When you get all your ducks in a row things go swimmingly. You can hit the sweet spot. That is exactly what is happening in Victoria where the State government is retrofitting government buildings to improve their energy efficiency.
Under the program, taxpayers will save around $1 billion in energy and water bills for their public buildings over the next 25 years. The government has invested $100 million so far and expects to invest $400 million in total.
Why has this project gone swimmingly when so many other programs have gone belly up? The reason is that it got all its ducks in a row. The ducks were the client (the government), the project parameters, and the contractors who carry out the work.
Both the client and the contractors (through their industry body the Energy Efficiency Council) researched programs in other countries and identified four best-practice principles for retrofits.
- Financial model. The program requires service providers to design and install energy and water saving solutions, and to guarantee annual cost savings. Winning contracts are those that guarantee the highest level of savings in a seven-year pay back period.
- Whole of government. The administrator gives individual government departments the tools and templates for managing projects.
- Project administration. A central project facilitation group sets mandates for agencies to achieve retrofit targets, and guides tenders to a panel of pre-qualified service providers.
- Targets were set as a percentage of energy consumption. Victoria’s target required each department to retrofit sites accounting for 20% of energy consumption by 2012, which was achieved, and 90% by 2018. Energy savings were anticipated to be 25 per cent but some buildings have doubled that outcome and the average is 42 per cent.
The central administration of projects across all government departments means that projects have been tendered in stages to avoid boom and bust cycles, ensuring a steady stream of work. Contractors know there is a stream of work stretching out to 2018, and they have been able to build a skilled workforce to meet the demand. This enhanced capacity will, in turn, multipy benefits across the whole property sector.
The program might be called the Greener Government Building program, but it is not run by the Environment agency, it is run by the bean counters in Treasury. In a curious reversal, this is the opposite of greenwashing, where products and programs try to look greener than they are. In this case, the environmental benefits are underplayed and the program is run mainly as a cost-saving exercise. What do you call that? Dollarwashing?
The Victorian program is a shining success and other State governments are following suit. They are working to get their ducks lined up so they can reap the benefits of energy efficiency retrofits.
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