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Efficiency Insight: June 2016

The quarterly e-zine of the Energy Efficiency Council, bringing you in depth policy analysis, insight into key technologies and a roundup of EEC news.

CEO welcome

Welcome to the second edition of Efficiency Insight, the Energy Efficiency Council's quarterly e-zine.

Efficiency Insight is designed to keep the conversation around energy efficiency moving, with articles from the EEC team and guest contributors that tackle the critical issues facing energy users, policy makers and efficiency professionals.

Expect comprehensive updates on the state of Australian energy efficiency policy, in depth analysis of key technologies, and opinion from Australia's leading voices on energy efficiency. In short, if you have a professional or personal interest in energy or energy efficiency, Efficiency Insight is essential reading.

This quarter, the EEC's Head of Policy, Rob Murray-Leach, steps back from the election campaign and considers the radical changes taking place in the energy sector that will require close attention from the incoming government. Hugh Saddler of pitt&sherry reflects on electricity demand trends over recent years and likely future trajectories. Phil Blythe and Skye Holcombe Henley of Greensync consider the current 'battery mania' sweeping the nation, and the sectors in which the business case storage is really going to stack up over the next five years.

The feedback on the first edition of Efficiency Insight was fantastic. I hope you enjoy the second edition just as much.

Best wishes,

Luke Menzel, CEO, Energy Efficiency Council


Analysis: Efficiency policy update

In each edition of Efficiency Insight, the EEC's Head of Policy, Rob Murray-Leach, will bring you the latest policy developments affecting energy efficiency across Australia, and the social, technical and economic trends shaping the energy sector as a whole.

Understandably, the Federal election on 2 July is focused on hot-button issues like taxation, immigration and health. However there are radical changes underway in the energy sector that are receiving far less attention, but will profoundly affect Australians over the medium term. The shift to renewable energy, electricity storage and sophisticated energy management are challenging fundamental energy market structures and businesses models. The energy sector will look dramatically different in 2030.

Articles in this issue of Efficiency Insight by Hugh Saddler from pitt&sherry, and Phil Blythe and Skye Holcombe Henley from GreenSync, highlight just two aspects of these changes – the unprecedented drop in electricity demand between 2008 and 2014 and the emergence of low-cost electricity storage. While energy retailers, networks and service providers are looking at ways to adjust rapidly, energy market rules and regulations are changing at a glacial pace.

The public debate needs to move away from a reductive and unprofitable debate that pits renewables against coal, towards a sophisticated discussion focused on how we can adapt to these changes in energy generation and use as cheaply as possible. Better energy management, including energy efficiency and demand response (adjusting demand based on system demand or supply), will play a critical role in keeping energy affordable during and beyond this transition.

The Federal election and beyond

Many parts of the energy sector are deliberately keeping their heads down during the election campaign because of the importance of developing a bipartisan, long-term approach to energy policy.

Nevertheless, the major parties have still made some important commitments on energy policy. In December 2015 the Coalition committed to a national target to boost energy productivity ($GDP per unit of primary energy) by 40 per cent between 2015 and 2030. The Greens and the Australian Labor Party (ALP) recently committed to a higher target of doubling energy productivity by 2030, in line with recommendations from the Energy Efficiency Council, the Alliance to Save Energy and ClimateWorks Australia. This means that, whichever party forms government in July, they will need to put serious policies in place to meet their energy productivity targets.

The real debate around energy, climate change and energy productivity will start after the election. The Coalition have committed to review their climate change policies in 2017. If elected, the ALP will also need to start a major review to implement their election commitments around energy and carbon, including their proposal for two emissions trading schemes, one for electricity generation and one for industrial emissions.

The next twelve months will also see work ramp up on the National Energy Productivity Plan (NEPP). The NEPP remains a plan to develop a plan, rather than a set of clear actions. However this gives the incoming government considerable scope to up the ante on energy management.

The Federal Department of Environment recently released a very useful report by Energetics that undertook a ‘bottom-up’ analysis of the technical potential for abatement in Australia. It seems to me that a lot of commentators missed the really critical point of this report – improved energy productivity can deliver almost half of Australia’s current international greenhouse gas target. The report doesn’t say what policies need to be in the NEPP to unlock that potential – it just highlights that the NEPP is our biggest opportunity to meet our greenhouse gas targets. This is an essential message for policy makers.

Whichever party forms government, they will desperately need to take up this opportunity if they are going to keep energy affordable, create jobs, grow the economy and meet their international commitments to reduce greenhouse gas emissions.

