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Many cost-effective energy efficiency opportunities exist in the commercial and services sector. Taking an integrated approach to identifying and implementing energy efficiency opportunities will help to realise the full cost savings available.

Improve energy metering and monitoring

Taking a systems approach to identifying and implementing energy efficiency opportunities in commercial buildings helps to realise the full cost savings available. This approach considers the energy use of the building as a whole, and how key systems interact with each other.

Energy efficiency strategies focused on individual energy-using devices or design features are often limited to incremental improvements. Examining the entire building can lead to entirely different design solutions. This can result in new buildings that use much less energy but are no more expensive than traditional building design. The building performance is optimized through an iterative process that involves all members of the design team from the beginning of the building’s planning.1

- Intergovernmental Panel on Climate Change, 2007

Sensors and monitoring systems are rapidly declining in cost and improving in performance. This is leading to more cost-effective and superior monitoring of energy use and other indicators of service provision. Improved monitoring enables greater precision in diagnosing energy waste and optimising system performance. At the leading edge, commercial building models use actual climate and activity data as dynamic benchmarks to compare against actual performance, so that factors contributing to energy waste can be more readily identified and addressed.

Technologies such as energy management systems can reduce consumption by turning off equipment when it is least likely to be used. Generally, turning off equipment after hours can reduce power consumption by half.

For more information

Footnotes ~ Show 1 footnote

  1. Levine, M., D. Ürge-Vorsatz, K. Blok, L. Geng, D. Harvey, S. Lang, G. Levermore, A. Mongameli Mehlwana, S. Mirasgedis, A. Novikova, J. Rilling, H. Yoshino (2007) Residential and commercial buildings. In Climate Change 2007: Mitigation. Contribution of Working Group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change B. Metz, O.R. Davidson, P.R. Bosch, R. Dave, L.A. Meyer (eds), Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA

Cost Effective Energy Efficiency Opportunities

Sizable energy efficiency reductions can be achieved in all major areas of energy usage such as lighting, heating and air-conditioning, as shown in Figure 1 below 1. Commercial appliances such as refrigeration, cooking and office equipment can also be upgraded with more energy efficient models, saving energy with good returns on investment.

Figure 1: Energy Efficiency Opportunities in Retrofitting Buildings 

(Source: ClimateWorks Australia, 2010)2

For more information

  • Low Growth Carbon Plan - Energy Efficiency in Commercial Buildings 2010 (Opens in a new window)

    This report from ClimateWorks Australia and the Australian Carbon Trust utilises the commercial buildings sector analysis of the Low Carbon Growth Plan for Australia to identify significant carbon emission reduction opportunities and energy and cost savings achievable by making Australia’s commercial buildings more energy efficient.

  • Low Carbon Growth Plan - Retail Sector Summary 2011 (Opens in a new window)

    This report developed by ClimateWorks Australia and the National Australia Bank uses the Low Carbon Growth Plan research to identify potential energy savings worth an annual $1 billion in the retail sector by 2020. Further analysis by NAB found that for 40% of the ASX 200 retail consumer sector the energy efficiency savings are equivalent to 2.1% to 5.5% growth in revenue. This is as much as five times historical growth rates and double current projections for the retail sector.



Improve lighting efficiency

Lighting can account for up to 40% of energy costs in the commercial buildings. There are many low-cost and no-cost measures available to reduce lighting costs. Combining such measures with the upgrading of lighting equipment can result in significant savings in lighting costs.

Some examples of opportunities in this area are outlined below.

Reduce demand for artificial lighting

Reducing (or eliminating) demand for an energy service can achieve greater energy savings than providing the energy service more efficiently.

The demand for artificial lighting can be reduced by:

  • using lighter colours for ceilings, walls, floors and furniture so that the light is reflected more effectively within the space
  • improving natural daylighting 1 through building design or retrofitting
  • re-arranging rooms to achieve the most effective lighting conditions.

Footnotes ~ Show 1 footnote

  1. US National Institute of Building Sciences (2011) Whole Building Design Guide – Daylighting

Optimise the use of existing lighting systems

Traditionally, commercial building lighting systems have been designed to provide a uniform task lighting level over the whole office space. This can result in as much as 85% excess illumination.  Task-appropriate lighting can save significant amounts of energy.

