Built to Perform Report

ABUILDING CODE ENERGY PERFORMANCE TRAJECTORY PROJECT / FINAL REPORT
ClimateWorks
A U S T R A L I A
BUILDING CODE ENERGY PERFORMANCE
TRAJECTORY PROJECT
July 2018
Built to Perform
An industry led pathway to a zero carbon
ready building code
FINAL REPORT

B BUILDING CODE ENERGY PERFORMANCE FINAL PROJECT / INTERIM REPORT

1BUILDING CODE ENERGY PERFORMANCE TRAJECTORY PROJECT / FINAL REPORT
Project partners
The project is a partnership between ASBEC
and ClimateWorks Australia.
The Australian Sustainable Built
Environment Council (ASBEC) is the peak
body of key organisations committed to a
sustainable built environment in Australia.
ASBEC members consist of industry and
professional associations, non-government
organisations and government and academic
observers who are involved in the planning,
design, delivery and operation of Australia’s
built environment.
ASBEC provides a collaborative forum for
organisations who champion a vision of
sustainable, productive and resilient buildings,
communities and cities in Australia.
ClimateWorks Australia is an expert,
independent adviser, acting as a bridge
between research and action to enable new
approaches and solutions to accelerate the
transition to net zero emissions by 2050 for
Australia and our region. It was co-founded in
2009 by The Myer Foundation and Monash
University and works within the Monash
Sustainable Development Institute.
In the pursuit of its mission, ClimateWorks
looks for innovative opportunities to reduce
emissions, analysing their potential then
building an evidence-based case through a
combination of robust analysis and research,
and clear and targeted engagement.They
support decision makers with tailored
information and the tools they need, as well
as work with key stakeholders to remove
obstacles and help facilitate conditions that
encourage and support the transition to a
prosperous, net zero emissions future.
Technical partner and sponsor
The Cooperative Research Centre for Low
Carbon Living (CRCLCL) is a national
research and innovation hub for the built
environment, funded by the Australian
Government’s Cooperative Research Centres
Programme.The CRCLCL is leading and
providing funding for technical analysis for
the Building Code Energy Performance
Trajectory Project.
The CRCLCL brings together industry
and government organisations with leading
Australian researchers to develop new
social, technological and policy tools for
reducing greenhouse gas emissions in
the built environment. It seeks to grow
industry confidence to invest in low carbon
innovations, providing evidence to inform
best practice Australian building codes and
standards.
Delivery partners
The Building Code Trajectory Project is being
delivered in partnership with CSIRO, Energy
Action (EA), Strategy. Policy. Research. (SPR)
and the Sustainable Buildings Research Centre
at the University of Wollongong (UOW).
Supporters
The project is steered by an ASBEC Task
Group comprising government, industry
and academic stakeholders and chaired by
Prof Tony Arnel, a former long-term Board
member of the Australian Building Codes
Board (ABCB), President of the Energy
Efficiency Council and Global Director of
Sustainability at Norman, Disney and Young.
RACV is a lead project sponsor. RACV
is proud to offer their members products,
services and benefits in the areas of motoring
and transport, the home and travel and
entertainment.
About Us
1

2 BUILDING CODE ENERGY PERFORMANCE TRAJECTORY PROJECT / FINAL REPORT
Other project supporters include:
• A range of industry and non-government
organisations including Air Conditioning
and Mechanical Contractors Association,
Australian Building Sustainability
Association, Australian Institute of
Refrigeration Air Conditioning and
Heating, Australian Passive House
Association, Australian Steel Stewardship
Forum, Australian Windows Association,
Chartered Institute of Building,
Consult Australia, Cooperative Research
Centre for Low Carbon Living, Energy
Efficiency Council, Engineers Australia,
Facility Management Association of
Australia, Green Building Council of
Australia, Insulation Australasia, Insulation
Council of Australia and New Zealand,
Property Council of Australia, Sustainable
Buildings Research Centre, University
of Wollongong, Standards Australia,
University of Melbourne, and Vinyl
Council of Australia; and
Project funders:
• Government organisations and departments,
including ACT Environment, Planning and
Sustainable Development Directorate, City
of Sydney, Commonwealth Department
of the Environment and Energy, NSW
Office of Environment and Heritage,
QLD Department of Natural Resources,
Mines and Energy, QLD Department
of Environment and Science, QLD
Department of Housing and Public Works,
QLD Department of State Development,
Manufacturing, Infrastructure and Planning,
SA Department of Energy and Mining, SA
Department of Premier and Cabinet, and
Victorian Department of Environment,
Land, Water and Planning.
The project has established two Technical
Advisory Groups (one for the residential
sector and one for non-residential buildings)
comprising relevant experts in building
design, construction and operation, energy
performance in buildings, building energy
modelling and societal cost-benefit analysis,
and ASBEC, ClimateWorks and the delivery
partners gratefully acknowledge the generous
and highly valuable input they have provided
throughout the project.
This amended version of the report was updated in October 2018, with changes to figures relating to national energy bill
savings and network benefits.

About Us____________________________________ 1
Project partners______________________________ 1
Executive Summary__________________________ 4
Glossary_____________________________________ 6
1. The case for forward energy targets____ 7
1.1 Role of the National Construction Code________________ 8
1.2 The benefits and costs of high-performance buildings _ 8
1.3 Market failures and progress to date _________________ 11
1.4 The case for trajectories and targets _________________ 12
1.5 Transition to a net zero emissions economy___________ 14
2. Energy targets________________________ 16
2.1 Targets and forward trajectories for Code energy
requirements ________________________________________ 17
Residential buildings_____________________________________________ 20
Commercial buildings____________________________________________ 22
Public buildings __________________________________________________ 24
Warmer climates_________________________________________________ 26
Milder and cooler climates _______________________________________ 27
3. Recommendations____________________ 28
4. Implementation considerations_______ 31
4.1 Process for Code updates and target adjustments
over time____________________________________________ 31
4.2 Renewables in the Code______________________________ 32
4.3 Compliance and enforcement ________________________ 34
4.4 Air leakage and ventilation ___________________________ 35
4.5 Phase out of gas use in buildings ____________________ 36
4.6 Accelerating trajectories with market transformation
policies______________________________________________ 37
4.7 Other complementary policies________________________ 37
Endnotes___________________________________ 39
Appendix A: Summary of technical
assumptions and results ____________________ 42
Table of Contents

Improved energy performance of buildings
presents a win-win-win opportunity, reducing
stress on the electricity network, offering bill
savings, supporting a least-cost pathway to a
zero carbon built environment, and improving
health and resilience outcomes for households
and businesses.
The National Construction Code is a ready-
made policy instrument to influence the
operational energy use of new buildings and
major renovations.The Code regulates the
building ‘envelope’ and fixed equipment,
including heating and cooling equipment,
lighting and hot water. Over time,
improvements to the Code can have a
significant impact since more than half the
buildings expected to be standing in 2050
will be built after the next update of the
Code in 2019. Increased minimum energy
requirements in the Code are essential to
address market failures in the delivery of
higher performance buildings that have seen
a widening gap between industry leaders and
minimum requirements.
As a signatory to the Paris Climate Change
Agreement, Australia has committed to
reducing economy-wide greenhouse gas
(GHG) emissions by 26 to 28 per cent
below 2005 levels by 2030.The Australian
Sustainable Built Environment Council’s
(ASBEC) Low Carbon, High Performance
roadmap found that actions to reduce
emissions from the building sector (including
new and existing buildings), could deliver
28 per cent of Australia’s 2030 emissions
reduction target.This report, prepared by
ASBEC and ClimateWorks Australia,
builds on Low Carbon, High Performance to
investigate opportunities for the Code to
contribute to the decarbonisation of Australia’s
economy in line with the Paris Agreement. It
recommends the establishment of a transition
plan to make the Code ‘Zero Carbon Ready’.
A Zero Carbon Ready Code would
maximise the potential for new
construction to cost-effectively
contribute to achieving the
overarching zero carbon goal,
and prepare buildings built
today for the 2050 zero carbon
environment in which they will
ultimately be operating.
Implementing this recommendation would
mean moving away from ad-hoc, periodic
updates whereby the ambition of performance
targets is re-debated every few years, causing
ongoing uncertainty for industry.This report
recommends defined targets and a timeline for
progressive Code upgrades to hit those targets,
as well as an established process for tracking
progress and adjusting targets to accommodate
future advances in technology and design
approaches. Shifting to this approach would
provide the regulatory certainty that industry
requires to plan and invest time and effort
in research and development to bring new
technologies to market and deliver higher
building energy performance at a lower cost.
It would also help unlock the potential for the
Code to deliver emissions reductions in line
with the Paris Agreement.
The report outlines a set of energy
performance targets for different building
types across different climates, based on
societal cost-benefit analysis of energy
efficiency and on-site renewable energy
opportunities.The goal of the analysis is to
assess the contribution that the Code could
make towards achieving GHG emissions
reductions in line with overarching zero
carbon targets.
Executive Summary

The analysis shows that by
2030, even conservative
improvements in Code energy
efficiency requirements could
deliver between 19 and 25 per
cent of the energy savings
required to achieve net zero
energy in new residential
buildings, 22-34 per cent of
the required energy savings
for commercial sector buildings,
and 35-56 per cent for public
sector buildings.
Achieving these targets could reduce
household bills by up to $900 per year
for each household, while saving thousands
of dollars each year across a whole non-
residential building.This could also reduce
electricity network investments across
Australia by $12.6 billion between now and
2050.These benefits more than offset the
upfront costs, noting that electricity market
reforms would be required to enable network
savings to be passed through to individual
building occupants. Achieving the targets
could also deliver 15 million tonnes of
cumulative emissions reductions to 2030,
and 78 million tonnes to 2050.
In order to achieve zero carbon buildings,
residual energy use would need to be addressed
through a combination of on-site renewable
energy, improvements in energy efficiency of
plug-in appliances and decarbonisation of
centralised grid electricity supply. Additional
analysis undertaken for this report highlights
that there is significant and economically
attractive opportunity for on-site renewable
energy generation to meet remaining energy
demand (see Section 2). Capturing the full
potential of on-site renewables could get
detached and attached homes all the way to
net zero energy, and the rest of the modelled
buildings between 10 and 85 per cent of the
way there.
Urgent action is needed to unlock these
opportunities.This report recommends the
following three actions:
RECOMMENDATION 1:
Commit to a Zero Carbon Ready
Building Code.
The COAG Energy Council and Building
Ministers Forum should commit to deliver a
‘Zero Carbon Ready’Code.This would mean
setting energy efficiency targets in the Code
at least as stringent as the conservative energy
efficiency targets in this report (excluding
renewable energy potential), introducing net
energy targets (including renewable energy
potential), and establishing a clear set of
rules and processes for implementation and
adjustment of the targets in the Code.
RECOMMENDATION 2:
Deliver a step change in 2022.
Ministers Forum should jointly agree to task the
Australian Building Codes Board (ABCB) to
deliver a step change in the energy requirements
in the 2022 Code, with a strong focus on
residential standards and a further incremental
increase in non-residential standards.
RECOMMENDATION 3:
Expand the scope of the Code and
progress complementary measures.
Ministers Forum should jointly establish work
programs that investigate expanding the scope
of the Code to prepare for future sustainability
challenges and opportunities, including health,
peak demand, design for maintainability,
provision for electric vehicles and embodied
carbon.The Building Ministers Forum and
COAG Energy Council should also progress
measures to complement the Code and drive
towards zero carbon new and existing buildings.

GLOSSARY
ABCB Australian Building Codes Board
ASBEC Australian Sustainable Built Environment Council
BCR Benefit-cost ratio
CRC Cooperative Research Centre
COAG Council of Australian Governments
Code energy
requirements
Minimum energy requirements in the National Construction Code
Energy efficiency
targets
Targets for energy performance to be included in the Code,
excluding any on-site renewable energy generation
NatHERS National House Energy Rating Scheme
NEEBP National Energy Efficient Building Project
NEPP National Energy Productivity Plan
Net energy
performance
Annual energy consumption of a building minus the annual on-site
renewable energy generation
Net energy targets Targets for net energy performance to be included in the Code,
accounting for on-site renewable energy generation
Net societal benefit The total social benefits of an action, minus the total social costs,
without considering the distribution of benefits and costs
(e.g. between the individual taking the action and broader society).
Net zero energy The annual on-site renewable energy generation is equal to or more
than the annual energy consumption
RIA Regulatory Impact Assessment
Zero carbon Refers to a building with no net annual greenhouse gas emissions
resulting from on-site energy or energy procurement (Scope 1 and
Scope 2) from its operation1
Zero Carbon Ready
Code
A Building Code that maximises the cost-effective potential for
new construction to contribute to achieving the overarching zero
carbon goal