Energy Efficiency Council 2016 Platform launch

The Energy Efficiency Council will release a major new platform for improving energy efficiency accross the economy on in Sydney on 19 July 2016, just after the election. The release of the platform has been deliberately timed to inform the thinking of the incoming government. The platform will set out a comprehensive range of actions to meet Australia’s energy productivity targets, including energy market reforms and specific policies for residential, commercial and industrial efficiency.

The aim of the platform is to bring together the collective expertise of the energy efficiency sector, and it will be updated regularly based on feedback from members, experts and the broader community. We will be releasing more information on the launch in the coming weeks, however if you are interested in hearing more about the platform and the launch, please register here.

The Energy Efficiency Council’s platform will also be relevant to state, territory and local governments, which have become increasingly active in energy efficiency over the last three years. The Council has released advanced copies of the platform to specific governments and agencies to inform their policy development.

As well as working on our platform, the Council has also been collaborating with a range of other organisations to ensure that government’s receive consistent advice on energy efficiency. The Australian Alliance to Save Energy recently released a set of proposals for improving efficiency in manufacturing. The Australian Sustainable Built Environment Council, which brings together key organisations in the property sector, has released it’s Low Carbon, High Performance report, which found that boosting renewables and energy efficiency in the building sector would deliver major emission reductions, greater productivity and comfort, and over $20 billion in financial savings by 2030. The Council was closely engaged in the working groups that produced both reports – for a full briefing on the ASBEC report, see the article by the EEC's Shauna Coffey below.

Victoria and the market for lemons

The Victorian Government will soon release its Energy Efficiency and Productivity Strategy, and the Victorian 2016-17 Budget outlined funding for a number of initiatives that will appear in the strategy, including:

  • $10 million to upgrade public housing and the homes of vulnerable Victorians.
  • $3 million to help small and medium sized businesses (SMEs) identify ways to reduce their energy bills.
  • $3 million to roll out the ‘residential efficiency scorecard’, a voluntary tool for rating new and existing homes’ efficiency.

The ‘residential efficiency scorecard’ is one of a number of models being considered around the country to inform homeowners and prospective buyers and tenants about the efficiency of new and existing homes. The Australian Capital Territory has a very mature scheme, and over the last two years the Energy Efficiency Council has been working with CSIRO, the NSW Government and other industry groups to develop a national approach for residential disclosure.

The economic case for residential disclosure comes from a 1970 paper by George Akerlov that won a Nobel prize, called “The Market for Lemons: Quality Uncertainty and the Market Mechanism”. The paper examines the second-hand car market, where it can be hard to tell good and bad quality cars apart. Effectively, Akerlov says that if buyers can’t tell the quality of a product before they buy it (e.g. a car or home) then there’s no incentive for sellers to produce higher quality products. This leads to a race to the bottom, with goods being produced at a much lower quality than buyers would be willing to pay for.

It’s actually pretty simple to fix this ‘market distortion’ by introducing a ‘residential disclosure’ scheme that enables buyers to identify the energy efficiency of a home at the point of sale. A ‘disclosure tool’ creates a strong incentive to upgrade the efficiency of homes before they are sold, in order to get a higher sale price. Real-world evidence shows that this theory is right, and homes in the ACT with higher energy efficiency ratings generally have higher sale values than homes that are otherwise equivalent. The NABERS Energy tool has achieved similar results in the commercial market, and has driven significant improvements in the energy efficiency of Australia’s offices.

A Victorian Parliamentary Inquiry in 2005 identified the need for a disclosure tool, so it’s great to finally see this tool being introduced. However, ultimately we need to move towards a national tool. This means that after a suitable trial period for state based tools, all States and Territories, including Victoria, will need to work together to develop a single national tool.

Along with energy efficiency in schools and hospitals, residential disclosure is going to be one of the hottest energy efficiency issues for 2016-17.


DEMAND FOR ELECTRICITY: WHERE IS IT HEADING?

Hugh Saddler of pitt&sherry explores the demand for electricity in Australia, and what it means for Australia's future.

The total quantity of electricity consumed each year in Australia fell over five successive years from 2009 to 2014.  Figure 1 shows that there has been no precedent for falling demand over the past twenty-five years, with the recession of 1990-91 only causing a brief slowdown in demand growth.  In fact, there has never been an extended fall in consumption in the entire history of the electricity supply industry in Australia.  No wonder that the demand reduction took the industry, and its regulators, so completely by surprise.   

