report executive summary Australian Commercial Building Sector Greenhouse Gas Emissions

Transcription

1 Australian Commercial Building Sector Greenhouse Gas Emissions report executive summary 1999 The Australian Greenhouse Office is the lead Commonwealth agency on greenhouse matters

2 ii ISBN Commonwealth of Australia 1999 This work is copyright. Permission is given for fair dealing with this material as permitted under copyright legislation, including for the purposes of private study and research. Apart from those uses, no part may be reproduced without prior written permission from the Commonwealth. Requests and inquiries concerning reproduction rights should be directed to the: Manager, Communications Australian Greenhouse Office GPO Box 621, Canberra ACT 2601 For additional copies of this document, the complete study or further information please contact the Australian Greenhouse Office, GPO Box 621, Canberra ACT 2601 This summary is available online at the Australian Greenhouse Office website Design Wingrove Wingrove Design Photos Michael Shaw

3 FOREWORD Climate scientists now generally agree that human activity has influenced, and will continue to influence our planet s climate. Wide acceptance of their work has driven the need for the global strategy of the Kyoto Protocol that Australia signed on 29 April Over the next decade the commercial building sector will need to recognise and address greenhouse concerns. This expanding sector with fast-growing emissions can significantly contribute to meeting Australia s greenhouse gas reduction target and simultaneously improve the comfort and health of all Australians in their built environments. FOREWARD The Australian Greenhouse Office is pleased to offer this sectoral report which will contribute to the wider understanding of greenhouse issues in Australia. The study provides a baseline within the commercial building sector for greenhouse gas emissions from 1990 and projects the expected growth of emissions to Along with a similar study on the residential building sector, the report is designed to foster knowledge and debate on limiting greenhouse gas emissions related to the built environment. The Australian Greenhouse Office believes that significant greenhouse gas abatement can be achieved within this sector. I hope that all members of the building industry will play an active role in meeting the challenge to slow global warming. iii I would like to thank the authors of this report, EMET Consultants Pty Ltd and Solarch Group, and recognise the input of the Steering Committee representing industry and government organisations. Gwen Andrews Chief Executive Australian Greenhouse Office December 1999

4 iv Acknowledgements The study was produced for the Australian Greenhouse Office by EMET Consultants Pty Ltd & Solarch Group.

5 CONTENTS Australian Commercial Buildings Sector Greenhouse Gas Emissions Study Objectives 3 Projection Scenarios 3 Key Project Findings 4 Greenhouse gas emissions Emissions by energy source 4 Emissions by end use application 5 Emissions by sub-sector 6 Emissions by building type 6 Emissions due to embodied energy 6 Greenhouse abatement options 7 Impact of existing initiatives 8 Quantitative assessment of an equitable commitment for the building sector 8 vcontents Quantification of the emission gap 9 Potential of voluntary measures 9 Project Conclusions 10 Operating energy related emissions to Greenhouse abatement options 10 Priority areas for abatement 10 Embodied energy 10 Recommendations 11 The way forward for reducing emissions 11 Further research 11 References 11

6 ABOUT THE REPORT 1 AUSTRALIAN COMMERCIAL BUILDINGS SECTOR GREENHOUSE GAS EMISSIONS This study estimates energy consumption and greenhouse gas emissions in the commercial buildings sector over the period 1990 to The primary aim is to provide a basis for the determination of an equitable contribution by the building sector to greenhouse gas emission reductions. The analysis uses existing databases from previous work within the industry by such bodies as ABARE, DPIE, and the Property Council of Australia. EMET s own databases and models are used heavily in the analysis. The use of electricity is responsible for 89% of commercial buildings greenhouse gas emissions. Specific operational energy applications principally responsible for greenhouse gas emissions are cooling (28%), air handling (22%), lighting (21%) and heating (13%). Heating, ventilation and air conditioning (HVAC) and lighting thus account for 84% of commercial building sector greenhouse emissions. Building shell performance has a large impact on the heating, cooling and illumination requirements for commercial buildings. Improvements in the thermal, daylighting and natural ventilation performance of commercial building shells will reduce greenhouse gas emissions. Increasing the efficiency of artificial lighting will reduce emissions directly by lower energy consumption, and indirectly through lower cooling requirements. In his Statement of 20 November 1997, Safeguarding the Future: Australia s Response to Climate Change, the Prime Minister announced a package of measures to reduce Australia s greenhouse gas emissions. He noted that this package of measures was designed both to ensure that Australia plays its part in the global effort required to reduce greenhouse gas emissions and to protect Australian jobs and industry. The Government is therefore seeking realistic, cost-effective reductions in key sectors where emissions are high or growing strongly, while also fairly spreading the burden of action across the economy. The Prime Minister also noted that [The Government is] prepared to ask industry to do more than they may otherwise be prepared to do, that is, to go beyond a no regrets, minimal cost approach where this is sensible in order to achieve effective and meaningful outcomes. Subsequent negotiations resulted in an international agreement to the Kyoto Protocol to the Framework Convention on Climate Change, under which Australia will have an obligation, inter alia, to reduce its rate of greenhouse gas emissions to 108% of their 1990 level by This compares with a BAU scenario prior to the Prime Minister s Statement of 28% emissions growth for the economy as a whole, and around 40% for energy-related emissions. A number of government and industry bodies have taken considerable steps to abate emissions emanating from commercial buildings. Various government organisations have imposed measures that influence the level of greenhouse gas emissions released by new and newly refurbished buildings. Some prominent companies have implemented voluntary greenhouse and energy management programs, and peak industry bodies have embarked on promotional and support programs to assist in the achievement of such improvements. The current combination of existing and proposed abatement measures will provide an improvement over the businessas-usual (BAU) scenario for the sector.