1. The case for forward
energy targets
Improved energy performance of buildings presents a win-win-win opportunity,
reducing stress on the electricity network, offering bill savings, supporting a least-
cost pathway to decarbonisation and improving health and resilience outcomes for
households and businesses. The Australian Sustainable Built Environment Council
(ASBEC) has convened a broad coalition of built environment sector industry groups to
develop, in partnership with ClimateWorks Australia, forward targets and trajectories
for the energy requirements in the National Construction Code.
i Estimating future construction rates is highly uncertain.The estimation presented here differs from the figure presented
previously by ASBEC and ClimateWorks as it now draws on updated Australian Bureau of Statistics data.
Buildings consume over half of Australia’s
electricity2
, and are a key driver of peak
demand across the electricity grid.The
operation of buildings also contributes
almost a quarter of national greenhouse gas
emissions3
. New construction adds up fast:
51 per cent of the buildings expected to be
standing in 2050 will have been built after
the next update of the National Construction
Code in 2019 (see Figure 1)4
. Reducing the
energy consumption of new buildings is an
important part of the solution to transitioning
to a zero carbon energy system.
FIGURE 1: Share of 2050 building stock
expected to be built after 2019i
This report presents the final results of
the Building Code Energy Performance
Trajectory Project (the Trajectory Project),
which aims to support governments to adopt
medium-term targets and trajectories for
Code energy requirements.The report sets
out a series of feasible forward pathways for
Code energy requirements that cover a range
of building types and climates across Australia,
which provide a benchmark for governments
to support the adoption of targets for future
revisions of the Code.
This introductory section (Section 1) sets
out the rationale for the introduction of
forward targets and trajectories for energy
requirements in the National Construction
Code. Section 2 summarises the targets that
this study found would deliver net societal
benefits for various building types across
different Australian climates, while Sections
3 and 4 provide specific recommendations for
the implementation of targets and trajectories
in the Code.
51%of
Australia's
buildings
in 2050
will be
built after
2019

1.1 Role of the National Construction Code
The National Construction
Code is a ready-made policy
instrument to influence the
energy performance of new
buildings and major renovations.
The National Construction Code (the Code)
sets minimum requirements for all new
buildings and major renovations in Australia,
and includes requirements for energy
efficiency.The Code energy requirements
cover heating and cooling performance of the
building envelope, lighting energy efficiency,
and energy efficiency of large fixed equipment
such as air conditioning and lifts; however,
the Code does not cover smaller appliances
such as refrigerators or computers, nor does
it cover the procurement of energy from off-
site sources (for example, through renewable
energy power purchasing agreements).
It is a model code (with no legal force)
developed and maintained by the Australian
Building Codes Board (ABCB) under an
Inter-Governmental Agreement, and given
legal force through State and Territory
legislation. Each jurisdiction may elect to
apply the Code with amendments, to suit their
own context5
.The Code applies at the point
of design and construction, the easiest and
cheapest time to deliver energy performance
outcomes.
1.2 The benefits and costs of high-performance
buildings
Low-energy, high performance
buildings can deliver lower
bills, reduced burden on the
electricity grid, greater resilience
to temperature extremes and
healthier, more comfortable
spaces for people to live and work.
Energy is inextricably linked to living
affordability and the costs of doing business.
Retail electricity prices for households and
small businesses have increased by 80 to 90
per cent over the past decade, while electricity
prices for some medium and large businesses
have doubled, or even tripled, in the past two
years alone6
. Low-income households and
small businesses are particularly vulnerable
to price increases - for example, low-income
households spend up to five times more (as a
proportion of disposable income) on electricity
than higher-income earners7
. Higher energy
prices have also had a detrimental impact on
the international competitiveness of larger
Australian businesses8
.
As a proportion of their disposable
income, low-income households
spend up to five times more as a
share of their disposable income
on electricity than higher-income
earners.

While individual households and businesses
have very limited influence on the unit
price of energy, there are concrete actions that
can be taken to reduce overall energy bills
by improving building energy performance,
particularly during the design and construction
of new buildings and major renovations.
If the energy efficiency targets in this report
are implemented in the Code, residential
energy bills could be reduced by $20.9 billion,
and non-residential bills could be reduced by
$8.4 billion, between now and 2050.
These benefits more than offset the upfront
costs, noting that electricity market reforms
would be required to enable network savings
to be passed through to individual building
occupants.
The increases in retail electricity prices over
the past decade have been driven primarily by
higher electricity network costs9
. Improving
energy efficiency and installing on-site
generation with storage each reduce the
burden buildings place on the grid.These
measures reduce the investment required
in transmission and distribution networks
to deliver electricity during periods of peak
demand (for example, air conditioning
demand peaks in the afternoons and early
evenings on hot days when businesses are
still operating and people are returning from
work)10
.
If a single building cuts its peak demand by
one kilowatt (kW), equivalent to the power
used to run a small oil heater, it is estimated
this will save almost $1,000 in required
investment in electricity system infrastructure,
reducing electricity prices for everyone11
.
Implementation of the energy efficiency
targets identified in this report would deliver
an estimated financial benefit of $12.6 billion
nationally by 2050 in the form of avoided or
deferred network investments.
Cutting peak demand by just one
kilowatt, the equivalent power used
to run a small oil heater, can save
almost $1,000 in investment in
electricity system infrastructure,
reducing electricity prices for
everyone.
It is important to note that the energy market
currently does not provide a mechanism
for most building owners and occupiers to
directly recover the financial benefits they
provide to the market by lowering their peak
demand.To address this, the Australian
Energy Market Commission (AEMC) Power
of Choice review is leading to new rules that
are intended to better incentivise individual
consumers to reduce their peak electricity
demand, including peak demand tariffs12
.

Achieving the energy efficiency
targets proposed in this report could
reduce residential energy bills by
$20.9 billion, and non-residential
bills by $8.4 billion, between now
and 2050.
In addition to financial savings, growing
evidence shows that Australia’s buildings can
significantly improve their occupants’ health
and wellbeing if energy performance, comfort
and resilience outcomes are targeted effectively
in a building’s design and construction. Low-
energy design and construction is important
for building resilience into the operation of
businesses and keeping homes comfortable
and safe in a changing climate. Low-energy
housing has also been demonstrated to reduce
stress associated with affordability issues13
.
These benefits apply not only to where we
live, but to where we work, study and learn.
Numerous case studies from around the
world have reported improved productivity
and reduced sick days when upgrading to
‘green’ offices14
, while comfortable indoor
temperatures in schools have been shown to
contribute to better student performance and
healthier work environments for teachers15
.
The benefits of the energy efficiency targets
set out in this report could be delivered at a
construction cost premium of between 1 and
4 per cent of typical construction costs for
detached homes, and around 1-2 per cent
for commercial office buildings16
. Further
details on the construction cost premiums for
the modelled building types are provided in
Appendix A.
The Code gives significant flexibility to
designers to achieve its energy requirements
in a range of ways. Leading designers have
shown that with close attention to building
design, very high energy performance can be
delivered at low cost.The upfront cost figures
in this report provide a conservative estimate
of upfront costs, assuming limited industry
adjustment and adaptation to reduce costs.
Improving the energy performance of
buildings is not just about the environment.
The benefits of lower-energy buildings to
people are clear: better living affordability,
a less expensive electricity network, and
improved health outcomes.

1.3 Market failures and progress to date
While market leaders are driving
world-class innovation in low-
energy buildings, a range of
barriers have limited progress
across the rest of the market.
Market leaders in Australia are demonstrating
world-class commitment to sustainability in
the built environment. Property companies and
fund managers in Australia and New Zealand
have been outperforming the rest of the world
for the past seven years in commercial office
sustainability, according to the Global Real
Estate Sustainability Benchmark (which
is based in part on measured and publicly
disclosed energy performance)17
. Recent years
have seen leaders commit to net zero emissions
targets. For example:
* AMP Capital Wholesale Office Fund,
one of the largest wholesale property fund
managers in Australia and New Zealand, is
targeting net zero emissions by 2030 across
its $4.7 billion portfolio18
;
* Investa, one of Australia’s largest owners
and managers of institutional grade office
real estate, is pursuing a net zero emissions
target by 2040 across its office portfolio and
business operations19
;
* Dexus, a real estate investment trust with
$26 billion worth of assets spanning
commercial office, retail and healthcare, has
committed to a net zero target across their
business by 203020
;
* Mirvac,a property group managing over $18
billion worth of assets across office,retail and
industrial sectors,has committed to reaching net
positive carbon emissions by 203021
;
* The GPT Group is working to achieve a net
zero emissions target across its $18 billion
property portfolio before 203022
;
* Lendlease’s wholesale commercial property
trust, Australian Prime Property Fund
Commercial, has set an ambitious target of
net zero emissions by 202523
; and
* Monash University has committed to net
zero carbon emissions by 203024
.
In the residential sector, although the
minimum requirement in many parts of
Australia is for housing to be designed to
the equivalent of a heating and cooling
efficiency of 6 Stars under the Nationwide
House Energy Rating Scheme (NatHERS),
almost nine per cent of housing designs
across Australia are at 7 Stars and above.
The proportion of ratings at these levels are
particularly high in the Australian Capital
Territory (21 per cent), Northern Territory (20
per cent) and Queensland (25 per cent)25
.
However, a range of persistent barriers and
market failures have prevented broader uptake
of these better practices across the building
sector. As a result, progress in improving
energy performance in the built environment
has been limited to a small segment of market
leaders. For example, a ClimateWorks review
of the progress being made in the building
sector towards a low carbon economy, released
in 2013, found that new commercial office
buildings with a Green Star rating had, on
average, half the emissions intensity of new
office buildings built to minimum Code
energy requirements26
.
While some gap between market leaders and
the market average is expected, these barriers
and market failures explain why most buildings
are built to minimum standards despite
the existence of feasible and cost-beneficial
upgrades as demonstrated by the leaders.
Barriers can be categorised as follows27
:
* Capability: Home buyers, tenants and
businesses often lack appropriate data,
information and skills, which can undermine
their ability to fully realise the benefits
of low-energy buildings when making
decisions to buy or rent a property; and
* Motivation: Internal and external
factors can have a strong influence on
the motivation of home buyers, tenants
and businesses to consider investing in a
high-performance building, regardless of
financial attractiveness and capability.These
include ‘split incentives’ between tenants
and landlords, and a lack of awareness of the
non-energy benefits of energy efficiency.

Energy requirements in the Code have not
shifted substantially in a decade, which is a
contributing factor to these market failures
that have seen a widening gap between
industry leaders and minimum Code
requirements. Increased energy requirements
in the Code are essential to address such
market failures in the delivery of higher
performance buildings. As discussed below, a
forward plan for introducing more ambitious
Code energy requirements, implemented
in a manner that provides consistency and
certainty to industry and consumers, will help
ensure that the full potential of the Code to
drive improvements is realised and accelerates
the adoption of new technologies and design
and construction practices across the market
as a whole28
.
1.4 The case for trajectories and targets
Because buildings are long-lived
assets, a delay in upgrading Code
requirements locks in higher energy
use and emissions for decades.
An estimated 1.1 million homes and 42
million square metres of non-residential
floor space are expected to be built between
2022 and 2025.These buildings will remain
standing for decades to come, and without
expensive retrofits, they will be using more
energy than they should. Just three years’ delay
in the implementation of the energy efficiency
targets recommended in this report could
lock in, between now and 2030, $2 billion in
residential energy bills, $620 million in non-
residential energy bills and $720 million of
additional network investments.
Well-designed and implemented
targets for minimum energy
requirements will drive innovation
and investment in new practices
and technology.
Specific and time-bound targets provide
guidance as to when, how and to what
degree energy requirements will change
over time. Forward targets that set out the
allowable levels of energy consumption
for new buildings and major renovations
over subsequent upgrades to the Code (as
illustrated in Figure 2) – well in advance of
each Code upgrade cycle – would provide a
regulatory signal to consumers and industry
that would encourage innovation and
investment in new technology, design and
construction practices.This is particularly
important for innovations that require a long
lead-time, such as the development of new
products by manufacturers, as it allows the
industry to plan ahead for future regulatory
requirements29
.

Just three years' delay in
implementing the energy efficiency
targets recommended in this report
could lock in $2.6 billion in wasted
energy bills and $720 million of
additional electricity network
investments to 2030.
FIGURE 2: Illustrative forward trajectory for Code energy requirements
Current
energy
requirement
Code upgrades
over time
Incremental
strengthening
of the energy
requirements
Target energy
requirement
Jurisdictions around the world have set
ambitious and time-bound energy
performance targets for new construction30
.
When combined with effective
complementary measures and good design
practices, a set pathway for progressively
strengthening energy targets can provide
certainty for planning and investment, enable
innovation and encourage the achievement
of energy performance above and beyond
current requirements31
.The latter effect has
been observed in Denmark, where a pathway
set in 2010 specified a series of incremental
increases in the stringency of energy
requirements for 2010, 2015 and 2020. Even
when “class 2010” minimum requirements
were in force, 15 to 20 per cent of Danish
building investors elected to build to “class
2015” or “class 2020” requirements32
.

1.5 Transition to a net zero emissions economy
Australia needs to accelerate its
transition to net zero emissions,
and many of the lowest cost,
shovel-ready opportunities
can be found in the design and
construction of new buildings.
As a signatory to the Paris Climate Change
Agreement, Australia has committed to
reducing economy-wide greenhouse gas
emissions by 26 to 28 per cent below 2005
levels by 2030, which equates to approximately
272-287 million tonnes of carbon dioxide
equivalent (MtCO2
-e)33
. A number of States
and Territories have also committed to
ambitious emissions reduction targets beyond
2030, including net zero emissions by 2050
targets in South Australia, the ACT, Victoria,
NSW,Tasmania and Queensland. Achieving
this level of emissions reduction relies on four
pillars of decarbonisation: improving energy
efficiency, implementing low carbon electricity,
electrification and moving away from fossil
fuels, and reducing non-energy emissions34
.
Unlike some sectors such as aviation, steel and
cement production and long-haul freight, the
buildings sector does not require fundamental
transitions and research and development to
produce new technologies that substantially
reduce emissions. For the building sector as a
whole (including new and existing buildings),
improving energy efficiency while encouraging
fuel switching and on-site renewable energy
generation could deliver 28 per cent of
Australia’s 2030 emissions reduction target
through measures that are technologically
proven and commercially available today35
.
Strengthened energy efficiency targets for
new buildings, as recommended in this report,
could deliver 14.7 million tonnes of emissions
savings to 2030, and 78.3 million tonnes to
2050.This assumes rapid grid decarbonisation
in line with a smooth transition to net zero
emissions by 2050. If the grid decarbonises
more slowly, the emissions savings from the
proposed Code changes would be significantly
higher, up to 21.4 million tonnes by 2030 and
147 million tonnes by 2050. Greater emissions
reductions could be unlocked if renewable
energy requirements are introduced in the
Code and the full technical potential for solar
PV on new buildings, as presented in this
report, is achieved.
If the energy performance of buildings is not
improved as suggested in this report, more
action would be needed in other sectors,
including the electricity sector. Reducing
demand also reduces the amount of new
large-scale renewable energy generation
infrastructure required.The Code energy
efficiency changes proposed in this report
would reduce energy demand by 24 percent
by 2030, and 28 percent by 2050.This is
important considering the already large
scale of investment that will be required to
transition to a net zero emissions electricity
grid while meeting the increase in demand
for electricity from future electrification of
transport and industry.

