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Australian Alliance to Save Energy Articles

Ethical Investor, July 2010 
More power to the energy savers by Mark Lister, Interim CEO of the Australian Alliance to Save Energy

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2xEP is a coalition of individual businesses and industry associations, research organisations and energy service providers. Our objective is to double Australia’s energy productivity (2xEP) by 2030. The 2xEP program is governed by a Steering Committee drawn from the leadership of participating organisations.

Commenced in July 2014, the program looks across the whole of the economy and at particular sectors including mining, agriculture, manufacturing, freight and passenger transport, the built environment.

The 2xEP Steering Committee welcomes the recent adoption by COAG Energy Council of the inaugural National Energy Productivity Plan. This announcement was made in early December through a meeting communiqué and supporting documents (available online here). We commend the federal, state and territory energy ministers for their efforts, ambition and consensus. We acknowledge the great work undertaken by officials - federal, state and territory - and their efforts to engage productively with stakeholders.

The Plan details a framework for significant energy productivity improvement. The results will be general productivity improvement, increased competitiveness and higher living standards.

The real value of this Plan will be in its execution. Business will propose and support industry-led initiatives to help drive energy productivity outcomes. Business is ready to work closely with governments to develop initiatives that are essential for success. We are looking to governments to rapidly implement elements of the Plan that fall to them. We are also looking to governments to adequately resource the Plan and facilitate the rapid improvement in energy productivity that is necessary and possible.

The 2xEP Steering Committee is working towards development of a roadmap for doubling energy productivity by 2030 and our work will closely dovetail with the Plan. Business, government and other parties can work closely together to deliver essential economic outcomes for Australia.

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News date: Wednesday April 8

Doubling energy productivity by 2030, saving $30 billion each year

The Australian Alliance to Save Energy welcomes the release of the Energy White Paper, which recognises ‘increasing energy productivity to promote growth’ as one of the three key planks of its energy policy framework.

A2SE strongly supports the Government’s commitment to rapidly improving Australia’s energy productivity. A2SE chairman Jon Jutsen said that:

“Energy costs equate to about 10% of Australia’s GDP (more than $110 billion/year). We have relatively low energy productivity combined with high and escalating energy prices. Our low energy price competitive edge is eroded and we’re now at a growing disadvantage.

The White Paper suggests that a national improvement target of up to 40% by 2030 is possible. Research by A2SE and by ClimateWorks indicates that energy productivity could be doubled by 2030 using currently available technologies and practices. Competitive pressures will necessitate this level of improvement. The USA has already adopted a target to double its energy productivity by 2030 and other countries also have aggressive targets. There is a strong business case for industry to improve energy productivity and payback periods are shrinking.

A2SE is advocating a 2xEP target and is currently supporting business to develop roadmaps in each sector of the economy to achieve these benefits. We expect that several sectors will have their roadmaps prepared by July.”

We recognise that sectors will require differentiated targets as, for example, the mining sector has been experiencing declining energy productivity in the last decade due largely to declining ore grades. However, overall 2xEP seems economically feasible and over the 15 years to 2030 further new technologies will increase the potential further.   

A2SE estimates that if Australia doubles energy productivity by 2030 there will be a 2.8% increase in real GDP ($2000 per capita), a $30 billion savings in energy spend and a 20% reduction in greenhouse has emissions.

A2SE welcomes the White Paper and is looking forward to contributing to the development of the National Energy Productivity Plan, and collaborating to deliver outcomes.

Media contact: Jon Jutsen 0418 510 109

11 August 2010

A2SE Opinion Piece

A few weeks ago many observers felt certain that an announcement was imminent on a national scheme to provide incentives for economy-wide energy savings. This was because both major parties had backed away from serious efforts to introduce a carbon price, a commitment to supporting renewable energy was now largely agreed, and a wide consultative process on energy efficiency for the Prime Minister had occurred. Beyond this, few other far-reaching policy options are left that could fit the bill as a sizeable, economically responsible stance on emissions reduction to take to the electorate.

Advocates had not contemplated one place that both parties might decide to take the emissions reduction debate in the lead up to the election... that is, nowhere. The only genuine progress has been Government’s sensible policy for tax breaks on green commercial buildings, released on a Sunday morning two weeks ago, to very little fanfare.  Both political parties still seem spooked by anything involving improved household energy efficiency, with mentions of the topic reserved only for the need to address insulation scheme-related problems.

Surveys have shown that many people feel the actions needed to save energy have probably already been taken. Indeed most energy efficiency policy seems to focus on retrofitting office buildings, or reducing household electricity use through incentives for switching lightbulbs or ‘greening up’ appliances. The focus on household and office electricity use has been important in raising the profile of energy efficiency, and it’s obvious that initiatives that have a direct impact in homes and offices will have more political cache as campaign announcements. But a bigger opportunity has been consistently overlooked because we don’t acknowledge and communicate where Australia’s energy is really being used (and wasted).