7 For the building sector, the Prime Minister s Statement specified: The Commonwealth will work with the States, Territories and key industry stakeholders to develop voluntary minimum energy performance standards for new and substantially refurbished commercial buildings on the basis of energy efficiency benchmarks. If after 12 months, the Government assesses that the voluntary approach is not achieving acceptable progress towards higher standards of energy efficiency for housing and commercial buildings, we will work with the States and industry to implement mandatory standards through amendment of the Building Code of Australia. This project has been commissioned by the Australian Greenhouse Office (in consultation with the building industry) to determine the baseline of 1990 greenhouse gas emissions attributable to the commercial building sector of the economy. The estimate provides a firm, quantitative basis for the subsequent development of specific greenhouse response measures by industry and government. By quantifying the impacts of a range of building sector influenced possibilities, this study provides a basis for establishing an equitable contribution that the commercial building sector can make to the national objective of reducing greenhouse gas emissions, in line with Australia s obligations. 2ABOUT THE REPORT

8 STUDY OBJECTIVES PROJECTION SCENARIOS OBJECTIVES AND SCENARIOS 3 The study was designed to achieve the following key objectives: 1. Assess the 1990 greenhouse gas emissions attributable to the non-residential building sector; 2. Quantify the BAU emission growth projections, , with and without emission-reduction measures implemented or announced to date; 3. Assess an equitable gas emission reduction commitment for the commercial building sector, taking into account baseline and projected emissions growth to 2010 and the Kyoto Protocol commitment for Australia as a whole; 4. Quantify any gap between the proposed emission reduction commitment to 2010 for the building sector and the projected emissions growth with measures implemented or announced to date. The study focused primarily on greenhouse gas emissions associated with the operation of commercial buildings, including emissions associated with the activities taking place within all buildings (eg tenant energy consumption). Emissions attributable to both building owners and occupants were covered by the study. The evaluation procedure quantified greenhouse gas emissions for the following scenarios in relation to the BAU forecasts: the abatement expected to be produced through natural improvement in technologies and systems, over and above that allowed for in the ABARE forecasts; the abatement expected to be achieved by policies and measures announced or implemented since November 1997; the abatement likely to be achieved through normal market forces (ie. desirable payback period); the gap between the level of emission abatement predicted from the above, and the Kyoto target. As an aid to future policy development, a summary relationship between abatement level, implementation cost and return on investment was produced in the full study (available from the Australian Greenhouse Office; see inside front cover for details). Quantitative information was derived to enable the identification of policy options for reducing sectoral greenhouse gas emissions. The study was not intended to identify and investigate such policy options.

