One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

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fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

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FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

Electricity

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GUEST OBSERVATION
It is difficult to make predictions, especially about the future. (attributed to Danish physicist Niels Bohr)
The difficulty of making predictions has long been known, but the rise of the internet means that it is getting harder to hide the gaps between predictions and reality.
Perhaps the most significant example of repeated failed projections has been the International Energy Agency’s projections of the importance of renewable power – the proportion of electricity generated by solar and wind and other renewable sources other than hydro.
Beginning in 1994, when generation from these sources was negligible, the Agency has produced estimates of the future share of renewables every two years.
Every two years, with striking regularity, the previous estimates have been exceeded (hugely) and the new set has been revised upwards. But never by enough. Each time the upward revision has been inadequate.
This graph, prepared by <a href="https://www.quora.com/q/xwpxpfefwalgifkr/A-modest-proposal-to-the-International-Energy-Authority" target="_blank">Paul Mainwood</a> from IEA reports, illustrates the point:
Projections versus reality
<a href="https://images.theconversation.com/files/302056/original/file-20191117-66945-19v9ijz.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/302056/original/file-20191117-66945-19v9ijz.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Reality versus repeated projections of renewables share of electricity generation (ex hydro). <a class="source" href="https://www.quora.com/q/xwpxpfefwalgifkr/A-modest-proposal-to-the-International-Energy-Authority" target="_blank">Paul Mainwood, Quora</a>
The dashed lines represent successive projections from 1994 to 2016.
The solid red line represents the actual growth of non-hydro renewables as a share of total electricity generation.
What can be seen is that eleven times in a row the projected growth in renewables was far too low and had to be upgraded. Eleven times in a row the upgrades weren’t big enough.
As a joke (indicated by the green line) Mainwood “corrected” the 2016 projection for the typical under-projection:
Projections plus “corrected” 2016 projection
<a href="https://images.theconversation.com/files/302067/original/file-20191117-66953-1tfh6u0.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/302067/original/file-20191117-66953-1tfh6u0.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Reality versus projections of renewables share of electricity generation (ex hydro) plus 2016 projection corrected for typical undershoot. <a class="source" href="https://www.quora.com/q/xwpxpfefwalgifkr/A-modest-proposal-to-the-International-Energy-Authority" target="_blank">Paul Mainwood</a>
Projections often understate change
Another striking example relates to religious belief. In 2015 the Pew Research Institute released a <a href="https://www.pewforum.org/2015/04/02/religious-projections-2010-2050/" target="_blank">report</a> suggesting a gradual decline in Christianity in the United States.
The headline finding for the US:
"Christians will decline from more than three-quarters (75%) of the population in 2010 to two-thirds (66%) in 2050."
Yet only four years later in 2019, Pew released another report with this headline finding about the US:
'In 2018 and 2019, 65% of American adults describe themselves as Christians when asked about their religion, down 12 percentage points over the past decade."
Thus, a decline expected to take forty years had taken place inside ten.
Moreover, Christian affiliation is highest in the older age cohorts, very few members of which will be around in 2050. Looking at the younger cohort born after 1981, only 49% claim a Christian affiliation, a proportion that has declined by 16 percentage points in a decade. Unless that trend is rapidly reversed, or later cohorts experience a religious revival, Christians will be a minority well before 2050.
They enable modellers to escape responsiblity
Faced with outcomes of this kind, modellers often defend themselves by drawing a distinction between “predictions” and “projections”.
A prediction (Latin for “foretelling”) is a claim about what is most likely to happen in the future. By contrast, a projection (“casting forward”) is a model output derived by extrapolating past trends, holding some parameters constant and allowing others to vary.
The International Energy Agency projections were characterised by the assumption that the costs of renewable energy would change only slowly, rather than continuing the extraordinary decline that began in the 1970s.
In the case of the Pew projections, the crucial parameter is conversion rates – the frequency with which people brought up with one religion (including “no religion”) change to another. The Pew projections were based on the assumption conversion rates will remain unchanged.
It is the opposite of the widely-held but controversial “secularisation hypothesis” which states that modernisation leads to increased conversions to “no religion”.
Predictions force them to take responsibility
Projections are useful in the development of models. All models are based on past experience and have to assume that in some respects the future will be like the past. By examining the projections generated under particular assumptions about which variables and parameters will remain constant, it is possible to understand how models works and make modelling choices.
But projections of this kind are of no use in informing people not familiar with the material. They mislead casual readers of the Australia’s budget.
The budget uses both predictions and projections.
For the two years following each budget the Commonwealth uses “forecasts” which it is prepared to stand by, then for the next two it presents mechanical “projections”:
<img src="https://images.theconversation.com/files/302072/original/file-20191117-66957-w8vxaq.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">
<a class="source" href="https://www.budget.gov.au/2019-20/content/bp1/index.htm" target="_blank">2019-20 Commonwealth budget, Budget Paper 1</a>
When asked to defend (for example) its wage growth number of 3½%, the treasury points out that it is a mechanical projection rather than a forecast, a distinction lost on all but the most enthusiastic of budget devotees.
In practice it is impossible to separate the two.
Even though both the International Energy Association and Pew describe their estimates as “projections” they are almost invariably <a href="https://www.mining.com/new-iea-report-predicts-surge-in-global-coal-use-2/" target="_blank">treated as</a> <a href="https://www.pri.org/stories/future-religion-around-world-one-chart" target="_blank">predictions</a>. 
Since any statement about the future will be treated as a prediction, the only serious option for modellers prepared to be truthful with the public is to bite the bullet and make predictions.
It means working hard to make the best possible estimate of the future paths of all model parameters, and using judgement to take account of everything else.
It’s what those of us looking to experts for guidance deserve.<img src="https://counter.theconversation.com/content/126734/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
John Quiggin, Professor, School of Economics, The University of Queensland.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/please-no-more-projections-what-we-need-are-predictions-and-theyre-harder-126734" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Please, no more projections. What we need are predictions, and they’re harder

