Phil Wilkinson

4 July 2012 ­­ ­­–The Australian Institute of Refrigeration, Air Conditioning and Heating has called for the federal government to assist with an expansion of training and education implemented in its industry in conjunction with the carbon price in order to avoid a failure of the energy efficiency market.

AIRAH chief executive officer Phil Wilkinson said this was vital to maintain the essential services of refrigeration and airconditioning.

Mr Wilkinson said his organisation was now engaging with the Federal Government to start to address a number of “many and complex” issues that industry was seeing.

The market for energy efficiency had failed in the past, for many reasons, including the lack of trained professionals to implement both new technology and the cost-effective strategies of servicing and maintenance, he said.

Mr Wilkinson, who is May this year warned of the possibility of a refrigerant black market following the introduction of the carbon price, has also called on the government to direct some of the revenue raised by the carbon pricing to an investment in education and support for the industry’s transition.

  • See our article: AIRAH flags a refrigerant black market after carbon levy _

In his organisation’s submission on carbon pricing, Mr Wilkinson said transforming the energy economy of Australia with a carbon price mechanism was necessary but the transformation could not be left to economics alone.

“To capture the larger opportunities briefly outlined in our submission, which could so directly support the decarbonisation of the economy, will require a sharp focus on the resources from the national education vote to this sector,” he said.

“It is a contribution that, we assert, does not fairly represent the scale of the benefit this industry makes to the national economy.”

Mr Wilkinson said airconditioning and refrigeration services had to be considered as essential services in the majority of modern-day applications.

“They are ubiquitous throughout the economy, and are one of the largest single uses of electricity in Australia,” he said.

“These services also rely on refrigerant gases known as hydrofluorocarbons, one of the Kyoto Protocol gases, as the ‘working gases’ in the heat transfer systems that are at the heart of the technology.

“As a result, the complex issues associated with transforming the energy economy to a sustainable, low carbon future could be said to converge on this sector.

“However, there is also real potential for perverse outcomes from the introduction of a carbon price radically inflating the costs of HFCs.

“In the worst cases this could lead to both larger greenhouse gas emissions, and higher energy consumption.

“The impact of a carbon price on the working gas in every household refrigerator has to be carefully considered.”

Mr Wilkinson said despite an inelastic demand and the essential nature of the services delivered, there remained long-term improvements in the efficiency of energy use that could be achieved.

“Unlike a lot of appliances, and even some other types of industrial equipment, the capital equipment in the HVAC&R sector often has a very long life,” he said.

“The key to improving long-term efficiency in this sector is servicing and maintenance. And the key to achieving that is employment and training.

“And it is here, by increasing training and employment opportunities in this sector, while actively pursuing best practice in energy use, we believe the interests of the community, industry and government align to reduce carbon emissions, reduce the impact of a carbon price on the community and industry, and to support the effectiveness of the carbon pricing scheme.”

Price rises and their perverse effects
However Mr Wilkinson also said, as an example, that a carbon price of $20 per tonne would add $26 to the price of kilogram of a common HFC with a GWP of 1300.

For a suburban butcher shop this might equate to an additional cost of between $260 to $500 on the price of gas provided when servicing cool rooms, display cabinets, airconditioners and freezers at the time of a routine maintenance or when fixing leaks, he said.

“Is this a significant disincentive to regular maintenance? In many cases – in small operations involving retail, restaurants, bars and hospitality, agriculture or wholesale/transport – we believe it could be.

“At the same time the biggest single consumer of electricity in all of these types of establishments is almost always the airconditioning and refrigeration systems.

“We suggest that, if HFCs were to be subject to the full price of carbon, that there is potential for relatively large price rises that could lead to several perverse effects including:

• An increase in a black market for recycled (second-hand) HFCs that, if contaminated with oil from compressors, are far less efficient in performing their essential heat transfer function, leading to more electricity use

• A disincentive to routinely service equipment, to avoid the high gas costs for recharging compressors, as a result of which systems will be run much longer, working harder to maintain temperatures, and trade increased electricity use for falling efficiency

• As a result of delaying maintenance in older compressors seals are more likely to dry out, or increase leak rates as they age and wear from vibration and heat, resulting in more losses of refrigerant gas to air.

But Mr Wilkinson said in the same businesses, where an increase in maintenance costs might lead to reduced maintenance, the potential for electricity costs savings was high.

“Several studies have shown that very significant efficiency improvements are achievable in all classes of commercial and industrial air conditioning and refrigeration that have more frequent and better informed maintenance,” he said

“We believe that a nationwide program actively supporting improved maintenance of air conditioning and refrigeration equipment in commercial and retail environments would deliver substantial electricity savings.

“Such a program would also deliver major reductions in HFC leak rates.

“Economic gains in small business almost always convert to more employment.”

Mr Wilkinson said the HVAC&R industry concerns are mainly with small to medium sized businesses which are largely unaware of the impact of the Carbon Equivalent Levy with the issues “many and complex”.

“We are starting to engage with the Australian Government to start to address a number of issues that industry is seeing,” he said.