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Efficiency Insight

Efficiency Insight is the Energy Efficiency Council's quarterly e-zine.

Packed with in depth articles by leading industry thinkers, Efficiency Insight aims to foster informed debate about energy efficiency policy and practice, to raise the profile of efficiency and shift the debate from ‘if’ to ‘how’ we drive energy efficiency. It also provides updates on major events and drives collaborative networking between energy efficiency experts, policy makers and energy users.

It's a 'must read' for anyone with a professional interest in energy efficiency, cogeneration and demand management.

Check out past editions via the left hand menu or click here to subscribe and get Efficiency Insight delivered direct to your inbox.

Efficiency Insight is complemented by the EEC's monthly e-newsletter Efficiency Action, which is sent exclusively to Energy Efficiency Council members and contains up-to-the minute expert analysis, news on the hottest issues and exclusive member opportunities. For an overview of the benefits available to EEC members, click here.

The next edition of Efficiency Insight will be published in August 2016.

 

Efficiency Insight - February 2016

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

CEO Welcome

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

The EEC and our members are united in a common cause – making sensible, cost effective energy efficiency measures standard practice across the Australian economy. To do that, we engage in a broad range of activities – advocating for stable, economically prudent policy, delivering training and certification and making sure homeowners and businesses have the information they need to make good investment decisions around energy efficiency.

But we’re also focused on moving the broader conversation forward. If you’ve been to our National Energy Efficiency Conference, you'll know that we work hard to put the latest thinking on the agenda and tackle the critical issues facing energy users, policy makers and efficiency professionals.

Efficiency Insight is designed to keep that conversation moving, with articles from the EEC team and guest contributors designed to get you thinking about the big issues. 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.

One last thought. Many of the articles in Efficiency Insight are long reads, and I found it worthwhile setting aside some time to take them in. I recommend you do the same – perhaps with a cuppa one afternoon.

I hope you enjoy this first edition - let me know what you think.

Best wishes,

Luke Menzel, CEO, Energy Efficiency Council


Contents

Analysis: Efficiency policy update by Rob Murray-Leach (Energy Efficiency Council)

Technology: Heat Pumps - radical efficiency by moving energy by Alan Pears (RMIT) & Geoff Andrews (Genesis Now)

Opinion: Will our energy policy makers remain lost in a climate change fog? by Tristan Edis

Driving efficiency in mid-tier offices - getting the right detail to the right stakeholder by Shauna Coffey (Energy Efficiency Council)

Measurement and verification critical to efficiency success by Luke Menzel (Energy Efficiency Council)

Efficiency industry champion firing on all cylinders by Jessica Roberts (Energy Efficiency Council)

New energy audit standards promote action on efficiency by Karla Paeglis (Energy Efficiency Council)

National Energy Efficiency Conference 2016 - Save the date!

EEC's top industry events picks

To subscribe to receive future editions of Efficiency Insight direct to your inbox, click here.


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. In this, the first edition, Rob provides an introductory overview of energy policy and the role of energy management.

Energy markets and energy efficiency policy

In this first edition of Efficiency Insight, I’m going to take a step back and look at why the design of our East and West coast energy markets increase the need for energy efficiency policies. While the reasons for policies like minimum appliance standards are well established, the problems with our energy markets are less well known.

Starting with basics, people don’t directly consume electricity and gas – they use it for ‘energy services’ such as warm showers, cool homes and computing. The cheapest way for a home or business to meet its need for energy services is through a combination of supply-side and demand-side investment.

For example, the cheapest way to keep an off-grid home cool in summer is through some supply measures (a generator) and some demand-side measures (e.g. insulation and an efficient air conditioner). If you design a house poorly and have an inefficient air conditioner, you’d have to spend a huge amount on energy supply. You could also over-invest in energy efficiency – it’s all about finding the right balance.  

Trying to achieve the right balance of supply-side and demand-side investment is much more complex for the houses and generators connected to a grid. Ideally we want the most cost-effective mix of investment in supply (generation and networks) and demand-side measures (e.g. efficient fridges and peak response programs).

However, Australia’s energy markets have failed to deliver the right mix of investments because of a number of choices that were made when setting up the market. Electricity markets are not ‘natural’ markets, as they are based around monopoly networks – poles and wires.

The question is not whether governments intervene in the structure of energy markets, but the choices that they make when they do. As a result, government decisions have had a major impact on investment patterns in both energy and energy management.

Governments gave network companies monopoly powers to make decisions on behalf of consumers to invest in supply-side infrastructure. This infrastructure allows generators to sell energy cheaply to aggregated consumers. However, very little effort was made to encourage networks to invest in demand-side measures when it was cheaper than network expansion, and governments didn’t set up a competitive market to aggregate demand-side investment and deliver balanced investment.

In other words, we set up a system that meant consumers could access supply with virtually no effort and very little upfront cost, as the costs are smeared among consumers and over time. Worse still, even if consumers don’t want more supply, networks can still invest in more supply on their behalf.

However, if consumers want to access energy management measures they have to take the initiative themselves, pay the costs upfront and get them installed. In short, we've set up a system that makes it much, much easier for consumers to access additional supply than manage their energy use.

The result is billions of dollars wasted on electricity infrastructure that we don’t need, much higher greenhouse gas emissions and homes and workplaces that perform poorly by developed country standards.

These distortions exist to a greater or lesser degree around the world. Most countries have had programs in place to address them, and these programs are currently ramping up. For example, California has long required its utilities to invest in energy efficiency when it’s cheaper than investing in supply, and they’ve just introduced one of the most sophisticated markets in the world for energy efficiency (a ‘negawatt’ market - for more on this, check out this article from Renew Economy).

Australian networks actually used to do a lot more to try to balance investment in supply and demand. However, when we created the National Electricity Market, energy efficiency largely dropped off the agenda. As a result, electricity bills are much higher than they should be.