Many lighting efficiency opportunities, such as turning lights off manually or automatically when not needed, can also be implemented without any capital outlay or redesigning of lighting systems.1

For more information

Footnotes ~ Show 1 footnote

  1. UK Carbon Trust (2016) Lighting overview

Upgrade lighting systems

There are excellent opportunities for energy savings whenever upgrades or refurbishments are planned.1 For instance, it is possible to replace inefficient T12 or T8 fluorescent bulbs with new super T8 and T5 fluorescent bulbs, and to replace CFLs (compact fluorescent lamps) with LEDs (light emitting diodes).  It is also possible to install lighting control systems, such as dimmable ballasts or photosensors, to optimise light for occupants.

Master switches that are timed to turn off electricity overnight, or occupancy sensors to switch off artificial lighting when no one is present, can also be installed. This is particularly effective in spaces such as bathrooms, parking garages and storage areas.

Table 1: Recommended types of energy efficient lighting

Source: UK Carbon Trust, 20072

See the Lighting technology page on the EEX website.

For more information

  • Energy Efficient Lighting Technology Report 2014 (Opens in a new window)

    This technology report outlines energy saving solutions to increase the efficiency of common types of lighting. Annual energy savings, capital costs and payback periods have been modelled and examples provided.

    The report will help users understand the potential for energy efficient lighting at their site and provides guidance for making the most cost-effective energy efficient technology upgrades. Generic technical specifications are provided which will allow users to confidently approach lighting suppliers and contractors.

  • Energy Efficiency Best Practice Guide: Lighting 2009 (Opens in a new window)

    This document is a step-by-step guide to improving energy efficiency in lighting systems and achieving best practice. By following this guide, you will be able to determine what changes can be made to reduce operating costs and improve the performance of equipment.

Footnotes ~ Show 2 footnotes

  1. Sustainability Victoria (2009) Energy Efficiency Best Practice Guide Lighting Guide. Sustainability Victoria (Opens in a new window) PDF 1.5 MB
  2. Carbon Trust (2007) Technology overview: Lighting: Bright ideas for more efficient illumination. (Opens in a new window) PDF 1.2 MB


Improve heating, ventilation, air-conditioning (HVAC) efficiency

Heating, ventilation and air-conditioning (HVAC) systems typically account for between 25–50% of a commercial business’s energy bills. Significant savings can be made when constructing a new building through clever design and installation of efficient equipment.

There are also many simple steps that can be taken to achieve savings in existing systems through reducing demand for HVAC services, optimising the use of mechanical HVAC systems and ensuring good maintenance practices are in place.1 Best practice maintenance can deliver utility cost saving of 10–40% compared with poor maintenance. 2

The Heating Ventilation and Air-Conditioning High Efficiency Systems Strategy (HVAC HESS) is a ten year State and Federal Government initiative that aims to drive long term improvements in the energy efficiency of HVAC systems. For more information see the HVAC HESS website.

Some examples of opportunities in this area are outlined below.


Reduce demand for HVAC services

As with lighting requirements, demand for artificial HVAC services can be minimised through the following:

  • Reducing heat generation from lighting and equipment through upgrading to more efficient lighting and energy efficient equipment. The reduction in cooling loads from this strategy can be as much as 5–20%.
  • Utilising cool roofs (painting roofs white) can reduce air-conditioning loads.
  • Designing spaces which can be closed off to minimise the space required to be heated and cooled.
  • Avoiding losses and leaks through windows. As much as 40% of the heat lost during winter, and up to 50% of unwanted heat gain during summer, is through windows. The use of appropriate shading devices, combined with double-glazing or low-emissivity windows can reduce heat loss during winter and the amount of incoming heat during summer.
  • Improving the air-tightness of a building by sealing areas of potential air leakage, weather stripping doors and using external shading (such as overhangs, shading devices and light-coloured exteriors), or standard sealants or caulking.
  • Using appropriate levels of insulation and optimising glazing areas to minimise heating requirements. If internal heat loads are high, insulation can increase annual HVAC energy use by increasing the need for cooling. This can be managed with economy cycles and natural ventilation.1
  • Minimising energy waste by managing air leakage and ventilation while ensuring good indoor environmental quality.
  • Expanding the temperature gap to at least 19–25ºC, depending on the seasons, to create a comfortable environment where no heating or cooling is operating. Cooling requirements can be minimised through economy cycles, opening windows and user-controlled local environments (e.g. use of small fans or local controls) which enable a larger comfort range and a reduction in air-conditioning loads.