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<img src="https://counter.theconversation.edu.au/content/82264/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
It sounds like good news. After summoning the heads of Australia’s major electricity retailers to Canberra, Prime Minister Malcolm Turnbull yesterday announced that the government will take “decisive action to reduce energy prices for Australian families and businesses”.
But look a little closer. Yes, the retailers have agreed to some small but important measures that will make it easier for customers to find the best electricity deal. But there is no guarantee energy prices will fall. And your electricity bill will only be lower if you, the customer, take action.
Retailers’ current advantage
At the moment, retailers typically encourage consumers to sign up by offering a discount on the bill for a fixed period – normally one or two years. After this period expires, customers usually face higher prices for their electricity. 
Some lucky customers will be put on an equivalent tariff and their electricity costs will not change much. Others will lose the discount – which can be as much as 30% of the bill. And some unlucky customers will be placed on the retailer’s “standing offer” – usually the most expensive plans in the market. 
All the retailers have to do is to send you a letter informing you of the change. Lots of customers find those letters too confusing or time-consuming to read, and throw them in the bin. Those who do read and understand it don’t necessarily take action: almost half of Australian households have not changed their electricity retailer in more than five years.
How the new deal could help you
Under the deal that Turnbull has brokered with the retailers, every consumer on a lapsing deal will be sent more comprehensive and helpful information that will encourage them to switch. This will include details of cheaper available offers, and information from websites that compare prices across the various plans and retailers. 
Second, as the Grattan Institute recommended in our March report, Price Shock, retailers will now have to be more explicit about what happens if you don’t sign up to a new offer. Specifically, that means detailing exactly how much it is going to cost you. 
Third, retailers will have to report to the Australian Energy Regulator how many customers are on lapsed deals. This may seem like a lot of red tape for not a lot of impact. But a lack of information on how many customers are on what type of deal has been a major barrier to understanding what is happening in the electricity market. This increased transparency will encourage retailers to reduce the number of customers they have on lapsed contracts. 
The new deal includes other welcome measures, mainly designed to help poor households reduce their bills and make sure they do not face increased costs as a result of late payments. (To be fair to the retailers, they already do a lot for customers whom they consider to be “in hardship”.) 
It’s still down to you
The deal will doubtless improve the retail electricity market. Retailers will take on more responsibility for helping their customers onto a better deal. And those customers who are most at risk from very high prices will get more protection. 
But these are only incremental steps and do not ensure that customers will pay less for their electricity. While more simple information will be available, it will still be up to the consumer to act on it. The bottom line remains the same: if you want to pay less for electricity, you need to search for and sign up to a cheaper deal. 
Customers should be under no illusions. Energy prices are still going to be high for as far as the eye can see. 
Gas prices remain way above historic levels. Wholesale electricity prices are also high. Network costs – the price we pay for the poles and wires – have grown enormously over the past 20 years, and ultimately those costs find their way onto our bills. And the much-needed policy stability on greenhouse emission reductions that can put downward pressure on electricity costs remains elusive.
Under the new rules, consumers might be able to get a cheaper deal, but this doesn’t mean they will get a cheap deal. 
It may be months before we know whether the new measures are enough to encourage consumers to go out and find a cheaper plan or retailer. The danger is that, in a year’s time, too many consumers will still be stuck on expensive electricity deals. 
Even if huge numbers of consumers switch, there are still fundamental issues in Australia’s electricity market. Prices won’t come down across the board until these are resolved. 
This is a welcome move by the government. But it only addresses a fraction of the problems in the electricity market. The big question for the prime minister is, what next?
<a href="https://theconversation.com/profiles/david-blowers-141792" target="_blank">David Blowers</a> is Energy Fellow, Grattan Institute and author for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
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jchancellor-FAypfDUnLy

