Around 70 people gathered for a workshop at Legal and General Property’s HQ in the City early December to hear about a remarkable transformation that has taken place in the energy efficiency of new office buildings constructed in Australia and to consider if the UK could follow suit.

At the turn of the century, new office buildings in Australia were no more energy efficient than typical existing office buildings, possibly less. Over the last 15 years, there has been a remarkable transformation in their energy efficiency, while existing buildings have also improved markedly. 

In 1999, New South Wales decided to measure and benchmark the energy used by a landlord to service a building and to call this a base building rating. Over the years, this developed into a national rating scheme and became part of NABERS^[i].

Base building performance is determined by the building design, its HVAC services, controls and management - all the things the developer, designer, procurement and delivery team and operations and maintenance people are responsible for.  It has been demonstrated that, provided operating hours are taken into account, other aspects of tenant activity have very small effects on measured base building performance. By providing information where the agency exists to improve it, the base building rating allows landlords to demonstrate how good and well-managed their buildings are.

Today, nearly all new prime office buildings in Australia have what the UK would call excellent energy efficiency, as measured by their actual base building energy use. 

Observers in the UK can draw two conclusions:

• First, it is remarkable that we actually know this situation to be true.  This is because Australia has a robust and credible means to measure and verify the base building operational energy performance of all large commercial offices. And these outcomes are publicly disclosed.
• Second, it has proved possible to make dramatic improvements in the energy efficiency of new office buildings over this 15 year period.

New UK office buildings have not followed the same trajectory, with base building services in new prime offices estimated to use at least twice as much energy per m² to provide a comfortable working environment compared with typical Australian buildings, and four times as much as the very best Australian counterparts.  

There are no intrinsic physical reasons why base building energy performance in new UK offices cannot be as good as Australia’s.  However, the lack of a disclosure culture has contributed to the UK falling behind, as base building energy in use is neither measured nor targeted; and the design of energy efficient offices is rarely informed by feedback from real world measurements.  Instead, the UK’s ‘design for compliance’ regime targets the energy performance of the same regulated loads as the base building metric, but concentrates on modelled theoretical results, not performance outcomes.

By contrast, Australia has pioneered a ‘design for performance’ culture.  Developers and their teams sign up to – and then follow - a “Commitment Agreement” protocol to design, construct and manage new office buildings to agreed levels of actual in-use performance.  By using the process, and learning from their experience, Australian teams can now design, build, commission and operate office buildings that routinely achieve measured performance in line with design intent, albeit after some (essential) fine-tuning that British buildings seldom receive.

The Commitment Agreement requires the developer to:

• Design and construct the premises to operate at the target energy performance level;
• Provide data to allow the operational performance to be verified after 12 months of full occupation;
• Provide all consultants and contractors involved in the design, construction, commissioning and management of the Premises with written notice of the Commitment Agreement;
• Include in agreements to lease and leases with all tenants a clause that discloses the Commitment Agreement;
• Use best endeavours to achieve and maintain the commitment rating for the duration of the lease;
• Provide the tenants with annual updates of the performance rating for the Premises.

It also has some technical requirements:

• Advanced simulation of the design, which can reliably predict actual operational energy use for individual sub-meters;
• Design reviews by independent experts;
• The rating must be reported to the scheme administrator once it has been measured.

Extended commissioning and post occupancy fine tuning against expected performance is invariably necessary to achieve target performance, illustrating common ground with the Soft Landings Framework.  Integration of Commitment Agreements and Soft Landings would seem to make sense in the UK, although this is not the case yet in Australia.

While it is virtually certain that new office buildings in the UK are dramatically less energy efficient than those in Australia, it’s perhaps most shocking to admit that the information needed to confirm this is absent in the UK.  How can we catch up?

We are familiar with whole building operational energy ratings, used for Display Energy Certificates in public buildings. They generally measure the annual energy consumption from whole building utility meters.  In Australia, utility metering generally follows the landlord tenant split in responsibility for management and control.   One set measures so-called landlord services: the energy used by the HVAC serving the whole building, the hot water, the lifts and the other services in the common parts.  This produces the base building rating.  Separate meters measure the energy used by each tenant for their lighting, small power and ICT to give each tenant a tenant rating. In practice, it is the base building rating that has enjoyed stellar success and attracted much international attention.

NABERS Energy motivates better than average performance by using a 1 to 6 star scale, with 6* half-way from 5* to true zero, not the zero carbon mirage the UK government was pitching.  The market transformation made possible by metering arrangements has actually come about because major office occupiers can now specify the performance they want. Federal and State governments set the ball rolling, saying they would only rent buildings that rated 4.5 stars or better.  Some corporates followed suit. In 2006, the imperative for new build to be energy efficient was sealed when the Property Council of Australia stated that, to qualify for the Prime or grade A office categories, a minimum 4.5* base building energy rating would be required (increased to 5* in 2012). That would be the equivalent in the UK of the BCO spec requiring excellent energy efficiency based on measured in-use performance. 

This created a challenge for new office developers: how to attract pre-lets and underwrite their investment, given that market credibility of energy efficiency was being driven by investment grade measured energy performance outcomes on existing buildings?  Clearly, developers needed to promise a guaranteed level of base building operational performance to their prospective tenants.  This implied two things: first an ability to deliver energy efficient base buildings and secondly an independent process to give such claims credibility in the market and authorise the developer to make the claim.

Necessity was the mother of invention. The NABERS Commitment Agreement, a route map designed to ensure that new offices would operate at the energy efficiency level they decided to target, was conceived.  And it must take a substantial part of the credit for turning round the energy efficiency of new office buildings in Australia over the last 15 years.  Developers there are now starting to target 5.5 and 6 stars.

In summary, the market transformation in Australia has occurred through a virtuous circle of drivers:

• The Commitment Agreement empowers developers to deliver good performance. 
• The promise of a guaranteed level of base building operational performance enables office developers to attract prospective tenants and underwrite their investment.  
• Major office occupiers have been inspired to specify the performance they want. 
• Market credibility is assured by investment grade measurements of energy performance, summarised in a simple star rating.

This workshop should be the first step on the path to putting the UK on a similar virtuous circle, and a regime where new UK offices compete with the best in Australia … and are able to prove it.

_{[i] NABERS (the National Australian Built Environment Rating System) covers energy, water, indoor environment and waste. It is based 100% on measured performance outcomes. The NABERS Energy rating scheme has enjoyed particular success in driving improvement in energy performance of larger prime office base buildings in Australia, for which it is now mandated (on sale or let) by the Building Energy Efficiency Disclosure Act 2010. It is also available, but less widely used, for office tenant ratings, whole office buildings, and for shopping centres, hotels and data centres.}