Submission by the ACT Owners Corporation Network
to the ACT Government’s Public Consultation
on the Integrated Energy Plan
As the OCN represents the interests of those owning and living in strata complexes, the comments we offer herein tend to concentrate on matters most affecting our members.
It is essential to recognise the diversity of socio-economic circumstances of those living in strata buildings. Occupants and owners range from wealthy retirees through to those living at the margins in small apartments – with a majority in the latter category. All are bound together into a singular Owners Corporation (OC). The burden of funding the various changes that are needed to transition to a low carbon future is distributed across all owners in proportion to the owners’ unit entitlements (loosely reflecting the value of their apartment). However, those “living on the margin” may struggle to contribute their share of the funding requirement. Indeed, there are case studies where some complexes are already abandoning good practice in building maintenance and defect rectification because many owners simply cannot afford the costs involved.
The Unit Titles (Management) Act (UTMA) requirement to achieve 75% support at General Meetings of the owners in a larger complex poses a significant hurdle to any OC securing agreement to invest in measures designed to improve environmental sustainability. This is particularly the case where a significant cohort of owners:
would struggle to meet their share of the cost of those measures; or
are moving more slowly in their personal transition to a low carbon future and are ideologically opposed to measures (like installing EV charging infrastructure) that they do not view as relevant to them at this stage.
As an example of possible approaches, if a subset of owners (falling short of the majority stipulated in Part 3.2 of the UTMA) is willing to fund sustainability infrastructure via a voluntary levy, it may be appropriate to grant those owners a special privilege in relation to the use of that infrastructure. It may also be appropriate to allow for owners who did not initially support the investment to “buy into” the solution at a later date on pre-defined terms. Appropriate flexibility in UTMA legislation could facilitate progress.
The UTMA does not appear to contemplate the long-term leasing of common property to a third party that is contracted to build, own, and operate sustainability infrastructure over an extended period, delivering worthwhile benefits to the owners collectively. Such arrangements may be an effective way of securing a higher level of ownership and operational expertise than might otherwise be found in the OC, its Executive Committee (EC) or its delegated Strata Manager (SM). Overall, the UTMA needs to support rather than impede the transition to an electrified future.
In general, it is important that ACT Government leads all its sustainability initiatives in a transparent and predictable way if it is to inspire confidence in the community. A measure of trust in Government has been lost over situations like (for example) the costly replacement of combustible cladding and in the high rates and land tax created by the change in calculation method for strata complexes.
Focus Area 1: Developing a Future Network
The electrification of the ACT is going to put significantly new and different demands on the electricity grid. Historically grids have been designed to distribute energy from large generation sources to passive end users. The landscape is changing, with renewable generation and storage resources distributed throughout the network – in much the same way as the computing environment has evolved from large mainframe computers supporting “dumb” terminals at the periphery, to a distributed mesh of computational and storage resources all connected by a high-speed network.
As this transition continues, the challenge of keeping supply and demand constantly in balance is becoming ever-more difficult due to the inherent variability of most renewable energy resources, and the potential for much higher peaks in demand due to the electrification of everything, increasingly including many vehicles.
As a co-owner of the ACT’s electricity network, the ACT Government has a key role to play in driving grid modernisation to meet changing needs. In general, the grid of the future will need a substantial infusion of sensing, analytics, and control technology if it is to meet emerging needs with intelligence rather than expensive brute strength.
Whilst the plan is to decommission the supply of natural gas, we recommend the retention of the pipe network. It may prove a valuable future access channel for the supply of other gases, optical fibre, or other infrastructure of value to the community.
Focus Area 2: Electrifying our Community
To maximise electrification of the whole community, it’s essential to address the challenges faced in established strata buildings - currently estimated at around 40% of the living units in Canberra. The proportion living in strata complexes is set to grow further as land availability becomes more scarce and Government ‘infill strategies’ are applied. Good progress has been achieved with detached housing and this now needs to be matched by similar progress in multi-user dwellings.
A significant proportion of this cohort will need assistance (similar to what has been provided to detached home owners) to expedite the transition in the strata sector.
Focus Area 3: Complex Buildings
As an initial comment, new building standards need to be brought in as quickly as possible so that new buildings do not add to the retrofit burden. The construction of both buildings and the units within them should meet high energy efficiency standards to lower future energy demands and thereby reduce greenhouse gas emissions.
Most of our remaining comments relate to addressing the challenges that already exist with strata buildings constructed over past decades.