According to the Australian Bureau of Statistics Energy Account figures (4604.0), which outline where energy is used in Australia, the most recent data for 2006-7 indicates that household electricity usage accounted for only 4% of Australia’s total energy use. Electricity use in commercial buildings was even less. This is because much of the energy used by households and offices is not just electricity - gas and wood is also used for heating air and water, and fuel is used for private vehicles. 

Even with heating and car use added back in, Australia’s households account for just 12% of total energy use. ABS figures leave no doubt as to where the lion’s share of Australia’s energy is consumed – it’s in the manufacturing and mining industries, and the process of supplying electricity itself. These sectors each account for about 36% of total energy consumed. Small gains in efficiency in these sectors will therefore have proportionally much larger impacts on Australia’s competitiveness and on emission reductions.

The opportunities to reduce energy waste in industry and energy supply are abundant. The Department of Resources, Energy and Tourism recently released an in-depth report looking at opportunities identified by mining companies under its Energy Efficiency Opportunities program. While less than half of their total usage has so far been scrutinised, upstream oil and gas companies have identified cost-effective energy savings that equate to 28% of the energy use that they have so far assessed. Metal ore miners and coal miners have also identified significant savings. Overall, the 70 companies studied in the report found $233m of savings that would completely pay for themselves within two years. This is clearly the tip of the iceberg. 

The savings can mostly be achieved by implementing tried and tested techniques for process control, heat recovery, maintenance and measurement. However, experience shows that businesses are unlikely to value the social benefits of their actions without government intervention.

In the heavily regulated electricity supply sector, it’s well known that electricity generation, transmission and distribution companies work within a framework that rewards expanding energy production. Reducing energy used in conversion and in energy transportation will require new frameworks and incentive structures that recognise the potential for more efficient energy supply. This will allow utility companies to shift their business models and continue to create profit from their investment in the sector. 

Planned investments in electricity supply and new industrial capacity to 2020 runs into the hundreds of billions. Policies to ensure greater energy efficiency in these sectors bring with them the promise of improved business productivity, significant easing of pressure on the need for ongoing electricity price increases, and an easing of budget constraints. While ducking for cover on climate change measures, none of our political leaders has yet laid out a comprehensive vision to benefit households by economic transformation through improved energy productivity in these key sectors – this is a climate change policy opportunity on which there is still time to act.

The Australian Alliance to Save Energy
By bringing the best energy efficiency ideas to Australia, targeted research, strategic collaboration and direct advocacy, the Australian Alliance to Save Energy (A2SE) is engaging with public and private organisations across all sectors in Australia to build the momentum for energy efficiency action.

ENDS

For more information or to arrange an interview contact:
Mark Lister, Executive Director, Australian Alliance to Save Energy
Mobile:  0402 320 906     Email: mark.lister@a2se.org.au

9 June 2011

The Australian Alliance to Save Energy (‘A2SE’) is today releasing a major research report into the status of demand management activity by Australia’s electricity network infrastructure companies.  The research, entitled “Scaling the Peaks: Demand Management and Electricity Networks” is being launched at an event in Sydney opened by NSW Minister for the Environment and Heritage, the Hon Robyn Parker MP.  The work was funded by the Victorian Department of Primary Industries, NSW Office of Environment and Heritage, and the Consumer Advocacy Panel.

A2SE commissioned leading energy efficiency company Energetics and the Institute for Sustainable Futures at the University of Technology, Sydney to complete the work, which includes a first-ever independent national survey of current investment practices by electricity network companies.  The survey found that:

  • Demand management measures are cost effective in creating new system capacity, with each dollar spent on demand management saving more than two dollars in avoided network infrastructure costs ;
  • Demand management energy savings expected for 2010/11 is 51GWh which equals 0.02 % of Australia’s annual energy usage;
  • Expenditure on demand management is relatively small - $50 million in 2010/11, equivalent to less than 0.6% of the annual $9 billion capital spending on reinforcing network supply capacity.

A2SE Executive Director Mark Lister said, “There is no question that energy bills are rising due to increasing spending on electricity networks, much of which is to provide for current growth in energy requirements. 

“Queensland and NSW electricity networks have taken the lead in investing in demand management but there are still major barriers to our electricity suppliers making the most of the opportunities.

“As our research demonstrates, there is a far greater focus on increasing network size and supplying more electricity.  We urgently need to level the playing field for the cheaper, equally effective alternative of reducing energy waste and reducing demand at peak times. 

“Energy savings, reducing peak demand and using local energy generation has the potential to meet our needs more cost-effectively while cutting consumers energy bills.” Mr Lister said.

Australian consumers have responded well in recent times to policies and measures helping them to become more energy efficient.  However, these gains may be eroded by the need to recover revenue to pay for new supply infrastructure, which are charged to consumers at rates by regulation.

Mr Lister said, “Most experts agree that savings are possible if there is greater co-ordination and changes to the incentives and regulatory environment for network companies.

