Efficiency Insight - February 2020
Efficiency Insight is the Energy Efficiency Council's monthly energy management update for members, partners and stakeholders.
At the Energy Efficiency Council's tenth anniversary celebration in June last year, I reflected on the state of play.
We were on the edge of the 2020s, the 'critical decade' in which we have the opportunity to secure our economic prosperity and begin dealing with the climate challenge by moving decisively towards a twenty-first century energy system.
We are no longer on the cusp of the critical decade; we are in thick of it. And the ferocious summer that has ripped through so much of our landscape has thrown the task before us into stark relief.
No one industry or profession has all the answers. But if you are receiving this email you probably have an interest in energy efficiency, energy management and demand response. So you know that the demand side has a crucial role to play, here in Australia and around the world, in taking unnecessary load off the system, in effectively managing the shift to renewables, and in lowering the costs of the transition to net zero emissions.
At the Energy Efficiency Council we have started 2020 with a strong sense of purpose, to ensure that those answers that we do have are elevated, and acted on.
But we know we can't do that alone. Which is why I'm proud to introduce you to the Council's first nine official NGO Partners.
We have collaborated with most of the organisations below for years. We've now formalised these relationships, providing a solid foundation for ramping up joint efforts aimed at putting smart energy management at the heart of Australia's energy transition.
It's going to be a big year. We look forward to working with you to ensure it is also a pivotal one.
Chief Executive Officer
Energy Efficiency Council
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“Effectively, change is almost impossible without industry-wide collaboration, cooperation and consensus.”
Simon Mainwaring, CEO of We First
In other words, partnerships are key to success. This couldn’t hold more true when it comes to successfully navigating Australia’s energy transition. It is for this reason that we are bolstering the Council’s relationship with key industry, consumer and environmental groups that support our vision of building a sophisticated market for energy management products and services that delivers:
- Healthy and comfortable buildings;
- Productive and competitive businesses; and
- An affordable, reliable and sustainable energy system for Australia.
In particular, the Council’s new strategy outlines the importance of industry and community coming together to achieve these goals. And consequently, our NGO Partner membership is designed to deepen the partnership between our organisation and other leading Australian non-governmental organisations. This enables us all to leverage our collective expertise and drive outcomes that are in Australia’s economic, environmental and social interests.
And on that note, we’d like to formally welcome the following organisations as NGO Partners of the Energy Efficiency Council:
- Australian Energy Foundation;
- Ai Group;
- Clean Energy Council;
- ClimateWorks Australia;
- Energy Consumers Australia;
- German-Australian Chamber of Industry and Commerce.;
- Green Building Council of Australia;
- Property Council of Australia; and
- Renew Australia.
The Energy Efficiency Council has been working with all of these organisations on advocacy and sector development for quite some time. Formalising the partnerships that already exist puts us in the best possible position to ensure our advocacy agendas are aligned and our communications strategies are cutting through.
This will enable us to realise the Energy Efficiency Council’s vision, and those of our partners, not just for the benefit of the energy management industry and our members, but for the benefit of all Australian households, businesses and communities.
With time we will build this coalition to include more allied organisations, so if you’d like to know more about the Council’s NGO Partnership initiative, please contact Holly Taylor, Senior Manager, Projects and Partnerships on email@example.com.
By Rando Yam and Zac Hardie
In Australia’s current climate of extreme weather and bushfires, businesses participating in demand response are playing an important role in maintaining system security and stability for all energy users. Demand response can also provide a quicker and cheaper alternative to new generation.
Businesses suited to demand response programs range from agribusiness to hospitals, water corporations, retail shopping centres, data centres, industrial manufacturing and more.
Businesses participate via a third-party aggregator who supplies their combined energy load to the Australian Energy Market Operator (AEMO) when called on in response to a grid need.
There have been multiple, significant grid requirements from December 2019 to February 2020.
New to demand response? Read the Energy Efficiency Council's demand response 101 that Enel X helped to develop.
A perfect storm
From Thursday 30 January to Saturday 1 February, AEMO called on two types of demand response - in both emergency and ancillary services via its Reliability and Emergency Reserve Trader (RERT) program and Frequency Control Ancillary Services (FCAS) - to support the grid each day. The cause was a combination of extreme weather and fragility of the transmission lines and network supply assets - particularly after bushfires, heat, smoke and damaging winds and storms.