The “big ticket” challenges/opportunities faced to varying degrees by strata complexes are:
maximising solar opportunities;
providing EV charging infrastructure;
replacing gas-fired hot water systems;
installing battery storage (where it makes commercial and environmental sense); and
upgrading building substations to cope with higher electricity demand peaks.
Many of these initiatives do not have short-term paybacks, and long-term funding is going to be needed. It will be beyond the means of some of the owners in a strata building to contribute their fair share. Government assistance in the forms of grants and/or long-term low interest or interest-free loans will be vital to accelerating progress.
We strongly support the recently announced solar incentive for multi-dwelling structures. Whilst details of the scheme have yet to be finalised, we understand that support of up to $100K will be available, comprising $50K grant from the Commonwealth and an additional $50K low interest or interest-free loan from the ACT Government. We recommend, however, that the scheme be generalised to address whichever of the five major challenges makes most sense for a particular strata complex. The quantum of funding support for any particular complex should be scaled to equitably support the number of home units in the complex.
Case studies and demonstration solutions are needed across the range of different building types to demonstrate solutions and show the way forward.
In the case of EV charging, the solutions will differ widely depending on the location of electricity meters. The simplest use case is where the meters are co-located in a parking basement, making it possible to deploy a charging outlet that is connected back to the same meter that measures power to the unit, allowing in situ charging whilst the owner’s vehicle is sitting in its normal parking space.
More complex in situ EV charging solutions involve the use of common power. In this scenario, some users may be faced with premium daytime electricity costs because of the network supply surcharges that EVO applies to every kWh supplied to non-residential customers, including the body corporate. It is obviously discriminatory if apartment dwellers are charged significantly higher rates than those available to EV owners living in detached housing, or living in complexes where it is feasible to connect charging outlets to the apartment meters. Artificially high costs will retard the move to electric vehicles.
Given the complexity and cost of providing in situ EV charging, there is an urgent need for more public charging stations to buy time to implement long-term in situ charging and prevent the uptake of EV stalling.
OC’s with the capability to do so need to be able to operate embedded networks – for example, to be able to charge communal electricity supply used for charging EVs back to the owners or to bill users for their use of hot water that is heated by a single gas feed to the building. This may be done directly, or through a strata/building manager – eliminating intermediary agents that offer embedded network services. Whilst the goal should not be to make a profit, generating a surplus from such activities can be a necessary and desirable way to repay loans taken out to provide the sustainability infrastructure. There needs to be more analysis and consultation about embedded networks and OCs charging individual owners for electricity and use of common property.
Focus Area 4: Electrifying Business
Many small businesses such as, professional services, restaurants, bars, and boutique hotels now share space in mixed use strata body corporate complexes. Their needs and equitable sharing of costs will need to be considered. The ‘user pays’ principle which was recently added to UTMA legislation could provide part of the solution.
Many office complexes host car parks for staff. These should be equipped with EV charging infrastructure so that as many vehicles as possible can be charged during the day when solar generation is at a peak. New building standards are needed not only for strata complexes, but also for commercial buildings.
Focus Area 5: Electrifying Industry & Heavy Transport
We do not envisage a role for the ACT Government in financially supporting the transition of commercial or industry entities to an efficient, electrified future. Rather, the Government should provide plenty of advance notice of changes and allow businesses to make their own commercial decisions about how and when to upgrade their operations to lower their carbon impact.
One side-effect to monitor may be the risk of businesses moving to other jurisdictions that are not pursuing a zero-carbon future at the same pace as the ACT.
Improving solutions for waste management in the strata sector could reduce the need for garbage transport, thereby reducing fuel consumption by ICE trucks.
Focus Area 6: Skills and Workforce
There will be a strong need for capacity to design and implement electrical solutions, requiring an up-skilling of existing trades persons, the training of additional resources for the future and the retraining of some skills that will fall by the wayside over time.
In addition to fostering skills at a “trades” level, the ACT can only become a true leader in the space if there is also development of strategic skills amongst professional engineers, architects, and others who devise and design solutions. Engagement with the universities is strongly recommended – both for skills development and to encourage relevant research.
With the ANU and the “Suburb Zero” initiative and its support from Saul Griffith and ACT Senator Pocock, the ACT is in a unique position to advance the cause of energy and climate sustainability.
There is also a significant need for education amongst ECs and SMs who are typically charged with developing the strategies and business case studies, and driving the implementations.