Reforming the energy market is a long, slow process. This has meant politicians have tried to address these issues outside the energy market, with programs like the NSW Energy Savings Scheme, which puts an obligation on retailers to invest in energy efficiency. In the absence of serious energy market reform, these kinds of programs are essential.

Of course there are also issues that will always be best addressed outside the energy market, because energy efficiency is about the interactions between markets for energy and markets for products that use energy. For example, minimum standards for buildings and appliances are about protecting consumers from shoddy products that use much more energy than they should.

The case for action on energy efficiency is strong and urgent. On economic grounds alone, Australia needs to get its act together fast, as developments in technology, consumer preferences and global politics drive a new wave of investment in energy supply and demand. If we get the balance of investment wrong again, it will waste hundreds of billions of dollars and reduce Australia’s productivity.

Moreover, modelling just released by the Commonwealth Department of Industry, Science and Innovation quotes research that shows that more thermally comfortable offices result in much more efficient staff. The modelling shows that the staff productivity benefits of improving the energy efficiency of our workplaces likely exceed the energy benefits!

POLICY DEVELOPMENT INTERNATIONALLY

The global focus on energy efficiency has increased substantially over the last five years, driven by countries’ desire to address competitiveness, energy security (e.g. concerns about Russia’s control of gas markets), air quality (especially in China) and greenhouse gas emissions.

However, while government policy on these issues might influence the speed and nature of the transition to renewable energy and efficient appliances, it appears that this transition is now inevitable. Over the last two years trends in technology costs and consumer preferences have hit a tipping point, and businesses and households are increasingly voting with their wallets.

Once a shift is seen as inevitable, the debate around it transforms – the economic consequences of being left behind means that the question becomes how to adapt, rather than whether to adapt. Many investors have already started to factor this change into their decisions and the price of coal has fallen dramatically over the last four years.

There is now broad consensus that there will be a huge amount of investment in new supply, storage and networks over the coming decades. The key question for many governments and investors will be how long this transition to cleaner energy will take, and how best to manage the cost of this transition. Energy management will be critical to lower the cost of transition and balance the greater variation in both demand and supply.

Recent estimates by the International Energy Agency and HSBC estimated that the global market for energy efficiency products and services is already around $350 billion per annum, but investment is growing rapidly and could more than double in the coming decade. Australia still has the opportunity to tap into this global market, but only if we ensure that our local markets encourage local providers to flourish.

AUSTRALIAN ENERGY EFFICIENCY POLICY

Energy efficiency has recently emerged from a turbulent and challenging time. While the NSW Government remained a beacon of moderate and consistent energy efficiency policy, in 2014 the Commonwealth Government and the previous Victorian Government terminated a number of important energy efficiency programs.

However, we have well and truly turned a corner. The Commonwealth Government became significantly more pro-efficiency in 2015, even before the change in Prime Minister, as the need to improve Australia’s competitiveness and lower greenhouse gas emissions became pressing, and the new Victorian Government is a vocal supporter of energy efficiency.

The former Commonwealth energy minister, Ian Macfarlane, started the development a National Energy Productivity Plan (NEPP), and his successor, Josh Frydenberg, signed off the NEPP in December with his state and territory counterparts.

Rather than outlining a set of policies, the NEPP is more of a work-plan to develop detailed policies in 2016, which means that this year will see major national work on a number of fronts. Key initiatives will include:

  • Governments developing plans to save energy in their own operations (e.g. hospitals and schools). NSW already has an effective program in place, South Australia recently announced that it would be running a scheme, Victoria is considering reintroducing a scheme that was effectively closed in 2014 and the Commonwealth has committed to developing a scheme by the end of 2016
  • Investigation of fuel-efficiency standards for cars
  • Further work on energy market reform, including the Demand Response Mechanism
  • Consultation on the expansion of the Commercial Building Disclosure Scheme to smaller buildings and building areas
  • Policy development for residential energy efficiency disclosure at the point of sale (and possibly lease). Victoria will lead this with the release of their voluntary scorecard

At a state level, the Victorian Government will release its energy efficiency and productivity strategy in the first half of 2016, the Victorian Energy Efficiency Target (Energy Saver Incentive) is being expanded to support a wider range of projects, and the NSW, ACT, South Australian and Victorian governments are working to harmonise their energy efficiency certificate schemes.

There is still a robust debate around energy efficiency. The Western Australian Government is currently considering reducing incentives for demand-response, which would benefit its state-owned generators, push up electricity prices and draw ire from large energy users. However, this issue shows how far the debate has moved, with consumers firmly pushing for more, not less, action on energy management.

2016 will be a huge year for energy efficiency.

Rob Murray-Leach is Head of Policy at the Energy Efficiency Council. He has an extensive background in climate change, energy, transport and sustainability, as an author of the Garnaut Climate Change Review and senior policy expert in the South Australian Government. Click here to contact Rob.


 

TECHNOLOGY: Heat pumps – radical efficiency by moving energy

The range of applications for heat pumps is expanding rapidly. In this special article, technical experts Alan Pears and Geoff Andrews demystify the practicalities and explore the potential of heat pumps to drive down energy use in Australian homes, businesses and industry.

Every Australian home and business has at least one heat pump – a refrigerator or air conditioner. But ongoing development means heat pumps can be used for an increasing range of activities, including cooling, producing hot water and even industrial steam.

The range of applications for heat pumps is expanding rapidly as capital costs fall and materials, motor efficiencies and capacity to vary motor speeds and manage systems all improve, new refrigerants are developed, more sources of heat (or cooling) are identified, energy storage becomes more attractive, and process heat requirements change.

Indeed, heat pumps now provide viable alternatives to traditional sources of heat, such as gas, for many activities. Given recent increases in gas prices, heat pumps are becoming even more attractive. And, of course, heat pumps can provide cooling as well.