Figure 1:  Annual electricity consumption, Australia, 1991 to 2014

Source:  Prepared from data in Electricity Gas Australia, various issues

Figure 2 suggests that, when expressed in per capita rather than total terms, annual growth in demand slowed progressively over several years, before starting to fall. Figure 2 is for the National Electricity Market (NEM), excluding the main systems in WA and the NT (respectively the SWIS and the DKS).  In 2013-14, the NEM accounted for 89.5% of total national electricity consumption, as reported in Electricity Gas Australia, down from 92% in 2004-05, because demand growth in WA has slowed but has not fallen to any significant degree.  

Figure 2:  Trends in demand for electricity in the NEM, 1998 to 2014

Source:  Prepared from data in Electricity Gas Australia, various issues

For the remainder of this article, all the data examined is for the NEM only, as the publicly available data for the NEM is more extensive and of better quality.  The main sources used are AEMO’s 2015 National Electricity Forecasting Report and the annual responses by network businesses to the Regulatory Information Notice (RIN) requests issued by Australian Energy Regulator (AER).

At the outset, it is important to distinguish between various forms of electricity demand, including electricity supplied from network businesses through the meter to consumers, and demand as seen by the major generators and the wholesale market of the NEM.  The latter excludes electricity supplied by small generators embedded within networks, termed small non-scheduled generators (SNSGs) by AEMO; these include landfill gas, small hydro and exporting cogeneration plants.  Electricity supplied to consumers also includes exports from rooftop solar installations, along with non-scheduled and scheduled generation. The fall in electricity supplied through the NEM between 2009 and 2014 was 7.5%, whereas the fall in total electricity supplied to consumers was 3.9%, as shown in Figure 3. 

Figure 3:  Electricity supplied to consumers from various sources, NEM, 2006 to 2015

Source:  Prepared from data in AEMO, 2015 National Electricity Forecasting Report

The remainder of this article focuses exclusively on analysing the changes in total electricity supplied to consumers, i.e. “true” demand for electricity. By undertaking a combined analysis of the AEMO and the AER data, it is possible to separate electricity consumers into three groups:

  • “Large industry”, defined in broad terms by AEMO as consumes with loads larger than 10 MW;
  • All other business, termed here general business, and;
  • Residential.

Figure 4 shows the shares of these three consumer groups in total electricity consumption, including consumption of electricity from rooftop PV, and Figure 5 shows the changes in consumption by each since 2006.  These data end at December 2014 because that is the most recent available data from the Victorian network business, which report to the AER on a different timetable from network businesses in other states.  

Figure 4: Total NEM electricity consumption by major consumer group, 2006 to 2015

Figure 5: Changes since 2006 in NEM electricity consumption by major consumer group

Large industry consists mainly of major manufacturing and mining establishments, but also includes some other consumers, such as railways, large water utilities and large university campuses.  AEMO data indicate that annual consumption fell by 3.3 TWh, equal to 13%, between the peak in 2010-11 and 2014-15.  During this period closure of two aluminium smelters, Kurri Kurri in NSW and Point Henry in Victoria, removed about 7 TWh of annual consumption.  However in both states, consumption by other large industry consumers increased modestly, as it did in each of the three other states in the NEM.

In its 2015 forecasts, AEMO anticipates continuing modest demand growth in each state except Queensland. In that state, strong growth is expected to result (in fact, is already resulting – see Figure 8) from converting the enormous number of pumps, compressors and related equipment, required to extract and transport coal seam gas, from gas engine to electric motor drive.  AEMO bases the large industry component of its forecasts on interviews with individual major consumers, combined with its own professional judgment.  The forecast outcome implies a business-as-usual future: no overall structural change in the economy either towards or away from electricity intensive activities, but also no significant increases in overall electricity use efficiency on the part of large consumers.

Figure 6: Factors contributing to changes in residential electricity consumption in the NEM since 2006

Figure 5 shows that residential consumers have been responsible for most of the reduction in demand since 2010.  I have previously analysed the major factors contributing to the trend in residential demand since 2006.  Figure 6 is an updated version of the analysis.  In the absence of these factors, residential demand would have continued growing at a rate only slightly slower than that prevailing prior to about 2008.  The price effect is of course a response to the very large increases in real residential electricity prices in every state throughout the period from 2008-09 to 2013-14.  The large wedge contributed by major energy efficiency programs consists almost entirely of the savings achieved by the imposition of minimum energy performance standards (MEPS) on a wide range of household appliances and equipment and, to a lesser extent, on houses.  The reductions in electricity consumption are calculated by subtracting the electricity consumed by the stock of each appliance type in a given year from what electricity consumption would have been had the average efficiency of the stock remained at the level in the base year, which in this analysis is 2005-06.