Footnotes ~ Show 1 footnote

  1. An economy cycle has a large fresh air intake, and also a large spill or relief air outlet. Rather than recirculating most of the air in the building as is normally done, with an economy cycle the air is not recirculated. It simply comes in, provides cooling, then is vented out again.

Optimise existing HVAC systems

Existing HVAC systems can usually be optimised by providing air-conditioning only when and where it is required.   For example:

  • Operating times of HVAC control systems can normally be reduced by at least 10% with negligible impact on comfort by using the building’s thermal mass to maintain a relatively similar air temperature for a period of time. Units can be cycled off and on for periods of time while only the circulation fans are on. Delaying the start time of HVAC systems each morning can also minimise energy usage.
  • Ventilation systems can be optimised by using high efficiency fans and motors, demand-controlled ventilation1 and by isolating fan motors and other heat-generating components from the supply airstream.
  • Variable speed drives (VSDs) on air-conditioning fans enable the speed of fan motors to be controlled to match the amount of air required to be moved through the building. VSDs can save 30–40% on the investment annually.
  • Air distribution systems can be optimised and streamlined, where possible,  through good ductwork design to reduce air resistance. Poor distribution system and ductwork design can reduce supply flow-rate and air-conditioning efficiency by as much as 10%.2

Footnotes ~ Show 2 footnotes

  1. Jacobs, P. (2003) Small HVAC System Design Guide: Design Guidelines, California Energy Commission, pp 37, 59-60 (Opens in a new window) PDF 1.6 MB
  2. Architectural Energy Corporation (2003) Design Brief: Integrated Design for Small Commercial HVAC, Energy Design Resources, p. 10

Ensure good maintenance practices

Proper maintenance can save up to 10% of space air-conditioning energy usage through measures such as:

  • cleaning distribution systems (fans, filters and air ducts) quarterly1
  • maintaining and regularly tuning all HVAC equipment and sensors.

Footnotes ~ Show 1 footnote

  1. UK Carbon Trust (2006) Heating, ventilation and air conditioning overview. Queen’s Printer and Controller of HMSO. (Requires login to view resource)

Upgrade or replace with more energy efficient HVAC systems

Applying demand management and HVAC optimisation steps can lead to significant cost savings by enabling a downsizing of existing HVAC systems. Downsizing HVAC systems can also lead to significant co-benefits such as increased water savings, as HVAC systems are responsible for up to 30% of water use in commercial buildings.1

When it comes time to upgrade HVAC systems, different approaches such as radiant chilled-ceiling cooling2 and displacement ventilation3 can further assist to achieve significant reductions in mechanical HVAC requirements.

See the Heating, Ventilation and Air Conditioning technology page on the EEX website.

For more information

Footnotes ~ Show 3 footnotes

  1. Department of Sustainability, Environment, Water, Population and Communities (2006) Water Efficiency Guide: Office and Public Buildings, DEWHA, Australia
  2. ASHRAE Journal (2004) Emerging technologies- Radiant Ceiling Cooling (Opens in a new window) PDF 200 KB
  3. Energy Design Resources. Energy Design Briefs – Displacement Ventilation (Opens in a new window) PDF 432 KB


Upgrade office equipment

Utilising the latest technological advances and energy efficient models in appliances, office, cooking and refrigeration can reduce energy usage from this equipment by at least 15% and as much as 70%. With good returns on investment.1

Some examples of opportunities in this area are outlined below.

Footnotes ~ Show 1 footnote

  1. ClimateWorks Australia (2010) Commercial Buildings Emission Reduction Opportunities. ClimateWorks Australia and Carbon Trust Australia (Opens in a new window) PDF 1.0 MB

Upgrade computers and other electronic office equipment

Significant energy efficiency savings can be achieved through upgrading and retrofitting computers and other electronic equipment as these can contribute up to 30% of an office’s energy use.

