The rise of sustainable development in recent years has driven nations and industries to incorporate innovative energy-saving methods in the pursuit of attaining net-zero energy goals. As the largest contributor to greenhouse gas emissions1 , building construction and operation are key focus areas for adopting more sustainable practices.
Singapore is a global leader in sustainable development and has set the goal of achieving 80% of newly constructed buildings classified as super low energy by 20302. This includes buildings categorised as Zero Energy Buildings, which produce the equivalent amount of energy that they consume on a yearly basis.
It's therefore important to understand exactly what Zero Energy Buildings are, the advantages they offer owners and users of commercial property, and how they are transforming Singapore’s commercial real estate sector.
Zero Energy Buildings Leave No Carbon Footprint
Most buildings being constructed and renovated incorporate various measures to reduce energy consumption and produce off-grid electricity. These measures include rooftop solar systems and other building-integrated photovoltaic (BIPV) systems, solar assisted natural ventilation, smart lighting controls, and single-coil twin-fan air cooling and distribution systems.
Zero Energy Buildings are buildings capable of utilising as many of the energy-saving and on-site renewable energy potential available to be able to consume as much energy as they produce.3
According to the World Green Building Council (WorldGBC), there are different definitions of net zero buildings, which depend on how energy is supplied to meet the remaining demand. Those that are able to produce 100% of their energy demand using on-site renewable energy are called net zero energy buildings.4
The reality is that not many are able to produce all their energy needs on-site. However, by procuring off-site renewable energy to meet the remaining demand, these buildings can be classified as being net zero operational carbon buildings .
Singapore’s Building and Construction Authority (BCA), in its drive to achieve carbon neutral development, launched a Super Low Energy (SLE) Programme in 2018.
The SLE Programme encourages firms to go beyond the existing Green Mark Platinum standards and deliver at least 60% energy efficiency improvement over prevailing building codes.5They fall under three categories.6
1.Green Mark Buildings capable of achieving this threshold of energy efficiency are classified as Super Low Energy (SLE) buildings.7
2.Buildings capable of supplying all its consumed energy through renewable energy sources, whether on-site or off-site, are classified as Zero Energy (ZE) buildings. These buildings must first prioritise and maximise the on-site renewable source before exploring off-site renewable sources.8
3. Buildings that are able to meet 115% or more of all its energy consumption through on-site renewable energy sources are classified as Positive Energy (PE) buildings.9
Since the launch of the SLE Programme, close to 100 industry stakeholders have taken part, with 50 projects being awarded the Green Mark SLE certification.10
That’s still a tiny fraction of the 4,600 buildings in Singapore that have already achieved a Green Mark certification.
The BCA is granting incentives of as much as S$1.2 million11 for existing buildings to upgrade and become more energy efficient by seeking the SLE certification.
The Tip of the Iceberg in Commercial Real Estate
No other sector dominates energy consumption in Singapore as commercial property. The commercial real estate landscape comprises over 6,350 buildings, including offices, retail, hotels, and mixed development buildings.12
These commercial buildings account for 74%13of the total energy consumption of Singapore, with offices making up 45% of that amount14.
Cooling makes up 60% of a typical office building’s energy usage, followed by lighting at 15% and ventilation at 10%. Incorporating energy-efficient cooling systems and solar-powered lighting systems can lead to a 6 to 40% improvement in energy efficiency15 .
To align themselves with the Singapore government’s goals of attaining net zero by 2050 and to green 80% of its buildings (by gross floor area) by 2030, owners and developers of commercial buildings need to invest in technologies that bring them closer to attaining SLE certification.
Aside from financial incentives meant to encourage existing building owners to upgrade their equipment, the government is also embarking on a policy of carbon taxation that penalises firms for refusing to adopt energy-saving measures.
The initial carbon tax rate was set at an initial S$5 per tonne of carbon dioxide equivalent (tCO2e) from 2019 through 2023. The five-year window was meant to provide businesses with a period of adjustment.
This carbon tax will quintuple to S$25 per tCO2e in 2024, S$45 in 2026, and could reach S$50 to S$80 by 2030. That could cost non-compliant buildings hundreds of thousands of dollars each year in carbon taxes.16
In summary, Singapore’s Zero Energy building sector is still in its nascent stages of development, with less than 2% of the qualified buildings under the Green Mark Certification Programme having attained SLE or ZE certification from the BCA.
But a significant number of buildings in Singapore have already attained Green Mark certification for their use of more sustainable methods. They have adopted such methods to align with government goals as well as increase their appeal towards tenants, shoppers, and investors alike.
Given that the Singaporean government has set a goal to attain 80% green building areas by 2030 and achieving net zero by 2050, one can expect building owners to face some pressure in the near- to medium-term.
Savills’ Energy & Sustainability Management team aims to provide solutions that will help to reduce the operational costs and embodied carbon footprint of buildings while maintaining asset relevancy. For more on this, visit our team at Savills.com.sg.
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