Energy Conservation: What it Means & How it Works

This article was originally submitted as part of a postgraduate degree and follows academic referencing conventions.

The Intergovernmental Panel on Climate Change’s report into the building sector indicates that low carbon buildings are critical to reducing greenhouse gas emissions and without climate change mitigation, global building energy use is projected to double or potentially triple by 2050 (Lucon et al., 2014).

In Australia, approximately 21% of annual carbon emissions come from the building sector (ClimateWorks Australia, 2020), with 86% of residential emissions and 95% of commercial emissions resulting from the consumption of electricity from the grid (ASBEC, 2016).

Given the high level of electricity use, strategies to conserve energy and improve efficiency have the potential to significantly reduce emissions in the building sector. However, to achieve mitigation in line with targets set in the Paris Agreement, an integrated approach is required, including addressing the issue of embodied emissions and a transition to a circular economy (Newton & Rogers, 2020).

Achieving decarbonisation in the built environment involves improved energy efficiency, electrification of fuels, a transition to renewable energy sources and the offsetting of residual emissions (ClimateWorks Australia, 2020). This can be achieved through a combination of well established and emerging solutions, strong governance, public and private investment, research, education and behaviour change (ClimateWorks Australia, 2020).

This paper will focus on the potential of energy conservation and efficiency to reduce greenhouse gas emissions and will argue that the built environment will fail to significantly reduce emissions and achieve mitigation without addressing the barriers to implementation. An initial discussion will describe how greenhouse gas emissions can be abated by reducing energy use through conservation and improved efficiency, both in new building construction and by retrofitting existing buildings. This is followed by an analysis of the effectiveness and viability of these solutions, barriers to implementation and recommendations going forward.

Energy Conservation in the Built Environment

Energy conservation and energy efficiency are interrelated concepts, both of which are required to reduce energy use. Energy conservation entails using less available energy, often through behaviour change, whereas energy efficiency refers to needing less energy to achieve the same outcome, for example, through improved design or technology (Newton & Rogers, 2020).

A combination of measures can be implemented in both the residential and commercial sectors to reduce energy use. A potential pathway to implementing these measures is through expanding and strengthening building codes (Enker & Morrison, 2020), including mandating the use of low energy heating, cooling and lighting (ClimateWorks Australia, 2020).

Affordable, mature technologies which improve thermal efficiency such as insulation, weather sealing and double or triple glazing along with improved building design are proven to be effective in reducing energy consumption in addition to emerging smart technologies which conserve energy (ClimateWorks Australia, 2020).

The Residential Sector

Substantial energy savings in residential buildings can be achieved by retrofitting measures that reduce the impact of heating, cooling and appliances, areas with the highest energy consumption in the housing sector (ASBEC, 2016).

Older housing stock has significant opportunities for energy reductions and should be prioritised. Post-war housing often has poor thermal efficiency and would significantly benefit from minor thermal retrofits, such as insulating ceilings, walls and floors, as well as deep retrofitting (Andrić et al., 2019). Similarly, Australian housing built before 2004 is considered to have lower energy performance and would also benefit from thermal retrofitting (Newton, 2017).

While deep retrofits will achieve the greatest energy savings, financial and time constraints often prevent these, with the majority of retrofits typically taking place in a piecemeal approach over long periods (Galvin & Sunikka-Blank, 2017).

Therefore, focusing on the most effective solutions would be more impactful, for example, installing a combination of insulation and double glazing can provide energy reductions of 25%, depending on climate conditions (Galvin & Sunikka-Blank, 2017).

Insulation is particularly effective in warmer regions where temperatures are expected to increase, with studies showing insulation to be more effective than improved energy efficiency of heating and cooling systems (Seo et al., 2013), whereas, in colder climates, weather sealing is simple but effective (Seo et al., 2018).

The construction of high energy performance new housing is essential for mitigation in the residential sector. The Australian building sector builds approximately 180,000 new homes annually (Housing Industry Association, 2020). Mandating energy efficient and low carbon buildings as standard will avoid high emission housing which will require retrofitting in the future.

The Nationwide House Energy Rating Scheme (NatHERS) regulates minimum standards and encourages energy efficiency through incentives but does not mandate low carbon buildings (Byrne et al., 2019).

