It is time to update energy audit approaches - Willow Aliento The Fifth Estate 29 March 2016

An updated Australian Standard for energy audits has the potential to drive ambitious energy savings, according to Energy Efficiency Council chief executive Luke Menzel.

The EEC is working with the NSW Office of Environment and Heritage to increase the uptake of the new Australian Standard for energy audits. AS/NZS 3598:2014 was released in October 2014, however Mr Menzel said many consultants were still offering audits under the old standard released in 2000. This standard, he said, allowed the auditor a lot of latitude, and could result in work that is not robust.

The new standard was developed through a three-year process involving government, industry associations, stakeholders, Standards Australia, New Zealand’s Energy Efficiency and Conservation Authority, the EEC and energy-efficiency experts including Energy Action director Paul Bannister.

It was a “complete root and branch rethink”, Mr Menzel said, that included looking at how the refreshed standard could best facilitate actions by energy users.

An audit carried out under the new standard for commercial buildings, for example, will include recommended actions to reduce energy use, and the financial expectations on cost and payback.

The standard also has a framework specifically for industrial audits and transport efficiency audits.

To increase uptake of the standard by auditors, the EEC and OEH are delivering one-day training sessions for consultants over the next few months, including sessions coming up in Brisbane, Perth and Sydney in May and June.

Educational materials are also being prepared for clients, which will explain how the standard works, its benefits and what to expect from an auditor.

It is not a compliance standard, but clients can make it part of the contract that activities will meet its requirements.

“There needs to be market demand,” Mr Menzel said.

He said the new approach was also about improving client confidence in energy audits, and about assisting clients towards a decision point on energy-efficiency activities that are recommended by an auditor.

“The thrust was always to make sure it is facilitating decision-making,” Mr Menzel said.

Having clear information about energy-saving measures, the financials and the payback, presented in a way that is actionable, is more likely to help get key decision-makers in an organisation to agree, he said.

Auditors also need to understand the processes of the organisation and consider how energy-efficiency activities fit into other activities, such as planned plant upgrades. There is an emphasis on engaging with people on-site, and focusing attention on what is relevant for the business.

“It’s about giving that customer a very straight-forward bundle of information they can take forward. If an audit is not doing this, it’s not doing its job,” Mr Menzel said.

Fixing an unlevel playing field

Dr Bannister said the old standard’s lack of enforceability regarding what auditors needed to deliver led to a unlevel playing field in the energy efficiency market.

“There was no certainty for clients,” he said.

Under the old standard, he said, “99 per cent of audits just became shelf-fillers.”

While he doesn’t expect change will be instantaneous, the consultants that are using the new standard are finding it positive because they have clarity about what is expected.

At this point in time, none of the relevant industry associations are using the standard as a benchmark for members to comply with, Mr Menzel said. There needs to be a pool of auditors up to speed with the new standard before this can occur.

“At some point there will be a tipping point from market demand for standards-compliant audits,” he said.

The market for audits generally varies across Australia, he said, reflecting the broader energy efficiency market.

The anecdotal evidence is that NSW is “by far and away” the most robust market for audits and energy efficiency. Mr Menzel said this could be put down to very stable government policy that has built confidence in the market.

In other states where there have been changes of government and policy over the last few years, there is not that kind of stability. The same holds true at the federal level, however the recently released National Energy Productivity Plan is starting to build some stability back into the market, Mr Menzel said.

Dr Bannister said the NABERS rating system for commercial property had led to a market where energy audits and efficiency activities were standard practice for the upper end of the market.

Many of these property owners and managers undertook audits and actions during the 2005-2012 period, and have already achieved a 40 per cent energy saving. These buildings are now in the mode of continuous, incremental improvement.

However, he said, if you walk not too far away from the top end of town, “you see some pretty frightening stuff.”

Opportunities for improvements in energy efficiency were everywhere, he said.

Retail, hotels and the institutional sectors are three areas where Dr Bannister said it was “hard going” and there was not a lot of activity in terms of energy efficiency actions. Retail, however, is seeing an increased amount of deep audit work.

The sticking point is the payback periods. He said a lot of clients outside the top end of town were looking for the two-year payback, and have a short-term perspective. The five to 10-year payback is not on their radar.

He said a lot changed in the market when the country had a Prime Minister who said “climate change is crap”.

“He dissed the whole market,” Dr Bannister said.

COP21 yet to show any effect

COP21 has not generated much impetus either in the private sector and the building space, except for owners that have heavy exposure to share market sentiment around sustainability. That could lead to improvements in performance above and beyond, he said.

“The other sectors are waiting to be subsidised; they are waiting for the free money.”

The industrial sector, in particular, was not very active in Australia, he said, as they don’t see themselves as exposed to green investment sentiment.

“We need an overarching policy – like a carbon tax – to increase motivation,” Dr Bannister said.

The policy level is the kind of structural thing other countries like the US and UK are doing, he said.

Many people still don’t understand that energy efficiency must be done before shifting to renewable energy, Dr Bannister said. At the same time, for some buildings, adding photovoltaics is actually more cost-effective than some energy efficiency options.

Overall, achieving energy market transformation will happen more quickly if energy demand does not expand, he said. For solutions like smart grids and large scale storage to work, there will need to be tighter integration between supply and demand.

The “next big thing” coming out of Europe is net zero buildings, and that this will be the next big thing in Australia over the next five years, Dr Bannister said.

“We need to reconceptualise and analyse buildings. The standard [for audits] can play a role in that.”

By Willow Aliento, The Fifth Estate, 29 March 2016

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