Increased energy performance standards of new dwellings have made a smaller contribution, mainly because of the much slower turnover of housing stock compared with appliances.  Savings are also lower because of significant non-compliance nationally with the mandated energy performance standards, as documented in two reports by pitt&sherry for the South Australian Department of State Development, and also because a substantial share of the energy saving is gas, not electricity.  The various state energy efficiency programs appear to make a smaller contribution, for two main reasons.  Firstly, because the specified targets are expressed in terms of the deeming lives of the various measures and are quite small when expressed as annual savings.  Secondly, because a good part of the saving from actions such as lamp replacement and water heating upgrades is already included in the estimates of savings from MEPS, because the stock data include the effects of these actions.

General business uses a larger share of total electricity than either of the other two consumer groups.  Analysis of the kind undertaken for residential consumption found that consumption reductions resulting from energy efficiency programs have been smaller in absolute terms and, a fortiori, in relative terms, than for residential consumption.  The response to higher prices also appears to have been smaller.  Neither of these findings is particularly surprising, for at least two reasons.  Firstly, equipment subject to MEPS accounts for a much smaller share of total electricity consumption than is the case for residential consumption.  Secondly, for much of general business electricity consumption is closely related to the output of the business, and output has continued to grow over this period.  This means that businesses generally have less scope than householders to respond quickly to higher prices by way of simple changes in electricity consuming behaviour. Investments to improve electricity use efficiency will be required in most cases and, as discussed below, Figure 7 suggests that businesses have been gradually improving the efficiency with which they use electricity over the entire period since 2006.

In fact, when general business consumption of electricity is expressed relative to gross state product (GSP), which is an aggregate measure of total economic activity in each state, a more interesting trend appears.  Electricity (or energy) consumption per unit of GSP (or, for a whole country, GDP) is very commonly used as a measure of electricity use intensity.  The trend since 2006 is shown in Figure 7, expressed in index numbers terms so that it can be compared with residential consumption per residential customer.  The significant features of this graph are, firstly, the steeper decline intensity since 2010 (consistent, of course, with the trends in total consumption) and, secondly, the apparent cessation of the declining trend in the last year.

Figure 7: Indices of residential and general business electricity consumption, 2006 to 2015, NEM excluding Victoria

The data shown in Figure 7 end in June 2015.  Figure 8, extracted from pitt&sherry’s CEDEX® data system, indicate that the apparent cessation of declining consumption changes into a definite increasing trend when extended for a further nine months.  Figure 8 also shows that the increasing trend is seen in all states.  It starts later in Victoria, because of the effect of the Point Henry smelter closure, which is not fully reflected in the annual data until July 2015.  As previously discussed, part of the increase in Queensland is caused by use of electricity in the coal seam gas fields.  An estimate of how this may have grown over the past nine months has been made by interpolating AEMO forecast numbers.  This suggests that coal seam gas use may account for most of the increase in demand seen in Queensland, and a majority of the NEM-wide increase.  That said, increases in other states, and from other sources of consumption, cannot be ignored.  Moreover, the increase in “true” consumption is somewhat larger than seen in the NEM only data, because steadily increasing supply from rooftop solar needs to be added.  If the very preliminary trend seen in Figure 7 continues, residential demand will increase at about the same rate as population growth, and general business consumption will increase in line with economic growth.

Figure 8: Changes in moving annual total electricity delivered through the NEM, June 2006 to March 2016

Why is general demand for electricity now apparently increasing?  First, the price shocks that occurred until around 2013 have now mostly been replaced with flat or even declining rates of growth, and also an increasing share of electricity bills has been shifted to ‘fixed’ charges.  But in addition, there has also been a slow-down in the growth of savings from energy efficiency programs.  Part of this is a consequence of the fact that most of the “big” opportunities for appliance standards were realised earlier in the life of the program, and further tightening of performance standards delivers diminishing returns in absolute terms. However, there has also been a slow-down in the introduction of new regulations over the past three years, which has contributed to slowing growth in electricity savings.