As is the case with energy bill savings and
electricity network investments, delaying
the implementation of the energy efficiency
targets recommended in this report would
lock in emissions that could have been
avoided. A three-year delay would lock in
9 MtCO2-e of emissions to 2030 and 22
MtCO2-e to 2050, which would require more
to be done by existing buildings or other
sectors of the economy.
The term 'Zero Carbon Ready'
describes a Code that maximises
the cost-effective potential for new
construction to contribute to the
overarching zero carbon goal.
A ‘Zero Carbon Ready’ Building
Code will prepare buildings built
today for the future zero carbon
environment in which they will
still be operating.
The National Construction Code is an
important contributor towards achieving
emissions reductions in line with the
overarching zero carbon targets.The term
'Zero Carbon Ready' describes a Code that
maximises the cost-effective potential for new
construction to contribute to achieving the
overarching zero carbon goal.
The goal of the Trajectory Project has been to
assess how much contribution the National
Construction Code could make towards
achieving emissions reductions in line with
overarching zero carbon targets.To achieve
this goal, this report assesses how far each
building type in each climate zone could
get towards net zero energy on-site through
energy efficiency and on-site renewables. ‘Net
zero energy’ here means that the building uses
less energy over the course of the year than it
generates on-site.

The report outlines a set of feasible energy efficiency targets for Code energy
requirements and potential net energy targets. This section summarises targets for
different building types across a range of climate zones.
ii Measures are considered to deliver net benefits to society if the capital cost is outweighed by the financial benefits from a
societal perspective over the lifetime of the relevant building elements, in most cases a 40-year period.
There are numerous opportunities available
today to improve the energy performance
of buildings, which in turn can deliver net
benefits to societyii
.The updates proposed by
the ABCB for the 2019 Code target a number
of these opportunities for non-residential
buildings.The Interim Report for this project
found that simple measures such as improving
air tightness also deliver net societal benefits
in many cases for housing36
. As technology
evolves and the costs of current leading-edge
technology reduces through scalability and
industry learning, many more opportunities
are expected to deliver net societal benefits.
The Code is currently on a three-yearly
upgrade cycle.This report proposes a set of
energy efficiency targets for different buildings
types that could be implemented in the Code.
The basis of the analysis is a conservative
projection for medium-term trends in
construction costs, energy prices, technological
changes and other economic factors.The
analysis covers the time period over which
the next five Code updates will take place,
from now until 2034. It sought to answer the
following question: “What is the maximum
level of energy performance that can be
achieved in the future (without fundamental
change in building designs) while delivering
net societal benefits?” for different building
types in different climate zones.
The results presented in this report provide an
industry-led evidence base intended to support
further government policy development.
The Trajectory Project is not intended to
replace the regulatory or policy making
processes required to implement targets,
trajectories and updated Code requirements.
Under NEPP Measure 31, Australian
Governments are investigating options for
advancing the residential and commercial
buildings energy efficiency measures in the
National Construction Code, including
consideration of possible trajectories.The
intent of this report is to present illustrative
pathways showing what is feasible, and to
provide recommendations that would enable
implementation of targets.
This report proposes energy efficiency
targets and sets out the potential for net
energy performance for climates across
Australia, covering most State and Territory
capital cities.Targets relevant to tropical
and arid regions of northern Australia
(including Darwin, northern Western
Australia, Alice Springs and far north
Queensland) will be published in a separate
northern Australia report.
2. Energy targets

2.1 Targets and forward trajectories for Code
energy requirements
The Trajectory Project analysis clearly identifies minimum energy efficiency targets and
trajectories that vary by building type and climate.
The Trajectory Project analysed eight building
‘archetypes’ across four climate zones, each
of which was modelled in four orientations.
While it was not possible to fully capture
the diversity of Australia's buildings, the
archetypes were developed to cover a range of
typical attributes of common building types
as a proxy for the entire building stock.The
modelled building archetypes were:
• For residential buildings:
- Detached, single-storey house;
- Attached, two-storey townhouse or terrace
house; and
- Apartment.
• For commercial and other non-residential
buildings:
- Office tower;
- Hotel tower;
- Medium retail shop;
- Hospital ward; and
- School.
The four climate zones were selected based on
the locations of major population centres (see
Figure 3):
• Climate Zone 2 - Warm humid summer,
mild winter (e.g. Brisbane);
• Climate Zone 5 - Warm temperate (e.g.
Sydney, Adelaide, Perth);
• Climate Zone 6 - Mild temperate (e.g.
Greater Western Sydney, Melbourne); and
• Climate Zone 7 - Cool temperate (e.g.
Canberra, Hobart).
The project team recognises that design
principles and associated energy efficiency
opportunities for buildings in the tropics are
unique when compared with the rest of the
country. Modelling for Climate Zones 1 (hot
humid summer, warm winter, e.g. Darwin,
Broome, Cairns,Townsville) and 3 (hot dry
summer, warm winter, e.g. Alice Springs) is
underway and the results will be published in
a separate Northern Australia report.
FIGURE 3: Australian climate zones
Image source: http://www.yourhome.gov.au/introduction/australian-climate-zones

18 BUILDING CODE ENERGY PERFORMANCE FINAL PROJECT / INTERIM REPORT
For each building archetype in each climate
zone, two different sets of targets and forward
trajectories were determined as follows:
• Conservative scenarios: These include
energy efficiency targets and the potential
for net energy performance through on-site
renewables (assumed to be solar PV, taking
into account average consumption profiles
and available roof space). All of these targets
and performance levels were set at a level at
which societal benefits outweigh the capital
costs; and
• Accelerated deployment scenarios: The
energy efficiency targets include all measures
that are deemed to provide a material energy
benefit, and assume faster deployment of
energy efficiency technologies.The identified
potential for net energy performance in
these scenarios assumes that the entire
available roof area of each building
archetype is covered with solar PV, allowing
for maintenance access and installation
angle for panels. Based on our analysis, the
benefits of achieving these targets would
not outweigh the capital costs on current
economic projections. However, the cost
of achieving these accelerated trajectories
could be lower if the industry adapts to
energy efficiency measures faster than
assumed or if government implements
market transformation measures, such as
research and development, to reduce the
cost of key technologies (see Section 4.6
for further details).
The conservative and accelerated deployment
energy efficiency scenarios for each building
type are illustrated in Figure 4.These summary
trajectories are averaged across all climate
zones. Further detail is provided in the body
of this sectioniii
and in Appendix A of this
report. A separate Technical Report, published
by the CRC for Low Carbon Living and
available on the ASBEC and ClimateWorks
websites, provides technical details
underpinning the analysis37
.
iii For simplicity, the summary results presented in the body of this report are relevant for new construction in 2030 (i.e. the
potential energy efficiency targets in the 2028 Code).This aligns with the timelines for the National Energy Productivity
Plan and Australia’s 2030 commitment under the Paris Climate Change Agreement.
FIGURE 4: Summary of proposed energy
targets for the Code, under the conservative
(darker line) and accelerated deployment
(lighter line) scenarios.
Residential
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
Detached House
Attached House
Single Apartment
Commercial
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
Office
Hotel
Public
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
Hospital Ward
School Building
20
30
40
50
60
70
80
60
80
100
120
Retail
30
60
90
120
150
2030
2030
2030

Best practice design, accelerated
industry learning and government
initiatives to support market
transformation could unlock
additional opportunities to
improve energy performance.
This project calculated energy efficiency targets
by identifying a set of design, technology and
construction measures deemed to deliver net
societal benefits for the particular building
archetypes and climates modelled. However,
the project takes a conservative approach that
assumes typical mainstream building designs
are retained, without inclusion of best practice
design for energy efficiency. Improving the
design of a building is often the lowest-cost
option to improve energy performance, but
assessing the impacts of best practice design was
not included within the scope of this project.
Although the selected measures provide an
illustration of how energy efficiency and
net energy targets could be achieved and
how individual Code requirements could be
updated, the targets are intended to be applied
in a way that does not favour particular
technologies over others. It is recommended
that the Code maintains this technological
neutrality to provide designers and builders
with flexibility in their choice of technologies
and design approaches to meet the targets.
Stronger targets, combined with this flexibility,
are expected to encourage best practice design
approaches as designers and builders seek the
lowest-cost approach to meeting the targets.
Although learning rates for some fixed
equipment, lighting and solar PV have been
assumed based on available evidence, for most
other measures the economic analysis has not
accounted for the accelerated technological
progress and cost reductions that forward
targets are likely to deliver.
In relation to upfront costs, this study assumes
the capital cost of identified energy-saving
measures are simply added to the cost of
construction.This is likely to overestimate the
actual cost of increased energy performance.
For example, a study for the Commonwealth
Department of the Environment and
Energy led by Moreland Energy Foundation
found significant variability in construction
cost increases and learning rates after the
introduction of the NatHERS 6 Star minimum
requirement in 2010.This suggests that
strengthened energy requirements are not
strongly correlated with increased costs, and
that there are strong drivers of construction
costs that are unrelated to energy performance38
.
In addition to this, the analysis assumes no
implementation of complementary initiatives
such as technology research and development
support or industry training and education,
which could significantly reduce the cost of
achieving higher energy efficiency (see Section
4 for further discussion).
Further, the analysis does not quantify the
health and resilience benefits of energy
efficiency; if these were to be incorporated,
energy efficiency measures are likely to prove
much more cost-effective, especially in the
context of rising temperatures and projected
increases in extreme weather.
The results of this analysis are therefore likely
to overestimate the costs of achieving increased
energy performance and at the same time,
underestimate the potential benefits. In other
words, the energy-saving components analysed
are likely to be even cheaper and deliver more
benefits than this analysis suggests.
The energy-saving components
analysed are likely to be even
cheaper and deliver more benefits
than this analysis suggests.
The conservative nature of this analysis
means that energy efficiency improvements
beyond those modelled in this report could
be achievable.The accelerated deployment
trajectories provide some indication of the
opportunities if costs decrease; however, even
this analysis remains conservative and it is
recommended that the targets be reviewed
over time as new evidence emerges (see
Section 4).

Residential buildings
Strengthening the energy efficiency
requirements of the Code could deliver
between 19 and 25 per cent of the energy
savings required to achieve net zero energy in
new residential buildings by 2030, compared
with a baseline that complies with the
deemed-to-satisfy (DtS) requirements of the
2016 Code39
.This could be achieved through
simple measures such as:
• Improving air tightness;
• Including double glazed windows;
• Increasing insulation;
• Installing adjustable outdoor shading or
larger eaves;
• Including ceiling fans; and
• Increasing the efficiency of air conditioning,
lighting and domestic hot water systems.
Assuming minimal industry learning and
conservative projections of technology cost
and performance improvements, the upfront
cost associated with these improvements
would be approximately $6,800 for the
modelled apartment archetype ($89 per square
metre), $8,000 for the attached housing
archetype ($63 per square metre) and $14,000
for the detached housing archetype ($74 per
square metre).These upfront costs would be
more than offset by the energy bill savings,
reduced spend on heating, cooling and
ventilation equipment, and electricity network
savings.
Under the accelerated deployment scenarios,
changes to the Code energy efficiency
requirements could deliver 22-30 per cent
of the required energy savings.This could be
achieved through accelerated deployment of
higher performance windows or more efficient
air conditioning, lighting and domestic hot
water equipment.
The remaining task to reach net zero energy
in residential buildings would need to be
addressed through a combination of best
practice design, on-site renewable energy,
voluntary measures to improve energy
efficiency, strengthened standards for items
outside the Code (such as plug-in appliances)
and decarbonised electricity supply.
Analysis of on-site renewable energy potential
shows that there is the potential for both
detached and attached housing to reach
net zero energy through a combination of
strengthened Code energy requirements and
rooftop solar PV generation as early as 2022.
By 2030, with projected cost reductions in
solar PV, the potential would increase further;
if grid integration and other challenges can
be resolved, there is the potential for a single-
storey detached house to generate over three
times its annual energy use through solar
PV, while a two-storey attached house could
generate one-and-a-half times its energy use.
The potential for apartments is less significant;
by 2030 an apartment in a mid-rise building
could potentially generate one-tenth of
its annual energy use via rooftop solar PV,
although accelerated commercialisation of
building-integrated solar PV could unlock
additional opportunity for apartment
buildings (this was not considered in the
analysis for this report).
Determining the optimal balance between on-
site renewables and other measures requires
consideration of the issues outlined in Section 4.
Case study: Innovation House 1
Townsville’s Innovation House was the first 10 star as-designed NatHERS
rated house in the Australian tropics. The house uses simple features to
maximise its energy efficiency, such as careful orientation to capture the
predominant breezes in the area, large eaves for shading, ceiling fans and
a light-coloured roof and walls which reflect much of the sun’s heat away
from the house. Collectively these design features reduce the need for
use of air conditioning. Electricity generation from the 5 kW rooftop solar
PV system is more than sufficient to meet the family’s air conditioning
demand during summer, as well as much of the remaining household
electricity consumption.
This case study was contributed by Dr Wendy Miller, Queensland University of
Technology, and Innovation House.