9 KEY PROJECT FINDINGS Figure 1: Commercial buildings energy share by energy source 1990 (ABARE 1997) Greenhouse gas emissions The study found that the commercial buildings sector is 60 expected to increase its greenhouse gas emissions to Emissions nearly twofold from 32 Mt of CO 2 per annum to 63 Mt between the years of 1990 and 2010 under the BAU scenario. Refer to figure 1. Emissions other than those directly related to energy consumption were negligible (less than 2%). An improvement over the frozen efficiency case, of approximately 3.8 Mt per annum was found. This has been included in the BAU forecasts and is due to the continued level of efficiency improvements achieved in the sector since the middle 1980 s. Emissions by energy source Figures 2 and 3 depict the proportions of energy use and greenhouse emissions respectively for each energy source used by the commercial buildings sector in Electricity was found to be the largest energy source (65%) but was responsible for an even larger proportion (89%) of the total greenhouse gas emissions due to its high average Emissions (Mt of CO -e per annum) Kyoto target level Figure 2: Commercial buildings energy share by energy source 1990 (ABARE 1997) 0% WOOD 3% COAL KEY PROJECT FINDINGS greenhouse gas emission factor. Natural gas was the next highest cause of greenhouse gas at 7% of total emissions. 7% PETROLEUM PRODUCTS 25% GAS 65% ELECTRICITY Figure 4 (over page) shows the proportions of energy source usage in the commercial buildings sector, and the relative trends between the years of 1990 and It can be seen that in the BAU scenario the relative proportions of electricity and gas are not expected to change significantly but energy use, and therefore greenhouse emissions, are expected to nearly double over these two decades. Figure 3: Commercial building greenhouse gas emission share by energy source 1990 (ABARE 1997, EMET 1999) 0% WOOD 1% COAL 3% PETROLEUM PRODUCTS 7% GAS 89% ELECTRICITY

10 Figure 4: Commercial building trends in energy consumption by energy source for the BAU scenario (ABARE 1997) Electricity KEY PROJECT FINDINGS Energy consumption (PJ per annum) Gas Petroleum Wood Coal Emissions by end use application Figure 6: Commercial building greenhouse gas emission share by end use 1990 (EMET 1999) 5 Figures 5 and 6 show the proportions of energy use and greenhouse gas emissions respectively caused by energy applications within the commercial building sector in In energy terms, heating is the largest single end use in the commercial buildings sector at 33%, but is the fourth largest with respect to greenhouse gas emissions. Space cooling, ventilation and lighting were found to be the three most significant causes of emissions, together accounting 4% COOKING & HOT WATER 12% OFFICE EQUIPMENT & OTHER 13% HEATING 21% LIGHTING 22% VENTILATION 28% COOLING for 71% of the total. The actual proportion applicable to a specific building type may vary substantially from this commercial sector average. Figure 5: Commercial building energy share by end-use 1990 (EMET 1999) Figure 7: Commercial building greenhouse gas emission share by sub-sector 1990 (ABARE, EMET & NSW DoE data) 6% COOKING & HOT WATER 9% OFFICE EQUIPMENT & OTHER 15% LIGHTING 16% VENTILATION 21% COOLING 33% HEATING 4% COMMUNICATIONS 11% RECREATION 17% FINANCE & BUSINESS 32% RETAIL/WHOLESALE 36% PUBLIC ADMIN & COMM SERVICES

11 Emissions by sub-sector Figure 7 (previous page) describes the proportions of emissions emanating from each sub-sector of the commercial buildings sector. The government buildings sector (public administration and community services) was found to be the most significant sub-sector, generating approximately 12 Mt of CO 2 per annum (36% of total sector) in The retail/wholesale sector was a close second at 32% of total emissions. Emissions by building type The commercial office building was found to be the most significant building type, responsible for an estimated 27% of total sector emissions in Hospitals formed the next largest group at 13%. Figure 8 shows the 1990 breakdown of CO 2 emissions from the Commercial Buildings Sector, by building type. Offices and hospitals together account for around 40% of total emissions. Figure 9 (over page) shows the 1990 breakdown of CO 2 emissions by sub-sector and energy end use application. The combined public administration and community services sector is shown to be the most intensive emitter, at a total of 12 Mt of CO 2 per annum. The retail/wholesale sector is the next largest at 10 Mt per annum. Emissions due to embodied energy Greenhouse gas emissions related to embodied energy (energy consumed in the production and placement of building materials) were found to be of less significance than those related to operating energy. Embodied energy emissions were found to be approximately 8% to 10% of buildings. This was the proportion found in studies of four actual buildings (McArdle et al, 1993 and EMET, 1999) assuming a 40 year lifespan. This proportion would vary substantially for different building types, and for those using far less operating energy (eg schools, warehouses, non air-conditioned offices and accommodation) it would be much higher. 6KEY PROJECT FINDINGS Figure 8: Commercial building greenhouse gas emissions by key building types 1990 (EMET 1999) Other recreation Other public admin & comm services Other retail & wholesale Registered clubs Fast food restaurants Schools Communications Accommodation Household appliance & hardware stores Department stores Clothing & fabric stores Food stores Hospitals Offices CO Emissions Mt per annum 2