A recap on heat pumps

A heat pump (or chiller) works by using energy (e.g. electricity) to pump thermal energy from one area to another. A fridge, for example, moves heat from inside the fridge to the coils at the back. As a result, heat pumps can use a small amount of energy to create a big increase (or drop) in temperature, which makes them seem to defy the laws of thermodynamics! In theory, a heat pump can deliver up to 10-15 times as much energy as they consume driving the compressor. The efficiency of heat pumps (often called the ‘Energy Efficiency Ratio’ or ‘Coefficient of Power’) is growing rapidly, as this graph from EnergyConsult shows.

Shifting heating and cooling to high-efficient heat pumps could save enormous amounts of energy. The latest residential heat pump can deliver heat at 600% efficiency (i.e. create six units of thermal heating per unit of electricity consumed) compared with a gas heater at 50% to 95% efficiency. When the electricity is produced using renewable electricity, this delivers astounding reductions in greenhouse gas emissions.

While most heat pumps are driven by electric motors, they can also be driven by gas engines or, indeed any device that can drive the compressor. This article focuses on heat pumps driven by electric motors.

(Graphic: Baseline and Policy Trends for Energy Efficiency Ratio [EER]: Split System Air Conditioners- Reverse Cycle, from report by EnergyConsult for Department of Climate Change and Energy Efficiency, November 2010).

If you’d like for more detail on how heat pumps work, click here to read Alan and Geoff’s 'back to basics' summary of heat pump principles.

Why use heat pumps?

There are many reasons for using heat pumps in today’s rapidly changing energy context.

Financial benefits

The running cost of an efficient heat pump is much lower than electric resistance heating, LPG and, in many cases, even mains gas. The best heat pump water heaters are competitive with solar options. Where use of heat pumps and other emerging efficient electric technologies (such as induction cooking) avoids the need to connect gas to a property, the fixed charges of gas supply, as well as the need to deal with another energy supplier, can be avoided.

There are concerns about ongoing increases in gas prices as our east coast gas grid competes with LNG exports from Queensland. At the same time, the economics of on-site electricity generation and energy storage, which complement heat pumps, are improving. So heat pumps provide insurance against increasing energy prices.

Installation costs can vary widely, but heat pumps can be cheaper to install than solar, and can avoid costs and practical problems of installing flues and on-site gas and steam pipes. Heat pump prices are falling as economies of scale and technology improvements flow through.

If a need for cooling exists, heating capability can be added at little or no extra cost by adding a ‘reverse cycle’ valve.

Where waste heat, water vapour or waste ‘coolth’ is available, a heat pump can scavenge and upgrade energy to temperatures suitable for use on-site.

(Graphic: Pears, A. Presentation to APEC Energy Ministers, October 2015)

Environment and safety 

A heat pump avoids on-site combustion, reducing local pollution and health concerns. It may also offer safety benefits, for example it can replace unflued gas space heaters in homes, and LPG cylinders in bushfire-prone areas.

Heat pumps can also play a key role in dramatically reducing emissions. While gas has traditionally been seen as a lower emission fossil fuel, it still has significant emissions, including methane leakage from the gas production and transport.

Heat pumps, however, can utilise renewable electricity and thermal storage. Where on-site generation occurs, dependence on electricity suppliers for fair pricing of electricity exports can be reduced by use of heat pumps. When combined with thermal or electricity storage, peak grid electricity demand can also be managed.

Energy supply and demand management

This is a complex area: increased electricity demand at existing peak times can add to supply infrastructure costs. However, attractive integrated strategies can limit or avoid increases in peak demand. Options to offset electricity use by an additional heat pump include replacing resistive electric equipment and old, inefficient heat pumps, utilising thermal and/or electricity storage and smart demand management, and upgrading energy efficiency of buildings and industrial process equipment. 

Replacing gas with such strategies can smooth seasonal gas peaks. This can increase gas infrastructure utilisation while freeing up gas for export.

At home - new applications for heat pumps

In homes, heat pumps are playing roles beyond refrigeration and cooling. They are now used for home heating, domestic hot water, clothes drying and pool heating. Heat pump clothes dryers extract the heat from the hot exhaust air, condensing the water vapour and recovering energy. This avoids the need for venting of humid exhaust air, although they need a water drain.

There are also many interesting innovations. Variable speed inverter-controlled air conditioners are now common: they offer improved temperature control and higher part-load efficiency. In space heating and cooling, multiple indoor units can share a single outdoor compressor unit. Daikin have recently released a European-designed indoor unit (Nexura) that provides both radiant and convective heating, as well as the US7, which has a built-in desiccant wheel and can deliver filtered and humidified or dehumidified outdoor air.

In extreme climates, ‘cascaded’ compressors are emerging. By using two compressors in series, with one sourcing its heat or cold from the other, the temperature difference across which each heat pump operates is reduced, so overall efficiency is improved. ‘Geothermal’ or ground source heat pumps are also available: because ground temperature is more stable – higher in winter and cooler in summer extremes, they can deliver higher efficiency, although pumping energy and temperature differences across heat exchangers can offset savings, especially in moderate climates.

While heat pumps have been used for domestic hot water for many years, they have tended to be noisy, and maintaining efficient cold weather performance has been a challenge. A number of Japanese manufacturers have jointly developed the ‘Eco-Cute’ design approach. This uses carbon dioxide as the refrigerant, which allows high efficiency (e.g. COP around 4.5) and maintains relatively high efficiency in cold weather. They can raise the temperature of water by around 40C in a single pass, so they can also provide a continuous flow of hot water.

Commercial buildings – existing and new uses of heat pumps

In the commercial sector, heat pumps are widely used for refrigeration, space heating and cooling and water heating. They are also beginning to appear in aquatic centres to heat pools and manage indoor humidity. A heat pump can recover large amounts of latent heat in exhaust air by condensing the water vapour in humid exhaust air.

