“All new buildings can be built to be all-electric today. The technologies and desire exist. There is no reason not to build them.” - The Green Building Council Australia.
We are being told to plan for an electric future. At least, a future without gas. For some, it is a sensible and much-welcomed shift away from our reliance on non-renewable energy sources.
Others are not so convinced. Property developers, for example, may perceive gas cooktops in a residential building as a non-negotiable. The hesitancy in changing to an all-electric building is mostly due to the cost and plant space needed to support greener alternatives. Tenant expectations also play a big role in the reluctance to give up gas, as does insufficient education on the opportunities and benefits of renewables.
In this Knowledge Series, we discuss The Green Building Council Australia’s ‘Practical Guide to Electrification: For New Buildings’, highlighting key data and considerations and adding our experience in helping our clients achieve this goal, including how we did it. In doing so, we discover what going all-electric looks like on residential projects, the surprising benefits and how to achieve it without costing margin.
With this in mind, let’s begin by looking at some of the main concerns or pain points experienced in the gas to electric transition as shown in the GBCA’s report.
Pain point 1. Cost and space blow outs
All-electric buildings require the following infrastructure:
Electric water heating is slow, and therefore needs more storage tanks to ensure hot water is ‘ready for use’. Developers are understandably hesitant to put in larger plant and increased substation requirements as these can be costly and result in less sellable area in their development.
Along with space, electric buildings take up a large amount of power. Electricity consumption, including time of use and demand charges, can greatly impact energy costs. This is one of the core reasons buildings are not going completely electric. Thankfully, there is a range of options to manage the power usage in an electric building.
Consider: Design efficiency benefits and opportunities
Three factors to consider that affect heating costs are: equipment efficiency, connection fees, and running costs. Despite taking up more space, electric options such as heat pumps are significantly more efficient than gas boilers and heaters and therefore increasingly desirable.
Furthermore, a well-designed electric building includes management systems to control the amount of power being pulled from the grid. This system can take advantage of lower electricity prices at different times of day to heat water to be used at a later time, otherwise known as utilising off-peak power supply. All-electric buildings can also be designed to take advantage of the lower heating hot water temperatures required for heat pumps.
Removing gas avoids the need for gas connection costs, gas pipe reticulation, ventilated gas risers and gas meter rooms. Naturally, this leads to savings, asset resilience, and future proofs from costly maintenance and removal of infrastructure for electric infrastructure upgrades.
Domestic Electric hot water solutions mean finding ways to make the additional infrastructure fit without losing valuable space. Neuron is leading the way in product innovation, collaborating with Rheem to provide energy storage solutions that optimise space use. For example, installing remote storage tanks in dead basement areas that can’t be used for parking can free up valuable roof space, reducing the associated plant roof footprint by up to 80%. This is an early example of where technology and engineering analysis tools can inform better product design.
Innovative system design and re-distribution of plant space requires substantial planning. The process of vetting design options is far too laborious to do so manually while also keeping to the design budget and program. Neuron was created to meet this need. We find ways to maximise efficiency, value and cost savings to save time, money, space across the whole building.
Pain point 2. Supporting EV uptake and green lifestyle solutions
As we know, Electric Vehicle charging stations are getting closer to being a prerequisite in buildings as electric cars become more common. State and Federal governments are taking action to support investment and uptake of low emission vehicles and the charging infrastructure.
“Transport is undergoing a major transformation towards electric technology. Consumer demand for electric vehicles (EVs) is increasing, with battery electric and plug in hybrid vehicles projected to make up 50% of new light vehicle sales in New South Wales and Queensland by 2030.”
One of the main perceptions is that EV chargers and electrified domestic hot water will lead to maximum demand power blow outs. While we know EV chargers use significant extra power, there are plenty of misconceptions regarding EV and domestic hot water power requirements that property developers should be aware of.
Consider: Supporting tenants through key technology transitions
Electric vehicles currently only account for less than 2% of the light vehicle market. However, the number of electric cars sold in 2021 was triple the number sold in 2020. As we move into a greener future, this is set to increase. Putting in the infrastructure now will save costly amendments later.
Out of the 80 projects we worked on in the past 12 months, 100% of them included some form of EV chargers. New buildings can and should be designed for the additional electrical loads and space requirements needed to accommodate the expected uptake of electric vehicles.
While EV chargers use a lot of power, the perception that power requirements will blow out is false. There are a lot of Demand Side Power Management Systems that effectively help manage and mitigate this risk. For example, power management systems may only allow the use of 10 EV chargers to be used at a time, even if 20 chargers are available. This provides the correct infrastructure to support tenants through these transitions while mitigating any blowout risk.