12 Figure 9: Commercial building greenhouse gas emissions by sub-sector and end use (EMET 1999) KEY PROJECT FINDINGS 7 A holistic understanding of energy consumption and the associated greenhouse gas emissions must take into account both the embodied energy and the operating energy. Embodied energy is becoming of greater significance as a proportion of whole-of-life energy consumption due to several reasons: more energy intensive materials are being used in buildings than previously e.g. aluminium, stainless steel, coated glasses and high strength concretes; buildings are often bigger than previously requiring greater quantities of materials; buildings are being refurbished more frequently than previously requiring more materials; more machine intensive, rather than labour intensive, techniques are used in construction, requiring energy derived from fossil sources; building materials are transported greater distances than previously so transport energy is likely to be greater; technologies reducing operating energy are constantly being developed and implemented; in the foreseeable future it is likely buildings will generate some of their own operating energy, by devices such as photovoltaics, which may be integrated within the building fabric. Greenhouse abatement options The analysis of greenhouse abatement options for the sector (refer to Table 1) produced the following results: using a payback criteria of 2.5 years, as the typical cut-off level for private sector voluntary investment, a reduction in greenhouse gas emissions of 12 Mt of CO 2 per annum may be expected to be achieved under a voluntary scenario (note that this includes the 3.8 Mt related to the frozen efficiency improvement); using a positive Net Present Value as criteria, the expected level of reduction would increase to between 15 Mt and 20 Mt of CO 2 per annum depending on the applicable interest rates; the most significant opportunity for greenhouse gas emissions abatement initiatives is lighting, showing a potential reduction average of approximately 70% of total emissions; no significant bias was found in the potential for emission abatement between new buildings and refurbishment of existing buildings with the average being close to 50% for each type.

13 Table 1: Greenhouse gas abatement potential and cost effectiveness of alternative groupings of initiatives (EMET 1999) Initiatives Grouping Criteria Greenhouse Gas Abatement Potential Mt of CO 2 per annum Cost of Abatement $/t CO 2 per annum Lighting systems initiatives HVAC systems initiatives Processes & other initiatives Total Average cost for group Marginal cost of last initiative Payback period Immediate (no cost) Nil Nil Greater than immediate and less than 1 year $89 $135 Between 1 and 2.5 years payback $160 $235 Between 2.5 and 5 years payback $332 $530 Positive net present value 4% discount rate $297 $650 8% discount rate $260 $575 15% discount rate $171 $500 8KEY PROJECT FINDINGS Specific target improvement 30% improvement over BAU $406 $1,900 Achievement of the Kyoto target Not cost-effectively achievable using conventional energy management techniques and technologies. Impact of existing initiatives Existing and announced greenhouse abatement and energy management initiatives may be expected to produce an impact of 1.4 Mt of CO 2 per annum only, due to their current low level of penetration or application. A full application of these measures may be expected to achieve a level of reduction of 8.5 Mt of CO 2 per annum by the year This level of reduction, is however lower than the reduction available from a combination of voluntary measures (cost-effectiveness) and improved level of awareness in the marketplace (12 Mt at 2.5 year payback). Quantitative assessment of an equitable commitment for the building sector It was found that the Kyoto target of 108% of the 1990 emission level could not be achieved using conventional energy management techniques. As a realistic target, a 30% emission reduction improvement in the commercial building sector by the year 2010 has been proposed. This involves a reduction of approximately 19 Mt of CO 2 per annum in 2010 from the BAU scenario, but would require additional investment of $4.2 billion (1990 dollars). Given the length of the marginal payback period involved, this is an unlikely voluntary scenario for any component of the Commercial sector.

