EEC report on the early impacts of COVID-19 04 May 2021
By Rob Murray-Leach
In March 2020 the Government of New South Wales and the Government of Victoria commissioned the Energy Efficiency Council (EEC) to assess the impacts of COVID-19 on the energy management sector to help inform the response of various organisations to the impacts of COVID-19.
This report – The impacts of COVID-19 on the energy management sector in the period March 2020 to July 2020 – is now being publicly released. It is important to note this report covers only five months: March to July 2020. This was a time of significant flux in which everyone – industry, government and beyond – were racing to come to grips with the health and economic impacts of COVID-19.
As such, it is a snapshot in time. There have been significant changes in the market for energy management services and goods since July 2020, including changes driven by policy announcements by governments.
The views set out in the report are solely my own, and do not represent the views of either of the governments that funded the report nor the people I interviewed. However, this project would not have been possible without the incredibly generous contribution of time from senior executives and experts from a broad cross-section of the energy management industry. And we believe this contribution was timely, providing governments with critical information on the impacts of COVID-19 on the energy management sector.
The report found that the COVID-19 pandemic has already had major impacts on the energy management sector in this period, including:
- In March and April 2020, social distancing measures and community concerns effectively prevented on-site energy efficiency upgrades in homes and businesses. This impact appears to have been temporary and, with the adoption of appropriate hygiene measures, many energy management activities resumed.
- Households significantly increased their expenditure on ‘home improvement’, including low-cost energy management measures such as do-it-yourself (DIY) draught-sealing and insulation. This is likely due to people spending more time at home, and therefore seeking to improve their comfort and reduce their energy bills. (It appears that this trend may be persisting in 2021, with household interest in the thermal comfort of homes remaining higher than before the pandemic.)
- While businesses were focused on reducing costs such as energy, many froze capital expenditure, including on energy projects. This had a serious impact on some energy management providers. However, some energy users were still paying for advisory services and / or investing in non-capital measures (e.g. system optimisation) and measures that are subsidised by government programs (e.g. lighting upgrades).
The report also found that the impact of COVID-19 on the energy management sector was being significantly shaped by governments’ policy decisions, including JobKeeper and JobSeeker. In addition, we found that many energy efficiency programs were acting as de facto stimulus programs, ensuring that investment occurred in energy efficiency.
The report recommended that governments prioritise energy management in economic stimulus packages, as energy efficiency is: jobs-intensive; suited to counter-cyclical investment; and delivers on other policy goals. The report identified a number of prospective policy measures that could drive immediate stimulus, including:
- Upgrading the energy efficiency of government facilities, such as office buildings, hospitals, schools and water treatment plants. This measure is very well suited to stimulus because it can be ramped up quickly, will ensure that high-skilled professionals remain in the industry and it is counter-cyclical, delivering billions of dollars in reduced energy and maintenance costs;
- Building and retrofitting public housing. Governments have control of all the necessary levers to deliver high-quality results with this measure, it will help retain employment in the construction sector and deliver multiple benefits;
- Retrofitting private housing. The reduction in Australian immigration rates will result in a significant reduction in demand for new private housing – incentives for retrofitting existing dwellings will absorb many of the jobs which are likely to be lost in new construction and deliver a significant improvement in community health and energy affordability;
- Supporting better energy management in businesses, with a focus on installing sub-metering for large energy users and a Smart Energy Fund to support the retrofit of specific types of commercial buildings; and
- Training and accreditation. Basic training will help many existing trades and professions shift to delivering high-quality energy efficiency upgrades.
Connect with Rob on LinkedIn.
This article was originally published in the May edition of Efficiency Insight.