Many commercial refrigeration systems are inefficient, with the inefficiencies starting with thermally poor design of the display cabinets, cold rooms and other equipment that needs cooling. As in other areas, improvements in all aspects of system design, such as variable speed drives for compressors and fans, more effective heat exchangers, smart controls and improved refrigerants are driving big savings. Thermal storage, sometimes using phase change materials (PCMs) to store more heat per unit of volume by utilising latent heat, is far cheaper than battery storage – and it can enhance the economics of adding on-site electricity generation by storing heat or ‘coolth’ for later use to avoid chiller operation at peak times or if the grid fails.

Heating, ventilation and cooling (HVAC) of buildings is the biggest energy consuming activity involving heat pumps in the commercial sector. ClimateWorks estimates that HVAC consumes 44% of commercial sector electricity and 39% of commercial gas. A significant proportion of this electricity runs fans (which actually add heat to the air they move) and pumps: their consumption is falling rapidly with improved motor and fan design and variable speed controls. Indeed savings often reach up to 80% relative to traditional fixed speed fans or pumps with dampers or valves.

HVAC energy demand is driven by building envelope thermal performance, but also by heat released by equipment, lights and people, as well as air leakage and exhaust air. Improving equipment efficiency and building design and construction are reducing energy use and size of HVAC systems. Well-designed buildings may need little or no heating, so they can avoid even connecting to a gas supply.

As in other sectors, commercial heat pumps and chillers are improving efficiency all the time. The Australian-designed PowerPax chiller, for example, is achieving Integrated Part Load Value (IPLV) COPs of 6.5 for air cooled units and up to a remarkable 11.1 for water cooled units. The IPLV is a weighted average COP based on ASHRAE-specified hours of operation at varying levels of part load operation. As noted earlier, chiller and heat pump efficiency improves at lower loads and, in the real world, many commercial buildings only operate at full output for limited periods.  

Real time diagnostic systems such as eco-tracker.com can now alert building managers to problems, while sophisticated management tools compare actual performance to real time simulation of design performance and ‘learn from experience’, to optimise operation. CSIRO’s Building IQ system uses this approach, and is internationally successful.

Industry – an emerging opportunity for heat pumps

Heat pumps are attracting increasing interest in industry, especially now that gas prices are increasing. They can play useful roles in a number of areas:

  • Refrigeration and cooling
  • Providing process heat efficiently, mostly at under 90℃, but steam production is practical (see below)
  • Recovering latent heat from moist exhaust air
  • Scavenging heat from gaseous, liquid and even solid wastes and upgrading the temperature of that heat
  • Drying: for example, drying of timber or grain can be very efficient, as the sensible and latent heat in the moist exhaust air can be recovered by the heat pump. The air delivered by the heat pump can also be drier than heated ambient air when the weather is warm and humid, as the ambient air carries a significant amount of moisture. Indeed, some conventional drying systems struggle to deliver consistent quality and output in humid weather.  

In many cases, modular heat pumps can be located at the point of use, replacing long steam, or hot water pipes or air ducts and their associated energy losses and capital and maintenance costs. This also allows process performance to be optimised because of improved flexibility.

A key issue in the cost-effective use of heat pumps is to carefully analyse the process temperature actually required, and to actively challenge the use of gas-fired steam boilers. Often boilers provide heat at temperatures far above those actually required, leading to very high energy waste. For example, one electrolytic process investigated operated at 63℃, and generated most of the heat it required from internal electrical resistance within the cells. The back-up gas boilers operated at very low efficiency and involved significant maintenance costs. A heat pump that utilised process waste heat (with a storage tank) could be a more cost effective solution.

Research in Japan is leading to development of cascaded heat pumps (see below) that can produce steam at 120-165℃ at efficiencies of 200 to 300%. They can utilise low grade waste heat that would otherwise be dumped. Their modular design offers potential to avoid expensive and inefficient centralised steam distribution systems for many industrial applications.

(Graphics from IEA HPP Annex 35 Application of Industrial Heat Pumps, Task 3 (2013))

Heat pumps are not a ‘silver bullet’

Heat pumps are great for many, but not all, applications. The bigger the temperature difference across a heat pump, the less efficient it is, so they can’t deliver high temperatures for furnaces and other high temperature processes. On the other hand, careful analysis of process requirements may show that the actual temperatures required are much lower than traditionally supplied by steam or combustion. And a heat pump can upgrade ‘waste’ heat for other uses.

Traditional refrigerants used in heat pumps have very high global warming impacts, although most of the ozone depleting refrigerants have been or are being phased out. There is rapid development of low and zero climate impact refrigerants, including hydrocarbons, carbon dioxide, resurgence of use of ammonia, and even water. Careful management of refrigerants is very important, as many are toxic or flammable.

In some sectors, the reputation of heat pumps has been damaged by poorly performing, often noisy equipment applied to inappropriate situations. Careful analysis of the temperatures and amounts of heat available and needed is critical, and quality equipment suited to the application is essential.

Alternatives and complementary technologies

Of course, heat pumps have to compete with a variety of options. Other alternatives are also improving and heat pumps can be combined with other technologies.

As noted earlier, heat pumps can, and should, be combined with thermal and electricity storage systems, onsite energy generation, waste energy recovery and smart demand management based on careful analysis of fundamental thermal energy and temperature requirements. There is increasing potential to avoid or reduce the need for high temperature heat using advanced chemistry, improved heat exchange systems and smart control systems. 

There are exciting developments across a range of technologies. For example, thermo-electric modules (used in some small refrigerators and for micro-cooling of electronics) have traditionally been inefficient, but modern materials technology is driving big improvements.

Thermal cooling and solar heating and cooling technologies are also improving, while gas-powered cooling is also a focus of activity. Of course, these can be integrated with heat pumps for many applications!