In particular, on Friday 31 January, storms damaged six transmission towers in western Victoria, causing a trip to the main interconnector transmission line between Victoria and South Australia. This caused the grid’s frequency to drop. FCAS providers were called on by AEMO to immediately stabilise the frequency and avoid widespread blackouts.
That same day, large parts of Victoria and New South Wales, which were already facing bushfire conditions, also experienced extreme temperatures that caused price spikes during the late afternoon and evening peak demand period.
Over these three days commercial and industrial businesses also powered down for up to four hours via RERT. As just one example, Enel X’s aggregated capacity provided 30 MW to the grid. This helped to reduce the length and severity of the emergency situation when the grid was under threat.
Other recent events
At the end of December 2019, there were temperatures over 30 and 40 degrees across the NEM, causing immense pressure on the grid. This was exacerbated by widespread bushfire conditions, particularly in eastern Victoria, where there was unavailability of large generating units at Loy Yang, as well as softening availability from wind and solar farms during the peak evening period.
When the main transmission line between Victoria and New South Wales tripped due to the bushfires, the result was substantial loss of supply in Victoria and AEMO issuing a ‘Lack of Reserve (LOR) level 2’ notice to the market.
While demand response capacity was impacted by bushfire hazards, as well as operational constraints given the time of year, a significant number of sites were able to respond to AEMO’s RERT activation, by powering down as much load as possible from 6:00pm – 9:00pm on 30 December.
On Saturday 4 January the transmission line trip caused a separation event between New South Wales and Queensland and the rest of the NEM. As a result, the grid’s frequency rapidly dropped in both states.
Enel X participated in three FCAS events, when the grid’s frequency dropped below its normal operating band. Businesses across New South Wales, Queensland, Victoria and South Australia curtailed load in response, helping to return the grid to its normal operating range. This also helps avoid generators tripping as a result of dangerously low frequency.
Businesses playing a role in supporting Australia’s electricity grid
Across all events, a combination of cold storage facilities, water utilities, data centres and industrial gas processors helped to provide crucial demand response, taking some pressure off the generators who were operating at an elevated output as they struggled to meet demand.
We expect that additional demand response events will take place before the summer is over, particularly with the transmission tower damage in Victoria, which will take several weeks to repair.
About Enel X
Enel X is an energy management company dedicated to accelerating the renewable energy transformation, and is the only independent aggregator providing demand response and power flexibility services to commercial and industrial businesses (C&I) in Australia.
Click here to learn more about how Enel X is supporting system security and reliability this summer.
Rando Yam is Manager, Flexibility Operations & Zach Hardie is Program Manager, Flexibility Operations at Enel X Australia & New Zealand. Rando can be reached at firstname.lastname@example.org and Zac can be reached at email@example.com.
Are you an Industry Leader or Corporate member of the Energy Efficiency Council with a view on an energy management hot topic? Contact us at firstname.lastname@example.org to discuss penning an op-ed for an upcoming edition of Efficiency Insight.
Australia’s summer of drought, bushfires and floods has had a profound impact on the political debate in Australia. It’s hard to predict exactly how the political conversation will evolve, or how long memories will last. However, there is now significant pressure on Australian governments – state and federal – to ramp up ambition on climate change.
Of course, energy efficiency has multiple benefits. It can deliver 40 per cent of the greenhouse gas emissions reductions Australia needs to meet its 2030 target. Energy efficiency also makes sense on purely financial grounds, especially with gas and electricity prices rising dramatically over the last decade. Further, making our buildings more energy efficient will help protect Australians during the heatwaves that will become more common in a warmer climate.
In this first edition of Efficiency Insight for 2020, I provide a recap of the current state of policy in some key areas, offering a view on where things may be going over the coming year, and conclude with how you can get involved with shaping the debate.
Minimum standards for new commercial buildings will become about 40 per cent stronger this year, as the energy efficiency provisions of the 2019 National Construction Code come into force.
The energy efficiency of Australia’s new and existing offices has been improving rapidly – in offices that have NABERS ratings, the average energy used per square meter declined by 43 per cent between FY2011 and FY2019. However, the energy efficiency of other types of existing commercial buildings, including hotels, shopping centres and smaller offices, is lagging a long way behind.
