Trigeneration on the rise in Australia

A combination of favourable policy, a national building rating scheme and voluntary agreements has resulted in a wave of trigeneration schemes in Australia in recent years. Tracey Colley finds out how it’s all come together.

It was Victor Hugo who said that ‘nothing is more powerful than an idea whose time has come’, and that certainly seems to be true for trigeneration in Australia at present.

Trigeneration isn’t new to Australia, as the 5.5 MW gas-fired Crown Casino and Entertainment Complex trigeneration plant was commissioned in 1995. As the Casino included online gaming machines, it required power backup in the event of grid failure, so the gas trigeneration plants were installed to provide a reliable backup supply. In summer, absorption chillers provide cooling and in winter the trigeneration plant switches to heating mode.

So what has changed to enable this increased uptake of trigeneration? The key success factors are building rating schemes supported by regulatory and economic tools, and voluntary agreements.

The National Australian Built Environment Rating System (NABERS) started in the mid 2000s and is unique, in that it assesses the operational performance of buildings and tenancies rather than the design. There are a range of tools which cover energy, water, waste and the indoor environment, and it is a national scheme. NABERS office ratings can cover the whole building, the base building or a specific tenancy. NABERS provides two energy ratings for existing building stock – Energy Efficiency and Greenhouse Gas Performance (which includes low emissions electricity purchase such as GreenPower and grid transfers from cogeneration and trigeneration plants). An Energy Efficiency rating will hold if the building ownership or tenancy changes, whereas the Greenhouse Gas Performance rating may change if the new owner or tenant changes the type of purchased electricity. Tools are available for offices, shopping centres, hotels, data centres and residences. If ratings are to be used for reporting or promotion purposes, they must be performed by an accredited assessor, whose work is regularly audited. Self-assessments can be completed using a free online calculator. Over 75% of the Australian office market has been rated by NABERS.

The Westfield Sydney redevelopment project has a five Green Star rating Credit: Scentre Group
The Westfield Sydney redevelopment project has a five Green Star rating Credit: Scentre Group

The NABERS Energy and Water rating scale ranges from zero to six stars, with six stars representing market-leading performance. By 2011 about 20% of rated office buildings had a NABERS five-star rating. Using a NABERS Energy Commitment Agreement, refurbishment projects can commit to achieving an agreed NABERS Energy star rating with or without GreenPower.

As the NABERS Energy schemes are credible, they are used in other government regulatory programmes. Installing trigeneration will improve the rating, and in schemes such as the NSW Energy Savings Scheme (ESS), the improvement in star rating can be converted into Energy Saving Credits (ESC), which can then be sold.

According to Jeff Bye, Director of the Demand Manager, ‘improving the NABERS rating of a typical commercial office building can deliver a financial benefit to the building owner worth around AUD$0.50-$1.00 ($0.37-0.73) per square metre per star rating increase per year. Unlocking this value can help building owners to deliver further savings and green ratings.’ The NSW ESS makes it mandatory for liable entities (electricity retailers or other parties licensed to buy or directly supply electricity in NSW) to obtain and surrender ESC. Victoria has a similar scheme, the Victorian Energy Efficiency Target (VEET, or Energy Saver Incentive).

Since 2010, the Commonwealth Building Energy Efficiency Disclosure Act (BEED) has required all offices over 2000 m2 to disclose their energy efficiency rating during sale or leasing. This disclosure usually takes the form of a NABERS Energy Efficiency rating and a lighting assessment.

Other programmes

Environmental Upgrade Agreements (EUAs) have been available since 2011, where up to AUD$80 million is available for upgrades to non-strata commercial and light industrial properties in Sydney, Melbourne and NSW regional centres. The loan amount is repaid through local council rate charges, so the financial risk is lower for the lenders as it is attached to the building. Similar government funding schemes exist in other states.

Sydney's Central Park development features a 2 MW trigeneration plant
Sydney’s Central Park development features a 2 MW trigeneration plant

EUA funding was used in the AUD$2 billion Central Park development in Sydney, which was a redevelopment of an old brewery site in the central business district (CBD). The redevelopment includes mixed-used urban structures, including 3000 residences and 65,000 m2 of retail and commercial areas in 14 buildings. The first stage included a 2 MW trigeneration plant which was partly funded by an AUD$26.5 million EUA loan. The Dandenong Precinct Energy Project trigeneration plant was operational in March 2013, and an additional 4 MW will be operational by 2017. An underground pipe network supplies the 7-ha precinct of commercial, retail and residential properties, and the design should mean that there are no additional costs compared to the usual approach.

The NSW Government Resource Efficiency Policy (GREP) requires NSW government leases to be a minimum of 4.5 star NABERS rating, and other governments have similar requirements.

Voluntary schemes

Voluntary schemes, such as the CitySwitch project, support commercial office tenants to improve their energy efficiency. The aim is to achieve a four-star NABERS Energy rating and, at present, 725 tenancies covering over 2.8 million m2 of commercial office space have joined CitySwitch.

