1200 buildings

Location: Melbourne, Australia

Population: 5,078,193

Climate: Oceanic

Duration: 2010 – 2020

Sector: Buildings

Funding sources: Public

City networks: C40

Savings: If the 1,200 commercial buildings retrofit by 2020, this will entail an estimated reduction of 383,000 tonnes of CO2 per year.

Solutions: The City of Melbourne established The 1200 Buildings Programme to help commercial building owners understand their buildings’ current performance and make improvements by offering advice and financial solutions [source].

Multiple benefits: Increase energy efficiency and reduce CO2 per year.

The volunteer 1200 Buildings programme was launched in 2010 as a ten-year strategy to boost strong improvements in energy and water consumption of 1200 commercial buildings in Melbourne and decrease waste to landfills. It is an important initiative to decarbonise the building sector. This voluntary programme was also implemented to accelerate Melbourne’s transition to a green economy by creating employment and business opportunities through driving demand for environmentally efficient buildings.

Objective – The Program´s purpose is to promote the environmental retrofit of around two-thirds of the municipality’s commercial stock. Retrofits improve energy and water efficiency in buildings, decreasing utility bills and growing an asset’s value. Building owners realise these benefits through the 1200 Buildings Program [source].

Solutions – The programme aims to exhibit leadership and catalyse behaviour change. Different participation opportunities are offered to building owners determined by their level of commitment, capacity and need for promotion.

Regarding the program´s content, it entails a range of elements designed to:

• Train owners and managers on the benefits of energy-efficient buildings;
• Enhance industry capacity to retrofit buildings and to monitor building environmental performance;
• Offer attractive and easily accessible finance options;
• Facilitate knowledge sharing and showcasing of best practices and new technologies.

Funding – The City allocates AU$ 750,000 to establish the programme and Environmental Upgrade Agreements and cover associated legal costs.

Innovation – The development of innovative funding mechanisms. The 1200 Buildings programme elaborated financing packages intending to support owners to overcome the barrier of lacking credit to finance retrofitting. The Environmental Upgrade Finance is the main product created for the programme and administered by the Sustainable Melbourne Fund (a trust set up by the City to finance sustainability projects). This product is composed of a tripartite agreement between the building owner, the City of Melbourne and a financial institution. Once a loan is negotiated, the lender transfers the funds to the owner to finance a retrofit. Then, the City of Melbourne collects loan repayments through rates (i.e. municipal taxes) and reverts to the lender on behalf of the borrower.

Success factors – 1) Time spent researching target audience. City officials emphasise that during this research time, a big effort was made to understand the constitution of the commercial building sector through stakeholder engagement and research. The focus was on distinguishing key decision-makers and understanding their motivations, capacity to finance retrofits and make decisions; 2) Different strategies for different building owners. Different communication and incentive strategies were adopted for different sectors of commercial buildings; 3) Driving forces of retrofitting behaviour. According to the 1200 Buildings Retrofit Survey (2013), the most usual reasons chosen by owner decisions to retrofit was to replace a broken asset (39%) followed by the wish to reduce energy consumption (31%) and attract tenants (21%). The latter reason illustrates market demand for energy-efficient buildings in central Melbourne, particularly by government and blue-chip tenants.

Significant outcomes:

• It is expected that a 38% increase in efficiency by 2020 for the commercial building sector (considering the initial 1,200 commercial buildings identified) will drive an overall decrease of 383,000 tonnes of CO2 per year.
• According to the 1200 Buildings Retrofit Survey that took place in 2015*, some of the main conclusions are [source]:
• Since 2010, 37%, or 541 of the buildings surveyed had retrofitted;
• 166 (11%) buildings were undertaking a retrofit at the time of the survey;
• 315 of the buildings (21%) surveyed claimed they intend to undertake a retrofit within the next five years.

Synergies with local policies:

• Climate Change Mitigation Strategy. The strategy aims to decrease the municipality’s largest source of GHG emissions. One of the four priorities is powering the City with 100% renewable energy [source].
• Energy Efficiency and Productivity Strategy works towards a modern energy future. It aims to extend the benefits of energy efficiency to more Victorian businesses and households and construct a more productive economy.

Political alignment:

• Climate Solutions Package. In 2019, the Australian government launched an AUD 3.5 billion investment to deliver on Australia’s 2030 Paris climate commitments. The program unified several existing government programs and policies and initiated several new ones, including the ‘Energy Efficient Communities’ programme, intended to enhance energy efficiency standards and labelling and grow homes, businesses, and communities [source].
• National Energy Productivity Plan (NEPP) 2015-2030 is a framework aimed to improve national energy productivity by 40% between 2015 and 2030 through better coordination of the energy market reform, energy efficiency and climate policy [source].
• National Strategy on Energy Efficiency (NSEE) offers the overarching framework for energy efficiency policy. It was conceived to improve minimum standards for energy efficiency and speed up the introduction of new technologies [source].
• Australian Building Codes Board. It includes mandatory energy efficiency provisions for all building classes (among other measures).
• The Commercial Building Disclosure (CBD) Program demands energy efficiency information be disclosed in most cases when commercial office space of 1000 square metres or more is offered for sale or lease. The Program aims to improve Australia’s large office buildings’ energy efficiency and guarantee prospective buyers and tenants are informed.

Marketability: The program shows big potential for replicability in other cities, and it could also influence the creation of new policies/regulations to promote energy efficiency in buildings.

* City of Melbourne identified 1,465 buildings in scope for the 2015 survey and interviews were conducted for 387 or 26 per cent.