14 Australian Commercial Building Sector Greenhouse Gas Emissions Executive Summary Report 1999 Quantification of the emission gap Figure 10 illustrates the impact of various policies/ measures over the BAU and Frozen Efficiency cases. Shown on the figure are the following scenarios of potential greenhouse gas abatement: the gap between the level of reduction expected in 2010 based on the current status of policies/measures and cost-effectiveness and the 30% target (GAP 1 of 8.8 Mt of CO 2 per annum) and the Kyoto target (GAP 2 of 18 Mt of CO 2 per annum). KEY PROJECT FINDINGS the abatement level expected from the existing measures and policies for government buildings, and new/refurbished private sector buildings (segment [1]); the additional abatement level estimated to be voluntarily achieved due to economic justification and better knowledge of emission saving options (segment [2]); the Kyoto target and the alternative 30% emissions reduction target; Potential of voluntary measures The study found that voluntary measures have the potential to produce higher levels of abatement than any of the current policies/measures. However for greatest effect, these would need to be reinforced by a program of awareness and education and an expansion of mandatory minimum performance standards for new building developments and refurbishments. These minimum standards would capture those buildings which currently do not achieve even the basic, cost-effective levels of improvement. Figure 10: Forecast commercial building greenhouse gas emission levels and comparison with alternative target scenarios (EMET 1999) Frozen efficiency emission level [1] [2] 50 BAU forecast GAP-1 Emissions (Mt of CO -e per annum) Kyoto target level 30% target emission reduction level GAP Base emission level Cost-effective measures New building policies (non govt.) Government sector Frozen efficiency Kyoto target 30% target

15 PROJECT CONCLUSIONS Operating energy related emissions to 2010 The BAU scenario for the Commercial Buildings Sector predicts an increase in energy related greenhouse gas emissions from a level of 32 Mt per annum in the year 1990 to 63 Mt for the year Achieving the Kyoto target level of 108% of the 1990 emissions would require a net reduction for the sector of approximately 28 Mt of CO 2. The baseline study indicates that this level of reduction is not likely to be achieved using conventional energy management techniques alone. Greenhouse abatement options The following greenhouse gas saving initiatives were identified: Priority areas for abatement major component sectors Public Administration and Community Services and Retail major building types offices and hospitals priority energy source electricity priority systems lighting equal priority to new and existing buildings Embodied energy Emissions related to embodied energy were found to be of less significance for the more energy intensive buildings such as offices, however a lack of substantive data was identified. PROJECT CONCLUSIONS voluntary measures may be expected to achieve a reduction in emissions by 12 Mt of CO 2 per annum using a typical investment criteria of 2.5 years payback; the level of reductions which may be expected to be achieved using a positive NPV would be between 15 Mt and 20 Mt of CO 2 per annum depending on the applicable interest rates; 10 the most significant area of application for greenhouse gas emissions abatement initiatives is lighting, which shows a proportional emission reduction potential of 70%; no significant bias was found in the potential for emission abatement between new and existing buildings with the average being close to 50% for each type. It should be noted that in an environment of carbon/ emissions trading, energy prices could rise. This would facilitate the uptake of energy-saving technologies.

16 RECOMMENDATIONS RECOMMENDATIONS The way forward for reducing emissions Sections of the commercial buildings sector which have had a higher level of performance monitoring and information dissemination have shown a sustained level of improvement in efficiency. This fact, together with the other trends identified in this study, indicate that a program of voluntary measures reinforced by a program of awareness and education and an expansion of mandatory minimum performance standards for new building developments and refurbishments would achieve the most cost-effective level of emission reductions. REFERENCES Bush, Shane et al 1997, Australian Energy Consumption and Production: Historical Trends and Projections to , Australian Bureau of Agricultural and Resource Economics (ABARE), Canberra. EMET Consultants and Solarch Group 1999, Baseline Study of Greenhouse Gas Emissions from the Commercial Buildings Sector (study commissioned by the Australian Greenhouse Office), Canberra. McArdle, S. A. et al 1993, Embodied Energy Thesis: Case Study Analysis of the Embodied Energy of Office Construction, School of Architecture and Building, Deakin University, Geelong. 11 Further research The study was conducted using existing databases and available information. The breakdown of energy use by building type and sub-sector was calculated by combining several different sources with a heavy reliance on EMET s own databases. To improve the accuracy of the forecasts, it is strongly recommended that a more comprehensive study on the energy use within the sector be undertaken, particularly in priority areas of energy application, and emission reduction. NSW Department of Energy 1996, Energy Use in the NSW Commercial Sector, NSW Department of Energy, Sydney. NSW Department of Energy 1998, Analysis of Energy Use in the New South Wales Manufacturing Sector, NSW Department of Energy, Sydney. A lack of substantive data has been identified in the area of embodied energy, and further research has been recommended.