By Lynne Blundell

Energy efficiency in buildings is the low hanging fruit in emissions reduction. Everyone around the world knows that – Christine Milne

Christine Milne has no time for prevarication and resistance to change. And she takes exception to what she sees as the federal government’s abundance of both. She is not alone. Those who voted for the Rudd government in 2007 had great hopes for its green promises. Two years down the track those promises are looking decidedly grey and tattered around the edges. Senator Milne certainly thinks so and she is pushing for urgent action, as she told The Fifth Estate in an interview this week.

As Deputy Leader of the Australian Greens, Christine Milne is one of Australia’s strongest advocates for decisive political action on climate change. Her approach is pragmatic and her message is clear – act decisively now through public policy or pay the price in the very near future.

Just look at the built environment, a sector that generates 17.7 per cent of all the country’s emissions, says Milne. The federal government has missed a huge opportunity to focus on improving energy efficiency in buildings.

“Energy efficiency in buildings across residential, commercial and industrial, is the low hanging fruit in emissions reduction. Everyone around the world knows that,” says Milne.

“In the US the Obama administration appointed Steven Chu [Nobel prize-winning physicist and a former Environmental Protection Agency administrator] to look at energy efficiency.

“But in this country there is no systematic program to retrofit residential buildings to make them energy efficient, nor any program that comprehensively addresses this issue in commercial or industrial buildings. The government has failed to grab this opportunity.”

Ad hoc policies discourage investment in renewables

Instead, says Milne, the Rudd government has introduced ad hoc policies that have left small businesses and householders out of pocket and wary of investing in new technologies and cynical about the future for renewable energy.

The government’s residential insulation, solar panel rebates and green loans programs are all cases in point.

” When the government introduced its insulation program it didn’t talk to the industry to make sure there were adequate supplies, so there was complete dislocation between what was being offered and what was deliverable,” says Milne.

“There are people importing insulation batts from China, without any of the checks on quality or other requirements, because they are rushing to get in before the government deadline.”

The government’s Green Loans program for improving energy efficiency in homes was also plagued by poor planning, says Milne. Assessors had completed and submitted assessments on 25,000 homes and then the government’s computer program broke down.

“As a result there have been practically no green loans that have gone through. The certificates that people needed to get their loans were not delivered so those who had paid deposits on products on the basis of the government’s promise of a 10 day turnaround lost their money,” says Milne.

“This boom and bust mentality of the government’s is undermining business and consumer confidence in renewable technology.”

Cap and trade scheme for commercial buildings

Last week Senator Milne introduced a bill to the Senate to upgrade Australia’s commercial buildings for energy efficiency.

The Energy Efficient Non-Residential Buildings Scheme, developed from an idea from Lend Lease, Lincolne Scott and Advanced Environmental (see our previous story on this), would establish a cap and trade scheme for building energy efficiency.

Christine Milne – “By capping energy use from the commercial building sector, bringing that cap down over time, and allowing building managers to trade permits, we would trigger a tremendous investment in energy efficiency upgrades and see greenhouse emissions and energy bills come down fast.” Photo: Tasman Miller

It would work by capping energy from the commercial building sector, bringing the cap down over time, and allowing building managers to trade permits. Those whose buildings are relatively efficient could sell extra permits, while those less efficient would have to buy more to match their energy use. Caps would be set for each building type for each climate zone, based on data collected over two years.

The Australian Financial Review reported on Tuesday that the scheme had had mixed reactions from business groups, with Property Council chief executive, Peter Verwer, saying he thought it had limited usefulness and that accelerated depreciation was a better solution for encouraging energy-efficient buildings.

“I’m not pretending it’s perfect but if we have a scheme that is mandatory it is the best way to really drive efficiency, ” says Milne. “It’s a scheme developed in Australia and is the world’s first proposal that would tap the full potential of energy efficiency in commercial buildings.”

“By capping energy use from the commercial building sector, bringing that cap down over time, and allowing building managers to trade permits, we would trigger a tremendous investment in energy efficiency upgrades and see greenhouse emissions and energy bills come down fast.”

The scheme would be national, removing the need for numerous state-based schemes and would apply across all commercial sectors including schools, offices, hotels and shopping centres. It would, says Milne, overcome one of the biggest barriers to energy efficiency – incentive to change.

“The biggest barrier in shopping centres, for example, is that there is no incentive to be energy efficient. Most centres have bulk contracts for energy and so it is not one of their major costs. A scheme like this would drive energy efficiency in the building sector and once that happens we’ll see real change.

“In the industrial sector the government introduced Energy Efficiency Opportunity legislation. This just encourages businesses to identify opportunities to be more energy efficient but it doesn’t require them to implement them.

“The government is just not taking any of this seriously – it has a lot to answer for – it does not think any of these programs through properly.”

Feed-in tariff the answer to boosting renewables

The other piece of legislation that Senator Milne is pushing hard to have passed is a national gross feed-in tariff scheme for renewable energy. Last year she introduced a bill to amend the Renewable Energy (Electricity) Act 2000 to establish a national feed-in tariff scheme and encourage commercial investment in the renewable energy sector.

