Role of financial mechanisms for accelerating the rate of water and energy efficiency retrofits in Australian public buildings: Hybrid Bayesian Network and System Dynamics modelling approach

In Australia, the government spending on public buildings' energy and water consumption is considerable; however the building energy and water retrofit market potential has been diminished by a number of barriers, especially financial. In contrast, in other advanced economies there are several reported financing strategies that have been shown to accelerate retrofit projects implementation. In this study, a coupled Bayesian Network - System Dynamics model was developed with the core aim to assess the likely influence of those novel financing options and procurement procedures on public building retrofit outcomes scenarios in the Australian context. A particular case-study focusing on Australian public hospitals was showcased as an example in this paper. Stakeholder engagement was utilised to estimate likely preferences and to conceptualise causal relationships of model parameters. The scenario modelling showed that a revolving loan fund supporting an energy performance contracting procurement procedure was preferred. Subsequently, the specific features of this preferred framework were optimised to yield the greatest number of viable retrofit projects over the long term. The results indicated that such a financing scheme would lead to substantial abatement of energy and water consumption, as well as carbon emissions. The strategic scenario analysis approach developed herein provides evidence-based support to policy-makers advocating novel financing and procurement models for addressing a government's sustainability agenda in a financially responsible and net-positive manner.