Conclusion

It is easy to be frustrated by the pace of improvement in energy efficiency, given the many benefits for households, businesses and the environment. But progress in heat pumps shows that rapid change can happen. The challenges are to take advantage of the opportunities being presented and to encourage even faster innovation.

Alan Pears AM is a Senior Industry Fellow at RMIT University and Senior Advisor to the Energy Efficiency Council. Alan has worked across all aspects of sustainable energy in policy, program development, public education and specific projects and is a well-known commentator on sustainable energy issues.

Geoff Andrews is the founder of energy efficiency engineering consultancy Genesis Now, co-founder of six of sustainability focused businesses and inventor of Organic Response. Geoff was named ‘Energy Efficiency Leader 2013’ at the National Energy Efficiency Awards in recognition of his long-standing contribution to the sector.


OPINION: Will our energy policy makers remain lost in a climate change fog?

Energy market analyst and carbon policy expert Tristan Edis argues that Australia's key energy regulatory institutions have handled the carbon reduction challenge poorly, and a changed approach is needed

Our energy regulatory institutions – the Australian Energy Market Commission which decides on the rules of our energy market, the Australian Energy Regulator which enforces these rules, and the Australian Energy Market Operator which manages its operation – could be considered the ultimate climate change sceptics. 

This has left them blindsided and poorly prepared to consider how energy efficiency, embedded generation and demand management could not just reduce carbon emissions but also reduce costs for energy consumers.

To clarify my provocative remarks, they are climate change sceptics not because the staff within them believe there’s some vast conspiracy to fabricate the scientific research on the earth’s climate.

Rather it’s because since the inception of the national regulatory system for Australia’s gas and electricity markets, senior government officials have resisted any attempt to incorporate any consideration of environmental impacts into the objectives of the regime.  The AEMC and the AER are explicitly instructed by the following overriding objective within the National Electricity Law:

The National Electricity Objective is to promote efficient investment in, and efficient operation and use of, electricity services for the long-term interests of consumers of electricity with respect to price, quality, safety, reliability, and security of supply of electricity; and the reliability, safety and security of the national electricity system.

Price is important. Reliability is important. Safety and security are important. But the fact that electricity is the largest source of Australia’s greenhouse gas emissions and that Australia’s electricity is also the most emission intensive in the developed world is completely irrelevant.

This was done for extremely good reasons and is also why they have also kept out consideration of social impacts. But it risks creating a myopic and ultimately more costly approach to management of our energy system.

Firstly it should be said in defence of those that have sought to keep the National Electricity Objective simple and focussed, that energy markets shouldn’t be used as the instrument to cure all the world’s ills.  Multiple, conflicting objectives risk leaving our energy policy makers and regulators in a quagmire of complexity when often there are better, more targeted ways of addressing social and environmental problems. 

For example, if we are concerned about the welfare of the socially disadvantaged then we can best assist them not through subsidising the cost of power (which well-off people also consume), but by ensuring welfare payments keep up with the cost of living and keeping unemployment low.  As another example, the toxic by-products of coal combustion such as mercury or sulphur dioxide could be partly contained by trying to encourage energy conservation and reducing the waste of electricity. But electricity also comes from sources other than coal that don’t have these kinds of nasties, so it’s far more effective for our state environmental protection agencies to directly regulate the coal power stations that emit these toxic substances.

However when it comes to greenhouse gases we face a serious problem.

The policy mandarins have generally been characterised by a consensus that the best, most efficient way to contain greenhouse gases would be to put a price on them, either through emissions trading or a carbon tax. Put this in place and voilà, no need for energy regulators to worry about greenhouse gas emissions specifically, because they’d get wrapped up within the overall electricity price. The AEMC and AER can then go about their normal business trying to optimise for lowest overall possible price, just as set out in the National Electricity Objective.

However there’s just one little issue– Australia’s politicians and the electorate haven’t come round to the same consensus as the policy mandarins. They have debated and argued over the introduction of a carbon price going back more than two decades with considerable acrimony. Instead there is a strong preference amongst the electorate (not just in Australia) for policy measures that are directly tied to tangible technological means of reducing emissions, like for example subsidising solar panels or banning the sale of highly inefficient appliances.

In addition most people and most organisations in the world aren’t the amazing calculating machines that the policy mandarins (who have typically been trained to think like classical economists) assume them to be. For all people’s whinging and moaning about electricity prices, the reality is that most households and most businesses don’t put very much effort into thinking about cost-effective and relatively straightforward ways they might use less of it. Countless studies stretching back to the 1970s energy crisis have found time and again that households and businesses don’t implement simple technologies for saving energy that would provide extraordinary financial returns without sacrificing on other attributes.

The end result of this breakdown between energy policy mandarins’ expectations of how the world should work and how it actually works in reality, is that our energy regulatory institutions are being left behind in a wake of changes to the energy system wrought by efforts to lower carbon emissions other than a carbon price.

It is certainly true that a number of these emission reduction efforts haven’t been as well thought out as they should have been.  But the general direction of the interventions - which have been to increase the amount of renewable energy supply and to reduce demand via improved energy efficiency - are completely consistent with what’s required to meet an overarching goal of containing global warming to 2℃.  This is an international goal both sides of Australian politics have signed onto.  Furthermore Environment Ministers have spoken about the need for deep emission cuts in the realm of 50% or more since the early 2000s. 

You would have thought that if our energy institutions took the Australian Government’s commitment to such a goal seriously they’d have been war gaming and thinking through how to design an energy system that is increasingly dominated by renewable energy, demand for energy from the grid might go down rather than up, and demand might need to become more flexible.

This is starting to happen, but from an outsiders perspective it appears to be reluctant and only after the changes have become so embedded that they can no longer be ignored. 