However, high NatHERS rated homes are being built which include concrete slabs, roof and wall insulation, ceiling fans, double glazing, window shading and high energy star rated appliances (Byrne et al., 2019).

Solar passive design is essential for the highest NatHERS ratings as this eliminates the need for space heating and air conditioning (Byrne et al., 2019). However, energy-efficient homes are often seen as showcases rather than the mandatory minimum standard.

The Commercial Sector

Significant improvements in energy conservation in Australia has occurred in the commercial sector, particularly in the premium office sector and in large-scale new developments which are specifically focused on sustainability (Carr et al., 2019).

Progress continues in both new commercial buildings and the retrofitting of existing buildings, driven by energy rating tools, improved technological efficiency and improved monitoring and management of building energy performance (Burroughs, 2018).

Energy consumption in commercial buildings comes predominantly from heating, ventilation and cooling (HVAC) at 43%, followed by lighting (20%) and equipment (13%) (ASBEC, 2016), indicating potential areas for further improvements. As 85% of

Australia’s office buildings are more than 10 years old, an effective strategy for mitigation is through upgrades of the management and control of HVAC systems which facilitate optimal energy use (Burroughs, 2018). For example, a Sydney office building retrofit reduced energy use by 48%, largely through highly efficient HVAC control strategies (Burroughs, 2018).

New premium office buildings are achieving high energy performance outcomes by focusing on efficient building envelope design, technologically advanced HVAC metering and control systems and behaviour change programs (Carr et al., 2019).

The National Built Environment Rating Scheme (NABERS) is a mandatory environmental performance rating scheme for the commercial sector and a considerable driver of improved performance (Burroughs, 2018). NABERS encourages change and adoption of energy-efficient measures through mandatory disclosure of ratings on sale and lease documents which increases competition (Carr et al., 2019; Oldfield et al., 2019).

Improved building envelope and façade design reduce energy use, for example, double or triple glazing, efficient ventilation and internal and external shading, such as automated blinds, results in considerable savings (Carr et al., 2019).

Additionally, electrochromic windows provide energy savings of up to 60% compared to regular glazing by dynamically moderating the absorption of sunlight (Cannavale et al., 2020).

Window design is also crucial, as buildings with optimum window to wall ratios can improve building energy efficiency by up to 30% (Foroughi et al., 2021).

Further reductions in energy consumption can be achieved by implementing green roofs, cool roofs and green walls (Todeschi et al., 2020), along with new emerging solutions.

Emerging Solutions

Technological advances and innovation can accelerate the transition to a low carbon building sector through rapid increases in efficiencies. Although existing solutions to mitigation are sufficient to achieve decarbonisation, ongoing research and development continues to provide innovative solutions, leading to improved efficiency and energy savings (ClimateWorks Australia, 2020).

An emerging area is smart technology, these are diverse technologies that reduce consumption by managing energy more effectively. For example, smart meters provide real-time usage data which helps increase awareness of energy use and can motivate behaviour change (Akinsipe et al., 2020), while smart thermostats allow users to remotely control their heating and cooling systems via their phones (ASBEC, 2016).

Additionally, smart sensors which monitor and control space heating, cooling and lighting could reduce building energy use by 20-30% (ASBEC, 2016) by automating optimal usage behaviour.

In the commercial sector, for example, innovation has improved the energy efficiency of lifts and escalators by more than 60% and 30% respectively (De Almeida et al., 2012).

Technological innovation can progress rapidly when incentives and competitive market conditions are in place (ASBEC, 2016) through investment from both the public and private sector.

Smart technologies are already being adopted in new buildings and have the potential to be retrofitted.

Mitigation Potential of Energy Conservation

Increasing adoption of energy-efficient technology and electric fuel sources powered by renewable energy, has the potential to achieve zero emissions by 2040 (ClimateWorks Australia, 2020). Energy conservation and efficiency are considered an important initial step towards mitigation due to the low cost and high impact of measures (ASBEC, 2016).

Existing buildings represent the highest potential for energy savings in the short term where retrofitting existing homes and commercial buildings could see a decline in energy consumption of 25% by 2030 (ASBEC, 2016).

