An Untapped Opportunity – Energy Efficiency to Cut Emissions
Energy efficiency is finally coming into its own in Australia. Mark Lister tells us what other countries are up to and what we should be doing about it. The Government appointed advisory group has a job to do, with 187 submissions to consider, while Climate Change Minister Penny Wong will pour an extra $100 million into the government’s troubled $175m green loans program over the next year.
By Mark Lister in EcoGeneration May/June issue 2010:
What Australia can learn from the rest of the world. Energy efficiency has enormous potential to cut damaging greenhouse gas emissions and save billions of dollars for all sectors of the economy, yet this potential remains largely untapped in Australia, writes Mark Lister.
As our politicians continue to treat energy efficiency as an afterthought rather than a central priority, developing and industrialised countries around the world are seizing energy efficiency opportunities and reaping the rewards.
While some of these nations have implemented energy efficiency strategies to address fuel shortages, energy security or lack of network capacity, many now see that energy efficiency is a cost-effective way to address climate change. The International Energy Agency (IEA) estimates that energy efficiency will account for around 54 per cent of global emission abatement to 2030, in a scenario where global carbon dioxide levels stabilise at 450 parts per million.
California’s citizens use about 40 per cent less electricity than other Americans. This success comes from stringent energy codes and standards for buildings and appliances, and ratepayer-funded energy efficiency programs administered by California’s electric and gas utilities. According to the 2009 California Green Innovation Index, California has prospered since energy efficiency regulations were introduced in the 1970s.
In recent times, Chile’s economy and energy consumption has grown in parallel by 5 per cent annually. Faced with limited fossil fuel resources and a high dependence on imports to meet its energy needs, the Chilean government prioritised energy efficiency in 2005 and developed a nation-wide program. Sustained energy efficiency action is forecast to reduce business as usual energy demands by 20 per cent by 2020.
With blackouts and ongoing power interruptions, Ghana in West Africa distributed six million Compact Fluorescent Lights (CFL) to help cut peak demand by 5 per cent while also reducing electricity bills for its citizens. Ghana’s government also implemented an extensive public education campaign and an energy efficiency standard and labelling program for appliances.
California, Chile and Ghana all have one thing in common: governments that created ambitious policies and environments to support major energy efficiency programs. Aside from addressing energy supply issues, their citizens have benefited from reduced energy bills and their economies have prospered. Australia would do well to learn from other countries and access the growing body of knowledge that demonstrates the benefits of large-scale energy efficiency.
Australia’s untapped energy efficiency opportunity
In Australia, energy consumption continues to increase. Rather than focusing on ways to reconfigure industry to reduce consumption, billions of dollars are spent to prop up old networks and coal-fired power stations. The cost of this is ultimately passed onto consumers through increased electricity bills.
While policies to encourage energy efficiency have been widespread, they regularly rely on markets and incentives to drive investment in this area. Price alone is not a significant driver of energy efficiency take-up.
To increase Australia’s energy efficiency to a level that will result in meaningful emission reductions, state and federal governments can intervene directly through strong policies and regulations to net economic benefit. We can do better with more stringent building codes, targeted information, electricity network regulation, and creating frameworks for parties that currently have no incentive to reduce consumption.
Our governments should consider these options, alongside incentives and other programs, to encourage the large-scale uptake of energy efficiency. The work of the Prime Minister’s Energy Efficiency Task Group offers a promising acknowledgement of this potential. The Group’s brief is to create a step-change improvement in Australia’s energy efficiency by 2020, and place Australia at the forefront of OECD energy efficiency improvement. Based on the achievements of other OECD countries, we have some catching up to do.
Energy efficiency is a proven, simple and cost-effective way to reduce carbon emissions and can be implemented now using existing technologies. It cuts electricity bills, decreases demand on networks during peak periods, and reduces the need for costly network infrastructure. Importantly, energy efficiency buys time for other solutions to be developed and is a fundamental part of any response strategy. Other countries have seen the light – let’s hope Australia doesn’t get left in the dark for much longer.
Mark Lister is the Interim CEO of the Australian Alliance to Save Energy.
The members of the Government’s Energy Efficiency Advisory Group are:
John Connor The Climate Institute
Greg Bourne WWF
Sharan Burrow Australian Council of Trade Unions
Neil Marshman Rio Tinto
Clare Martin Australian Council of Social Service
Karen Moses Origin Energy
Rob Murray-Leach Energy Efficiency Council
Cameron O’Reilly Energy Retailers Association of Australia
Brian Spalding Australian Energy Market Commission
When the deadline for submissions on energy efficiency closed on 2 May, a total of 187 had been received. Government, with the help of its advisory, will now consider submissions received from the public and interested organisations.
Nicola Berkovic in the The Australian (12 May 2010):
CLIMATE Change Minister Penny Wong will pour an extra $100 million into the government’s troubled $175m green loans program over the next year.
The money will be used to fund an extra 600,000 environmental audits for householders, announced by the government earlier this year.
The audits provide advice to home owners about ways to improve energy and water efficiency.
Initially, the program provided for low-interest loans of up to $10,000 to help householders pay for environmental products recommended by the audit, such as roof-top solar panels and water tanks.
However, the government axed the loans component of the program in March, without warning to the banks and credit unions that had designed loan products to fit within the scheme’s guidelines.
Yesterday, the government revealed in the budget it would discontinue a $50 rewards card promised to all householders that booked an environmental audit.
The government has yet to send a rewards card to any of the hundreds of thousands of householders that have already received their audit.
The budget revealed the government still intends to send a card to those households, but anyone who receives an audit from today will miss out on the $50 reward.
The green loans program has been plagued by administrative bottlenecks, including major problems with the government’s call centre that made it difficult for assessors to book appointments and long delays in the government sending out environmental audit reports to householders.
Allegations have also been made of favourable treatment for certain businesses and sub-standard training for assessors. A number of external inquiries into the scheme’s mishandling are under way, including a $4m independent probe of alleged rorting of the scheme.
Concerns have been raised that some environmental assessors charged for audit reports without visiting the home.
Senator Wong announced the government would try to better manage demand for program by cutting the number of environmental assessors to 5000.
However, she has not yet made clear how the government will decide which assessors will miss out on work under the program.
The government angered environmental assessors when it slashed the number of audits that environmental assessors could perform each week so that the program no longer provided them with full-time work.