Substations are designed based on what is referred to as the ‘maximum demand calculation’ it purely assesses the highest peak power that a building will ever use or draw from the grid and is not necessarily reflective of the ongoing power needs. When assessing EV chargers, accounting for power management systems can significantly reduce the impact to the maximum demand. Similarly, for example in Sydney, where the maximum demand typically occurs during a peak cooling scenario say 2 pm on February 24th, domestic hot water power use is minimal, as it typically peaks in the morning and evenings when people shower and cook outside of work hours. Implementing suitably sized storage tanks and control logic to ensure DHW heating can occur outside of these periods is a method to manage this risk. Neuron has the ability to analyse these loads and frequently runs this analysis for developers to compare the impact on the maximum demand and its impact on power connection options. It’s a holistic approach that is hard to do manually. By providing accurate analysis early on, Neuron saves the client 6-12 weeks of manual vetting. It provides a strong competitive advantage by enabling the best decisions for the project to be made at the outset.
Pain point 3. Stranded assets
“Buildings that are not resilient to climate change or responding to changing regulatory and economic environments may end up as stranded assets. At the very least, they may be uncompetitive in a sector that is rapidly responding to the climate change challenge.”
Property developers operating in the NSW residential sector would be familiar with The Building Sustainability Index (BASIX). Undertaken as part of the development application process, BASIX assessments require all residential dwelling types to meet certain sustainability standards.
Some developers have experienced issues with going all-electric on buildings as the BASIX requirements do not always efficiently support this change. BASIX is currently undergoing a review to ensure that all-electric buildings are better supported.
What this demonstrates, is that building codes are being updated all the time. While a building may initially be developed as a compliant asset with no defects, there is a risk that the building will become non-compliant over time. This occurs when changes are adopted within new standards across the property industry. In short, what is compliant now is likely to be non-compliant at some point, and this can seriously affect a building's resellable value.
When this occurs, both the property developer and the building’s tenants are left without a valuable investment unless costly amendments are made. This is where the term ‘stranded assets’ comes into play.
Consider: Pre-emptive action can future proof buildings.
Sustainability strategies are fast becoming the focus of investors. Figuring out a way to incorporate these strategies while maximising key value contributors can be a complex task. Utilising software such as Neuron allows us to do this without eating into valuable time in the design phase.
The GBCA Report sets the tone for upcoming industry changes and allows for pre-emptive integration of systems to meet those compliance needs. If business leaders have a financial responsibility to deliver assets that represent value for money over the long-term, then being future-proofed for a changing climate and the potential future costs associated with carbon emissions is of paramount importance.
Protecting the lifespan of an investment involves significant thought going into its sustainability potential over the long term. Neuron technology assists in aligning building services with sustainable alternatives that safeguard investments from future changes in building codes. This prevents the development of unsustainable, unattractive and inefficient buildings that nobody wants to live in or buy.
Paint point 4. Managing tenant expectations
A major barrier to removing gas is managing customer expectations. Even with developers committed to net zero carbon by 2030, the risk of losing potential sales due to the absence of a gas cooktop can override carbon reduction commitments.
“For some tenants, the lack of gas has been a deal-breaker and that is something we need to address collectively across industries – from development level to supply chains.”
Consider: Education is key to a sustainable future
Whether tenants are residential or retail, setting a clear pathway for a transition to clean energy includes making it equitable and accessible. The first step here lies in education.
The many benefits of modern induction cooking to purchasers include:
While the impacts of gas processing, vetting and flaring seem like an ‘out of sight, out of mind’ problem, using natural gas in buildings can directly impact the health and well being of occupants and users.
By switching to renewable energy sources, we are effectively reversing the current system of buying fossil fuels from energy companies. While this is how our grid currently works, the future is leaning farther and farther away from this model. At Neuron, we believe our future will involve a decentralised smart power network, capable of receiving, storing and delivering clean power to maintain a sustainable level of clean, reliable, renewable electricity for all.
All electric-buildings are not only cleaner and better. They enable the tenants to use 100% renewable electricity, which is the best mechanism to meet net-zero carbon targets. This also reduces climate-related risks and supports healthy property emissions and transition strategies.
Property developments are highly complex undertakings that are not for the faint hearted. Reputation and product are at the forefront of every project. Therefore, it’s unrealistic to expect developers to pay for extra sustainability infrastructure without any incentive, especially when so much money is already at stake.
When it comes to protecting assets and maximising value, investing in integrative renewable energy systems is a smart move. All-electric buildings have a variety of beneficial features that provide value to project stakeholders.
To truly become sustainable at scale, we need win-win solutions. We need a way to incorporate affordable sustainable initiatives that don’t cost developers margin. To achieve a win-win scenario, we need technology that supports holistic viewpoints in order to make the best decisions.
Pushing the boundaries of sustainability means we’re now getting to a point where selling apartments with no bills is almost a realistic value-add opportunity. Utopia is not so far away, after all.
Designing an all-electric building involves careful consideration of how to integrate the key systems and find opportunities for efficiencies. Issues arise when extensive time required to vet design options is not available. Neuron’s software supports this need.
To find out how your development can incorporate innovative sustainable design into an upcoming residential project, get in touch with email@example.com today.