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The cost of comfort…

How are air conditioning manufacturers innovating to ensure that cooling is not merely a privilege but a right, with electricity costs in Australia skyrocketing, driven by subsidies to renewables? And with the premium being placed on efficiency, how does IEQ rank in the hierarchy of needs? Hannah Jo Uy has the story…

| | Jun 12, 2018 | 9:45 am
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Frank Seeley

Australia is facing a cooling crisis, says Frank Seeley, Founder and Executive Chairman, Seeley International. To prove the statement is not an exaggeration, he points to compelling evidence published in a recent RMIT University report identifying extreme heatwaves as a significant risk to household health. The research included contributions from 70 health and social services sector professionals from 36 potentially heat vulnerable households in Cairns, Dubbo and Melbourne. The most alarming aspect of the report, Seeley stresses, is confirmation that elderly and other vulnerable Australians are “too scared to switch on air conditioners or fans in heatwaves because of spiralling electricity costs, while families are forced to go without groceries or schoolbooks so they can afford to stay cool”.

Seeley says there are calls for authorities to excuse the elderly and unwell from public alerts to conserve electricity in extreme heat to avoid shortages and blackouts. “Australia has just had another hot summer,” he says, “and our leaders continue to tinker at the edges of what is a very broken energy system to keep pressure off the energy grid – and the frail, elderly, and those suffering chronic health conditions made worse by extreme heat, continue to be in danger.” Discussing the findings of the RMIT research, Seeley expresses disbelief at the fact that in modern-day Australia, 78% of respondents do not have cooling at all, and of those that do 89% are reluctant to use it, calling this fact “nothing short of a national disgrace”. This, he says, should serve as an impetus for politicians to help people access energy-efficient home appliances.

Allan Ramsay

Allan Ramsay, Export Manager for Edmonds, shares his observation on the situation’s ramifications for the commercial sector, providing the example of the neighbourhood butcher buckling under the cost of operating a refrigeration unit to emphasise that the biggest burden is placed on SMEs. “A lot of small businesses are having trouble passing on cost increases to the market place,” he says. Ramsay adds that while bigger businesses have enough of a margin to cope, this is not the case for others. “Even supermarkets with large freezer units have incurred massive cost increases,” he says. “It’s a big problem.” Ramsay says that the skyrocketing price of normal electricity followed the move towards renewables, as the money accrued is being used to subsidise rebates offered to solar and wind projects to encourage their uptake, owing to looming targets.

Seeley, however, advocates for a national rebate scheme to encourage investment in energy-efficient air conditioners and replace inefficient cooling options that bring the power grid to breaking point on days of extreme heat. “What the RMIT report shows is that a rebate scheme should target those most at risk as a first priority,” he says. “The current system, which sees funds made available to try and partially offset high energy bills, isn’t working. We need to see funding that forces business and industry, and encourages and assists households, to invest in more energy-efficient cooling, which not only protects them on extreme days but reduces the demand on the system, too.” Seeley calls for investment in premium evaporative air conditioners and hypo-coolers, some of which he says, are up to 90% cheaper to run than ducted reverse-cycle air conditioning, while still offering similar, if not better, cooling relief.

These are all unavoidable consequences of the government’s effort to ramp up to achieve environmental targets. Ramsay points to Australia’s promise to reduce air emissions to 28% from 2005 levels by 2030, as an important driver. “According to the Australian Institute of Refrigeration, Air Conditioning and Heating (AIRAH) in 2013,” Seeley says, “total emissions from the commercial and residential building sector accounted for 127 MtCO2e, nearly one quarter – 23% – of Australia’s annual national greenhouse gas emissions that year (ASBEC 2016). Grid-supplied electricity consumed by buildings was responsible for 86% of the sector’s emissions, so reducing these emissions can help Australia meet its energy productivity target and more than one quarter of our 2030 national emissions target.”

However, Seeley says, between 2005 and 2015, building energy intensity has only improved by two per cent across the commercial sector and five per cent across the residential sector. “There is considerable scope for improvement in all property sectors,” Seeley says.

Expression in legislation

Chris Matthews

The government’s move to ramp up efforts to move the dial towards its targets has found expression in legislation. Chris Matthews, Managing Director, Silenceair International, touches on the government’s move to introduce new energy-efficiency codes, primarily to reduce the need for new power generation facilities. “The City of Sydney Council has recently introduced requirements that all new apartments in the city jurisdiction have natural ventilation to habitable rooms,” Matthews says, by way of example. “These have been outlined for some time in the New South Wales State Government ‘Apartment Design Guidelines’ documents, but the City Council is the first to enforce these guidelines. Other councils will follow as issues of amenity become more pressing.”