POTENTIAL 2030 ENERGY TARGETS - Residential buildings
* Data presented here is an average for this building archetype across the modelled climate zones (2, 5, 6 and 7) for the 2028 Code
^ Percentage reduction is a proportion of whole building energy (or in the case of the apartment, whole-dwelling energy excluding
central services), including energy that is currently not in the scope of the Code and needs to be addressed by measures outside
the Code
Conservative scenario Accelerated deployment scenario
69.2
43.2
0
Baseline energy use (2016 Code)
Net zero energy
19%
via energy
efficiency^
22%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in
appliances)
kWh/m2/year
Single
Apartment*
Relevant to
approx.
9%
of new
construction
2019-2050
Could be met by using:
> All measures in conservative
scenario, plus:
> Market-leading higher
performance windows
> Accelerated efficiency
improvements in air
conditioning equipment,
lighting and domestic hot
water
> Better air tightness
> Double glazed windows
> Increased insulation
> Increased thermal mass
> Adjustable outdoor
shading
> Efficiency improvements
in air conditioning
equipment, lighting and
domestic hot water
44.8
25.8
0
Net zero energy
22%
via energy
efficiency^
25%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in
appliances)
kWh/m2/year
Attached House*
Relevant to
approx.
9%
of new
construction
2019-2050
scenario, plus:
performance windows
improvements in air
water
> Ceiling fans (mostly warmer
climates)
> Larger eaves (mostly warmer
climates)
> Adjustable outdoor shading
> Efficiency improvements in
air conditioning equipment,
water
42.7
21.9
0
Net zero energy
Relevant to
approx.
64%
of new
construction
2019-2050
Detached House*
25%
via energy
efficiency^
30%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in
appliances)
kWh/m2/year
> All the measures in the
conservative scenario, plus:
performance windows
improvements air
water
shading
> Ceiling fans (mostly in
warmer climates)
for air conditioning
equipment, lighting and
domestic hot water
Analysis of on-site renewable energy potential shows it could meet approximately:
10% of remaining energy use for apartments
Greater than 100% of remaining energy use for attached homes
Greater than 100% of remaining energy use for detached homes
The gap to net zero energy can be met by a combination of best
practice design, on-site renewable energy, improved appliance efficiency and
decarbonised grid electricity supply.

Commercial buildings
Strengthening the energy efficiency
requirements of the Code could deliver
between 22 and 34 per cent of the energy
savings required to achieve net zero energy in
new commercial buildings by 2030, compared
with a baseline that complies with the energy
requirements proposed for the 2019 Code.
This could be achieved through simple
measures such as:
• Improving air tightness (combined with
overnight ventilation);
• Increasing thermal mass;
• Installing adjustable outdoor shading; and
• Increasing the efficiency of air conditioning
and lighting.
conservative projections of technology cost
and performance improvements, the upfront
cost associated with these improvements
would be approximately $230,000 for the
modelled hotel archetype ($128 per square
metre), $640,000 for the office archetype
($71 per square metre) and $160,000 for the
retail archetype ($171 per square metre).
These upfront costs would be more than offset
by the energy bill savings, reduced spend on
heating, cooling and ventilation equipment,
and electricity network savings.
Under the accelerated deployment scenarios,
changes to the Code energy requirements
could deliver 32-38 per cent of the required
energy savings.This could be achieved through
accelerated deployment of more efficient
chillers, lighting, lifts and commercial-scale
electric heat pumps.
The remaining task of reaching net zero
energy in commercial sector buildings would
need to be addressed through a combination
of best practice design, on-site renewable
energy, voluntary measures to improve energy
shows that by 2030, when combined with
strengthened Code energy requirements, there
is potential for a low-rise hotel to generate
approximately 20 per cent of its annual
energy use through rooftop solar and building
integrated PV. A mid-rise office building
could potentially generate approximately one-
third of its energy use and a medium-sized
single-storey retail building could generate
approximately two-thirds.
Case study:
Monash University Buildings and Property
Completed in 2014, Monash University’s Buildings and Property office
building in Clayton, Victoria is an industry exemplar of an adaptive reuse
project. Formerly an asbestos-clad warehouse, it is now the University’s
best performing office building. The project piloted Passive House design
principles and features high levels of insulation, double glazed windows,
an airtight building envelope to maintain stable indoor temperatures, and
a heat recovery ventilation system that efficiently warms and circulates
fresh air. Automated external shading on the building’s north and east
sides, as well as additional horizontal shades on northern windows are
used to cool the interior in summer and maximise solar heat gain during
winter. A 70 kW rooftop solar system supplies 65% of the building’s
electricity annually.
This study was contributed by the Buildings and Property Division at Monash
University.

POTENTIAL 2030 ENERGY TARGETS - Commercial buildings
^ Percentage reduction is a proportion of whole building energy, including energy that is currently not in the scope of the Code
and needs to be addressed by measures outside the Code
114.7
23.9
0
Baseline energy use (Proposed 2019 Code)
Net zero energy
31%
via energy
efficiency^
36%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in
appliances)
kWh/m2/year
Hotel*
Relevant to
approx.
3%
of new
construction
2019-2050
scenario, plus:
improvements in air
conditioning equipment and
lighting
> Switch from gas heating to
electric heat pumps
> Increased efficiency of lifts
shading
for air conditioning
equipment
> Light-coloured external
walls (mostly warmer
climates)
93.2
43.6
0
Net zero energy
22%
via energy
efficiency^
32%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in
appliances)
kWh/m2/year
Office*
Relevant to
approx.
6%
of new
construction
2019-2050
scenario, plus:
improvements in air
conditioning equipment
and lighting
electric heat pumps
> Increased efficiency of lifts
air conditioning equipment
and lighting
> Better lighting control
> Better air tightness and
overnight ventilation
> Perimeter zone daylight
harvesting
> Light-coloured external walls
(mostly warmer climates)
116.3
20.8
0
Net zero energy
34%
via energy
efficiency^
38%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in appliances)
kWh/m2/year
Retail Shop*
Relevant to
approx.
5%
of new
construction
2019-2050
scenario, plus:
improvements in air
and lighting
and lighting
climates)
23% of the remaining energy use for a hotel
28% of the remaining energy use for an office
67% of the remaining energy use for retail

Public buildings
Strengthening the energy requirements of
the Code could deliver between 35 and 56
per cent of the energy savings required to
achieve net zero energy in new hospital wards
and school buildings by 2030, compared with
a baseline that complies with the energy
requirements proposed for the 2019 Code.
This could be achieved through simple
measures such as:
• Increasing thermal mass;
• Installing adjustable outdoor shading; and
• Increasing the efficiency of air conditioning
and lighting.
conservative projections of technology cost and
performance improvements, the upfront cost
associated with these improvements would
be approximately $57,000 for the modelled
hospital ward archetype ($120 per square
metre) and $39,000 for the school building
archetype ($204 per square metre).These
upfront costs would be more than offset by the
energy bill savings, reduced spend on heating,
cooling and ventilation equipment, and
electricity network savings.
Under the accelerated deployment scenario,
changes to the Code energy requirements
could deliver 50-60 per cent of the required
energy savings.This could be achieved through
accelerated deployment of more efficient
chillers, lighting and commercial-scale electric
heat pumps.
The remaining task to reach net zero energy
in public sector buildings would need to be
addressed through a combination of best
practice design, on-site renewable energy,
voluntary measures to improve energy
shows that by 2030, when combined with
strengthened Code energy requirements, there
is potential for a single-storey hospital ward to
generate approximately one-third of its annual
energy use through rooftop solar PV, while a
single-storey school building could generate
over three-quarters of its energy use.
Case study:
Towards a zero emissions future - ACT Public
Schools
The ACT Education Directorate (the Directorate) has adopted a
holistic approach to transitioning ACT public schools toward a
zero-emission future. Since the commencement of the Carbon
Neutral Government Framework in 2012, the Directorate has
implemented a range of carbon emission reduction strategies
including the installation of solar panels, lighting upgrades,
implementation of sustainable transport options and capacity
building within schools. These approaches explore the roles that
technology, infrastructure and behaviour play in reducing carbon
emissions across an aged building portfolio.
Across the schools and support offices, a total of 2.4MW in solar
panel array systems have been installed. This includes 1.265MW
of systems installed in partnership with the Australian Government
National Solar Schools Program in 2012 and 2013, which send
generated electricity to the local grid (gross fed) under an ACT
feed-in-tariff arrangement. In addition to the systems mentioned
above, a 600kW system is in place at Amaroo School (Preschool
to Year 10 students) and is part of a unique leasing arrangement
between the Directorate and a private company.
To support ongoing sustainability performance, the Directorate
entered an agreement with schools to reinvest all feed-in-tariff
income into sustainability initiatives. This is supported through
access to sustainability advisors within the Directorate. Schools
have also undertaken sustainability initiatives, such as lighting
upgrades, using their own funds in addition to income from the
feed-in-tariff.
This case study was contributed by the ACT Education Directorate.

POTENTIAL 2030 ENERGY TARGETS - Public buildings
^ Percentage reduction is a proportion of whole building energy, including energy that is currently not in the scope of the Code
and needs to be addressed by measures outside the Code
137.9
43.8
0
Net zero energy
35%
via energy
efficiency^
50%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in
appliances)
kWh/m2/year
Hospital Ward*
Relevant to
approx.
2%
of new
construction
2019-2050
scenario, plus:
improvements in air
and lighting
electric heat pumps
shading
and lighting
climates)
84.6
12.3
0
Net zero energy
56%
via energy
efficiency^
60%
via energy
efficiency^
Controlled by
the Code
(Heating,
cooling, lighting,
hot water)
Outside scope of
current Code
(Plug-in appliances)
kWh/m2/year
School Building*
Relevant to
approx.
4%
of new
construction
2019-2050
> All the measures in the
conservative scenario, plus:
performance windows
improvements air
water
> Adjustable outdoor shading
and lighting
> Perimeter zone daylight
harvesting
> Light-coloured external walls
(mostly warmer climates)
33% of the remaining energy use for a hospital ward
86% of the remaining energy use for a school building

Warmer climates
The results above provide averages across all
climate zones, however the modelling has
been completed separately for each zone.This
section highlights the specific results for the
warmer Climate Zones 2 and 5. As defined
by the ABCB40
, Climate Zone 2 is described
as having warm humid summers and mild
winters and covers a large proportion of
coastal Queensland (including Brisbane), from
just north of Mackay down to just south of
Coffs Harbour. Climate Zone 5 is described
as warm temperate and covers coastal areas on
the west, south and east coasts of Australia.
Perth, Adelaide and Sydney all fall within
Climate Zone 5, as do Geraldton, Esperance,
Ceduna, Newcastle and a hinterland strip west
of Brisbane.
Although many of the energy efficiency
measures were found to be cost effective for all
the climate zones analysed, the measures that
were found to be generally more effective for
the warmer climates included:
• Ceiling fans for residential buildings;
• Larger eaves for some residential buildings;
and
• Lighter outside wall colour for non-
residential buildings.
Case studies:
Housing in warmer climates
Josh’s House
Josh’s House has achieved a 10 Star NatHERS rating using
conventional building materials, demonstrating that high energy
performance is possible at little or no extra cost. The Perth project was
built in 2013, and is both oriented east-west with few windows on the
eastern and western walls to minimise solar heat gain in the summer.
Shading and eaves on the northern windows, well insulated walls and
ceilings, and carefully selected internal materials help ensure indoor
temperatures remain comfortable without air conditioning during
Perth’s hot summers and cool winters. A 3kW rooftop solar system on
each house provides more energy than the house needs on average
over the year, saving the family over $1,500 in electricity bills every
year compared to the Perth average.
This case study was contributed by Josh Byrne & Associates.
Wunya House
Wunya House is situated in Queensland’s sub-tropical Mary Valley,
which experiences large variations in seasonal temperatures. The
house is well adapted to this variability, keeping indoor temperatures
cool during the summer through features like its light coloured roof
to reflect heat, and strategically placed insulation and ceiling fans.
Wunya House has proved to be a highly affordable home to run,
as its 3 kW rooftop solar system supplies what little electricity the
household uses and exports the excess energy to the grid for a profit.
This case study was contributed by Don Parry.