More fundamentally, there is a clear need to improve the efficiency with which electricity is used by general business, currently accounting for nearly half of all electricity consumption in the NEM.  It is well recognised that there are a great many unrealised opportunities for business to use electricity much more efficiently.  Over many years, energy efficiency programs have paid far more attention to households than to business and, it could be said, the result shows in the relative trends in electricity consumption.  Far more effort needs to be put into programs directed towards business, especially small and medium businesses which could be said to be in no less need than households of help and advice with energy efficiency.  Finally, the experience with electricity consumption over recent years suggests that consuming behaviour is influenced by the general level of awareness of and support for decisive action to address climate change across society.


Commercial electricity storage – opportunities, costs and challenges in the midst of Battery Mania

Dr Phil Blythe and Skye Holcombe Henley of GreenSync discuss the emergence of low-cost electricity storage and value streams for the commercial and industrial sectors that make sense over the next five years.

There is much being written about the paradigm shift underway in Australia’s electricity system. The CSIRO has predicted that Australia’s homes and businesses will be powered by more than 20 different energy sources and technologies by 2050. The key drivers in the transition to a new energy system are changing consumer demands and advances in energy and digital technologies. Rooftop solar has been a catalyst for change in the centralised grid system. The advent of affordable battery storage is expected to drive an even greater transformation of Australia’s National Electricity Market (NEM) in the decades to come. This article considers the opportunities and challenges for battery storage systems in the Commercial and Industrial (C&I) sector, focusing on large energy consumers where batteries are likely to have the best economic case in the next five years.

Battery mania!

It's only a slight exaggeration to say that we're in the midst of battery mania. People are excited, and not only the early adopters. Australia now has nearly the highest penetration of solar PV in the world, with around 1.3 million rooftop PV installations in the NEM as of 2014-15. It’s little wonder our sunny island continent has become a target market for battery manufacturers. The wildly successful marketing of Elon Musk’s Tesla Powerwall home battery, and others such as those offered by Fronius and Enphase, has shone the spotlight on the residential market.

Caught up in the excitement, some pundits are making ambitious claims about household self-sufficiency, although the costs and technical issues for most homes will remain significant barriers in the near term. While the Clean Energy Council launched a valuable consumer safety guide and an energy storage safety report in late 2015, households still face risks due to gaps in the regulatory framework, including oversight of technical or safety standards.

Household battery storage, as a complement to PV, will become economically viable for many homes at some point – we just have to wait until the cost of a battery is so low it can be purchased with a (modest) credit card. The story is somewhat different in the C&I sector where a number of value streams are already available to commercial battery operators.

C&I Storage systems

The uptake of C&I battery storage systems is gaining momentum as knowledge around battery integration grows and the potential sources of income (value streams) increase. In recent years we’ve seen renewed focus on the demand side of Australia’s electricity system and a range of innovative new business models emerge for delivering energy services. Regulatory changes have meant that before augmenting electricity supply (building more poles and wires), utility businesses are now required to consider how demand could be better managed, which will likely result in the deferral of millions of dollars in asset builds.

Value Streams

1. Network support

This new approach to managing Australia’s vast spider web of transmission and distribution infrastructure presents new opportunities for businesses with a commercial battery. Network companies are often faced by ‘constraints’ in parts of the grid, which means that the demand for energy at certain times (e.g. 3pm to 6pm during summer) exceeds the capacity of the infrastructure. The traditional approach has been to simply augment the network, but this can be very expensive and several network companies now offer energy users payments if they reduce their demand during these peak periods (termed ‘demand response’).

Whereas C&I customers without battery storage would have to reduce or defer their electricity usage during the peak time to receive a network payment, battery owners can use their stored energy during the peak time and continue their operations business as usual. In our experience, this is frequently the most lucrative of the value streams.

2. Tariff arbitrage

Another value stream is known as tariff arbitrage, which involves switching from grid to battery power during times when electricity prices are high. In the wholesale electricity market, prices can fluctuate in minutes due to supply shortages, from minus $1,000 (yes, prices can go negative) to $13,800 per megawatt hour. Businesses that can respond quickly to changes in price by switching to stored energy can potentially benefit from this price differential.

3. Demand tariffs

Most C&I sites pay electricity bills that include consumption charges (the total amount of energy consumed) and demand charges (the peak energy use of that site during a particular period). Businesses can avoid incurring high demand tariffs by switching to storage when their electricity usage reaches a certain peak level, a technique that is known as ‘peak smoothing’. By keeping energy use under a threshold appropriate for that customer’s operating environment, the tariff can be kept low. Often just relatively short periods of battery use can knock up to 10 per cent off an average electricity bill.