Ramsay adds that another big change is coming in 2019, “when Section J of our National Construction Code is due for change”. Stakeholders, he says, are anticipating the changes and its impact on energy efficiency in Commercial Buildings. Ramsay highlights eight provision areas, which, he says, will see increased stringency in the coming year. This includes building fabric, glazing, building sealing, air movement, air conditioning and ventilation systems, artificial lighting and power, heated water supply and facilities for energy monitoring. The overall objective, he says, is to achieve energy savings of up to 40% in commercial buildings.

Ahmad Fraij

Ahmad Fraij, Director, EHVACS, weighs in, pointing to the government’s introduction of Minimum EnergyPerformance Standards (MEPS) that determines the allowable minimum efficiency for mechanical and electrical appliances and equipment sold in Australia. Manufacturers, he says, have to comply with these standards, making a case for the efficiency of locally made products. For their part, he says, EHVACS is leveraging the high efficiency of Australian products as a competitive advantage in advancing its penetration in the Middle East and Africa.

Matthews says that the industry itself is an important driver, pointing to the AIRAH, the peak body for ventilation in Australia, seeing itself as key driver in the development of sustainable and efficient solutions through education programmes, in the bid to “be a leader, not a follower”.

For Fraij, consumer behaviour continues to be the biggest driver for the industry, saying that there has been greater awareness of the consequences of increased energy consumption and CO2 emissions. “Now, normal people hire specialists to conduct energy audits to their homes,” Fraij says, “to make sure they are using the energy properly and cut any wastage.” Matthews seconds this, adding that customers are demanding more efficient solutions, “as they are the ones who bear the bills”.

Ramsay shares the same observation, noting that tenants are looking for ways to save by enhancing the efficiency of air conditioning systems, through better sealing and glazing, which, he says, will be more vital from 2019 onwards. Ramsay says that this is creating a lot of pressure on owners to update new leasing.

Design trends

Unsurprisingly, these factors have led to a paradigm shift among stakeholders. Fraij says that now, most of the medium to big projects have an Environmentally Sustainable Design (ESD) Report during the design stage, focusing on energy efficiency and the design approaches used to make the building environmentally sustainable. Many buildings, he says, have been certified with Green Star Rating, “which is the Australian green building certification system similar to LEED Certification popular in the Gulf countries”.

Matthews goes further to emphasise that in institutions such as hospitals and universities, where the initiator is the end user, the value proposition of ESD, both cultural and economic, is understood and realised. In relation to capex, he says, the trends have made a gap in the market for Silenceair products, which he says are significantly cheaper than traditional systems and, most importantly, are a code compliant ventilation solution, adding that saving in electricity cost is a driver for designers that have specified their products in projects.

Seeley shares his observation on the growing trend of both first- and last-home buyers, downsizing to smaller, high luxury living options, which, he says, has inspired innovation in the company. “The Australian residential building boom continues to defy predictions of a downturn,” he says, “and this has largely been achieved by a surge in approvals for smaller dwellings. A growing number of Australians are now opting to follow lifestyles already enjoyed in some of the world’s greatest cities such as Paris and New York, where inner city living means vibrant eating and entertainment options, right on the doorstep.”

Over the past 25 years, Seeley says, the number of occupied apartments, flats and units in Australia has increased by 78% and now numbers over 1.2 million dwellings. Seeley International, he says, is aiming towards versatility to ensure complete comfort through hot summers without incurring massive cost, especially with extended heat waves. To address this, Seeley says the company came out with its new product, Climate Wizard CW3. “Existing refrigerated air conditioning technology is based on a 100-year-old invention and, in principle, has remained shackled to it,” Seeley says, stressing that the CW3 aims to combine heating and cooling with energy efficiency. The system, he says, was designed to address demand for lower running cost and effective dual systems in humid conditions, with fresh air delivered into the house through one set of delivery ducts.

Matthews says that owing to architectural design trends and new construction technologies, the space available for ducting is disappearing, prompting the company to develop new and more compact wall-based acoustic ventilator products that are 90 mm thin, to fit into steel stud cavity wall systems. “Ceiling plenum spaces are now only 65 mm or less in many projects. This is just enough to allow for electrical cabling and water piping,” he says. “We have developed an acoustic ventilator for these thin spaces to allow for acoustically controlled make-up air to A/C systems in apartment towers.” Matthews adds that the company is also finalising designs for acoustic ventilators that are installed into the façade glazing system, for projects where there is no exterior wall surface and acoustically controlled natural ventilation is required in the apartment or office.

Mike Garrett

Mike Garrett, Managing Director, Plandroid, seconds this, noting that new buildings in Australia continue to have lower ceiling space, with more manufacturers coming out with small duct systems and high velocity systems with very small ducts and special air handling units.