Network costs – a financial disaster

The area where the greatest stress is evident is in how we regulate and pay for the electricity network.

In the decade leading into the commencement of the national energy regulatory regime which began in 2007, Australian state and federal governments’ environment officials, in conjunction with governments overseas, had been working on implementing a range of measures to improve energy efficiency of things as varied as refrigerators to industrial motors to new homes and commercial buildings.  For the most part these measures made very good economic sense beyond the environmental benefits.

Unfortunately the mandarins developing the regulatory rules surrounding the energy market were either blissfully unaware of this or deeply sceptical that such measures would achieve anything.

The end result has been a financial disaster. Network businesses were granted the right to invest and guaranteed a return on billions of dollars in additional network capacity, while consumers’ power demand barely grew.

On top of this solar power systems, which can bypass a large proportion of the electricity network, have now become a highly competitive source of electricity. Again this was a product of more than a decade of deliberate international government effort. Solar systems, which used to be horribly expensive, are now anticipated to be one of the lowest cost means of decarbonising power supplies in sunny locations such as Australia.

A further emerging development is the internet of things, which enhances our ability to shift power demand across time far more easily.

No one knows with certainty what will be the cheapest means of achieving the dramatic reductions in greenhouse emissions required within the next 30 years to contain global warming below 2℃. But there’s a better than even chance it will involve technological changes at the customer end of the power line.  Technologies that would have allowed us to decarbonise with little change to the existing structure of the energy market in carbon capture and storage, as well as nuclear power, have fallen well short of the outcomes their proponents envisaged over the last decade and a half. Furthermore large rises in the price of gas in Australia mean it isn’t likely to play an important transitionary role in decarbonisation either.

The views of the energy policy establishment, perhaps best personified by the recent Energy White Paper as well as the prior Labor Government’s White Paper, don’t appear to have come to terms with this.  They seem to still approach issues from the perspective that the existing supply infrastructure should be protected from change. 

This reached ridiculous proportions during the recent review of the Renewable Energy Target where the government argued the target should be reduced primarily because it was leading to an oversupply of electricity generation capacity. But an oversupply of electricity generation capacity isn’t a problem for anyone other than owners of existing power stations.

Reform of electricity pricing for small electricity consumers seems to also be proposed not so much from the perspective of the future need to enhance the flexibility of the market to respond to changes in the supply-demand balance (which becomes more valuable as you increase the amount of renewables in the system). Rather it appears to be more about ensuring the costs of investment in the existing network infrastructure are recovered without encouraging further reductions in energy consumption from the grid. Recent hikes in fixed charges unrelated to customers’ behaviour by some power companies are a worrying sign of where this might go. They are completely inconsistent with economic efficiency and will also increase the costs to society to decarbonise. They serve to illustrate that the decision by the AEMC to entrust monopoly network businesses themselves with developing the shape of new pricing structures was like putting the fox in charge of the hen house. 

Meanwhile progress on development of a wholesale market in demand response that would reward reductions in demand as an alternative to expensive peaking power plants has been painfully slow.

Advances in energy efficiency, customer-embedded generation such as solar and the internet of things provide a prized opportunity to decarbonise the economy at lower cost to consumers.  This is precisely because they allow consumers to lessen their need for quite expensive existing capacity from conventional suppliers. Energy policy and regulatory rules that are framed around the idea that past investments in capacity must be protected from such advances, or entrusting monopoly network businesses to play nice with emerging competitors, will make the task of decarbonisation far harder and more costly for consumers than it needs to be. 

Tristan Edis is an energy and climate change/carbon policy and market analyst who has worked in government, consulting, clean energy industry and the media. He is Director – Analysis & Advisory at Green Energy Markets and blogs at www.newenergyeconomics.com.au


National Energy Efficiency Conference 2016 - Save the date!

The National Energy Efficiency Conference, Australia’s premier energy efficiency event, is coming to Sydney in 2016.

Following the huge success of the event in Melbourne last November, this year's conference will take place at the Australian Technology Park on 15 and 16 November 2016.

Exciting plans are afoot which will bring a truly global perspective to this year’s conference. Over 300 leading energy efficiency specialists, policy makers and industry leaders will come together to debate the big changes and influence the decisions that will drive our industry forward in 2017 and beyond.

More details will be announced soon, so watch this space, follow us on Twitter or check out the conference website here.

In the meantime, be sure to add the National Energy Efficiency Conference 2016, Tuesday 15 – Wednesday 16 November, Australian Technology Park to your diary!


Driving efficiency in mid-tier offices - getting the right information to the right person

While the Australia’s premium commercial buildings sector has seized the opportunities of energy efficiency, the mid-tier still lags behind. Shauna Coffey explores some of the work underway to help complete this vital piece of the jigsaw.

In recent years, energy efficiency performance in the top tier of Australia’s office market has increased significantly. However the balance of the commercial office building sector (those B, C and D-grade buildings commonly defined as the ‘mid-tier’) operates differently, and still faces significant barriers to realising these energy savings and the associated benefits.

The scale of unrealised opportunity is enormous. In Australia, it is estimated that as much as 80% the 64 million square metres of commercial office space could be classified as mid-tier. They are there in the CBD and fringe areas of major cities, in suburban centres and in regional towns.

Mid-tier building owners are diverse in their size, business structure, investment strategy, risk appetite and understanding of energy efficiency benefits and opportunities.

Herein lies one of the biggest challenges in wholesale market transformation. There simply is no one size fits all approach. That means it is critical that, as we seek to assist mid-tier building owners unlock energy efficiency benefits, we recognise and respond to these differences.

A range of organisations are working hard on this problem. The Green Building Council of Australia (GBCA), with support from the Department of Industry, has pulled together over 50 industry stakeholders to develop a national pathway to deliver the mid-tier commercial office building sector as ‘an exemplar for energy efficiency and greenhouse gas emissions reduction’ and the planned actions and initiatives. The action plan includes a range of initiatives intended to act as targeted levers on the different owners within the market.