4. Solar shifting

With such high penetration of rooftop PV, commercial premises can make full use of the solar power that has charged their battery during sunlight hours by discharging it during peak tariff times, referred to as ‘solar shifting’. This is the most common value stream used to substantiate the benefits of battery storage. It is typically the most consistent value stream, but not necessarily the highest value.

5. FCAS markets

A final value stream currently unavailable to commercial battery operators is in the frequency control ancillary services (FCAS) market. The Australian Electricity Market Operator (AEMO) operates FCAS markets to help maintain the balance between supply and demand over very short periods of time. Much like generators today bid generation into the spot market, battery operators would bid their generation into one of the FCAS markets. Given the growing presence of commercial storage in the NEM, addressing the current regulatory barrier to the FCAS markets is one example of how regulators could act to unlock benefits of storage for the overall network.

Cost of commercial storage

So just how quickly are battery costs expected to decline and what are some of the factors influencing uptake?

According to a CSIRO report prepared for the Australian Energy Market Commission (AEMC) in September 2015, baseline costs of the more mature battery technologies (advanced lead acid and lithium-ion) are projected to decline by 53 per cent by 2025 and by 68 per cent by 2035. The report also states that baseline costs of emerging technologies (zinc bromide and molten salt) are projected to decline rapidly: a reduction of 79 per cent by 2025 and by 85 per cent by 2035.

The report’s authors note that while costs will decline significantly, they will be subject to considerable uncertainty and caution that the costs of installation, inverters and maintenance must be taken into account. This final point is important, as installation costs are currently very high. Whilst they will come down as knowledge and experience is accumulated, in the interim they will act as a barrier for projects that are borderline feasible.

In terms of uptake, businesses tend to be savvy consumers so will apply their own cost/benefit analysis of whether storage, or solar and storage, stacks up in the near term. Considerations would include where a business is located (rural, remote, urban setting), the tariff structure of its retailer, whether it already has solar installed, (which would partially reduce start-up costs), and whether its consumption patterns would enable the business to benefit from one or more of the value streams described above.

The NEM in transition

While the future is certainly sunny for the humble battery, there are a few obstacles that must be overcome before it and its other distributed friends can infiltrate the NEM on a grand scale. Widespread penetration of distributed energy resources will serve to decentralise our grid and incrementally displace synchronous generation – large scale, reliable power plants, as they become economically and/or environmentally unviable or are retired. However, at present these facilities provide important services that help balance the NEM including frequency control, inertia voltage control, and the ability to vary production levels in response to five-minute dispatch targets. As such, there are a raft of technical challenges that need to be overcome as our energy system transitions to distributed technology.  

AEMO has a program of work underway to explore the technical risks to power system security and reliability of a more diverse generation mix. As the body responsible for maintaining Australia’s electricity system within secure operating limits, it has reason to be concerned about a shift away from centralised generation to smaller scale distributed resources which, short of establishing a database of every generation unit in the country, may not even be visible to AEMO. The concern is not the technologies themselves, but that these technologies reduce the ability to control some of the technical elements of the system. Among the technical implications being explored by AEMO are the challenges for frequency control, in particular emergency schemes for when the system really faces a crisis, fault levels and the visibility of the distribution system as it changes.

The day is approaching when there is far greater bi-directional power flow and the excess energy households and businesses send back to the grid can be harnessed, in aggregate, as mass generation. The NEM already has over 4 GW of rooftop PV, which overshadows the largest generator in the system, which is the 2.88 GW Eraring Power Station in NSW. The distributed generation future is vastly different from the one that AEMO currently presides over, and the NEM’s transition is going to be a very interesting ride.

And to conclude

The changes underway in Australia’s electricity system will make it far more complex for teachers to give children that basic lesson about where electricity comes. Let’s face it – even interested and committed adults are struggling to comprehend how all the moving parts will fit together as more energy resources are integrated into the grid and consumers get increasingly creative about how and when they use electricity. One thing’s for certain – technology is transformative and the horse has bolted.


International partnership to supercharge discussion at National Energy Efficiency Conference 2016 

The annual National Energy Efficiency Conference has long been the premier annual event for discussion and debate around Australia's energy efficiency agenda.

Every year for the last seven years, the conference has provided a platform for hearing from energy efficiency leaders from Australia and around the world. It has brought professionals in the sector up to speed with the latest developments in energy efficiency markets, technology and policy. And it has been instrumental in forging connections between the energy efficiency industry, energy users and policymakers, helping professionals in this space work together to unlock the many benefits of sensible, cost effective energy efficiency.