Ensure new electronics purchases, such as televisions, electronic menus, laptops and computer systems, are the best performers in their category in relation to energy usage.

  • Office Equipment Technology Overview (Opens in a new window)

    The UK Carbon Trust has developed a range of guidance materials on the selection of energy efficient office equipment. It includes an overview of key types of office equipment and tips on how to operate office equipment efficiently.


  • Energy Rating Website
    • Equipment Energy Efficiency (E3) Program

    The Energy Rating Website provides information on the energy performance of a range of residential, office and industrial equipment which is communicated via energy rating labels.

    The website also includes information on mandatory minimum energy performance standards (MEPS) which apply to a large range of equipment, appliances and lighting products including refrigerators, clothes washers, televisions, compact fluorescent lamps and industrial motors.

Upgrade commercial refrigeration equipment

Commercial refrigeration is a substantial energy user, yet often little consideration is given to its energy efficiency, operating costs or environmental impact.1 The energy costs of refrigeration plant can be reduced by around 40% through adoption of best energy efficient equipment and techniques.

Supermarkets and other food retailers often have open refrigeration units for ease of customer access. Enclosing refrigeration units with glass doors, which customers can easily open, can reduce refrigeration loads by as much as 68% according to laboratory testing.2 This can save significant amounts of energy as around half of the energy usage in a supermarket is for refrigeration.

For more information

Footnotes ~ Show 2 footnotes

  1. NSW Government (2011) Technology Report Industrial refrigeration and chilled glycol and water applications
  2. Walker, D.H., Faramarzi, R.T. and Baxter, V.D. (2003) Investigation of Energy-Efficient Supermarkets Display Cases, 21st International Congress of Refrigeration, Washington DC, USA. (Opens in a new window) PDF 22.4 MB

Upgrade cooking equipment

There is significant room to improve the design and energy efficiency of ovens.  Commercial ovens are usually made by smaller scale manufacturers and due to the low volume of ovens manufactured, tend not to go through the same rigorous design processes as domestic appliances.

When upgrading commercial ovens, look for the following features to ensure the oven is as efficient as possible:

  • fully insulated solid doors and no glass
  • good seals on all four sides of oven doors to reduce heat loss
  • no metal joints that provide a thermal bridge from the inside to the outside, allowing heat loss.
  • exhaust hoods designed to reduce electricity consumption and increase amount of heat recovered by the system1. This can reduce energy loss from oven hoods by 75%.

For more information

Footnotes ~ Show 1 footnote

  1. Walker, D.H., Faramarzi, R.T. and Baxter, V.D. (2003) Investigation of Energy-Efficient Supermarkets Display Cases, 21st International Congress of Refrigeration, Washington DC, USA. (Opens in a new window) PDF 22.4 MB


Improve the energy efficiency of data centres

The use of data centre services is growing as businesses expand their array of digital hardware resources, procure larger servers and increase their online services. Office computers, servers and data centres contribute anywhere from 5% to as much as 40% of the energy consumption of commercial office buildings.1

Over 50 measures have been identified to improve energy efficiency in data centres.2

Some of the main strategies include:

  • reducing power consumption with virtualisation (consolidating onto fewer servers)
  • improving airflow management
  • properly decommissioning redundant servers
  • upgrading to more efficient equipment
  • consolidating and optimising storage
  • using fresh air to cool data centres.

Combining these strategies can improve data centre energy efficiency by over 50%.3

A review of energy efficiency improvements in 36 data centres in the USA4 found that a capital investment of about US$500,000 reduced operating energy costs by more than US$2,000,000 per year, thus demonstrating the potential for solid returns on investment.