“We need to engage positively with these companies and work in partnership with them, towards a business model that better recognises the role demand management can play in creating significant savings for energy users.”

Other components of the research include an extensive survey of the barriers to action on demand management, and a review of the solutions being deployed internationally.  The reports can be downloaded here.

A2SE is modelled on the United States-based Alliance to Save Energy (www.ase.org), which has played a critical role in North American energy efficiency advocacy and policy making for over 30 years.  The Alliance has helped design, implement, and evaluate a range of energy efficiency, demand management and distributed energy programs.  A2SE is engaged in research and information on these issues nationally and has affiliations with industry bodies, universities, leading practitioner companies, State and Federal government representatives and international partners.

For more information about A2SE or this research please contact Mark Lister on 0402 320 906 or mark.lister@a2se.org.au.

26 July 2010

A2SE Opinion Piece

Our new Prime Minister has wasted no time in creating a new political push for a “lasting and deep community consensus” on climate change action by proposing new measures to engage and consult with the public.

On the surface, this is a welcome development.  Our political system thrives on competition rather than consensus, and the building of society’s support for action is invaluable. 

But there are pitfalls to this approach.  Recent experience on climate change, which is as all-encompassing as a political issue can be, demonstrates that the forces protecting the status quo are infinitely more powerful than the voices for change.  Just ask Malcolm Turnbull and Kevin Rudd.

It’s easy to conclude that differences of public opinion on such a thorny issue may well be irreconcilable, and that as a result “lasting and deep community consensus” may, somewhat conveniently, be defined as never being reached.  This is especially true of a randomly selected Citizen’s Assembly, which will likely agree on the need for action, but diverge dramatically on the actions that are required, and who ought to pay for them.  This in a sense is where the climate debate has already got to.  The pursuit of consensus through such an approach may not necessarily lead to a consensual outcome without a more forthright display of leadership that sets the tone.  Popularity cannot be the only benchmark for introducing new and far-reaching policy.

More importantly, there is plentiful evidence of remarkable convergence and agreement on issues that can successfully reduce emissions.  Take for example energy efficiency, which is simply about eliminating non-productive energy use.  There is widespread untapped potential for greenhouse gas reductions in this area, much of which can be achieved at a financial gain.  In its Low Carbon Growth Plan ClimateWorks undertook an extensive bottom-up analysis of emission reductions opportunities and created the first economy-wide emissions reduction strategy for Australia.  The report found that over 50 Mt of abatement is available through energy efficiency measures across sectors at negative cost.  If these savings were achieved, it would mean no net growth in energy usage for Australia between now and 2020, obviating the need for major investment in new energy network infrastructure, thus leading to further significant financial benefits.

It is difficult to find any Australian organisation that is not pro-energy efficiency, other than those who profit by volume of energy sold. Even energy sector businesses are open to the idea that incentive structures dictating their activities could be re-aligned to better recognise the available efficiencies.  Better energy efficiency is agreed policy to be pursued by all sides of Parliament; mainstream businesses agree with it either in principle or as active implementers; and it is a key vehicle of community engagement and empowerment.  Support for energy efficiency exists across all sectors and in all walks of life, but being so disaggregated has meant its support base is too diffuse to stand up and be noticed. 

As David Hetherington and Tim Soutphommasane have pointed out in their recent think piece for Per Capita, the politics of climate change require progressive actors to build broad coalitions of support behind their ideas, and to be successful, action on sustainability must be supported with a ‘nation-building’ narrative about transition to the economy of the future. 

The Labor Party has set out its plans to build broad coalitions of support behind climate change action.  In a range of ways, the Australian Alliance to Save Energy is assisting this by working to demonstrate the existing depth of consensus on energy efficiency action.  If these pockets of support for energy efficiency are brought together and made more of a priority we may actually start to build some mainstream momentum for scaled-up change.

On a nation-building narrative, there are encouraging signs of late - the Prime Minister used last night’s great debate as an opportunity to link climate actions to her vision for ‘a prosperous Australia and for a sustainable Australia’.  The weekend’s announcements on tax breaks for green buildings is sound policy that will reinforce the government’s rhetoric with tangible actions. These are first steps in the right direction, though the potential for a stronger linking of these themes by either party remains a largely untapped opportunity.  In a practical sense, further energy efficiency policy announcements during this campaign can provide a bridge to a more positive re-framing of climate change action in the longer term, because the community agreement is already so developed, and the economic payoff is also compelling.

If in the current political times a firm consensus is a precursor to climate change action, on energy efficiency it remains high time for Australia to act.

The Australian Alliance to Save Energy

By bringing the best energy efficiency ideas to Australia, targeted research, strategic collaboration and direct advocacy, the Australian Alliance to Save Energy (A2SE) is engaging with public and private organisations across all sectors in Australia to build the momentum for energy efficiency action.

ENDS

For more information or to arrange an interview contact:
Mark Lister, Executive Director, Australian Alliance to Save Energy
Mobile:  0402 320 906    
Email: mark.lister@a2se.org.au