Collaboration with International Energy Agency's Energy in Buildings and Communities Program

The eighth National Energy Efficiency Conference, taking place in Sydney in 15-16 November 2016, will take the discussion to a whole new level, as it is being delivered in collaboration with the International Energy Agency’s Energy in Buildings and Communities Programme (EBC).

The EBC is one of the IEA’s international technology collaboration programmes. It carries out research and development focusing on the integration of energy efficient and sustainable technologies into healthy buildings and communities. The EBC Executive Committee is made up of some of the foremost authorities on energy effficiency from around the world.

The Energy Efficiency Council's collaboration with the  the IEA EBC will allow a number of the EBC’s international efficiency experts to feature in the two-day conference program. The EEC is working closely with the IEA EBC to design a conference program that supercharges the discussion on how we can drive efficiency further, faster in Australia, and build markets for Australian energy efficiency providers in our region.

IEA's Head of Energy Efficiency to deliver keynote

Dr Brian Motherway, Head of Energy Efficiency at the International Energy Agency, is the first international keynote speaker to be announced for this year's event. Dr Motherway joined the IEA in early 2016 after four years as the CEO of the Sustainable Energy Authority of Ireland.

Brian's visit to Australia for the National Energy Efficiency Conference 2016 is timely, as energy users, providers and policy makers grapple with the waves of new technology transforming Australia's energy sector. Brian will share his insights into the rapid transformation taking place in energy systems around the world, and the critical role energy efficiency is playing in this transition. The International Energy Agency is at the heart of global dialogue on energy, providing authoritative statistics and analysis on critical energy issues, including energy efficiency.

Conference a must-attend for energy efficiency professionals

Our collaboration with EBC will bring a truly global perspective to the National Energy Efficiency Conference 2016. With so many international experts in Sydney at the same time, this year's conference will be a unique opportunity for Australian energy efficiency professionals, policymakers and energy users to engage with cutting-edge practice from around the world.

Based on previous attendance, over 350 delegates will attend the National Energy Efficiency Conference 2016. A range of sponsorship and exhibition opportunities have been released, providing an ideal opportunity for organisations seeking to connect face to face with Australia’s leading energy efficiency professionals, policy makers and innovative energy users and to demonstrate their leadership of the energy efficiency sector.

The National Energy Efficiency Conference 2016 takes place at Australian Technology Park, Sydney, on 15-16 November 2016. For more information, visit www.eec.org.au/NEEC16 or contact the EEC at 03 8327 8422.


Energy efficiency can more than halve emissions from Australia’s buildings by 2050.

The EEC's Shauna Coffey reports that Australia’s building sector can save billions of dollars and reach zero carbon emissions by 2050, with energy efficiency delivering over half the emissions reductions according to a new report by the Australian Sustainable Built Environment Council (ASBEC).

ASBEC’s Low Carbon, High Performance report provides detailed modelling from ClimateWorks of potential emissions reductions from the building sector and sets out an enabling policy roadmap towards 2050. As the peak body for sustainability in the built environment, ASBEC provides a collaborative forum for organisations who champion a vision of sustainable, productive and resilient buildings, communities and cities.

The Energy Efficiency Council, the Property Council of Australia, the Green Building Council of Australia and other key ASBEC members funded the report, and worked closely with ClimateWorks in shaping its development.

The report highlights that improving the energy performance of buildings has many benefits beyond reducing energy bills. The quality of our buildings increasingly determines our quality of life, and Australia’s attractiveness as a place to live and work.

Buildings that are well-designed and constructed for energy efficiency are also more comfortable, quieter, and tend to have better indoor air quality. And recent research commissioned by the Australian Government found that the economic benefits of improved office worker productivity in more efficiency buildings could be double the benefits of energy savings and greenhouse gas reductions.

Over the last decade energy efficiency delivered more than 100 petajoules in energy savings and $28 billion in avoided energy bills in Australia’s buildings, yet overall energy intensity across the sector has only slightly improved. That means the majority of Australians are not experiencing the benefits of energy efficiency in their homes and workplaces.

A comprehensive policy roadmap

The full suite of recommendations form five key policy solutions in the roadmap; 

  1. Establish national plan towards zero carbon buildings by 2050 with supporting policy frameworks and governance arrangements
  2. Setting strong mandatory minimum standards for buildings, equipment and appliances;
  3. Using targeted incentives and programs to motivate and support higher performance;
  4. Reforming our energy market to ensure that it supports the roll-out of cost-effective energy efficiency and distributed energy improvements; and
  5. Rolling out a range of supporting data, information, training and education measures.