Improved energy performance of new buildings could see substantial energy savings in both residential and commercial buildings. Energy savings in residential buildings could range from 19-25%, while 22-34% is possible in commercial buildings (ClimateWorks Australia, 2018).

However, by mandating state-of-the-art building design, rather than minimum standards, there is the potential to achieve more than a 40% reduction in energy use (Newton & Rogers, 2020), which can be further reduced by lessening energy performance gaps and focusing on retrofitting rather than demolishing and rebuilding.

Energy Performance Gaps

Expected energy performance of newly constructed and retrofitted buildings is often inaccurate, negatively impacting the capacity to achieve mitigation. Gaps between designed energy efficiency and what is actually built often do not align (Newton, 2017). This can occur through poor construction and installation methods, for example, from incorrect installation of insulation or weather sealing (Ambrose & Syme, 2017).

Discrepancies can also be attributed to inconsistencies between theoretical and actual energy performance of appliances and equipment due to either calculation errors or improper intended usage (van den Brom et al., 2018).

Performance gaps also arise through what is known as the attitude-action gap, where consumers state their intention to change energy consumption behaviours, but they do not actually take action to change (Newton & Meyer, 2013), however, the impact of the attitude-action gap is disputed and may only be minimal (van den Brom et al., 2018).

Retrofitting vs New Buildings

Retrofitting existing buildings should be prioritised over knocking down and rebuilding to reduce overall energy use and emissions. Retrofitting and the construction of new buildings involves significant embodied emissions which contribute to the entire life cycle of building emissions.

Embodied emissions are emissions from the construction, renovation and maintenance of buildings, from materials used in the manufacturing of appliances and equipment, building waste-related emissions and any associated transport emissions (ASBEC, 2016).

Life cycle assessment in the building sector is an analysis of all the direct and indirect emissions related to buildings including embodied emissions, building use emissions and end-of-life emissions such as demolition (Crawford, 2011).

A comparison of the life cycle assessment of building emissions shows that using recycled materials, reusing existing building components and retrofitting or renovating is preferable to knocking down and rebuilding (European Academies Science Advisory Council, 2021), resulting in an overall decline in energy use.

Barriers to Implementation

There are several key challenges and barriers to implementing solutions designed to achieve mitigation; inadequate governance and policy, a perceived lack of affordability and a general lack of knowledge surrounding the benefits of low carbon buildings and of climate change more broadly (Hurlimann et al., 2018).

Governance and policy are significant barriers to the implementation of climate change mitigation measures in Australia, specifically insufficient targets, regulations, and incentives (ASBEC, 2016; Hurlimann et al., 2018).

Ambitious long and short-term national targets provide pathways to transitions and are considered best practice (Harrington & Hoy, 2019) but are currently lacking or insufficient.

Enforced mandatory minimum standards have resulted in an increased uptake of energy efficiency and low carbon measures, nonetheless, existing standards are considered inadequate, with state-of-the-art standards required to see a meaningful impact on emission reductions (Hurlimann et al., 2018).

This is urgent considering the long lifespan of buildings where delayed action risks locking in high carbon-intensive buildings, meaning poor energy performance buildings will remain inefficient for decades (Lucon et al., 2014) and potentially require retrofitting in the future.

Unlike in the residential sector, a competitive private market in the commercial sector has driven innovation, resulting in the design and construction of highly efficient, low carbon buildings, above minimum standards (Oldfield et al., 2019).

Public funded incentives such as subsidies, rebates and grants for retrofitting are designed to accelerate adoption and investment in new technology by essentially reducing the cost of retrofitting (ASBEC, 2016). However, existing incentives are insufficient, only applying to a narrow range of retrofitting measures, for example, subsidies for the replacement of inefficient appliances.

A lack of progressive incentive policies is a further barrier, particularly from the federal government. For example, what is known as green depreciation, a tax incentive that would influence property owners to undertake energy-efficient retrofitting, or other ‘green’ renovations, by deferring the tax burden (ASBEC, 2016).

Strong governance, policy and leadership can reduce barriers to adoption and behaviour change but are currently inadequate.