Milder and cooler climates
The results above provide averages across all
climate zones, however the modelling has
been completed separately for each zone.
This section highlights the specific for the
milder and cooler Climate Zones 6 and 7.
Climate Zone 6 is described by the ABCB as
mild temperate, and spans coastal and inland
regions in the south-west and south-east of
Australia. Melbourne, the Adelaide Hills and
western Sydney fall within Climate Zone 6,
as do Albany and Ballarat. Climate Zone 7 is
described as cool temperate and covers most
of Tasmania, as well as the sub-alpine regions
of Victoria and southern New South Wales.
Canberra and Hobart are major cities located
within Climate Zone 7.
Although many of the energy efficiency
measures were found to be cost-effective for
all the climate zones analysed, the measures
that were found to be generally more effective
for the warmer climates included:
• Higher levels of wall insulation for
residential buildings;
• Under slab and slab edge insulation for
residential buildings;
• Increased thermal mass for some residential
buildings; and
• Stronger requirements for heat exchangers
for some non-residential buildings.
Case studies:
Housing in milder and cooler climates
Stray Leaf House
Stray Leaf House
Stray Leaf House is designed to be comfortable and cheap to run in
Canberra’s climate. The house makes the most of the sun’s warmth
in the winter, with living spaces oriented to the north and features
like double glazing, concrete floors, thorough insulation and a well-
sealed internal building envelope to retain heat. Appropriately sized
eaves allow high levels of solar heat gain in the winter, and shade
floors during Canberra’s hot summers. The efficiency measures at
Stray Leaf and its 1.5 kW rooftop solar system mean that in summer
power bills can be as little as one third of that of typical one-person
households in the area.
This case study was contributed by Light House Architecture and Science.
Davison Street Collaborative
The Melbourne townhouses in the Davison Street Collaborative
will be constructed to reach net zero energy usage annually. A 4
kW rooftop solar and battery storage system is predicted to meet
100% of each home’s energy demand, which will be kept low through
energy efficient design and equipment. An airtight building envelope
along with double-glazed, timber-framed windows ensures that
unwanted heat loss and gain is minimised. Inside, cross ventilation
in living areas and energy recovery ventilation, as well as ceiling fans
and a heat pump hydronic heating system will provide fresh air and
keep temperatures comfortable for building occupants across all
seasons.
This case study was contributed by HIP V. HYPE.

RECOMMENDATION 1:
Commit to a Zero Carbon Ready
Building Code
Ministers Forum should commit to deliver
a ‘Zero Carbon Ready’ Code.
Why?
According to the World Green Building
Council’s Advancing Net Zero program,
all new construction globally needs to be
operating at net zero carbon from 2030
onwards to align with the Paris Climate
Change Agreement41
, a target which the
Green Building Council of Australia42
has
also proposed for Australia.This report
demonstrates the potential for the National
Construction Code to contribute to this
transition. Committing to a Zero Carbon
Ready Code would mean establishing targets
and a process to progressively upgrade the
Code energy requirements to maximise this
potential contribution.This would provide
the regulatory certainty needed to stimulate
investment and innovation by industry to
deliver higher performance buildings at lower
cost.
How?
By the end of 2018, the COAG Energy
Council and Building Ministers Forum should
commit to make the National Construction
Code Zero Carbon Ready, and establish
and fund a work program to develop a Zero
Carbon Ready Code Implementation Plan.
Delivering a Zero Carbon Ready Code would
mean:
1. Setting a trajectory for future energy
efficiency targets in the Code at least
as stringent as the conservative energy
efficiency targets (excluding renewable
energy potential) in this report;
2. Introducing net energy targets (including
renewable energy potential) along with a
trajectory for future net targets.This report
sets out the potential for on-site renewable
energy for different building types, which
provides an indication of where net energy
targets could be set.The specific net energy
targets appropriate for the Code requires the
investigation of a number of key issues as
outlined in Section 4; and
3. Establishing a clear set of processes for
implementation of the targets in the
Code, and adjustment of targets over time
to take advantage of future technology
developments and design innovations (see
further detail in Section 4.1).
Ministers Forum should establish and fund
a work program to develop a Zero Carbon
Ready Code Implementation Plan, due for
completion by the end of 2019.
3. Recommendations

RECOMMENDATION 2:
Deliver a step change in 2022
Ministers Forum should jointly agree
to task the Australian Building Codes
Board (ABCB) to deliver a step change
in the energy requirements in the 2022
Code, with a strong focus on residential
standards and a further incremental
increase in non-residential standards.
Why?
Work is already in progress to increase
the stringency of non-residential energy
requirements in the 2019 Code update,
along with improvements to the residential
requirements (but no increase in stringency).
The analysis in this report shows that a step
change in energy performance is possible
today for residential buildings. Further gains
for non-residential buildings are also possible
beyond the proposed 2019 changes.This
indicates that the Code energy requirements
for both residential and non-residential should
be strengthened in 2022.
Delaying these upgrades would be costly.
Just three years' delay from 2022 to 2025
could lock in $2 billion in residential energy
bills, $620 million in non-residential energy
bills and $720 million of additional network
investments between now and 2030.
How?
By the end of 2018, the COAG Energy
Council and Building Ministers Forum should
task and resource the ABCB to deliver a step
change in Code energy requirements in 2022,
to at least the level of energy performance
for 2022 identified in the conservative energy
efficiency targets in this report.
RECOMMENDATION 3:
Expand the scope of the Code and
progress complementary measures
As part of an integrated package of
building energy and emissions policy,
the COAG Energy Council and Building
Ministers Forum should jointly establish
work programs that investigate expanding
the scope of the Code to prepare for
future sustainability challenges and
opportunities, while also progressing
measures to complement the Code
that drive towards zero carbon new and
existing buildings.
Why?
There are a range of issues outside the scope
of this report and currently outside the scope
of the Code that have been identified by
stakeholders as important issues to address
moving forward. Consideration should be
given to expanding the scope of the Code to
address future energy and emissions challenges
and opportunities.
In addition, the Code is important but can
only deliver part of the solution. Effective
compliance and enforcement is paramount,
and a range of complementary measures are
required to drive towards zero carbon new and
existing buildings.
How?
A Zero Carbon Ready Code needs to be
complemented by a broader set of policies to
enable the transition to a zero carbon built
environment by 2050.This includes fixing
compliance and enforcement (see Section
4.3) and a range of other complementary
measures as recommended in Low Carbon,
High Performance (see Section 4.7).These
complementary policies could be progressed as
part of the National Energy Productivity Plan.

As part of the development of a Zero
Carbon Ready Code Implementation Plan,
the COAG Energy Council and Building
Ministers Forum should also establish work
programs that investigate the expansion of the
Code to cover future energy and emissions
challenges and opportunities, including:
Health and safety requirements: Introduction
of specific health and safety requirements in
relevant sections of the Code to complement
energy requirements.This would include
mechanical ventilation requirements for
airtight buildings and free-running indoor
temperature limits during periods of extreme
weather;
Peak demand: Introduction of Code
requirements relating to peak demand
reduction, including emerging demand
management technologies such as batteries
and ‘smart’ appliances integrated with smart
metres and time-of-use electricity pricing;
Maintainability: Introduction of Code
requirements that systems are designed
and installed to enable commissioning and
ongoing maintainability;
Electric vehicles: Potential to incorporate
new requirements to prepare buildings for
future electric vehicle uptake; and
Embodied energy and emissions: Potential to
integrate embodied energy and emissions into
the Code in the future.
FIGURE 5: Timeline for implementation of
recommendations
By end of 2018:
Commit to a Zero Carbon Ready Code
Task and resource the ABCB to deliver
step change in 2022
Establish and fund a work program to
design a Zero Carbon Ready Code
Implementation Plan
By end of 2019:
Complete Zero Carbon Ready Code
implementation plan
By 2022:
Step change in the 2022 Code energy
requirements
Introduction of new measures to address
future sustainability challenges
Ongoing:
ABCB to upgrade Code requirements in
line with targets and trajectories
Three-yearly public report on progress
towards targets

This section sets out the key issues that need to be considered in pursuing the
recommendations of this report. These include:
1. Processes for code updates and target adjustments over time
2. Issues relating to introducing renewables into the Code
3. Fixing compliance and enforcement
4. Appropriately managing air leakage and ventilation
5. Phase out of gas
6. Accelerating the trajectories through market transformation initiatives
7. Other complementary policies
4.1 Process for Code updates and target
adjustments over time
A clear, rules-based process
for Code updates and target
adjustments is essential to
fully capture potential benefits
and provide the policy stability
required by industry.
The Zero Carbon Ready Code
Implementation Plan should include:
• An updated objective statement for the
Code energy requirements to reference
health and resilience outcomes and the
contribution to broader zero carbon policy
objectives;
• A clearly defined process for the ABCB to
implement Code upgrades over time in line
with the targets,including the potential to
quantify the Performance Requirements in the
Code and a requirement that all Verification
Methods be shown to deliver broadly the same
energy performance outcomes;
• A set process for monitoring and publicly
reporting on progress towards the targets; and
• Scheduled reviews at least every six years
to identify opportunities to strengthen
targets to account for faster improvement in
technology or design practices and effective
implementation of complementary measures
to accelerate trajectories by driving down
technology costs or improving industry
capability. Reviews should include an
assessment of the gap between market
leaders and minimum standards. Reviews
should also be subject to independent third-
party assurance and provide industry and
other stakeholders with the opportunity to
be consulted and provide input.
The Implementation Plan should also provide
clear and public guidelines for Regulatory
Impact Assessments of Code updates, which
should include:
• Clarification that the objective of Code
energy requirements includes contributing
the maximum cost-effective level of energy
performance in new construction in line
with the economy-wide transition to net
zero emissions in line with the Paris Climate
Agreement;
• Valuation of key externalities and financial
and non-financial costs and benefits,
including costs and benefits for human
health and comfort, productivity of building
occupants, resilience in the face of extreme
temperatures, and the electricity network;
4. Implementation considerations

• Projecting the future cost of achieving
performance targets, anticipating the
impact of industry learning including
learning relating to passive solar design,
market transformation initiatives, changing
technology performance/cost and existing
and anticipated barriers to compliance based
on industry consultation and findings from 3
yearly reviews; and
• Assuming a future changed climate in line
with the best available projections.
4.2 Renewables in the Code
Pursuing the potential for on-site
renewables through the Code
presents significant opportunities
but also challenges that will need
to be resolved.
The capacity of installed small-scale solar
photovoltaic (PV) systems has grown strongly
since 2010, driven primarily by steadily
reducing prices43
.The pace of rooftop solar
PV installations is also accelerating; recently
published data from Green Energy Market
showed that the rate of growth in solar PV
installations increased by a record 60 per cent
in the year to April 201844
.
However, there is significant, cost-effective
potential for additional on-site renewables
as illustrated in this report. Incorporating
net energy requirements into the Code that
reflect this potential could remove market
barriers (similar to those described in
Section 1.3 for energy efficiency) which are
currently preventing the accelerated uptake
of distributed renewable energy systems,
including rooftop solar PV.This could make
a major additional contribution towards
decarbonisation of the built environment and
the economy more broadly.
An alternative approach to accelerate uptake
of distributed renewables could be to rely
on policy mechanisms outside the Code,
such as national energy emissions policies or
direct financial incentives.This report has not
investigated the relative costs and benefits of
these alternatives.
One significant advantage of introducing on-
site renewable energy requirements into the
Code is that it could provide greater certainty
about the likely speed of distributed renewable
energy uptake, which would support planning
for future electricity network upgrades. In
addition, distributed renewable energy paired
with battery storage may help address grid
stability issues, reduce transmission and
distribution losses, increasing the resilience
of the grid during power outages45
and assist
with the broader transition to a zero carbon
electricity sector.

By contrast, inclusion of on-site renewable
energy requirements in the Code may create
challenges.These include:
• Variability of solar potential: This report
presents the solar PV potential for eight
different building types, with a limited
assessment of the sensitivity to different
building sizes. But the rooftop solar PV
potential of new construction will vary
significantly by building type.This may
create challenges for setting specific targets
that incorporate solar PV potential;
• Need for exemptions: The analysis assumes
that roofs are unshaded with an average
amount of rooftop equipment. Exemptions
may be required where there is unavoidable
shading or constraints on the roof space,
though this would need to be combined
with measures to combat individuals seeking
to minimise their investment in on-site
renewables;
• Barriers to grid connection: There is no
regulatory oversight in Australia of rules and
requirements that govern the connection
of distributed energy to the grid – the
requirements are set by individual electricity
distributors, which has led to inconsistency
in connection standards and requirements
around the country46
. Many distributors also
set a 5 kW limit for solar PV systems on
housing connected to the grid47
, meaning
that the PV system sizes assessed as cost-
effective in this report could not be installed
in practice;
• Grid integration: Accelerated growth in
distributed renewable energy can increase
the complexity of managing the electricity
grid by increasing the amount of variable
generation in the system; and
• High upfront costs: Installation of
renewable energy systems requires
significant upfront capital. Even smaller
systems require a considerable upfront
investment. While this cost will be more
than offset by financial benefits over time,
greater availability of financing instruments
and leasing arrangements are needed for
building owners who may be capital-
constrained.
These issues are likely to be solvable, and other
jurisdictions such as the State of California
have already begun to introduce specific
on-site renewable energy requirements into
building codes48
. Accelerating and facilitating
the uptake of battery storage systems is
likely to be an important contributor to
solving a number of these issues, as grid-
connected storage systems can help reduce
solar variability and grid integration issues,
and potentially improve the economics for
building owners. Batteries are already on a
rapid cost-reduction trajectory, driven by
technological advances in smartphones and
electric vehicles as well as the growth of the
renewable energy industry globally. Analysis
by the Alternative Technology Association
estimates that batteries will become cost-
effective for many households by 2020, well
before the 2022 Code update49
.
Australian governments can help accelerate
and facilitate uptake of battery storage
systems. A report by the Clean Energy
Council outlines four key reforms that are
required.These are levelling the playing field
for batteries to participate in the energy
market, removing regulatory barriers to
storage by making grid connection easier
for battery-equipped renewable energy
systems, recognising and rewarding the full
value of storage systems, and supporting the
introduction of appropriate product standards
and consumer protection measures50
.
The issues outlined above would require
further consideration before net energy
requirements incorporating on-site renewable
energy potential are introduced.