New rules for retailers, but don’t sit there waiting for your electricity bill to go down

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<img src="https://counter.theconversation.edu.au/content/66049/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The latest bid for a share of the New South Wales electricity distributor, Ausgrid, from two big Australian superannuation funds is part of a wider investing trend where infrastructure is the new black.
AustralianSuper and IFM Investors announced an unsolicited offer of a reported A$10 billion after two much larger bids from Chinese interests were controversially disallowed by Treasurer Scott Morrison on national interest grounds.
When big infrastructure assets come up for sale in Australia now, there are increasingly only three types of bidders: Chinese state-owned firms, large Canadian pension plans and local superannuation funds.
Superannuation funds have traditionally invested the bulk of their members’ contributions in the share market. The most profitable companies are usually those listed on stock exchanges and holding shares is widely seen as the best way to ensure long term investment success.
But stock markets can also go down, bringing down superannuation balances with them, as many Australians discovered for the first time during the global financial crisis. Investing in infrastructure has developed as an increasingly popular alternative to holding most of a superannuation fund’s investments in shares.
The returns available in infrastructure are comparable to those available on the share market but they have the added advantage of being more stable. Airports, toll roads, ports and utilities (including electricity infrastructure) have become key targets for superannuation fund managers, both in Australia but also increasingly in Europe, North America and Asia.
<h2>Who are AustralianSuper and IFM Investors?</h2>
With an investment portfolio of more than A$100 billion, AustralianSuper is the country’s largest superannuation fund. Formed in 2006 after the merger of the Australian Retirement Fund (ARF) and the Superannuation Trust of Australia (STA), AustralianSuper has a long history of investment in infrastructure.
Long-term ARF and STA trustee (and former ACTU secretary) Bill Kelty is a particular advocate of infrastructure investment. As AustralianSuper CEO Ian Silk acknowledges, much of AustralianSuper’s investment success can be ascribed to Kelty’s emphasis on infrastructure.
Pairing up with AustralianSuper is IFM Investors. Managing more than A$72 billion worth of infrastructure assets, the super fund is the country’s leading player in the infrastructure sector.
IFM was formed in 2004 (as Industry Funds Management) and is the successor to the Development Australia Fund (DAF). It is owned by 29 industry superannuation funds and invests on a global scale.
DAF was launched in 1991 by the ACTU in collaboration with the AMP Society and the Australian Chamber of Manufacturers. Chaired by Ian Court, the head of Cbus (the building and construction industry superannuation fund), DAF led the push of the industry funds into infrastructure investment. On behalf of the industry funds, DAF partnered with AMP in the privatisation of airports, purchased toll road companies and invested in the renewable energy sector.
Like other businesses owned by the industry funds, IFM is run on a cut-price “all profits to members” basis. It buys up infrastructure assets on behalf of the industry funds, allowing their millions of members to profit from government privatisations.
<h2>Super funds leading infrastructure investment</h2>
The Canadians have only recently cottoned on to the idea that investment in airports, shipping terminals and electricity assets is ideal for retirement-savings schemes. Members of superannuation funds expect their nest eggs to grow over the 30 years or more of their working lives. Infrastructure investments match long term financial returns with the long term investment horizon needed by a pension or superannuation fund.
Rather than being sold to foreign firms or wealthy investors, the involvement of the industry funds in infrastructure privatisations means that all working Australians can benefit.
However the movement of the industry funds into infrastructure has been widely criticised by Coalition politicians. In 2007, the then Treasurer Peter Costello dismissed infrastructure investments as “union pet projects…like rats eyeing the grain silo”.
Infrastructure privatisations are controversial. But selling electricity distributors to superannuation funds means that everyday Australian workers can profit from owning them. Unlike investing in derivatives and bonds, infrastructure investment is a form of direct ownership.
Bernard Mees is senior lecturer in Management, RMIT University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/bernard-mees-182089" target="_blank">here</a>.
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Electricity infrastructure like Ausgrid is a safe bet for super funds