Unfortunately, the energy efficiency of Australia’s homes is very poor by global standards. In most parts of the country, new homes are built to at least 6-star NatHERS efficiency, but existing homes are worse – one sample of existing Victorian homes built before 2003 found that they had an average NatHERS rating of 1.8 stars.
And the situation is even more dire for rental properties, which are often in very poor condition. The low quality of our housing stock contributes to the estimated 3,000 deaths each year in Australia that are caused by hot and cold weather.
However, the tide appears to be turning. In February 2019, the COAG Energy Council agreed to a Trajectory for Low Energy Buildings, which set out a broad framework to improve the energy efficiency of Australia’s new and existing buildings. In December 2019, the COAG Energy Council also agreed to an Addendum to the Trajectory for Low Energy Buildings, which set out a detailed national work plan to improve the efficiency of existing buildings.
Important areas of policy work in the next year include:
- Significantly updating minimum standards for new residential buildings and tweaking the standards for new commercial buildings. The overall design of standards is likely to be determined in the next 6-12 months, although the National Construction Code won’t be updated until 2022;
- Designing minimum energy efficiency standards for residential rental properties in Victoria and the ACT;
- Further work on the development of energy efficiency ratings for homes, which would ideally become mandatory when homes are sold and leased; and
- Expansion of the Commercial Building Disclosure (CBD) program for commercial buildings. While the Australian Government has yet to announce a decision on whether it will expand the CBD program, the Draft Report by the independent reviewers recommended expanding the program to some hotels and office tenancies.
Business energy management
Governments are starting to pay more attention to improving the energy management of businesses, including manufacturing, resources and agriculture.
The NSW Government is rolling out support to help businesses improve their energy management, and we expect that the Government will start to share some of the results from this program in coming months.
The Victorian Government is also considering how to encourage large energy users to adopt energy management systems (EnMS), potentially by exempting companies that have EnMS from certain requirements.
In the meantime, the Energy Efficiency Council is continuing to drive the conversation, with fresh editions of our energy briefing for business, and ‘sector spotlights’ on energy management issues for manufacturing and agribusiness, coming up in 2020.
Energy efficiency schemes
Four state and territory governments require energy retailers to help consumers save energy using ‘energy efficiency schemes’ – NSW, Victoria, South Australia and the ACT. These schemes are delivering major savings to consumers, and so these four governments are considering or have committed to expansions of their energy efficiency schemes.
A couple of very significant issues are currently being considered as part of scheme reviews:
- The speed that these schemes move away from their current focus on improving the energy efficiency of lighting; and
- How these schemes can support reductions in peak demand and improve the flexibility of energy demand.
Queensland, Western Australia, Tasmania and the Northern Territory still haven’t introduced energy efficiency schemes, a failure that is costing their residents and businesses hundreds of millions of dollars in wasted energy.
This summer seriously challenged Australia’s energy system. Savvy programs to save energy, particularly reducing demand during heatwaves, played a critical role in keeping the lights on. However, far more needs to be done.
In December the Australian Energy Market Commission (AEMC) decided to delay finalising the mechanism that will reward consumers if they reduce their energy demand during high-price periods, the ‘Wholesale Demand Response Mechanism’. We now anticipate that the AEMC will make a decision on the demand response mechanism in the middle of 2020. However, this will just be the start of a more comprehensive move towards a ‘two-sided’ energy market.
Help change the debate
Across all these areas we are seeing a growing appetite for policy change, but it is critical that new policy is well-designed and based on the latest research.
To support this, over the next several months the Energy Efficiency Council will consult with members, partners and other stakeholders on a major update to the Australian Energy Efficiency Policy Handbook.
The quality of the Handbook depends on bringing together the collective wisdom of Australia’s energy efficiency experts, and we’re keen to hear your views. If you are interested in being involved in this process, please register your interest by emailing me at email@example.com.
At the World Economic Forum last month, climate change topped the agenda and was coined the ‘defining question of our time’ by UN Secretary General António Guterres. As 67% of primary energy is wasted due to system inefficiencies, systemic efficiency – ‘the optimisation of energy to create a net-zero carbon future’ – was discussed as a solution. The panel Creating a Carbon-Neutral Future discussed systemic change and featured Jean-Pascal Tricoire, CEO of Schneider Electric, which is an Industry Leader member of the Council.