Green Star is a voluntary rating scheme launched in 2003, which covers building design and construction, as well as operation. There are currently 138 buildings with a six-star rating and 250 buildings with a five-star rating. Of the 982 Certified Green Star Projects, 28% are in Victoria and 25% are in NSW.

To provide a comparison of the NABERS and Green Star schemes, 200 Victoria Street in Melbourne, the redevelopment of an inner-city brewery site, includes mixed office and retail in a 7925 m2 building. It was the first Victorian building to achieve a six Green Star design rating and a five-star NABERS energy rating after it started operation in December 2009. This was due in part to the trigeneration unit which provides backup for the site during grid outages.

Central Park thermal plant
Central Park thermal plant
Credit: Total Construction

Green Star is often used to rate the building design, and NABERS is used to rate the building once it is operational. Both tools have enabled the building sector to provide clear, understandable information, which has led to a shift in the behaviour of the sector. Companies make a point of highlighting that they were leasing buildings with six Green Star or five-star NABERS ratings, as part of their commitment to sustainability.

The largest five Green Star Retail Design v1-rated retail precinct is the Westfield Sydney site (>10,000 m2), which includes a trigeneration system and complements adjacent Westfield buildings, the 100 Market Street six Green Star office Design v2 and 85 Castlereagh Street, which is expected to achieve a six-star Green Star rating for both Office Design and Office As Built v2.

Amongst the largest trigeneration plants in Australia is the Qantas headquarters and Terminal 3 at Sydney airport, which has been operational since May 2013. An 8 MW trigeneration unit services the headquarters, catering centre and jet base and a 4 MW unit services Terminal 3. The net result of the overall site efficiency improvement project was that the NABERS energy rating went from 1.5 to five stars over a site with 16 buildings and a total floor space of 210,000 m2.

Making it happen

In terms of individuals and organisations spearheading change, Allan Jones, having previously worked his magic in Woking and London, joined the City of Sydney local council as the Chief Development Officer for Energy and Climate Change in 2009. The City of Sydney area covers inner-city Sydney, an area of 26.15 km2 with over 183,000 residents.

The Sustainability Sydney 2030 plan, released in 2008, aimed to cut CO2 emissions by 70% from 2006 levels by 2030. This led to the development of the Green Infrastructure Plan, comprised of complementary Decentralised Renewable Energy (2013) and Trigeneration (2013) Master Plans. The Renewable Energy Plan called for 100% local renewable power by using ‘green transformers’, which convert waste to energy and supply a local area or precinct via district thermal pipe networks, in a similar fashion to plants in Europe. The original Trigeneration Master plan was for 360 MWe of new trigeneration to provide 70% of the electricity needs for the City of Sydney area, made up of 13 individual plants in four Low Carbon Infrastructure Zones, to be developed in co-operation with commercial developers. As the Trigeneration Master Plan stated, it was ‘a radical departure from current practice which tends to be based on locating small engines in individual buildings on an ad hoc basis’.

Regulatory issues

During 2013-2014 there was a NSW Public Accounts Committee review of polygeneration in response to concerns from the industry, which investigated issues such as whether the regulatory framework was adequate to support precinct trigeneration developments and trigeneration in a single building. In its final report in March 2014, it recommended support for small-scale trigeneration developments and regulatory and administrative changes to support them, but recommended against larger precinct retrofit schemes. The lack of cost-reflective network access fees for embedded generators in the Sydney CBD and wider electricity network was aknowledged, as were the benefits of trigeneration: deferral of network investment, improved energy efficiency and supply security. The industry response was that some of the recommendations were valuable, but some were misinformed, requiring further negotiations between the industry and government.

This has led to the larger precinct retrofit projects stalling, but the City of Sydney has progressed with installing trigeneration in its own buildings, such as the Town Hall House. This is a 1.4 MW (7 x 200 kW microturbines) build-own-operate project which will increase the NABERS energy efficiency rating from 3.5 to 4.5 stars. It has received an AUD$3.05 million grant from the Federal Governments Community Energy Efficiency Program, and construction will commence in 2016. Other larger trigeneration projects, such as the Green Square Town Centre project, will be revisited once regulatory issues have been fully resolved.

Looking ahead

One potential problem looming on the horizon for gas-fired trigeneration is the current and expected increases in gas prices in Eastern Australia (particularly NSW), due to large coal seam gas extraction and LNG projects for the export market in Queensland. The higher prices offered by export opportunities have seen NSW prices increase and activated the development of coal seam gas in NSW, often in prime agricultural areas.

As Ric Brazzale, Managing Director of Green Energy Trading, states: ‘Cogeneration has really struggled in recent times with rising gas prices and lower wholesale power prices. The removal of the carbon price last year and the completion of the Clean Technology Investment Program meant that there was no longer any recognition of the lower greenhouse benefits of cogeneration. On the bright side, we are expecting that changes to be implemented in the NSW ESS and Victorian VEET schemes will recognise the improved energy efficiency and lower emissions from cogeneration.’

Tracey Colley is a journalist focusing on the energy sector

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