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<img src="https://counter.theconversation.edu.au/content/64213/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The European Commission’s latest Quarterly report on electricity markets makes sobering reading down under.
Over the last year wholesale electricity prices have been falling just about everywhere across the developed world except here in Australia, where they are skyrocketing.
Australian prices are now above the European average, well above the US and rapidly converging with Japan, which is still recovering from the shock of Fukushima in 2011 when prices rose to over eight times Australian.
With Japan now reactivating nuclear power production, and Australian LNG exporters putting the squeeze on domestic gas markets, it can be anticipated that Australia will soon be top of the price tree. Indeed, with 2016 Q2 and Q3 Australian prices rising at unprecedented rates, it probably already is.
Combined with exorbitant power distribution costs, the alarming trends highlighted by the EC’s report will be exercising the mind of our new Federal Minister for the Environment and Energy, Josh Frydenberg.
<h2>How fast are Australian prices rising?</h2>
The trends highlighted by the EC’s report are expressed in Euros, so they somewhat obscure local dynamics. In reality, Australian wholesale prices are rising more steeply than ever before, having risen by around 45 percent over the last year. Prices over the last six months are now higher in aggregate than at any comparable time during the carbon tax period, which added around 50 percent to wholesale prices in the period 1/07/2012 - 17/07/2014. When the impact of the carbon tax on 2014 prices is removed, prices are up by more than 65 percent in just 2 years. 
Compared to the same period one year earlier, wholesale prices have risen across all seasons and all jurisdictions in the last year, excepting summer in Queensland. The rate of increase has risen steadily from the spring 2015 through to the winter 2016. For the winter period of 2016, prices were up by an average by 85% compared to the previous winter, with the increase ranging from 65 percent in Queensland to 115 percent in South Australia. 
<h2>Why are electricity prices falling everywhere but Australia?</h2>
The reasons for wholesale electricity price falls in Europe and Japan are straightforward.
Both are dependant on imported gas, and with the oil-linked price for gas falling, so too are electricity prices. In the US market, the flood of shale gas greatly exceeds export capacity, so there is a continuing glut of cheap gas [1].
The story in Australia is quite different. Despite a three fold increase in gas production in the last few years, due to the opening up of new coal seam gas (CSG) fields in Queensland, the Australian domestic market is being squeezed as LNG exporters struggle to meet supply contracts.
In the Australian CSG industry it is an open secret that some exporters agreed punitive clauses in contracts should they fail to fill their LNG trains. Despite strong opposition from former industry champions such as John Ellice-Flint, exporters such as Santos stretched themselves on production by committing to two LNG trains. Now gas is being diverted from domestic markets to avoid industry collapse. The consequence is that Australian gas consumers are increasingly subject to scarcity pricing when domestic prices can rise to many times that which international buyers have contracted for the same gas.
Not surprisingly, steep rises in the cost of gas is causing a reduction in gas use in domestic electricity markets. In Queensland gas fired power output in the winter of 2016 was down about 250 megawatts or 20% on the year before. Meanwhile black coal generation was up 450 megawatts, with Queensland’s CO2-production from the electricity sector increasing by 5%.
An insight into the impact of the rising cost of gas on our electricity market is provided in the figures below, which show how market prices varied with gas dispatch in Queensland over the winters of 2015 and 2016, respectively. In winter 2015, when gas dispatch averaged 1076 megawatts, there was no correlation between wholesale prices with the amount of gas dispatch, consistent with gas generation being a price taker. Then the average price of electricity was $39.6 per megawatt hour.
By winter 2016, when gas dispatch averaged 833 megawatts, a strong price correlation had established as gas generators increasingly set the price. Average prices had risen to $65.2 per megawatt hour with spot prices increasing almost $100 per megawatt hour for each additional gigawatt of gas dispatch. 
<h2>We really need to talk about gas</h2>
In 2015, the availability of “ramp” gas made Queensland settings somewhat analogous to the US, where cheap gas increasingly fuels electricity generation. By winter 2016 when more LNG export trains had been commissioned, scarcity pricing was manifesting in our domestic gas markets impacting our electricity market big time.
