Update to commercial buildings baseline study acknowledges that it’s time to get moving on energy upgrades 09 February 2023

At the tail end of last year, an exciting report dropped: the Commercial buildings baseline study 2022

Why was it exciting? 

To support the EEC’s work around commercial buildings, I spent a lot of time with my nose in the 2012 version of the report. But so much has changed in the past 10 years. Renewables are huge in a way hardly anyone could have predicted in 2012, Australia has a meaningful net zero commitment, and lots of people are starting to really think through the practicalities of improving energy consumption and reducing emissions in commercial buildings. All of which means that 2012 data is quite out of date, making an update incredibly useful. 

To give those of you with an interest in Australian commercial buildings an idea of what’s new and particularly interesting in the 2022 study, I’ve written up this handy post. 

First, the study found there are more commercial buildings in Australia than previously thought. This means more buildings need energy upgrades for decarbonisation. It also means we need more people to do the work. Good thing the Energy Efficiency Council has been mapping the roles and skills involved in commercial building energy upgrades: information that will be vital for workforce planning to carry out the retrofits needed to achieve net zero buildings and a decarbonised economy.

Second, one of the key questions of the study is how many buildings are undergoing major refurbishment. Unfortunately, data was largely unavailable, meaning we don’t know how many buildings are being retrofitted. It’s interesting, but not surprising, this information isn’t being captured, but my assumption would be that the rate of major refurbishment is low. Several factors would contribute to this, particularly:

  • Resource constraints on decision makers – including financial and time resources – mean there’s little time to think about and plan for energy upgrades. The capital expenditure associated with energy upgrades still tends to prevent many from proceeding, despite the potential for significantly decreased operational costs. Not to mention the reduced environmental impact: as a general rule, the social cost of carbon – or the cost associated with damage from emissions – is still not being considered in building retrofits.
  • Workforce constraints mean there’s a general lack of expert individuals in the market who can specify retrofits, and a lack of qualified individuals to undertake the work. This phenomenon is not unique to the commercial buildings sector, but one that must be rectified urgently to achieve our net zero task.

The study also raises the crucial question of data availability on this topic: if we don’t know how low the rate of major refurbishment truly is, it’s likely there will continue to be a lack of urgency in fixing it. 

The third interesting piece from the study is that overall emissions from commercial buildings are decreasing: they were 23% lower in FY2020 than in FY2012. Emissions to 2050 are expected to reduce 80% on 2012 levels. Importantly, these figures rely on continued grid decarbonisation, not necessarily on an uptick in building upgrades. 

While it’s fantastic news that emissions from commercial buildings are decreasing, and while a 23% decrease is substantial, we need faster emissions reduction rates to reach net zero across the economy by 2050. A linear projection of 80% by 2050 means we fall short of reaching zero emissions in buildings.

In other words, we cannot rely fully on grid decarbonisation to reach zero emissions in buildings. This makes the case for efficient electric technologies – like heat pumps – in commercial buildings particularly compelling, as they can take advantage of a decarbonising grid while using less energy overall. However, we can’t forget about building envelope upgrades to ensure we can size HVAC systems to be smaller than they are now, further reducing energy and emissions. 

There are some additional interesting practicalities about the report, for those who may want to use the data in the future:

  • The current version estimates the total floor area for commercial buildings at 830m m2. The 2012 version did not make such an estimate;
  • The data in the 2022 study has a much higher degree of granularity than the 2012 version. The 2012 study provided data down only to the state and territory level, while the current version goes down to 85 statistical areas across the country; and
  • The current version includes several additional building types that the 2012 version did not. Granularity differs here too, due to the way the ABS tracks construction activity. So direct comparison is not possible, but new building types roughly include:
    • Transport;
    • Factories;
    • Warehouses;
    • Agricultural and aquacultural buildings;
    • Religion buildings;
    • Aged care facilities; and
    • Entertainment and recreation.

Want more on the detail of the report? You can read it here.

This article was written by EEC Buildings Policy Advisor, Julianne Tice. It originally appeared on Julianne's LinkedIn