energy efficiency information.
This means all parties - the building owner and potential buyers or tenants - will have access to consistent, credible and meaningful information about a building's energy efficiency to inform decisions when they buy or rent.
The disclosure scheme will be a tremendous driver for green innovation and competition in the commercial office market.
Only this week, reports of a study looking at the US market indicated greener buildings attracted 6 per cent higher effective rents and sold at a premium of around 16 per cent compared to the rest of the market.
I anticipate the disclosure scheme will help drive demand for greener offices that are not only more comfortable to work in, but can also deliver more motivated and productive workers and support clean energy jobs.
The scheme will also apply to office buildings owned by the Australian Government, in line with the Government's commitments under the National Strategy on Energy Efficiency.
Owners who don't comply with this new requirement will risk a penalty.
Although given the number of sustainability leaders in the commercial building sector, I suspect the challenge will be less about compliance and more about keeping pace with a competitive market.
This is an important measure which we will develop, along with more stringent minimum energy performance standards, to greatly accelerate the transformation in the commercial building sector.
But it is not the only string in our energy efficient bow when it comes to targeting greenhouse savings from commercial buildings.
Just last week, my colleague, Minster Kim Carr, announced another 37 projects under the third round of the Green Building Fund, bringing projected savings from projects under the fund so far to more than 101,000 tonnes of greenhouse gas emissions a year, generating investment of almost $75 million.
Additionally, through the Energy Efficiency Trust, the Government will provide $50 million in seed funding for innovative approaches to energy efficiency investment, helping to showcase and mainstream these approaches across the commercial building sector and business operations more broadly.
This is a dynamic set of measures for commercial buildings, spanning carefully targeted regulation, competitive grants and innovative financing.
I also well understand that this is just the beginning of an exciting and transformative journey.
So tomorrow, I will be convening the inaugural Built Environment Sustainability Roundtable, fulfilling a commitment made just three months ago to establish a regular government-industry dialogue on sustainability in the built environment.
I expect this will become the first in regular high-level consultations, with the potential to vary representation as we explore the many sustainability issues and opportunities confronting the built environment sector.
Owners of Australia's large commercial office buildings will have to provide energy efficiency information to potential buyers or lessees starting in the second half of 2010, under a measure designed to improve building energy efficiency.
Disclosure of commercial office building energy efficiency will:
- provide valuable information to buyers and lessees that will allow them to factor energy efficiency and energy costs into their decisions,
- provide valuable information to building owners on the relative energy efficiency of their buildings,
- reassure buyers and lessees that the building they are considering meets the sustainability targets of their organisation,
- encourage reductions in energy use and greenhouse gas emissions,
- help businesses save money on their energy bills and building maintenance costs,
- help stimulate demand for and investment in more energy efficient buildings, and
- have the potential to improve staff morale, productivity and stimulate green jobs.
In the second half of 2010, building owners selling or leasing office space over 2,000 square metres will have to obtain a Building Energy Efficiency Certificate.
These certificates will include a NABERS (National Australian Built Environment Rating System) Energy base building star rating, information on tenancy lighting efficiency and potential energy saving suggestions.
In November 2009, Australian, state and territory government energy ministers approved the parameters of the new disclosure scheme for office building energy efficiency. Commonwealth legislation is now being developed to give effect to the scheme in the second half of 2010.
Between December 2008 and March 2009, this measure was subject to extensive industry consultation. Information forums were held in all capital cities to collect feedback and a total of 41 written submissions were received.
In preparation for the scheme's implementation, a NABERS Energy base building assessment is a great way for building owners to get a snapshot of their building's performance. Property owners who haven't already rated their buildings under NABERS Energy should familiarise themselves with this system.
In a later phase the Government will consider expanding this measure to other building types including hotels, shops, schools and hospitals.
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