New ASBEC report confirms electrification “unlocks the pathway” to net zero buildings

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“This report finds 100% electrification is the lowest cost option to decarbonise our built environment, but lowest cost does not mean no cost. Our detailed analysis by building type, geography and lifecycle reveals that electrification, while necessary, is not always cost-beneficial. Failing to acknowledge and address these costs will significantly impede the transition to net zero building operations.”

Speaking at the launch of the report, ASBEC Executive Director Alison Scotland acknowledged the elevated commitment from Australian governments to act.

“Australia is now taking strong action on climate change, with a national emissions abatement target of 43% below 2005 levels by 2030 and a net zero target by 2050. Australia now has a roadmap to deliver cleaner, more affordable energy to households and businesses,” Ms Scotland said.

“But as our grid decarbonises, we must turn our attention to other sources of emissions. The built environment is responsible for a quarter of Australia’s emissions. This means decarbonisation of our buildings is an essential strategy to cut emissions and strengthen Australia’s future as a renewable energy superpower.”

ASBEC’s report, an output of the Rapid and Least Cost Decarbonisation of the Built Environment project, is backed by a building-level technical report by DeltaQ and modelling of least-cost decarbonisation options by SPR.

SPR modelled three ‘plausible but divergent’ decarbonisation scenarios: 100% electrification; a combination of electrification and green hydrogen; and a ‘base case’, representing ‘business as usual’ of electrification, fossil gas, green hydrogen and carbon offsets.

The modelling was applied to new and existing residential buildings and commercial buildings (hotels, offices and retail) in Victoria, New South Wales and Queensland. The three scenarios were modelled over the period FY2024 to FY2050.

“ASBEC’s work confirms that relying on a business-as-usual approach to decarbonisation will require investment in offsets. A strategy based on offsets is the most expensive and uncertain option for the economy and the worst outcome for emissions reduction,” Mr Morrison says.

“The report also recommends that electrification, which is available now, should be pursued rather than waiting for green hydrogen to drive transformation. By electrifying buildings now, hydrogen can be reserved for industries with high intensity energy requirements.”

Electrification of Australia’s built environment will require government action, and ASBEC’s report includes six clear policy recommendations. These include an upgrade to the National Construction Code, a national plan to phase out fossil gas, and incentives to address capital cost constraints.

ASBEC also calls on governments upgrade their own assets and embed electrification in procurement standards, to invest in training and education, and to develop strategies that ensure vulnerable communities are not left behind.

“Electrification is the least-cost option to drive down emissions, but it is not a no cost option. The built environment must electrify, and public policy can smooth the pathway so this happens at speed,” Mr Morrison concludes.

The Australian Government, through the Department of Climate Change, Energy and Water, and the NSW Government, through the NSW Office of Energy and Climate Change, provided financial support for ASBEC’s Rapid and Least Cost Decarbonisation of the Built Environment project.

Download Unlocking the pathway: Why electrification is the key to net zero buildings.

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