Demand for new technologies

Unsurprisingly, new design approaches lead to demand for new technologies. To name a few, Fraij says, there has been uptake in demand for magnetic bearing, oil free chillers, chilled beams, condensing boilers, solar PV panels, solar hot water systems and demand ventilation – all new technologies, which, he admits, increase the initial cost of the project. “The demand for green buildings is increasing even though the capital cost is higher,” Fraij says, owing to more consciousness among stakeholders about the effect of global warming, coupled with a desire to mitigate its effect for the coming generations. “The building owners also know that green buildings will attract tenants more than the conventional buildings,” he says, “because the tenants will enjoy less running cost… and better comfort inside the offices.”

“People don’t care about the initial capital cost anymore,” Ramsay adds, in view of provisions being rolled out. Whether or not stakeholders are willing to pay the capital cost, he says, cost of energy is so high it makes a case for investing in such equipment. “It will increase in stringency up until value of the energy savings outweighs increased cost,” he says, adding that stakeholders keep cost benefit ratio between 1 and 1.5; “a lot will come down to a ratio between 1.1 and 1.2” he further adds. Edmonds, he adds, is accommodating trends by focusing on glazing. Though the company offers insulation, as well, he says, the current standards for insulation are considered to be sufficient, stressing that of late, more emphasis is given on efficacy of pumps and fans, which has ramifications across the chiller, air conditioning and ventilation sector.

Matthews weighs in: “The traditional drivers in equipment choice has been the balance between Capex, energy costs and maintenance. There will always be projects, clients and situations, where economic considerations are the principle drivers of equipment choice. The various stakeholders, and when they realise their investment in the building’s life cycle, also needs to be understood. A developer who builds apartments and sells them as soon as they are completed is only interested in how cheaply he can build them and how exclusive he can make them look to maximise his profit.” Operating, maintenance and replacement costs are of no interest to the developer, Matthews says, but these costs are of critical importance to the apartment buyers and the building managers.

Ramsay adds that though many efforts are directed towards construction of new buildings, there is pressure among owners of existing buildings to retrofit to higher standards to attract potential tenants who have the power to opt for newer, more efficient developments.

What of IEQ?

Though efficiency is front and centre, stakeholders are equally aware of the IEQ. Buildings are investment vehicles, Matthew says, “These investors want high returns on their investment, and it is demonstrated that buildings employing ESD principles with high IEQ can charge a premium rental.”

People, Matthews says, are becoming more aware of the value and health benefits of adequate and good quality ventilation, and businesses are becoming more aware of the financial benefits of a healthy and productive workforce. “Awareness of IEQ issues is gaining ground,” he says. “This awareness has taken some time to gain traction, but I believe general awareness is rapidly increasing. Stories have begun to appear in popular media, such as TV, on the importance of IEQ. Here in Australia, AIRAH is an active promoter of the values of good IEQ. Recent research, Matthews adds, has piqued interest amongst building owners and tenant groups leading to a customer-driven demand for better IEQ.

Additionally, he says, the regulatory framework is becoming more stringent for schools and hospitals in Australia, a trend he believes is set to continue. The move, he says, is welcomed by facility management and engineers in general, and they are actively driving change where possible. “Compliance from these groups is usually excellent,” he says.

Ramsay says that in New South Wales, there is a growing number of new schools owing to rapid increase in population and the government’s immigration programme. Ramsay adds that in addition to this, the state government is not permitting use of air conditioning in the schools and they are asked to rely on ventilation, leading to a conversation on the balance between energy efficiency and better IEQ through more fresh air changes. “In NSW,” he says, “they require 5-7 air changes per hour in schools.” This he says, has driven demand for the company’s EcoPOWER solution, as it can operate in natural, wind-driven mode during the day to provide air exchange, then revert to power mode at night, with flow rate 4-5 times greater than during the day, to ensure all radiated heat is removed from the building and the lowest external temperature is reached by start of next day.

Matthews provides a perspective for Sydney, which he says is introducing guidelines that will force grade B, C and D office space to be more energy efficient during their next equipment upgrade. “Most of the owners of this type of building stock are driven by economic factors, and are trying to do the cheapest solution possible,” he says, “but the growing awareness of the importance of IEQ on the personal health of people will lead to more demand from tenants for higher IEQ and a demonstrated performance from their landlords. In a classic competitive market, landlords will be forced to upgrade or have empty buildings.” This, he says, will drive growth of superior IEQ solutions.

Efficiency, evidently, is imperative in Australia, but not at the cost of IEQ, as the country has an educated market looking to strike a balance between cost and comfort, thus driving innovation among local manufacturers.


Hannah Jo Uy is Assistant Editor at Climate Control Middle East magazine. She may be contacted at hannah@cpi-industry.com

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