Without doubt, there is a small group of innovators in the mid tier forging ahead with building energy improvements, often with the support of ‘pilot’ government programs and incentives. They are receiving much deserved recognition in awards and as cases studies to demonstrate to others of what is possible.

As outlined in the widely accepted ‘Rogers Diffusion of Innovations Theory’ approach, ‘early adopter’ owners benefit from access to tools to assist in change and the ‘early majority’ will also make use of these tools, supported by solid proof of benefits.

To deliver these tools of change and solid proof of benefits, the Energy Efficiency Council and the Property Council of Australia are leading the development of the Building Retrofit Toolkit (BRT). The BRT will be a comprehensive package of tools, information and facilitation to support mid-tier office building owners to achieve best practice energy performance and plan to promote it through trusted sources.

A scoping study undertaken in collaboration with the NSW Office of Environment and Heritage is almost complete, which will establish best practice in retrofits and tune-ups in mid-tier buildings as well as identify information needs and information gaps.  Following the completion of this study the BRT will move into development.

We know from our research and engagement that different stakeholders in the mid-tier building upgrade process have different information needs. Even within building owners, different types of owners will have different information needs based on their motivations.

While there is no shortage of information intended to facilitate building energy upgrades (we identified over 100 in the scoping study) few reflect the unique information needs of the stakeholders or reflect the different retrofit opportunities and challenges presented by mid-tier buildings.

As we now move into delivery of the BRT, our priority is to address these two key gaps in the delivery of meaningful and accessible support.

Shauna Coffey is the EEC's Manager of Policy. Shauna leads the Council’s policy work in NSW and works with partners on a range of collaborative projects. Click here to contact Shauna.


Measurement and verification critical to efficiency success

M&V may not be a barbeque stopper, but EEC CEO Luke Menzel reminds us that it’s a fundamental issue for the energy efficiency sector.

Let’s face it. Measurement and verification (M&V) of energy savings is not a barbeque stopper. In an industry with more than its fair share of abbreviations, the International Performance Measurement and Verification Protocol (IPMVP) is a gold medal candidate for most unwieldy acronym. And it’s easy for non-experts to be intimidated by M&V, to feel that it is too technical for them to get a handle on.

But experts in energy efficiency are working hard to turn that perception around. I was immersed in the global conversation around M&V late last year when I spoke at the APEC Workshop on Harmonising Standards for M&V of Energy Savings in Beijing.

The stories being told by APEC delegates echoed what I've heard from EEC members. To a person, delegates reported that measurement and verification is often regarded as an optional extra in their countries, and that clients are happy to shave that cost off the project budget.

Unfortunately it’s not well understood by the private sector, in Australia or globally, that robust M&V is how a client ensures that they get what they pay for. Clients that embark on an energy efficiency project without a credible M&V plan in place are effectively crossing their fingers and hoping that the promised savings materialise.

If you engage a credible provider things can work out okay, but low rates of M&V make it harder to demonstrate the quality and value of energy efficiency projects.

That has big implications for the reputation of our industry over time, which is why we need to keep working to get the message across on M&V. It’s a fundamental issue for the energy efficiency sector, in Australia and around the world. Building confidence in energy efficiency investments requires a high level of certainty that the product, energy savings, will materialise. And ubiquitous, robust M&V is the mechanism that can deliver that certainty.

Building professional capacity around measurement and verification has been a core focus for the EEC for a number of years now. In partnership with the Efficiency Valuation Organisation, we've run the Certified Measurement and Verification Professional (CMVP) training and exam every year for the past four years, which certifies the professionals that can develop M&V plans and verify an energy efficiency project's success.

That work has had a significant impact; last year we saw Australia's 150th CMVP certified, up from just eight in 2012. As a result, we have more capacity and expertise in the Australian market. And we are building on that work – in April, we’ll welcome US expert Steve Kromer delivering an advanced Applied M&V Workshop for Australian CMVPs in Melbourne.

But it’s clear there is still much to be done. In 2015, we surveyed Australian CMVPs and 85% of them said their clients need a better understanding of the basics of M&V. This is exactly the type of work the EEC is focussing on, and we'll be ramping up our efforts to help educate the market on the benefits of robust M&V.

It’s true that M&V may never be a barbeque stopper. But getting the message out is incredibly important for increasing the uptake of sensible, cost effective energy efficiency projects in Australia.

Registration is now open for the CMVP training and exam program:

  • Melbourne: 9, 10 & 11 March 2016 – click here for info and to register
  • Perth: 11, 12 & 13 April 2016 – click here for info and to register

An expert on energy efficiency capacity building and financing, Luke Menzel is CEO of the Energy Efficiency Council. Click here to contact Luke.


Industry champion firing on all cylinders

Jessica Roberts reflects on a productive 18 months for the Energy Efficiency Council, a period which has seen a step change in the organisation’s activities and a surge in its membership.

As Australia’s peak body for the energy efficiency, demand management and cogeneration industry, the Energy Efficiency Council's focus is to grow the market for our members’ products and services and to drive the development of a collaborative, mature and forward-looking sector.

Over the last 18 months, our team has invested time in reviewing and refreshing the ways in which we work collaboratively with our Members to do just that.

As part of this process we’ve launched a new website, undertaken our first Annual Member Survey, redeveloped our digital communications, revamped our database, rebranded the National Energy Efficiency Conference (and held our most successful conference ever in November), created a range of new professional training and education opportunities, welcomed a new Board and spent more time than ever before talking directly with our Members about their priorities and aspirations for their businesses, for the EEC and for the sector more broadly.