According to Milne, the bill will provide greater financial support for the commercialisation of a broad range of prospective renewable energy technologies, particularly those that are generally unsupported by the Mandatory Renewable Energy Target (MRET).

“It is apparent that while the MRET has been successful in promoting the cheapest renewable energy technologies, especially wind and solar hot water, emerging technologies such as solar thermal, solar photovoltaic (PV), geothermal, wave power and others, receive either very little or ad-hoc support.

“This is a problem because these emerging technologies are useful complements to wind power, and in the long term may prove the most cost-effective renewable energy option. Those technologies best able to provide base-load generation, including solar thermal and geothermal, in particular, deserve Federal Government support,” says Milne.

Under the proposed scheme generators of renewable energy would be guaranteed a set price for a set period of time for energy generated. Prices would be set according to each technology’s needs. By guaranteeing a market at a guaranteed price, feed-ins tariffs give investors certainty, thus attracting large scale investment to the renewables sector, argues Milne.

Germany’s introduction of a feed-in tariff scheme has led to a 100 million tonne reduction in carbon emissions and enormous growth of its renewable energy sector. This giant photovoltaic plant under construction in Brandenburg in Germany has an output of about 53 megawatts and is the size of more than 210 football field. It is the second-largest PV installation in the world

There is no doubt that in countries where a feed-in tariff system has been introduced there has been increased investment in renewables. In Germany, where the feed-in tariff system was pioneered by Greens MP Hans-Josef Fell, its introduction led to a 100 million tonne reduction in carbon emissions and lower electricity prices, according to a recent report by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety.

Under the German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, EEG) the feed-in tariff system guarantees a set price for 20 years. The EEG introduced a fundamental change in energy supply: every citizen can now become an energy producer and grid system operators are committed to accepting this electricity, and to paying fixed fees for it.

Christine Milne’s feed in tariff bill was hugely successful in attracting a response – 125 submissions, 120 in favour of the bill. Those against it included the Federal Government, South Australian government and the large energy generators.

The government’s response, says Milne, was to send it to COAG (Council of Australian Governments) – a “sure way to kill it as COAG is designed to reduce everything to the lowest common denominator.”

“The government would prefer to spend $2 billion to help the coal industry – they have a vested interest in propping it up and have put all their eggs in the clean coal basket.

“Penny Wong, Kevin Rudd and Malcolm Turnbull are all unable to imagine Australia without coal as our main export. They are focused on votes in the coal electorate and can’t see past it.

“But even people in the Hunter and other coal areas have said it is not coal they are married to but jobs.”

Importance of coal exaggerated

While coal is undeniably a major export earner for Australia, its importance has been overstated, says Milne. She points to former Liberal Party member and environmental author, Guy Pearse’s, recently published critique of the coal industry to highlight this  (Quarterly Essay 33- Quarry Vision: Coal, Climate Change and the End of the Resources Boom)

“If you read Guy Pearse’s essay, it seems the importance of coal has been seriously overstated and we would be much better exporting our intellectual property. There are so many examples of Australians with expertise in renewable energy who have left the country because there is no backing of business here.”

Everywhere you turn another Australian company or expert has gone elsewhere, says Milne. Engineers, entrepreneurs, scientists as well as companies are all leaving in droves. She lists companies that have left Australia due to lack of government support such as solar panel manufacturer BP Solar and Danish wind turbine manufacturer Vestas, and those that have run into financial problems such as Solar Systems in Mildura.

Then there are the individuals – Shi Zhengrong, the Chinese migrant who after doing ground breaking research in Australian on solar technology returned to China to become the world’s largest producers of photovoltaic equipment; and Canadian expatriate David Mills who made Australia home and made his reputation here as a world pioneer in solar research, only to take this expertise to California because he felt Australia couldn’t see past its rich coal and uranium reserves. These are two of many, says Milne.

Meanwhile other countries such as China are attracting large volumes of investment in renewable energy. The recent announcement by US photovoltaic firm First Solar that it is to build the world’s largest solar power station in China is a perfect example, says Milne.

“And the reason China is attracting these businesses is that the government there has set up a system that encourages investment in renewable technology. It has a gross feed-in tariff scheme.

“This system has been demonstrated around the world as a way to grow the renewable sector and yet Australia has nothing for the large scale renewable industry.”

Even the government’s 20 per cent renewable energy target is not really 20 per cent, says Milne, because half is made up of phantom credits. For example, with solar panel systems, every unit of power (a megawatt hour) generated earns five renewable energy certificates. While this is designed to boost investment in photovoltaic panels, it means the government’s 20 per cent is padded out with units of power that are not real.

And the solar program is even further flawed, says Milne, because it only applies for the first 1.5 kilowatts of system capacity, restricting investment to small systems.

“You’d have to come to the conclusion that this must be a deliberate way of preventing investment in large scale renewables.”

The frustration in Milne’s voice is palpable but even clearer is a firm resolve. One thing is certain – the government’s looming deadline to get its emissions trading  bill through Parliament is just one of many future battles over climate change policy.

lblundell@thefifthestate.com.au

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