Low carbon buildings are relatively cost-effective, however, there is a perceived lack of affordability that is deterring implementation. This perception is often due to a failure to consider the long-term cost savings of energy-efficient buildings, both by construction companies and consumers looking to build or renovate.

Research shows some developers believe the construction of low carbon buildings is not worth the additional time, effort and cost (Hurlimann et al., 2018), even though evidence suggests it is straightforward and affordable (Newton, 2017). It is estimated that a 50% reduction in energy use through energy efficiency measures can be implemented at no additional net cost when considering the long-term energy savings (ASBEC, 2016).

Additionally, developers are concerned suggestions to implement low carbon or innovative technology will deter customers due to higher up-front costs (Hurlimann et al., 2018).

However, while low carbon buildings are cost-effective for those with the financial capacity to build or renovate, there are concerns around inequitable outcomes. Retrofit poverty is a situation where low-income households and renters do not have the capacity to retrofit their homes and benefit from lower energy costs and health co-benefits, even when subsidies are provided (Willand et al., 2020).

A lack of knowledge and awareness of climate change and low carbon buildings is hindering adoption and investment, particularly in the residential building sector. Low customer demand is a major issue in the residential sector with customers lacking awareness and interest in building zero emission homes (Hurlimann et al., 2018).

Government education campaigns have had limited impact due to the complexity of consumer behaviour and the focus on energy savings rather than potential lifestyle benefits, a relevant consideration when purchasing a home (Newton et al., 2019).

Additionally, inconsistent language and messaging can cause further hesitancy and uncertainty. The usage of vague terms like ‘green’ can be interpreted as an optional feature rather than something that has health or economic benefits, but there is also confusion around terms like adaptation and resilience (Hurlimann et al., 2018).

Finally, a general lack of awareness of climate change is a barrier, both with customers and construction industry professionals, but also the perception that climate change doesn’t impact the building sector, or that there is no urgency for change (Hurlimann et al., 2018).

Recommendations

Given the significant barriers to implementation, policy interventions could be introduced to address challenges and overcome barriers. Strong governance requires national leadership that outlines ambitious targets and a coordinated pathway to achieve mitigation, involving government, industry and community engagement.

The National Construction Code outlines the minimum building codes in Australia. The code should be expanded and strengthened to include state-of-the-art best practices to avoid locking in poor performance buildings. To facilitate rapid responses to changes in climate and emerging technology, regular reviews and a framework for updating the code should take place, contrary to the current situation where scheduled updates can take years (Hurlimann et al., 2018).

Regulations need to be more flexible to adapt to diverse households considering socio-economic status, gender, culture and building heritage (Galvin & Sunikka-Blank, 2017).

Industry awareness of the role of the building sector in climate change could be improved by explicitly acknowledging climate change within the National Construction Code (Hurlimann et al., 2018). Funding for research, education and training is required to enhance knowledge, awareness and the benefits of energy conservation, efficiency and low carbon buildings (ASBEC, 2016; Hurlimann et al., 2018).

Simple, direct messaging which avoids vague terms or industry jargon should be used with consumers, highlighting the comfort and health benefits rather than building performance or climate benefits (Newton et al., 2019).

Conclusions

When coupled with a fuel switch to electricity powered by renewable energy sources, existing energy conservation knowledge and energy efficiency technology is adequate to achieve climate change mitigation in the built environment.

However, the building sector has failed to realise significant reductions in greenhouse gas emissions due to ongoing barriers to implementation, including inadequate governance, policy and understanding of low carbon buildings and climate change.

Mitigation can be achieved through mandatory, state-of-the-art building regulations which continue to be expanded and revised in response to a changing climate and emerging solutions. These should be applied to both new buildings and the retrofitting of existing building stock, with priority given to retrofitting to reduce the impact of embedded emissions and standards should be enforced to ensure closing of the gap between design and the built outcome.

A broad range of policy interventions is required to overcome these barriers. Particular attention should focus on the residential sector where high standard building codes and incentives along with education and training could drive a rapid transition and positive outcomes.

Future research could examine the barriers to achieving a circular economy in the building sector and could identify opportunities to overcome spatial inequality and retrofit poverty with a view to achieving a just transition to decarbonisation in the built environment.