Building threshold changes in CBD program
Economic Benefits of Lowering the Threshold
The CBD program has proved to be a low-cost, high-value program which encourages substantial energy efficiency improvements in the commercial office sector.
ACIL Allen (2015) states that extending the threshold for mandatory disclosure from 2,000 to 1,000 will yield economic benefits of $24 million in net present value assuming a 7 per cent real discount rate.
Which Buildings Will Be Captured by Extending the threshold for mandatory disclosure reduces from 2,000 to 1,000?
There is a larger percentage of private ownership for a smaller office or retail buildings. These private landlords may have limited knowledge around energy efficiency and rely on information passed on from their managing agents.
How Much Additional Floor Space will be Included when the threshold for mandatory disclosure reduces from 2,000 to 1,000?
Conservative estimates of small building floor space suggest that approximately 1.5 million m2 of additional floor space would be captured by the CBD program if the threshold was lowered to 1,000 m2.
A report by ACIL Allen (2015) showed that the volume of floor space between 1,000 and 2,000 m2 that was found to be voluntarily rating as at 25 October 2014 was 0.23 million m2 (estimated based on analysis of NABERS data).
This was subtracted to arrive at an estimate of the additional ‘mandatory’ floor space that would be covered by the CBD scheme of 1.27 million m2.
Direct connect electricity meters that are manually read using the display on the meter itself are exempt do not need to be validated.
Will the CBD program be extended to other asset classes?
A 2015 report from ACIL Allen recommended against extending the CBD program to cover the other buildings types which currently assessable under the NABERS program, namely Shopping Centres, Date Centres and Hotels.
- The rating tool for data centres is relatively new
- Electricity consumption can be very commercially sensitive, particularly for cloud providers, since it provides in-depth information about business profitability and competitiveness. Total processing and storage capacity is likely to be even more commercially sensitive. Some data centres might thus be unwilling to allow third parties to access energy consumption data and could result in resistance to any mandatory measures.
- The accommodation sector made up 5% of total commercial building energy use by building type in 2012 (ClimateWorks Team Analysis based on Pitt&Sherry, 2012)
- The NABERS program only covers hotels and not motels, serviced apartments, holiday parks, visitor hostels, bed and breakfasts (B&Bs) or resorts
- There is a relatively low turnover with an annual turnover of hotels sold numbering between 20-30 / annum
- Uptake of NABERS by the Hotel sector is low as energy is not a driving concern
- The retail sector made up 36% of total commercial building energy use by building type in 2012 (ClimateWorks Team Analysis based on Pitt&Sherry, 2012)
- The NABERS program is only suitable for larger shopping centres which accounted for 16.4 per cent of all retail area and no more than 50 per cent of energy use (ACIL Allen 2015).
- Shopping centres are already currently required by state legislation to disclose (base building) energy costs to prospective tenants.
- Information on the energy efficiency performance of a shopping centre, made available through mandatory disclosure, is unlikely to exert much influence on the decision-making of prospective tenants.
- Voluntary ratings are available for residential homes under the NABERS scheme
- The federal government are considering this under a separate program