4.3 Compliance and enforcement
Fixing compliance and
enforcement regimes is
paramount.
This project has focused on developing a
feasible set of energy targets for the Code,
and has not focused on how to improve
compliance, monitoring or enforcement.
However, it is widely acknowledged that
non-compliance with the Code is an
ongoing issue51
. Non-compliance and under-
compliance is unlawful. It undermines the
rights of building purchasers and occupants
who are not receiving what they are legally
entitled to receive under the Code, and
provides an unfair advantage to operators who
cut corners over those who meet required
standards.This issue must be addressed as
a matter of urgency if a zero carbon built
environment is to be achieved by 2050.
While compliance and enforcement issues affect
the building sector beyond just energy efficiency,
there is a need for a specific focus on energy
efficiency compliance.This requires cooperation
between the ABCB, Building Ministers
Forum, COAG Energy Council, the relevant
state and territory building agencies, and local
government, as well as appropriate resourcing
of the agencies responsible for oversight of
construction standards and compliance.
A number of the issues relating to compliance
and enforcement could be addressed through
the recommendations of the Shergold and
Weir building and construction industry
compliance and enforcement systems review.
The review focused primarily on safety issues
but the following recommendations have
particular relevance to energy efficiency52
:
• A nationally consistent approach to
registration and training of building
practitioners, including compulsory
continual professional development;
• Improvements and expansion of regulatory
oversight, including a proactive audit
strategy;
• Enhanced statutory and reporting
requirements with a legislated code of
conduct for building surveyors;
• A central database or platform for sharing
building information;
• Measures to improve design documentation
including enhancements to third party
reviews of documentation and approval
processes for performance solutions;
• Expanded inspection regimes;
• Requirements for more comprehensive post-
construction documentation management,
including a digital building manual;
• Establishment or expansion of product
certification schemes; and
• A plan for implementation of the
recommendations with regular review and
reporting.
The National Energy Efficient Buildings
Project (NEEBP) has focused more
specifically on compliance and enforcement
of building energy efficiency regulation.The
project is a joint initiative of the Council
of Australian Governments under the
National Energy Productivity Plan. Its latest
report focused on the residential sector has
recommended a range of measures to improve
compliance, including improvements to:
• Planning and building approvals
processes: Requiring energy efficiency
measures to be explicitly outlined on
the plans and building contract and
a compliance review checklist to be
undertaken prior to handover from the
builder to the owner;
• Associated systems and tools: Requiring
an appropriate level of energy efficiency
education, knowledge and training for
building professionals; development of
a national product verification system to
ensure the energy efficiency of products
supplied to builders meet Australian or
appropriate standards and that those
products are installed correctly; and
development of a national audit/inspection
system that can be applied across all states,
territories and climate zones; and

• Consumer awareness: Increase consumer
awareness of the value of energy efficiency
compliance in reducing heating and cooling
costs, improving comfort and quality of life,
and reducing power bills.
In addition to these, there are a number of
structural issues with the Code that have been
highlighted during the course of this project
and should be investigated to support Code
enforcement, including:
• Funding to update the NatHERS
framework and relevant tools, or
establishment of a new tool (for example,
one which considers whole-of-house energy
performance) to address shortcomings in
the current NatHERS regime for residential
buildings. For example, the NatHERS
scheme currently does not provide an
incentive for building more airtight
buildings53
, and does not currently address
comfort or resilience outcomes impacted by
energy efficiency measures54
; and
• Investigating the potential of mandatory
post-construction verification of energy
performance rather than allowing
compliance to be verified based on
modelling of the predicted outcomes
based on the design.This should include
investigation of options to remove or limit
the availability of deemed-to-satisfy (DtS)
elemental requirements in favour of a
performance pathway55
. For example, DtS
elemental requirements could be made
available for small projects or extensions
only.The DtS elemental requirements are
unlikely to provide sufficient flexibility to
support higher levels of energy performance
required under a Zero Carbon Ready Code.
Improvements to the energy efficiency
requirements of the Code must be matched by
improvements in compliance and enforcement.
The fact that some operators are failing to
comply with the regulations should not
prevent implementation of cost-beneficial
and achievable strengthening of the energy
requirements.
4.4 Air leakage and ventilation
Code requirements for infiltration
and ventilation must ensure
that occupant health outcomes
are maintained or improved
when pursuing increased energy
efficiency.
Making buildings more airtight can
significantly improve energy performance
by reducing draughts, and decreasing the
energy required to maintain comfortable
indoor temperatures.This must go hand-
in-hand with improved ventilation, which
will both deliver improved indoor air quality
and avoid unintended consequences of more
airtight buildings such as condensation and
mould issues or trapping of harmful airborne
pollutants inside.
Steps to improve air leakage and ventilation
include:
1. Establish a plan for introduction of
quantified mandatory air tightness
requirements in the DtS requirements;
2. Introduce education and training programs
for designers and builders, including
introduction into the tertiary curriculum;
3. Determine appropriate quantified air
tightness standards with corresponding
ventilation standards to ensure flushing of
indoor air pollutants;
4. Provide a voluntary incentive to encourage
the development of more airtight buildings;
5. Build the evidence base for appropriate
air tightness and associated ventilation
requirements for Australian climates, and
refine the proposed standards; and
6. Introduce mandatory quantified standards in
the DtS requirements.

4.5 Phase out of gas use in buildings
Gas use in buildings needs to be
phased out to meet long-term
emissions targets, but further
work is required to assess the
best approach to this transition.
Phasing out gas in buildings is likely to be
needed over the long term to meet Australia’s
commitments under the Paris Climate
Change Agreement. All buildings built today
will still be operating in 2050 when Australia
will need to be at or near net zero emissions.
In a zero net emission environment, gas use
in buildings will need to be offset.This is
unlikely to be a sensible strategy for buildings,
as demand for offsets from industries where
emissions are unable to be completely
eliminated is likely to push offset prices higher
in the future. In the short term, as electricity
generation transitions towards low carbon
energy sources and becomes less emissions-
intensive than gas56
, all-electric buildings
may become a less emissions intensive choice
as a matter of course. In addition, retail gas
prices have significantly increased in most
states since 200657
, making gas increasingly
unaffordable for households and businesses.
This report assumes no new gas connections
for residential buildings, and no new gas
connections for commercial buildings in the
accelerated deployment scenarios. Research
has already shown that this is currently more
cost-effective than installing gas connections
in new residential buildings58
. Installing gas
equipment such as boilers in new buildings
also risks locking in gas consumption and
the associated emissions over the life of the
equipment, and potentially increasing the cost
of replacement during the end-of-life stage
if equivalent electric equipment needs to be
retrofitted into the building. Avoiding new
building gas connections can also help relieve
pressure on Australia’s east coast gas supply
market, which in turn will reduce energy costs
for existing gas users59
.
The recommendations of this report do not
specifically preclude gas use in new buildings,
for example, a number of the non-residential
archetypes modelled assume gas use for
heating under the conservative scenario. But
the recommended energy targets could be
expected to facilitate the phase out of gas in
buildings over the long term.
This report recommends an energy metric
for the Code which is agnostic in respect
to the fuel used.This means that different
emissions outcomes could be seen for
different developments that meet the same
energy target, depending on whether gas
appliances are installed or not, and on
the emissions intensity of the grid at that
location. Progressively strengthening energy
requirements using a specific energy metric
may in itself eventually lead to a gas phase
out, as electric appliances such as heat pumps
are generally more energy efficient options to
deliver the same services, although the timeline
over which this might occur is uncertain.
Further work is required to assess the best
approach to transitioning away from gas,
particularly in areas where gas is the dominant
fuel for heating and cooking, and in specific
applications such as commercial kitchens
where gas may continue to be demanded.
Further work is also needed to explore the role
of zero carbon gas sources such as biogas in a
future zero carbon built environment.

4.6 Accelerating trajectories with market
transformation policies
Research, development and
deployment policies targeting
key technologies, and design
practices can help accelerate
energy performance trajectories,
while generating significant
benefits.
The analysis in this report highlights technologies
that could have the greatest impact on building
energy performance,and their relative costs and
benefits.These conservative scenarios illustrate
feasible energy performance targets based on
current and projected economics.However,with
research,development and deployment policies,
these targets could be accelerated or increased
over time.
The accelerated deployment scenarios
highlight that additional energy savings
could be achieved if cost reductions can be
delivered for a range of technologies that are
not currently cost-effective, or not projected
to be cost-effective until later years.These
include market-leading higher performance
windows, large-scale electric heat pumps, and
accelerated improvements in the efficiency of
air conditioning, lighting and domestic hot
water systems.
In addition, market transformation support
should be considered for:
• Integrated solar PV and battery storage as
discussed above; and
• To support industry learning and improvement
in building design and construction for energy
efficiency,for example,through training and
accreditation programs.
4.7 Other complementary policies
The Code is one part of the solution
to transitioning buildings to zero
carbon - other complementary
policies targeting building energy
performance are required.
The Code energy requirements set minimum
standards for heating and cooling performance
of the building envelope, lighting energy
efficiency, and energy efficiency of large fixed
equipment such as air conditioning and lifts;
however, they do not cover smaller appliances
such as refrigerators or computers, nor do they
cover the procurement of energy from off-
site sources (for example, through renewable
power purchasing agreements).The Code also
only applies to new construction, and does not
include rules for existing buildings unless they
are undergoing major renovations. Finally, the
Code does not target the embodied energy or
emissions in building products and materials.
Because of this, a Zero Carbon Ready Code
needs to be complemented by a broader set
of policies to enable the transition to a zero
carbon built environment by 2050.
The Low Carbon, High Performance report
recommended a broad suite of policy measures
to support the transition to a zero carbon built
environment, including:
• Strengthening energy standards for equipment
and appliances and establishing long-term
targets and processes to support ongoing
improvements as technology improves;
• Investigating the introduction of minimum
standards for existing buildings and rental
properties;
• Financial incentives to accelerate investment
in high performance buildings, such as green
depreciation and stamp duty concessions;
• Government leadership through its own
procurement;

• Energy market reforms to provide
appropriate financial incentives for
distributed energy and energy efficiency,
including cost-reflective network tariffs that
are passed on to individuals; and
• Expanding mandatory disclosure of energy
performance to sectors beyond large
commercial buildings, including housing.
The National Energy Productivity Plan
provides a vehicle for implementation of
nationally harmonised or coordinated energy
productivity measures, but may require
additional resourcing. State,Territory and
local-level energy efficiency and climate
mitigation strategies provide another avenue
for implementation of regional policies.

Endnotes
1
Adapted from ASBEC (2011),Defining zero
emission buildings-review and recommendations,p.48.
2
Harrington, P. and Toller, V. (2017). Best
Practice Policy and Regulation for Low Carbon
Outcomes in the Built Environment, p.19.
3
Australian Sustainable Built Environment
Council (ASBEC) (2016). Low Carbon, High
Performance, p.27.
4
Based on floor area across all building sectors,
given currently expected growth rates (primarily
from the Australian Bureau of Statistics) and
allowing for a refurbishment/rebuild rate of 1
per cent of the stock each year, in addition to net
stock growth.
5
A summary of how the Code is administered
and the variations in Code energy requirements
is provided in ASBEC and ClimateWorks
Australia (2016). Building energy performance
standards project: Issues Paper, pp.5-10.
6
Australian Competition and Consumer
Commission (ACCC) (2017). Retail Electricity
Pricing Inquiry - Preliminary Report, pp.12-20.
7
ACCC (2017), p.14.
8
ACCC (2017), p.20.
9 ACCC (2017), p.29.
10
ASBEC (2016). Low Carbon, High
Performance, Appendix 1 p.10.
11
According to estimates by CSIRO from the
Energy Network Transformation Roadmap.
12
More information is available on the AEMC
website: https://www.aemc.gov.au/our-work/
our-current-major-projects/power-choice
[Accessed 19-06-2018]
13
A selection of studies is summarised in ASBEC
and ClimateWorks Australia (2018). The Bottom
Line - The household impacts of delaying improved
energy requirements in the Building Code, p.18.
14
World Green Building Council (2018). Doing
Right by Planet and People: The Business Case for
Health and Wellbeing in Green Building.
15
Green Building Council of Australia (2012).
Green Schools, pp.4-5.
16
The analysis determined an average cost
premium of $58 per m² for the modelled
detached house and $44 per m² for the modelled
office building. Estimates are based on what
is cost-effective for the 2022 Code. Average
construction costs are difficult to determine, but
industry consultation suggests that for detached
housing this ranges between $1,500 per m² for
volume built homes and upwards of $4,000 per
m² for custom architect-designed homes. Data
from the Rawlinson's Australia Construction
Handbook suggests that typical construction
costs for commercial office buildings (finished
floor, 7-20 storeys) range between approximately
$2,400 and $3,300 per m².
17
Global Real Estate Sustainability Benchmark
(GRESB). Press Release: 2017 Results Show
Australia and New Zealand Real Estate Sector
Leading the World in Sustainability Performance.
13 September 2017, available at: https://gresb.
com/australia-and-new-zealand-real-estate-
sector-leading-the-world-in-sustainability-
performance/ [Accessed 19-06-2018]
18
More information available at: https://www.
cefc.com.au/case-studies/amp-capital-wholesale-
office-fund-aims-for-net-zero-emissions-
by-2030.aspx [Accessed 19-06-2018]
19
investa.com.au/news-and-media/news/2016/
investa-%E2%80%93-the-first-australian-
property-company-to [Accessed 19-06-2018]
20
More information at: https://www.
thefifthestate.com.au/innovation/dexus-
commits-to-net-zero-2030-target [Accessed
20-06-2018]
21
More information available at: http://
sustainability.mirvac.com/our-strategy/
[Accessed 20-06-2018]
22
gpt.com.au/sustainability/environment/climate-
change-energy [Accessed 20-06-18]
23
thefifthestate.com.au/innovation/commercial/
lendlease-fund-sets-2025-net-zero-carbon-
target [Accessed 20-06-2018]

