All-Electric CO₂ Heat Pump Retrofit at Mercure Melbourne Southbank

As part of a strategic initiative to decarbonise building operations across its portfolio, Accor Hotels has undertaken a significant electrification retrofit at Mercure Melbourne Southbank.

This retrofit replaces aging gas boiler systems with high-efficiency, natural refrigerant-based heat pump technology. With 275 guest rooms and high hot water demand during peak hours, this site presented an ideal opportunity to demonstrate the capability of CO₂ heat pumps in large commercial applications.

Mercure Melbourne Southbank
Mercure Hotel_6
Sustainability Objectives

Accor’s sustainability roadmap targets a 5% reduction in energy consumption by 2025 and a 30% overall reduction by 2030. Decarbonising hot water generation is a critical component of this effort. The Mercure project aligns with these targets by eliminating Scope 1 emissions from natural gas use and leveraging Victoria’s increasingly low-carbon electricity grid.

The adoption of natural refrigerant CO₂ heat pumps underscores a commitment to environmentally responsible technology choices that support long-term carbon reduction.

Automatic Heating’s Contribution

Automatic Heating supplied Revere CO₂ heat pumps to replace the hotel's two gas boilers, previously responsible for 672 MWh of annual energy use.

The heat pump system was selected based on a detailed analysis of peak demand, recovery rates, and sustainability performance. Key selection criteria included high COPs (coefficient of performance), alignment with government incentive schemes, and the use of natural refrigerants.

Energy Efficiency Impact

Annual energy use has been reduced from 672 MWh with gas boilers to just 120 MWh with CO₂ heat pumps — an 82% decrease.

Annual Energy Consumption (kWh)
82% Reduction
Existing Boiler System
672,177 kWh
CO₂ Heat Pump Technology
120,032 kWh
Annual Operating Cost ($)
51% Reduction
Existing Boiler System
$55,470.20
CO₂ Heat Pump Technology
$27,091.12
Operational Cost Benefits

The hotel has achieved a 51% reduction in operating costs, with the annual energy bill dropping from $55,470 to $27,091, equating to annual savings of approximately $28,300.

Mercure Melbourne Southbank_2
Emission Reductions

By 2034, the CO₂ heat pump system is projected to emit only 15.60 tCO₂-e, down from 103.23 tCO₂-e in 2024, as Victoria's electricity grid decarbonises. This represents an 84% reduction in greenhouse gas emissions.

Table 1: Victorian Electricity Grid Emission Factors (tCO₂-e/MWh)

Source: Australian Emissions Projections 2023

Year 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Emission Factors 0.86 0.75 0.74 0.69 0.61 0.39 0.40 0.38 0.32 0.24 0.13 0.01

The emission factors represent the amount of greenhouse gases released per megawatt-hour of electricity generated. As more renewable energy enters the grid, these factors decrease substantially, benefiting technologies like heat pumps that run on electricity.

Annual Emissions Comparison
Emissions Projection (2024-2035)
Emissions from the gas boiler system remain constant at approximately 135 tCO₂-e annually, while CO₂ heat pump emissions significantly decline due to grid decarbonisation. This diverging pattern highlights one of the key long-term benefits of electrification: as the grid gets cleaner, so do heat pump operations, without requiring any equipment upgrades or additional investment.

The heat pump system becomes increasingly environmentally friendly over time, while gas systems cannot improve their emissions profile without replacing the equipment entirely. This makes heat pump technology not only the best choice for immediate emission reductions but also a future-proof solution that will continue to improve its environmental performance throughout its operational life.

Return on Investment
The Revere CO₂ system delivers a return on investment in just over five years, compared to nine years for a new gas and solar thermal system. The project was further supported by a substantial rebate under the VEU scheme.

The Hotel obtained pricing for a new gas & solar thermal plant with an estimated payback of 9 years.

The Revere CO₂ package payback is 5.12 years.

Government VEU rebates provided financial incentives for the high-efficiency heat pump technology, further reducing costs.

Outcome and Community Impact
The electrification of the domestic hot water (DHW) system at Mercure Melbourne Southbank has resulted in measurable energy, cost, and emissions savings while supporting Accor’s broader net zero objectives. With robust technical performance and a strong financial return, the project exemplifies how legacy hotel infrastructure can be modernised to meet future-ready sustainability standards without compromising guest comfort.
Project Images

Key Products

Revere CO2 Heat Pumps
  • Flexible
    The same system can be simultaneously used for Space Heating & Domestic Hot Water.
  • Suits Australian conditions
    Accommodates ambient operating temperatures from -5°C to 43°C (Special unit available for -15°C or -20°C).
  • Eco friendly
    The Revere® CO2 Heat Pump uses natural CO₂ refrigerant. This refrigerant has a global warming potential (GWP) of about 1/1700 that of R410 and zero ozone-depleting potential (ODP).
  • Heats up to 90°C
    Due to its innovative design, the Revere® CO2 Heat Pump can produce hot water up to 90°C at low and high ambient temperatures (-20°C to 43°C).