The recommendations are aligned with Council’s policy platform, due for release on July 19 – to register your interest click here. The EEC and other ASBEC members are calling on federal and state governments to support the enabling policy roadmap set out in the report.

Implementing the recommendations of the plan is urgent. Just five years of delay could lead to $24 billion in wasted energy costs and over 170 megatonnes of lost emission reduction opportunities through lock-in of emissions intensive assets and equipment.

Practical next steps – unlocking the mid tier

Recently, the EEC has been focussed on extending the world leading achievements of many of Australia’s big property institutions to the balance of the commercial office property sector. These B, C and D-grade[1] buildings commonly defined as the ‘mid-tier’ still face significant barriers to realising these energy savings and the associated benefits. With as much as 80% the 64 million square metres of commercial office space in Australia classified as mid-tier[2], the scale of unrealised energy efficiency opportunity is enormous .Connecting with the mid-tier to drive significant improvements in energy performance will be critical to the whole sector reaching its full potential.

The Council’s Building Retrofit Toolkit Scoping Study, which we developed in collaboration with the Property Council of Australia and the NSW Office of Environment and Heritage sets out a structure and approach for a phased, comprehensive project for a widespread, effective effort to improve mid-tier energy performance. 

If you are interested in this work, you can contact Shauna Coffey by clicking here.


[1] As defined by the Property Council of Australia Guide to Office Building Quality

[2] Green Building Council of Australia (2015) Mid-tier commercial office buildings in Australia: A national pathway to improving energy productivity


Case study: Certified professionals achieving real world results

The Energy Efficiency Certification Scheme (EECS) certifies professionals that have the skills and experience to lead and manage all scales of building energy upgrades, including energy tune-ups, targeted performance upgrades and comprehensive retrofits.

Here, we look at a project by a Certified Energy Efficiency Specialist, Tristan Webber of Energy Action, which resulted in energy savings of greater than $200Kpa as an example of the many quality projects being delivered across Australia by Certified Professionals

Project Scope

The aim of this project was to reduce the energy consumption of the car park ventilation fans at the centre.

This project scope included:

  • installation or replacement of variable speed drives for 21 car park fans;
  • integration with the existing fire strategy;
  • control of car park ventilation via the building management system using carbon monoxide sensors;
  • re-commissioning of car park systems; and
  • installation of electricity meters, and integration with the existing energy monitoring system.

Project Outcomes

Energy savings were achieved by matching the operation of car park ventilation fans to demand for vehicle emissions or heat rejection. This allowed fans to turn off overnight and run at minimum speed on most days. In addition to energy reduction outcomes and the associated financial savings, the project has achieved reduced wear and tear on plant and equipment and reduced noise through full speed fan operation. An integral part of the scope was a pre-project dilapidation report. This assisted in an appropriate level of planning around associated works and adherence to the timeline.

The energy savings objectives were 2,100,000 kWh per year, with an estimated energy cost reduction of $180,000 per year.

The achieved energy savings of the project was 2,606,000 kWh in the first year, a 77% energy reduction and 500,000 kWh greater than the project objective.

The project client, Rebecca Day of Vicinity Shopping Centres, was especially pleased with the way the project was managed, saying “The car park ventilation energy efficiency project was highly successful. Energy Action specified the project and acted as Independent Commissioning Agent, while Centre Management acted as the Project Manager for the works. The collaboration between stakeholders allowed for a relatively trouble free implementation, and all risks to project outcomes were identified early and pragmatically managed.”

On the overall project outcomes she said “The result was a significant energy saving that was greater than forecast, which has been demonstrated through monitoring and verification processes.”

Why choose a Certified Professional?

A successful building energy upgrade needs a multi-disciplinary team with a “can-do” attitude, and strong management and leadership to ensure that the different technical disciplines work together in an integrated way to deliver the best possible outcome. Integration is the key to excellent long-term outcomes. With a professional certified under the EECS and you can be sure you’re working with someone who has the knowledge, capabilities and practical experience necessary to lead and manage your project from beginning to end.

Click here to find out more about the Energy Efficiency Certification Scheme.

Case studies of real world projects will be a regular feature of Efficiency InsightIf you have a case study you think would be appropriate to share, contact us at news@eec.org.au.


 

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