24
monash.edu/net-zero-initiative [Accessed 19-
06-2018]
25
Based on data for 220,000 class 1 dwellings
(detached and attached housing) from the CSIRO
University Certificate Database, including
FirstRate5 data from Sustainability Victoria,
since May 2016. Not all of the projects that have
submitted certificates have necessarily been built,
and although efforts are made to ensure only
one certificate is submitted per property there
may be cases there may be more than one rating
corresponding to a particular project.
26
ClimateWorks Australia (2013). Tracking
Progress Towards a Low Carbon Economy:
Buildings. P.19. ‘Emissions intensity’ is defined
as the annual greenhouse gas emissions (in
kgCO22
-e) divided by the building floor area.
27
Adapted from ASBEC (2016). Low Carbon,
High Performance, Appendix 2 p.12.
28
Low Carbon, High Performance (ASBEC,
2016) sets out a holistic package of five broad
policy areas required to save energy and rapidly
decarbonise Australia’s built environment: a
national plan with strong governance and action;
mandatory minimum standards with a forward
trajectory to provide a regulatory signal; targeted
programs and incentives to stimulate the market;
energy market reform to provide a level playing
field; and data, research, information, education
and training to enable effective action.
29
Although there are early leaders already
bringing higher performing products, such
as windows, to the market, feedback from
stakeholders suggests that a lead time of three
to four years is typically required to re-tool
manufacturing to produce new products.
30
For a summary, see ASBEC and
ClimateWorks Australia (2017). Building Code
Energy Performance Trajectory Project: Issues
Paper, pp.10-11.
31
Harrington, P. and Toller, V. (2017). Best
Practice Policy and Regulation for Low Carbon
Outcomes in the Built Environment, p.10.
32
Energy Efficiency Watch (2014). Energy
efficiency policies in Europe: Case study - Danish
Building Code, p.2.
33
Performance, p.78.This target refers only to
2030 annual emissions. Once the international
rules for setting national targets under the
Paris Agreement are negotiated and agreed, the
2030 target will be translated into a cumulative
emissions limit to 2030 in line with the existing
government commitment.The current estimates
from government projections is that the 26-
28 per cent target translates to a cumulative
emissions reduction of 868-934 million tonnes
of carbon dioxide equivalents between 2021-
2030. If a cumulative emissions limit is set,
taking early action to begin reducing emissions
becomes more important.
34
ClimateWorks Australia (2014). Pathways to
Deep Decarbonisation in 2050, p.17.
35
Performance, pp.77-78.
36
ASBEC and ClimateWorks Australia (2018).
The Bottom Line - The household impacts of delaying
improved energy requirements in the Building Code.
37
Accessible via www.asbec.asn.au and
www.climateworksaustralia.org.au
38
Department of the Environment and Energy
(2017). Changes Associated with Efficient
Dwellings - Final Report, p.43.
39
As no increase in stringency is proposed for
residential Code energy requirements for the
2019 Code, it is assumed here that housing
that complies with the 2016 Code energy
requirements will also comply with the 2019
Code.
40
For more information on the climate zones
as defined by the ABCB, refer to: http://www.
yourhome.gov.au/introduction/australian-
climate-zones [Accessed 19-06-2018]
41
World Green Building Council (2017). Doing
Right by Planet and People: The Business Case
for Health and Wellbeing in Green Building, p.7.
42
Green Building Council of Australia (2018).
A Carbon Positive Roadmap for Buildings –
Summary Report.
43
Australian Energy Market Operator (2017).
Projections of uptake of small-scale systems,
Section 2 ‘Historical Trends’.

44
As reported by The Fifth Estate (2018),
Australia breaks another rooftop solar record,
24 May 2018. Available at: https://www.
thefifthestate.com.au/energy-lead/business-
energy-lead/australia-breaks-another-rooftop-
solar-record/99069?mc_cid=3505518555&mc_
eid=597b61fbdd [Accessed 28 May 2018]
45
Institute for Sustainable Futures (2014), Issues
Paper: A Level Playing Field for Local Energy,
prepared for the City of Sydney, p.9.
46
ClimateWorks Australia and Seed Advisory
(2018). Plug & Play 2: Enabling distributed
generation through effective grid connection
standards, pp.9-10.
47
Based on stakeholder feedback provided for
this project.
48
California Energy Commission (2015).
2016 Building Energy Efficiency Standards for
Residential and Nonresidential Buildings Title 24
Part 6.
49
Alternative Technology Association (2016).
Household Battery Analysis.
50
Clean Energy Council (2017). Charging
Forward: Policy and Regulatory Reforms to
Unlock the Potential of Energy Storage in
Australia.
51
pitt&sherry. (2014). National Energy
Efficient Building Project, prepared for the
South Australian Department of Economic
Development, p.x.
52
Adapted from Shergold, P. and Weir, B.
(2018). Building Confidence - Improving the
effectiveness of compliance and enforcement systems
for the building and construction industry across
Australia.
53
More details on the modelling of air
tightness under the current NatHERS scheme
are provided in ASBEC and ClimateWorks
Australia (2018). The Bottom Line - The household
impacts of delaying improved energy requirements
in the Building Code, p.35.
54
The CRC for Low Carbon Living has
undertaken work to investigate inclusion of
comfort metrics in the NatHERS framework
through its ‘Advanced Comfort Index for
Residential Homes’ project. More information
available at: http://www.lowcarbonlivingcrc.com.
au/research/program-1-integrated-building-
systems/rp1019-advanced-comfort-index-
residential-homes [Accessed 19-06-2018]
55
More details on the issues relating to
DtS elemental requirements are provided in
ASBEC and ClimateWorks Australia (2018).
The Bottom Line - The household impacts of delaying
improved energy requirements in the Building Code,
pp.35-36.
56
ClimateWorks Australia (2014). Pathways to
Deep Decarbonisation in 2050, p.25.
57
Greenwood, O. (2016). Gas Price Trends Review,
prepared for the Commonwealth Department of
Industry Innovation and Science, p.6.
58
Alternative Technology Association (2018).
Household Fuel Choice in the National Electricity
Market.This report found that “owners will be
between $9,000 – $16,000 better off over 10
years if they establish their new home as all-
electric with a 5-kilowatt solar system rather
than gas-electric with no solar”; Alternative
Technology Association (2014). Are we still
cooking with gas? Report for the Consumer
Advocacy Panel.The research was conducted
across ‘most gas pricing zones in the NEM
(National Electricity Market)’, so excludes
homes in Western Australia and the Northern
Territory.The analysis found that for new and
existing homes not currently connected to
gas, choosing efficient electric space heating
(multiple reverse cycle air conditioners, sized to
house), hot water (heat pump large) and cooking
(electric oven, induction cooktop) is more cost-
effective than connecting gas.
59
ClimateWorks Australia (2017). Solving the
Gas Crisis, p.3.

Appendix A:
Summary of Technical
Assumptions and Results
This appendix summarises the key assumptions and modelling results relating to the
Trajectory Project analysis. Further details on the methodology and results are provided
in the Technical Report, published by the CRC for Low Carbon Living and available on
the ASBEC and ClimateWorks websites.
Overview of the building energy modelling
methodology
The Trajectory Project analysed eight building
‘archetypes’ across four climate zones.The
eight building archetypes were developed to
cover typical attributes of some of the most
common types of buildings in Australia.
Overall, the set of models cover a range of
geometric properties from low to high external
surface area to volume ratio, and covers
models where heating and cooling energy is
dominated by internal loads (such as heat from
people and equipment) and those dominated
by facade loads (the transfer of heat between
the inside and outside of the building).
The modelled building archetypes were:
• For residential buildings:
- Detached, single-storey house (190 m2
floor area);
- Attached, two-storey towwnhouse or
terrace house (128 m2
); and
- Apartment (76 m2
).
• For commercial and other non-residential
buildings:
- Office tower (9,000 m2
floor area);
- Hotel tower (1,800 m2
);
- Medium retail shop (950 m2
);
- Hospital ward (475 m2
); and
- School building (190 m2
).
The four climate zones were selected based on
the locations of major population centres:
• Climate Zone 2 - Warm humid summer,
mild winter (e.g. Brisbane);
• Climate Zone 5 - Warm temperate (e.g.
Sydney, Adelaide, Perth);
• Climate Zone 6 - Mild temperate (e.g.
Greater Western Sydney, Melbourne); and
• Climate Zone 7 - Cool temperate (e.g.
Canberra, Hobart).
The Trajectory Project modelling methodology
can be summarised in the following key steps:
1. Project forwards electricity prices and
technology costs (where these change over
time);
2. Establish baseline consumption of each
building archetype in each climate zone,
based on the minimum energy requirements
of the 2016 National Construction Code
(for residential buildings) or the proposed
energy requirements for the 2019 Code (for
non-residential buildings);
3. Estimate the energy and cost savings
associated with individual measures where
each measure is varied independently;
4. Assess the costs and benefits of each
measure from a societal perspective;
5. Prioritise the ‘cost-effective’ measures for
further analysis, where the benefit-cost ratio
is greater than one;

6. Estimate the combined impact of the set of
cost-effective measures, and calculate the
benefit-cost ratio for each time step (i.e.
based on today’s economics, then based on
the economic scenarios in 5, 10 and 15 years’
time);
7. If the overall benefit-cost ratio of the
combined measures is outside the range of
1-1.5iv
, iterate Steps 5 and 6 by adding or
removing measures (including measures
which on their own may have a benefit
cost ratio of less than 1) until a benefit cost
ratio of 1-1.5 for the combined package of
measures is achieved for every time step.
This provides the conservative energy
efficiency targets;
8. Take the conservative energy efficiency targets
from Step 7 and apply a cost-effective level of
rooftop solar PV (in most cases this is simply
the maximum sized solar PV system that can
fit on the roof).This provides the net energy
performance targets; and
iv Limiting opportunities to those with benefit-cost ratio greater than one aligns with the Best Practice Regulation approach
of ensuring regulations deliver benefits that outweigh costs, while capping the benefit-cost ratio at less than 1.5 enables the
cost-effective opportunities to be maximised.
v Department of Climate Change and Energy Efficiency (2012), Baseline Energy Consumption and Greenhouse Gas Emissions
in Commercial Buildings in Australia
9. Take the conservative energy efficiency
targets from Step 7 and apply additional
measures that have a material energy benefit
but are not cost-effective.This provides the
accelerated deployment energy efficiency
targets.
The three-yearly targets for each upgrade
of the Code are determined by linear
interpolation of the five-yearly results.
Overview of the national estimation methodology
The impact of Code changes on state, territory
and nation emissions was undertaken using
the following steps:
1. Develop a ‘stock turnover model’ to estimate
the area of new building work (including
refurbishments) that could potentially
be affected by higher Code performance
standards.The stock turnover model was
built using inputs from Australian Bureau
of Statistics Census data, GeoScience
Australia’s NEXIS database and the
Commercial Buildings Baseline Studyv
;
2. Apply the modelled energy savings per-unit
floor area to the stock model, to generate
estimates of national energy and related
greenhouse gas emissions savings over time;
3. Estimate equivalent savings for those
building forms not modelled as part of this
project;
4. Estimate expected savings from building
forms in climate zones not modelled as part
of this project; and
5. Aggregate costs and benefits to generate an
estimates of the overall cost effectiveness of
the scenarios modelled.

Economic assumptions
vi Council of Australian Governments (2017), Best Practice Regulation: A guide for ministerial councils and national standard
setting bodies.
vii Australian Government Department of the Prime Minister and Cabinet, Office of Best Practice Regulation (2016), Cost-
Benefit Analysis Guidance Note.
The economic analysis is based on a benefit
cost methodology that is informed by the Best
Practice Regulation guidelinesvi
and Guidance
Note on Cost-Benefit Analysisvii
.
Costs for all measures are developed based on
contractor and quantity surveyor pricing, retail
and trade pricing, and the 2017 edition of the
Rawlinson’s Australia Construction Handbook.
A discount rate of seven per cent is used, in
alignment with the Best Practice Regulation
guidelines.
The national electricity prices are derived from
previous work by CSIRO completed for the
Electricity Network Transformation Roadmap
(the Roadmap). A key feature of the Roadmap
scenario was that the electricity sector does
more than its proportional share of current
national abatement targets (i.e. achieving
40 per cent below 2005 levels by 2030) and
accelerates that trajectory by 2050 to reach
zero net emissions. For the electricity sector
to achieve net zero emissions by 2050, an
implicit carbon price series was used. Assumed
to commence in 2020, the carbon price
increases from around $30/tCO2
-e to around
$190/tCO2
-e by 2050.The national average
emission intensity of grid electricity falls from
its current level of around 0.78 tCO2
-e/MWh
to around 0.09 tCO2
-e/MWh by 2050.
It is likely that energy performance
improvements will not only reduce energy
consumption but also demand on the network
during peak periods.To estimate potential
savings from deferred network augmentation,
an estimate of average augmentation costs
were sourced from Roadmap scenario
modelling outputs, adjusted for the level of
overcapacity in current infrastructure.
On this basis the indicative network
augmentation cost is modelled as being $963/
kW to around $905/kW by 2050 reflecting
recent Australian Energy Regulator (AER)
determination decisions and assumed
continued productivity improvements.
An additional allowance was made for the
reduction in air conditioning system costs
from reduced peak heating or cooling load. A
study on the incremental cost of split system
air-conditioners was undertaken and based
on this; an incremental air-conditioning cost
saving of $230 per kW of thermal capacity
was included.
A measure is deemed ‘cost-effective’, i.e. it
delivers a net societal benefit, if it has a benefit
cost ratio to society of at least 1.0 over a 40-
year period.
Limitations
The scope of the analysis is subject to the
following limitations:
• Limited number of building archetypes
modelled;
• Limited number of climate zones modelled;
• Future climate change has not been
considered;
• There has been no quantification of co-
benefits such as health and comfort relating
to energy efficiency;
• Learning rates in reducing costs have not
been considered for all technologies and
measures;
• There has been no consideration of
redesigning the buildings for energy
efficiency; and
• The analysis has not dealt with major
renovations separately.

