It's Deja Vu All Over Again

A co-creator of the original NABERS scheme in Australia, Paul Bannister reflects on the uptake of building energy ratings this side of the Tasman. Two years after NABERSNZ launched, are we seeing the change we expected?

I recall, way back in 1999, the launch of Australia’s Building Greenhouse Rating scheme (which later became NABERS Energy). It was a modest affair at the Customs House by Circular Quay in Sydney. Notable at the back of the room were the original development team - all of whom were Kiwis, myself included at the time, (somewhat to the chagrin of the locals). Now, sixteen years later, the scheme has become bigger than Ben Hur in Australia.

NABERS has nearly 80% market penetration, with more than 17 million square metres of Australian office space rated. It’s also demonstrably lifted performance - by the time of their 5th rating, buildings report average energy improvement of more than 25%.
Given all this, the release of our local version NABERSNZ two years ago, came with huge expectations. How’s it gone?

When I talk to industry professionals in New Zealand about the progress of NABERSNZ I hear worried feedback. There's a lot of informal activity but no-one wants to do formal ratings; there's a lot of metering problems with many buildings simply not wired correctly to separate tenant and landlord energy use; no-one wants to be the first to declare their ratings to the world; no-one wants to publish their bad ratings. All of which takes me back to the early days of the scheme in Australia, when we had exactly the same issues. It's like taking a step back in time.

Compared to the first couple of years in Australia, how do I think NABERSNZ is going in New Zealand? With a couple of exceptions, things are exactly as I'd expect.
Firstly, informal rating activity. People seem to play endlessly with the calculator, inputting the required energy use and other data to see where their building sits on the scale - but they’re not prepared to take the leap to an official rating. In the early days in Australia we had exactly the same dilemma, to the extent that I remember ruing that we had given free access to the calculator because it seemed no one would bother to move to the next step of formal ratings.

There were also the same metering issues. When the first portfolios rated their assets – which was at least three to four years after the launch - metering issues were rife. Interestingly, the resolution of metering issues frequently led to reduction in energy use because metering problems were often associated with bad design. New Zealand buildings do seem to have more issues with base building plant on tenant meters, but in most HVAC designs this division creates split incentives that can easily lead to poorer overall efficiency - so correcting the problem isn't just about compliance, it's about good practice.

And what of owner reticence? This is definitely a challenge. In New Zealand we have seen an early burst of ratings at 5 stars out of 6 (market-leading) and even higher – which makes it even less appealing for competing owners to publish ratings which are more modest. Anecdotally there are owners who won't push ‘send’ on a 4 out of 6 star rating – even though it denotes excellence. In my experience, this issue resolves very quickly when the first owner publishes, because then everyone else looks like they have something to hide.

So will NABERSNZ take off in New Zealand, and what still needs to happen?
In my view, the biggest current barrier to NABERSNZ being used more widely is a lack of leadership from the government and major corporate tenants. One of the watershed moments in Australia was when, five years after it launched, the NSW Government started insisting on minimum NABERS ratings for their leased properties. This was followed rapidly by the other states, many major corporates and the Federal government.

This changed the game completely, as suddenly owners had the fear of not being able to secure or retain their blue-chip tenants. Although the NZ government is not quite as ubiquitous a tenant as the various Australian governments, there's no doubt that a NABERS-related leasing requirement from government would send a very strong signal to the market which could prompt the large corporate tenants to do the same - as in many cases their Australian divisions already do. Councils may also decide to play a stronger role in promoting or incentivising NABERSNZ locally – as indeed Wellington City has already started to in a small way, through its Smart Buildings Challenge.

Tenant demand and expectations are major influencers too, of course. The driving factor for NABERSNZ is the tension between what tenants would like and what owners are prepared to provide. Good NABERSNZ base building ratings bring lower outgoings and, at least as importantly, also tend to go hand-in-hand with more comfortable and better serviced buildings, which deliver more functional and productive workplaces. Programs such as CitySwitch in Australia encourage tenants to manage their own energy but also to interact with landlords and push for better base building performance. Green leases can similarly promote this.

Overall, the response and uptake of NABERSNZ in New Zealand is almost exactly mirroring Australia at the same stage of maturity. When owners realise that they have nothing to fear from transparency – and when tenants start seeing the value and pushing for efficiency – public NABERSNZ ratings for office buildings will start to become de rigeur.

 

Paul Bannister
Director, Projects and Advisory Services at Energy Action


Dr Paul Bannister is the original technical author of NABERS, and sits on the Board of the Energy Management Association of New Zealand (EMANZ).

The above article was originally published in the March 2016 edition of The Advocate, the magazine of the Property Council New Zealand.