NABERS ratings - the next generation

In the 10 years since it began operations, the National Australian Built Environment Rating System (NABERS) has become a leader in assessing the environmental performance of buildings. Adding even more significance to NABERS, coming of age is the federal government’s scheme requiring office building energy efficiency to be disclosed at sale or lease, which is expected to commence in the second half of this year.

NABERS Energy will be used to disclose the energy efficiency of Australia’s office buildings, under legislation being considered by Parliament. The office building sector is a major greenhouse gas emitter that has been identified by the federal government as a priority for cutting emissions.

The Building Energy Efficiency Disclosure Bill was introduced to Parliament on 18 March 2010. If passed in its current form in July, it is anticipated that the requirement to disclose energy-efficiency ratings will come into effect in October this year.

The Disclosure legislation, affecting offices greater than 2000 m² net lettable area, will require building owners selling or leasing space, or tenants sub-letting office space, to provide a Building Energy Efficiency Certificate (BEEC) to prospective purchasers or tenants. The BEEC will include a NABERS Energy base building rating, an assessment of the existing tenancy lighting and generic energy-efficiency advice. Any advertisement about the sale or lease will need to include the NABERS Energy rating.

The Bill presented to Parliament includes transitional arrangements, which allow existing, current NABERS Energy base building ratings to be disclosed in place of a BEEC for the first year.

The benefits of a NABERS rating

The coming mandatory disclosure legislation will introduce the benefits of NABERS to a new generation of building proponents. NABERS, which is predominantly used voluntarily as a tool to benchmark and report performance, offers ratings for energy, as well as water, waste and the indoor environment.

NABERS, managed by the NSW Department of Environment, Climate Change and Water (DECCW) on behalf of state and federal governments, was adopted nationally in 2000. The NABERS suite of tools was developed to provide a clear measurement of how a building performs across a number of environmental impacts.

The system is simple, allowing building owners and tenants to keep track of their building’s environmental performance with minimal effort. A rating system of between one and five stars is used to rate the environmental performance of buildings, and tools are available for commercial office buildings, homes, hotels and shopping centres. New tools for data centres, hospitals and schools are currently under development.

By providing a straightforward indication of how well Australia’s buildings are performing, NABERS provides a system for comparing the performance of buildings against their market and identifying areas where savings can be made.

Governments around Australia have now set sustainability standards for government-owned and leased offices. This includes seeking to occupy space that has achieved minimum NABERS ratings and also writing NABERS targets into green lease schedules.

A 2009 study looking at low-energy, high-rise buildings by Sydney University’s Warren Centre found a direct correlation between a reduction in operational expenditure and a NABERS rating. In fact, building proponents who disclosed NABERS ratings were found to have achieved a significant reduction on the cost of operating a building. This was linked to the flow-on effects of identifying low-cost, non-technical improvements and enhancements to maintenance regimes and control systems.

The study also found that most buildings have the capacity to easily make energy savings equivalent to half a star - or about a 10% reduction in energy use. For Investa Property Group, one of Australia’s largest portfolio owners, the focus was not on technology or engineering to improve performance, but rather overcoming the non-technical barriers.

Investa’s Sustainability Manager Craig Roussac said the company has used NABERS to achieve ambitious targets for improved energy and water performance, achieving a 25% reduction in energy use across its portfolio since it began benchmarking performance with NABERS in 2003. Over the same period, Investa’s average NABERS Energy rating has increased from 2.5 to 4 stars.

Another major property owner, Industry Superannuation Property Trust (ISPT), has also made substantial savings through non-technical and operational improvements. A 2005-06 environmental audit process, aimed at identifying areas for improvement across ISPT’s extensive property portfolio, has led to water savings of more than 250,000 kL, and energy savings of around 10% across its retail and commercial portfolios. This represents an overall cost saving of $2.5 million since implementation.

In addition to NABERS Energy and Water ratings, leading asset managers Colonial First State Global Asset Management (CFS GAM) has also obtained NABERS Indoor Environment ratings, after assisting with the development of the rating tool.

CFS GAM considers indoor environment quality a key consideration of their corporate social responsibility, a priority in promoting ongoing good health amongst the building’s occupants and for attracting and keeping tenants.

The NSW Department of Environment, Climate Change and Water’s Built Environment Manager, Matthew Clark, believes obtaining and improving a NABERS rating increases a building’s market competitiveness and appeal to tenants.

“In an environment where capital for new build projects is still scarce, the focus for Australia’s property industry is on maintaining the performance and income of existing assets,” Clark said.

“Maximising occupancy and reducing operational costs are integral to this focus.

“Prospective building owners and tenants are looking for buildings where their environmental bottom-line performance can be maximised. NABERS-rated buildings are driving this market forward in Australia.”

NABERS has adapted to the needs of Australia’s built environment stakeholders for 10 years. Thousands of buildings have been rated under the system and since its inception office buildings containing more than 10 million m² of space, or half of the national office market, have rated their energy efficiency using NABERS Energy. Buildings making up 30% of the national office market have also rated their water efficiency using NABERS Water. NABERS-rated buildings have achieved combined annual savings of 200,000 tonnes of greenhouse gas emissions.

Mandatory disclosure will introduce NABERS to a new generation of building proponents, who will benefit from the simplicity of the NABERS rating system.

Tips for getting your building ready for disclosure requirements:

• Start looking for opportunities to reduce the energy use of your building - an energy audit may assist you.
• If your building lacks the necessary sub-metering for a base building rating, put this in place now.
• Collect the documents needed for a rating: energy bills, leases, after-hours requests register.
• Find an assessor. Only NABERS-accredited assessors can provide certified ratings that meet the disclosure requirements. The cost of an accredited rating will depend on the type of rating you are undertaking, the size of your building and the difficulty of gathering the appropriate data.