For more information

Footnotes ~ Show 4 footnotes

  1. IBM (2007) Sustainability Victoria finds IBM blade servers a powerful solution to a heated issue (Opens in a new window) PDF 140 KB
  2. US Department of Energy. ASHRAE Data Center Technical Guidebooks (Opens in a new window) PDF 2.5 MB
  3. USA EPA (2007) Report to Congress on Server and Data Center Energy Efficiency.
  4. Tschudi, W., Mills, E. and Greenberg, S. (2006) Measuring and Managing: Data-Center Energy Use, Findings and Resulting Best Practices – from a Study of Energy Use in 22 Data Centers, HPAC Engineering, pp 45-51 (Opens in a new window) PDF 284 KB


Consider installing cogeneration or trigeneration technologies

Cogeneration and trigeneration systems enable the harnessing of otherwise excess heat, steam and/or other gases, significantly improving the overall efficiency of energy use in electric power generation. By using heat that would otherwise be lost, a cogeneration system can make use of 70–80% of the energy in the original fuel, compared to around 25–35% for a conventional, subcritical coal-fired power station. Another advantage of cogeneration and trigeneration systems is that by generating electricity locally, they avoid transmission and distribution network losses, which can be as high as 10%.

Cogeneration systems produce electrical power while capturing and utilising the heat that arises as a by-product of the process. Trigeneration uses some of the remaining lower grade heat for cooling as well as capturing heat from the initial power generation. Systems typically have returns on investment in the range of 5–20% and can reduce energy demand and greenhouse gas emissions by as much as 20–30%.1

Both cogeneration and trigeneration systems are appropriate to use at sites that have high demand for heating, such as hotels, hospitals, industrial laundries, data centres and swimming pools. They are especially cost effective when heating and/or cooling demands are present throughout the year.

Trigeneration can be cost effective in facilities such as large data centres, which require onsite electricity generation and have substantial year-round cooling requirements. In these cases, the heat by-product of the power generation process can be used for cooling using an absorption chiller.

Developments in small-scale technologies such as microturbines and fuel cells are also opening up new opportunities for the application of cogeneration systems.2

Footnotes ~ Show 2 footnotes

  1. UK Carbon Trust (2010) Introducing Combined Heat and Power. The Carbon Trust.
  2. Worrell, E. and Galitsky, C. (2004) Emerging Energy-Efficient Technologies in Industry: Case Studies of Selected Technologies, Ernest Orlando Lawrence Berkeley National Laboratory – Environmental Energy Technologies Division


Adopt non-technical building management strategies

Many non-technical factors can impact on energy performance.1

The structures of leases, maintenance contracts and management responsibilities can support or hinder efforts to cut energy waste.

There are also a number of actions tenants can take to reduce their own energy use through energy efficient fitouts, benchmarking energy use, empowering staff and purchasing efficient office equipment. 2

The Warren Centre has identified a series of practical means to improve the energy performance of large commercial buildings by implementing these non-technical measures listed below.

Energy efficiency measure NABERS energy impact Measure summary (buildings perform best when):
Management 1.3 stars Management is at least partially in-sourced
Empowerment and accountability 0.9 stars Building, asset and portfolio managers all feel able to affect efficiency
Disclosure 0.5 stars NABERS performance is disclosed to tenants
Incentives and penalties 0.4 stars Service contracts provide efficiency penalties/incentive to maintenance contractors
Training and skills 0.5 stars There is an efficiency training program
  1.3 stars The manager reports a higher level of energy efficiency knowledge

Source: ‘Low Energy High Rise Building Research Study – Final Research Survey Report’, p. 7)3

For more information

  • Low Energy High Rise Building Research Study – Final Research Survey Report 2009 (Opens in a new window)
    • Bannister, P et al. The Warren Centre
    • PDF 2.4MB

    This report summarises the findings of the research phase of the Warren Centre for Advanced Engineering’s Low Energy High Rise (LEHR) project, conducted by National Project Consultants and Exergy Australia Pty Ltd. The purpose of the research was to find measurable evidence of nontechnical factors that assist or hinder energy efficiency in commercial office buildings.

    The research findings are based on a substantial survey of factors potentially affecting energy efficiency in a sample of 127 buildings. The building sample predominantly comprised larger buildings (over 7,500m²), located in Australian capital cities.

  • Energy Management Guide for Tenants 2012 (Opens in a new window)

    This guide developed by National Australian Built Environment Rating System (NABERS) assists tenants in office buildings to manage their energy use. It provides practical advice for tenants in large and small offices, new fitouts and established tenancies on how to save energy, as well as where to go for professional advice and assistance.

