Dodgy data used to crush energy savings for families in Victoria

Staff reporters

14 July 2014 – Victoria’s Napthine government has spurned major economic benefits and used “dodgy data” to justify scrapping the Victorian Energy Efficiency Target, a new report by global engineering and construction firm Jacobs has found.

A recently released business impact assessment conducted by the government, concluded the benefits of VEET were limited and recommended that it should therefore be discontinued.

However, the Jacobs report said the VEET could deliver between $48 million and $179 million a year.

Commissioned by the Energy Efficiency Council, Brotherhood of St Laurence and Energy Efficiency Certificate Creators Association, the report identified a number of benefits of the scheme which were not incorporated into the BIA. It concluded that households would benefit if the VEET was continued with a modest target, with the greatest benefit estimated to be $179 million if the target were set at 2.7 Mt CO2 a year under a 3.5 per cent discount rate.

Other benefits identified included 2000 Victorian jobs which will be lost if the scheme is axed.

The Jacobs report showed the only scenario modelled where the scheme did not deliver a net benefit was the highest reduction target of 5.4 Mt of CO2 a year, at a 7 per cent discount rate.

Jacobs’ analysis identified some key differences in the BIA views, compared with views of others. These included:

  • Potential underestimation of savings from avoided electricity generation costs
  • Exclusion of operating and maintenance cost savings from energy efficiency appliances
  • Assumptions that energy savings would last for only a fraction of their full life
  • No consideration of the financial benefits of reducing greenhouse gas emissions.

Ric Brazzale from the Energy Efficiency Certificate Creators Association said the government had failed to release a cost-benefit analysis for consultation before it made a decision on the VEET.

“Now we’ve found out that their cost-benefit analysis was full of dodgy assumptions. We call on the Napthine Government to halt their proposal to scale back the VEET until this modelling has been re-done,” Mr Brazzale said.

Chief executive officer of the Energy Efficiency Council Rob Murray-Leach said the Napthine government was “favouring big energy companies’ interests ahead of jobs and families.

“Even their own modelling found that the scheme lowered household’s energy bills. When we re-did their modelling we found that VEET would deliver significant benefits to the whole State,” Mr Murray-Leach said.