 

(Image: delegate feedback following the National Energy Efficiency Conference 2015)

Most importantly though, while this has all be going on behind the scenes, our well-respected policy experts have continued to fly the flag for mature energy efficiency policy in Australia, working with governments across the nation to implement and develop programs, projects and policies that will drive long-term uptake of energy efficiency products and services.

In recent months, more and more organisations have recognised that industry collaboration is critical to maintain momentum and to move Australia’s energy efficiency sector forward. We've seen a host of new members have joined the EEC to add their voices to the discussion.

Siemens has joined AGL, Honeywell, Philips, Schneider Electric and Veolia at the top tier of membership. Australia’s most influential and well respected energy businesses operating at the top tier of the industry, Sponsor members share the EEC's ambitious aspirations for the sector and are integral to the development of innovative practice and an informed policy debate.

Stefan Schwab, Siemens’ Executive General Manager said "We are deeply committed to working with the Energy Efficiency Council to grow the market for energy efficiency services in Australia. There are huge opportunities in commercial, industrial and government efficiency, and our collaboration with the EEC is a core part of our strategy to unlock that potential."

A diverse mix of organisations large and small have also come on board including AE Smith, Kingspan Insulated Panels, ACTewAGL, OPRA Turbines, OASETech, the ACT Government and more. Leading organisations including EnerNOC, City of Melbourne and the City of Sydney have upgraded their membership to take advantage of new opportunities such as the new ‘Energy Efficiency Leaders’ Lunch’ series, which brings industry executives together with political leaders to discuss tackle the big issues and opportunities facing the sector.

(Image: Luke Menzel and The Hon. Mark Speakman MP, Minister for the Environment at the EEC's NSW Energy Efficiency Leaders' Lunch, Dec 2015).

There are more exciting projects on the horizon for the EEC - from the launch of our new policy platform articulating our vision for energy efficiency in Australia, an exciting new collaboration for National Energy Efficiency Conference, and a host of new collaborative projects with other leading organisations which will provide members with more opportunities to get involved.

2016 is already shaping up to be a big year. We’re looking forward to working with our Members, established and new, to drive Australia’s efficiency conversation forward.

Click here to read more or to apply for EEC membership or click here to see a full list of EEC members.

Jessica Roberts is the Energy Efficiency Council’s Executive, Membership & Communications. Click here to contact Jessica.


New energy audit standards promote action on efficiency

Often used as the basis for business case justification, project design and as a baseline to measure post-upgrade savings, accurate and consistent energy auditing is critical to the uptake and quality of energy efficiency projects. Following the introduction of the new Australian Standards for energy auditing, the EEC's Karla Paeglis explains the benefits of ensuring your energy audits are Standard-compliant.

In 2014, Standards Australia released the new standard for energy auditing: AS/NZS 3598:2014, which sets out minimum requirements for commissioning and conducting audits that identify opportunities for cost effective investments to improve energy performance.

Unlike the previous standard, the new Standard is actually a series of standards focused on particular economic sectors: commercial buildings; industrial and related activities and transport related activities.  

The new series of Standards are a significant revision to the previous Standard. They are more rigorous, are outcomes-based and are focused on providing audit customers with actionable energy conservation measures. Read more here.

Whether you’re an external consultant or an in-house energy manager, by delivering Standard-compliant energy audits, you’ll give decision makers the confidence they need to increase both the quantity and quality of their energy efficiency projects. You’ll be better positioned to identify opportunities, develop powerful business cases, design innovative projects and to effectively measure post-upgrade savings.

To help practitioners implement the Standards in real life projects and to drive the update of more high quality energy efficiency projects, in partnership with the NSW Office of Environment & Heritage, the Energy Efficiency Council has developed a new one day training program.

The program is practical and hands-on, using workshops and group exercises to lead participants through the process of delivering a Standard compliant energy audit. The training will be delivered by Dr Paul Bannister, one of the world's leading authorities in energy efficiency. Registration is now open for the one day program as follows:

  • Sydney - Tuesday 23 February 2016 - click here for info and to register
  • Melbourne - Thursday 25 February 2016 - click here for info and to register

Karla Paeglis is Manager, Sector Development at the Energy Efficiency Council. She leads the EEC's training and education programs and the delivering of the Energy Efficiency Certification Scheme. Click here to contact Karla.


Industry Events

From specialist training opportunities in M&V and energy auditing to industry networking opportunities, there are some outstanding events coming up to help kick-start your professional development in 2016.

Here are some of the EEC team's top picks for the coming months:

  • Energy Audit Standard Training - learn how to apply the new Australian Standards for energy auditing with efficiency expert Dr Paul Bannister  - 23 February (Sydney) & 25 February (Melbourne). Read more here
  • Network with some of Australia's leading efficiency experts at the A2SE Summer Study on Energy Productivity - 24-26 February, Sydney. Read more here
  • Join the Clean Energy Regulator, the Department of Environment and AusIndustry to hear about how the Emissions Reduction Fund (ERF) can provide a positive incentive for businesses to undertake energy and fuel efficiency projects - 29 February (Townsville), 1 March (Brisbane), 3 March (Adelaide) & 4 March (Perth). Read more here
  • Want to improve the success-rate of your business case proposals for energy efficiency projects? Join this new seminar - 1 & 8 March, Sydney. Read more here
  • Get a detailed insight into the Building Blocks of Energy Efficiency with a join EEC & Australian Institute of Energy lunchtime seminar - 2 March, Perth. Read more here.
  • Update your measurement and verification knowledge with the internationally recognised Certified Measurement & Verification Professional (CMVP) training program - 9-11 March (Melbourne), 11-13 April (Perth). Read more here 

Acknowledgments

The Energy Efficiency Council offers warm thanks all our external contributors – Alan Pears, Geoff Andrews and Tristan Edis – for their work on this inaugural edition of Efficiency Insight.


 

To subscribe to receive future editions direct to your inbox, click here.

 

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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