_Electrification of Buildings
Many of our building-owner clients have set (or are setting) zero carbon emissions targets for their buildings and building portfolios. This requires the elimination of natural gas from buildings.
While we have zero carbon (renewable) electricity, there is currently no zero-carbon gas (biogas) available for space heating or cooking in commercial buildings. The general view is - although the biogas industry in Australia is growing, all gas in the future will need to be reserved for industrial processes which require very high temperatures, rather than being used for heating in buildings.
Some of our building owners are fortunate in that their buildings are already heated by electricity (or are not heated at all because they are located in warm climate zones).
For buildings currently heated by natural gas, there is no zero-carbon option on the horizon other than to replace gas boilers, gas domestic hot water systems and gas cooking with electrically powered equipment.
The main option for replacing gas boilers is to install electric heat pumps, which are essentially just large versions of your home reverse-cycle air conditioner when operated in heating mode. The heat pump extracts heat from the outside air to make hot water, which becomes the heat source for the building.
The Electrification Process
The process of successfully electrifying a gas-heated commercial building requires detailed planning.
Our ESG team follows the process as set out by organisations including NABERS, the Green Building Council of Australia and the Better Buildings Partnership.
The typical steps in the process, whether for a single building or a portfolio are as follows:
Source: Better Building Partnership
For a portfolio of buildings, the electrification process can take multiple years and involve significant capital expenditure. This means it is very important to start early and to incorporate the process into existing capital upgrade and plant replacement plans and programs.
A key trap to avoid is like-for-like replacement of end-of-life capital equipment without considering long term carbon emissions targets. An example is the replacement of worn-out gas boilers with new gas boilers.
Knight Frank’s ESG technical team are well positioned to undertake building electrification projects and we welcome electrification enquiries from our clients.