Click here to view the 45-minute session.
The European Green Deal was also a hot topic of discussion at the WEF. Europe plans to become the first climate-neutral continent by 2050 and to do so, it plans to put energy efficiency first. Energy production and use across economic sectors accounts for more than 75% of the EU’s greenhouse gas emissions, so halving energy demand by 2050 compared to 2005 levels will be the first step.
The National Energy Efficiency Conference 2020 program is now available!
Click here to view the draft program.*
Taking place at the start of a critical decade for Australia’s energy transition, the Conference is a must attend event for anyone with an interest in building an affordable, reliable and sustainable energy system for Australia.
The Council is delighted to announce Ross Garnaut as a plenary speaker at NEEC20.
No stranger to the Australian climate space, Ross Garnaut is the recent author of Superpower: Australia's Low-Carbon Opportunity and a distinguished professor of economics.
Ross will lead a high-profile panel on climate change science, politics and the implications for energy management policy and practice.
Click here to view the draft program.
Click the link below to view registration options and secure your early bird tickets now. Earlybird rates won’t hang around for long, so book now!
*Please note that the program is subject to change.
The Energy Efficiency Council extends warm thanks to the following sponsors of the National Energy Efficiency Conference & Awards 2020, whose support and vision makes the event possible:
Pesented by the Energy Efficiency Council, and now in its eighth year, the National Energy Efficiency Awards are Australia's highest profile honours dedicated to excellence in energy efficiency.
The National Energy Efficiency Awards are a fantastic opportunity to be recognised for your efforts and celebrate your commitment to energy efficiency.
We invite individuals and organisations to nominate their projects for one of 11 award categories that demonstrate outstanding achievement in performance, leadership and innovation.
Nominations are now open for the following award categories:
- Best Commercial Building Energy Efficiency Project
- Best Agricultural Energy Efficiency Project, prroudly sponsored by Queensland Farmers' Federation
- Best Industrial Energy Efficiency Project
- Best Residential Energy Efficiency Project, presented in partnership with Renew
- Best Small Medium Enterprise (SME) Energy Efficiency Project, presented in partnership with the Australian Energy Foundation
- Best ‘Smart Energy’ Project, for cogeneration, district energy, demand response and utility programs
- Best Innovation in Energy Efficiency
- Best Energy Saving Program
- Leading Energy User, presented in partnership with the Energy Users Association of Australia
- Young Energy Efficiency Professional 2020, for a leading individual under 35 who has contributed to energy efficiency through advocacy, research, education or projects
- Energy Efficiency Champion 2020, for a leading individual who has advanced the energy efficiency sector through outstanding advocacy, research, education or projects
Nominations from the Commercial Building, Agricultural, Industrial, Residential and Energy User categories will also be invited to nominate their project for consideration in the:
- Integrated Clean Energy Award, proudly sponsored by ARENA
The winners of the National Energy Efficiency Awards 2020 will be announced at the National Energy Efficiency Conference Gala Dinner on Tuesday 26 May 2020 at the Pullman on the Park in Melbourne, Victoria.
Nominations close at 5pm on Monday 16 March 2020
Need inspiration? Click here to learn about previous winners that were recognised for their efforts in energy efficiency.
If you have any further questions regarding the National Energy Efficiency Awards, please feel free to contact the Energy Efficiency Council by email at firstname.lastname@example.org or on 03 9069 6588.
As we enter a new decade of Australia's energy transition, training and professional development in the energy management sector have never been more important.
With that in mind, we'd like to highlight that we've updated the Energy Efficiency Council's training and professional development calendar for 2020:
Energy Efficiency Council member and group discounts are available.
For more information, click here.
Upcoming training on Capturing the value of demand response
Tuesday 31 March 2020, Sydney
Demand response enables energy users to manage costs behind the meter, while also being an increasingly important tool for improving the affordability and reliability of Australia’s electricity system. And as Australia’s energy market transforms, the ability of energy users to rapidly adjust their energy use to adapt to changes in the energy system is only becoming more valuable.
In this practical one-day masterclass, you’ll learn about the benefits of demand response for businesses and the broader energy system, different value propositions and business models for demand response, how to leverage existing and emerging technologies to facilitate demand response, and rapidly evolving opportunities to create new revenue streams for businesses by selling demand response in energy markets.
For more information and to register, click here.