As the EC’s quarterly market report flags, the historical competitive advantage Australia has had as a cheap provider of electricity has been obliterated in a little over a year. And that is without any carbon tax. It is hurting most severely in South Australia which has always been more exposed to gas prices than other states by virtue of its limited coal reserves.
While several compounding factors have played out in extreme electricity price rises in South Australia, as discussed in my last post, the broader rises across Australia have their underpinnings in the rising domestic gas market prices as well as contractual arrangements in gas piping. The smoking gun is the resent steep rise in Queensland electricity prices - a market that remains essentially a  renewable free zone.
The damaging reality of the situation is highlighted by a recent post on the tech website Whirlpool.
“We are a business in SA [South Australia] with high usage (use up to 14MW), on spot pricing since June 1st – and are turning everything off when a spike hits – but the last 5 minute spike was at the end of the half hour pricing cycle (price is averaged in half hour periods). We just chewed through $75,000 worth of power in a half and hour! (we are used to paying $1000). This period while the interconnector is down could effectively burn about 3 years of profits in 4 working days if the forecast prices come to fruition.”
One might ask why such energy users exposed themselves to spot (wholesale) pricing (the norm is via the contract market). Whatever, the cautionary is that 14 MW represents 1% of average South Australian power consumption. Ten such business at threat of going under would be devastating, with potential to reduce South Australian electricity demand by 10%.
<h2>The horse has bolted, so what next?</h2>
The EC’s quarterly market report was already flagging in Q1 2016 that Australian electricity production was expensive by international standards. Since then, further steep price rises across the NEM in autumn and winter 2016 have further exacerbated price differentials, surely now placing Australia amongst the most expensive producers of electricity in the world.
No doubt the gas lobby will absolve the industry from any responsibility for the recent events that have transpired on our electricity markets, arguing the solution lies in even more gas production, and that renewable energy policies are more to blame.
To be sure, eastern Australia is short on supply of cheap conventional gas from the offshore Gippsland Basin and a few other locations. Expanding the gas base by exploiting unconventional resources such as CSG was always going to come at a price, since such resources are inherently more expensive.
But developing the new CSG fields at such scale was always going to risk that production would fall short of targets. As much was acknowledged by the joint Department of Industry and Bureau of Resources and Energy Economics study into Eastern Australian gas markets.
The current development of LNG in eastern Australia and the expected tripling of gas demand are creating conditions that are in stark contrast to those in the previously isolated domestic gas market. The timely development of gas resources will be important to ensure that supply is available for domestic gas users and to meet LNG export commitments. Such is the scale of the LNG projects that even small deviations from the CSG reserve development schedule could result in significant volumes of gas being sourced from traditional domestic market supplies.
The hope is that the events of 2016 are transients, related to temporary development schedule difficulties. If they are not, then god help domestic consumers, not just those exposed to electricity prices but also right across the gas sector. A broader question for our gas exporters is just how much risk from any such development schedule difficulties is appropriate to defray onto domestic consumers? As the Eastern Australian Gas Markets Study highlights, it is not as though such circumstances were not anticipated.
In prosecuting the case to deliver more of our national gas resources to market, perhaps it is not too much to ask that domestic gas consumers are offered some insurance against any further development schedule difficulties incurred by our exporters? After all, it is our gas.
Domestic reservation, anyone? - at least while transitional issues work through the system.
[1] Shale gas economics in the US is linked to co-produced liquids, and thus differs markedly from the CSG fields in Australia where there is no liquid hydorcarbon production.
Mike Sandiford is chair of Geology &amp; Redmond Barry Distinguished Professor, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/mike-sandiford-228" target="_blank">here</a>.
 
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