Key results
The forward energy efficiency targets and
net energy potential for each archetype,
averaged across climate zones 2, 5, 6 and 7, are
summarised in Figure A1.
FIGURE A1: Summary of energy efficiency targets and net energy potential, averaged
across the four modelled climate zones
Single apartment
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
Whole building energy consumption
kWh/m²/year
0
20
40
60
80
Detached house
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
-150
-100
-50
0
50
100
Attached house
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
-40
-20
0
20
40
60
Hotel
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
0
30
60
90
120
150
Conservative energy efficiency targets
Accelerated deployment energy efficiency target
Net energy potential - Conservative scenario
Net energy potential - Accelerated deployment scenario

46 BUILDING CODE ENERGY PERFORMANCE FINAL PROJECT / INTERIM REPORT
FIGURE A1: Summary of energy efficiency targets and net energy potential, averaged
across the four modelled climate zones ... continued
Office
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
0
20
40
60
80
100
Hospital ward
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
0
50
100
150
Retail
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
0
30
60
90
120
School building
Base Case 2022
Code
2025
Code
2028
Code
2031
Code
2034
Code
kWh/m²/year
0
20
40
60
80
100
Conservative energy efficiency targets
Accelerated deployment energy efficiency target
Net energy potential - Conservative scenario
Net energy potential - Accelerated deployment scenario

Table A1 summarises the results for different
climate zones for the conservative and
accelerated deployment scenarios, relevant to
the 2022 Code.Table A2 present the results
relevant to the 2028 Code. Complete results
relevant to each three-yearly Code upgrade
from 2022 to 2034 inclusive are published in
the Technical Report.
TABLE A1: Results for each building archetype in each climate zone, relevant to the 2022
Code
Base Case 2022 Code
Climate
Zone
Archetype Energy use
(kWh/m2
/year)
Energy
efficiency
target
(kWh/m2
/year)
Up-front
additional
capital cost
– Energy
efficiency
($/m2
)
Annual
energy bill
savings,
averaged
over 15
years
($/year)
Net energy
potential
(kWh/m2
/year)
On-site
solar PV
system
size (kWh)–
includes
rooftop and
BIPV
Conservative scenario
CZ 2 Apartment 63.4 56.0 $48 $198 50.6 0.3
Attached 41.3 35.2 $46 $270 -3.5 3.6
Detached 37.4 31.8 $42 $397 -17.0 6.6
Hotel 130.3 89.7 $132 $10,990 72.5 28.2
Office 99.6 83.2 $59 $50,342 78.3 26.2
Retail 129.1 99.8 $98 $11,430 54.4 26.2
Hospital ward 138.5 85.9 $144 $6,519 50.7 31.0
School building 93.5 57.8 $149 $2,529 13.6 12.0
CZ 5 Apartment 63.1 55.7 $61 $207 50.7 0.3
Attached 40.3 34.9 $37 $245 1.2 3.4
Detached 37.2 31.5 $38 $405 -3.7 5.4
Hotel 127.2 84.9 $99 $18,546 79.2 28.2
Office 91.4 77.8 $48 $40,111 73.0 26.2
Retail 116.9 92.4 $79 $9,456 49.6 26.2
Hospital ward 140.3 89.2 $122 $5,201 59.6 29.7
School building 76.7 41.6 $158 $2,324 7.8 12.0
CZ 6 Apartment 73.3 58.6 $56 $385 53.8 0.3
Attached 47.3 36.9 $62 $451 3.3 3.5
Detached 45.6 34.7 $66 $690 -1.7 6.3
Hotel 99.2 79.0 $71 $11,461 60.1 28.2
Office 88.5 72.3 $36 $33,141 67.7 26.2
Retail 109.0 86.5 $75 $8,438 46.0 26.2
Hospital ward 128.9 103.1 $60 $3,273 76.0 28.1
School building 77.9 40.0 $149 $2,424 11.1 11.9
CZ 7 Apartment 77.0 59.0 $124 $460 53.5 0.3
Attached 50.3 38.2 $67 $454 -1.9 3.7
Detached 50.5 35.6 $84 $919 -16.2 7.1
Hotel 102.0 83.8 $74 $11,238 67.8 28.2
Office 93.1 76.6 $34 $36,231 71.2 26.2
Retail 110.0 85.4 $94 $8,824 41.6 26.2
Hospital ward 144.1 106.3 $77 $3,329 78.1 29.7
School building 90.2 50.8 $167 $2,528 13.3 12.0

Base Case 2022 Code
Climate
Zone
(kWh/m2
/year)
Energy
efficiency
target
(kWh/m2
/year)
Up-front
additional
capital cost
– Energy
efficiency
($/m2
)
Annual
energy bill
savings,
averaged
over 15
years
($/year)
Net energy
potential
(kWh/m2
/year)
On-site
solar PV
system
size (kWh)–
includes
rooftop and
BIPV
Accelerated deployment scenario
CZ 2 Apartment
Same as the
conservative
scenario
54.8 $278 $205 49.4 0.3
Attached 33.7 $234 $266 -10.7 4.1
Detached 30.1 $296 $436 -75.0 14.4
Hotel 81.4 $139 $22,343 69.1 28.2
Office 72.4 $308 $70,752 65.6 26.2
Retail 89.0 $109 $12,961 45.7 26.2
Hospital ward 70.2 $165 $7,242 38.1 31.0
School building 42.0 $943 $2,777 5.9 12.0
CZ 5 Apartment
Same as the
conservative
scenario
54.4 $210 $206 49.4 0.3
Attached 33.4 $225 $236 -6.9 4.1
Detached 29.9 $306 $437 -65.2 14.4
Hotel 77.2 $106 $18,996 65.8 28.2
Office 67.9 $510 $57,445 61.1 26.2
Retail 81.6 $142 $11,495 41.8 26.2
Hospital ward 66.6 $140 $6,145 39.0 31.0
School building 33.4 $597 $2,334 5.0 12.0
CZ 6 Apartment
Same as the
conservative
scenario
54.8 $255 $450 50.0 0.3
Attached 34.5 $216 $452 -5.1 4.1
Detached 31.3 $367 $836 -62.3 14.4
Hotel 72.6 $76 $12,159 61.3 28.2
Office 61.2 $515 $57,378 54.7 26.2
Retail 78.7 $487 $9,988 40.7 26.2
Hospital ward 76.8 $301 $2,936 48.3 31.0
School building 27.7 $565 $2,704 5.0 12.0
CZ 7 Apartment
Same as the
conservative
scenario
55.4 $283 $530 49.9 0.3
Attached 35.3 $209 $522 -9.6 4.1
Detached 31.5 $290 $1,154 -74.6 16.2
Hotel 73.1 $80 $12,378 61.1 28.2
Office 60.1 $480 $62,204 52.8 26.2
Retail 79.0 $394 $10,163 37.4 26.2
Hospital ward 74.9 $95 $3,730 47.2 31.0
School building 40.0 $578 $2,734 7.4 12.0
TABLE A1: Results for each building archetype in each climate zone,
relevant to the 2022 Code... continued

relevant to the 2028 Code
Base Case 2028 Code
Climate
Zone
(kWh/m2
/year)
Energy
efficiency
target
(kWh/m2
/year)
Up-front
additional
capital cost
– Energy
efficiency
($/m2
)
Annual
energy bill
savings,
averaged
over 15
years
($/year)
Net energy
potential
(kWh/m2
/year)
On-site
solar PV
system
size (kWh)–
includes
rooftop and
BIPV
Conservative scenario
CZ 2 Apartment 63.4 54.9 $72 $287 48.6 0.3
Attached 41.3 34.1 $51 $385 -18.1 4.8
Detached 37.4 30.7 $50 $597 -83.6 15.7
Hotel 130.3 82.4 $170 $26,408 61.2 89.9
Office 99.6 78.0 $94 $72,033 57.2 307.5
Retail 129.1 82.5 $207 $18,401 26.1 103.2
Hospital ward 138.5 80.7 $168 $7,992 46.6 53.0
School building 93.5 44.1 $202 $3,164 4.1 22.8
CZ 5 Apartment 63.1 54.6 $68 $295 48.8 0.3
Attached 40.3 34.0 $44 $354 -13.3 4.8
Detached 37.2 30.3 $53 $601 -70.7 15.3
Hotel 127.2 78.6 $148 $23,023 70.7 89.9
Office 91.4 73.2 $64 $58,086 53.3 307.5
Retail 116.9 78.3 $167 $15,762 26.7 103.2
Hospital ward 140.3 85.5 $140 $6,264 56.2 53.0
School building 76.7 31.6 $205 $2,829 3.6 22.8
CZ 6 Apartment 73.3 57.0 $75 $543 51.3 0.3
Attached 47.3 35.5 $75 $647 -11.0 4.8
Detached 45.6 33.2 $89 $994 -66.6 15.5
Hotel 99.2 74.7 $96 $14,712 51.8 89.9
Office 88.5 69.0 $64 $49,144 49.7 307.5
Retail 109.0 74.4 $154 $13,942 25.6 103.2
Hospital ward 128.9 91.0 $85 $4,065 63.8 53.0
School building 77.9 30.9 $209 $3,014 5.9 22.8
CZ 7 Apartment 77.0 57.4 $139 $641 50.9 0.3
Attached 50.3 36.7 $82 $657 -16.0 4.8
Detached 50.5 33.6 $105 $1,284 -82.4 17.5
Hotel 102.0 79.3 $98 $14,364 59.1 89.9
Office 93.1 69.4 $63 $51,618 47.0 307.5
Retail 110.0 74.0 $157 $14,300 23.2 103.2
Hospital ward 144.1 104.1 $85 $4,020 75.9 53.0
School building 90.2 41.0 $202 $3,105 6.9 22.8

Base Case 2028 Code
Climate
Zone
(kWh/m²/year)
Energy
efficiency
target
(kWh/m²/year)
Up-front
additional
capital cost
– Energy
efficiency
($/m²)
Annual
energy bill
savings,
averaged
over 15
years
($/year)
Net energy
potential
kWh/m²/year
Rooftop
solar PV
system size
(kW)
Accelerated deployment scenario
CZ 2 Apartment
Same as the
conservative
scenario
53.9 $282 $262 47.6 0.3
Attached 33.1 $236 $334 -19.1 4.8
Detached 29.4 $297 $550 -94.1 16.9
Hotel 78.1 $176 $27,516 60.4 89.9
Office 70.2 $315 $90,086 46.5 307.5
Retail 77.6 $219 $18,635 23.7 103.2
Hospital ward 67.8 $189 $8,657 35.2 53.0
School building 39.7 $941 $3,383 3.5 22.8
CZ 5 Apartment
Same as the
conservative
scenario
53.5 $214 $263 47.7 0.3
Attached 32.9 $227 $296 -14.4 4.8
Detached 29.3 $309 $548 -82.5 16.9
Hotel 74.1 $156 $24,485 58.6 89.9
Office 66.6 $522 $73,517 43.7 307.5
Retail 71.3 $229 $16,502 23.6 103.2
Hospital ward 64.4 $156 $7,210 36.3 53.0
School building 31.7 $649 $2,843 3.5 22.8
CZ 6 Apartment
Same as the
conservative
scenario
53.9 $258 $555 48.2 0.3
Attached 33.8 $217 $562 -12.8 4.8
Detached 30.5 $368 $1,042 -79.5 16.9
Hotel 70.7 $101 $15,189 55.3 89.9
Office 59.3 $514 $72,282 37.9 307.5
Retail 69.2 $641 $14,390 23.7 103.2
Hospital ward 72.8 $322 $3,518 43.7 53.0
School building 25.6 $633 $3,239 3.5 22.8
CZ 7 Apartment
Same as the
conservative
scenario
54.4 $286 $653 47.9 0.3
Attached 34.5 $211 $653 -18.3 4.8
Detached 30.7 $291 $1,417 -94.0 19.0
Hotel 70.6 $105 $15,372 53.8 89.9
Office 57.7 $488 $77,205 33.8 307.5
Retail 69.6 $532 $14,598 21.3 103.2
Hospital ward 71.7 $103 $4,349 43.2 53.0
School building 37.3 $612 $3,298 4.8 22.8
relevant to the 2028 Code... continued

ClimateWorks
A U S T R A L I A
Contact
Suzanne Toumbourou
EXECUTIVE DIRECTOR
suzanne@asbec.asn.au
Australian Sustainable Built Environment Council
5/104 Commonwealth Street
Surry Hills NSW 2010
www.asbec.asn.au
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PROJECT MANAGER
michael.li@climateworksaustralia.org
Eli Court
PROGRAM MANAGER
eli.court@climateworksaustralia.org
ClimateWorks Australia
Level 16, 41 Exhibition St
Melbourne VIC 3000
www.climateworksaustralia.org
Published by ClimateWorks Australia
Melbourne, Victoria, July 2018
© ClimateWorks Australia 2018
This work is subject to copyright. Apart from any use permitted under
the Copyright Act 1968, no part may be reproduced by any process
without written permission from the publisher.
Co-founded by Monash University and
The Myer Foundation and working within
Monash Sustainable Development Institute

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