Footnotes ~ Show 3 footnotes

  1. Bannister, P et al (2009) Low Energy High Rise Building Research Study – Final Research Survey Report. The Warren Centre
  2. Office of Environment and Heritage NSW (2012)  Energy Management Guide for Tenants  NABERS
  3. Bannister, P et al (2009) Low Energy High Rise Building Research Study – Final Research Survey Report. The Warren Centre

Future developments

There are several innovations and emerging technologies that can improve the energy efficiency of commercial buildings over their entire life cycles.

Cool roofs

Solar-reflective cool roofs are achieved by painting roofs with a (generally) white coating, sometimes infused with reflective membranes, or by applying a white vinyl covering. These methods reflect solar radiation by up to 85%, which reduces heat transfer and offers a highly cost-effective way to decrease the cooling loads of commercial buildings.

While cool roofs reduce summer cooling needs, they can conversely increase the level of winter heating requirements—although the latter can potentially be mitigated by other means. Each case needs to be assessed on the basis of an overall annual energy savings projection.

Cool roof performance will depend on a number of factors:

  • local climate—temperatures and the amount of incident sunlight
  • the proportion of the year when heating and cooling are needed—white roofs can be a negative in winter
  • the proportion of roof area to building volume—white roofs are most effective for single storey buildings
  • roof insulation, sarking and ventilation which all reduce the amount of solar thermal radiation that passes through the ceiling of the building
  • local building regulations/planning laws etc; white roofs may not be allowed in some areas
  • roofing materials which affect the costs of recoating and its durability
  • roof angles which affect how much of the roof is shaded at certain times of day and the angle at which direct sunlight strikes the surface and thus the insulation per square metre required.

For more information

Low embodied energy materials

The concept of embodied energy has started to be included in life cycle energy calculations of buildings. 1

The average commercial building contains tens of thousands of gigajoules of energy embodied in its construction materials. Databases, such as the EcoSpecifier, can assist in selecting new innovative materials with low embodied energies (and low life cycle cost).

Reusing and recycling building materials, especially façade and structural components, at the end of their useful lives, reduces embodied energy and can also reduce capital costs for new buildings.

For more information

Footnotes ~ Show 1 footnote

  1. Embodied energy is defined as ‘the quantity of energy required by all of the activities associated with a production process, including the relative proportions consumed in all activities upstream to the acquisition of natural resources and the share of energy used in making equipment and in other supporting functions (i.e. direct energy plus indirect energy)’

Water-energy nexus efficiency opportunities

As the commercial building sector strives to become more energy efficient, there is a risk that water usage in this sector will rise. Water-based evaporative cooling systems, for example, are more energy efficient than air based air-conditioning systems, but constitute around 30% of total water usage in the commercial building sector.

Australian innovations in air-conditioning systems, known as hybrid dry air/water cooling systems1, use 80% less water than the typical water-based cooling towers, while only using 5–10% more energy. This also significantly reduces the life cycle energy consumption associated with water use, such as the treatment and pumping of freshwater from dams to buildings.

Other commercial water-saving measures, such as reducing leakage and installing more efficient water amenities, also save energy in commercial buildings from reduced pumping. Examples include the new Business and Economics School building at the University of Melbourne which has utilised dry/hybrid cooling systems, combined with energy and water efficiency solutions to reduce potable water use by 80% and energy use by 50%.2

For more information

Footnotes ~ Show 2 footnotes

  1. Smith, M, Hargroves, K. Desha, C. (2009) A Factor 5 water saving with a cooling systems innovation. CSIRO ECOS
  2. Department of Sustainability, Environment, Water, Population and Communities (2006) Water Efficiency Guide: Office and Public Buildings, DEWHA, Australia (Opens in a new window) PDF 5.5 MB

Footnotes ~ Show 2 footnotes

  1. ClimateWorks Australia (2010) A low carbon growth plan for Australia. ClimateWorks Australia
  2. ClimateWorks Australia (2010) Commercial Buildings Emission Reduction Opportunities. ClimateWorks Australia and Carbon Trust Australia (Opens in a new window) PDF 1.0 MB