By Tina Perinotto

1 March 2012 – It’s official Sustainability Victoria will be focusing strongly on waste, drop several of its programs – particularly those aimed at households –but the property industry is hopeful that its lower grade inefficiency buildings will finally come in for attention.

How much attention is still unclear. The review document released this week concentrated on discussion of waste management.

But sources in the property industry say they are confident there is open dialogue, even though there are not yet any clear plans.

A key comment in the review is that energy efficiency in buildings can reduce the energy efficiency of all sectors by about 14 per cent.

Chief executive of Environment Victoria Kelly O’Shanassy said the review had few surprises – the focus would be more on landfill and less on climate action.

“It’s another sign that Victorian Government is moving away from action on climate change,”  Ms O’Shanassy said.

The focus on waste was “great,”  she said, but it was also necessary to focus on how products were designed so waste can be minimised.

Focusing on renewables and on energy efficiency was a “huge opportunity” she said. And although there would be a spotlight on this for businesses, households were now on their own.

There were 2 million houses in Victoria whose energy ratings are estimated at 2 star or less, she said.

Ms O’Shanassy SV had previously helped retrofit about 10,000 homes a year.

“It’s unclear now where communities will go now to seek funding because the priority statements [in the review] are about waste and business.”

Following are some highlights from the report:

On upgrading the energy efficiency of the existing building stock

Twenty three per cent of Australia’s greenhouse gas emissions are a result of energy demand in buildings. The building sector also has potential for the greatest and most economical efficiency gains and emissions reductions. Comprising residential and commercial buildings, the sector represents a large proportion of Australia’s economic activity.

Its emissions are estimated to have increased by 94 per cent in the 20 years from 1990 to 2010 and continue to rise rapidly.

The building sector is considered to have potential to save 60 megatonnes of greenhouse gasses in Australia by 2030 at an average community net saving of $130 per tonne.

The built environment is therefore a key source of cost effective greenhouse gas abatement. Most opportunities could be realised by 2020 and many can be implemented today.

The building sector’s energy efficiency can reduce the costs of GHG abatement for all sectors by nearly 14 per cent by 2050.

In fully realising the Australian building sector’s potential, savings in the order of $38 billion annually by 2050 could flow to the wider economy.

A number of opportunities to improve energy efficiency were identified during this review.

Key areas include B, C & D grade office buildings, residential buildings, hospitals and retail tenancies. SV currently provides these areas with support and has done much work understanding scope for improvement.

Industry stakeholders also support government (and SV) intervention in these sectors and there are no current regulatory regimes in place, or wide-scale voluntary programs targeting these areas.

A price on carbon introduced by the Commonwealth may address many of the incentive gaps to improve the energy efficiency of buildings, and would encourage such activities to be undertaken in the most cost- effective ways.

However, given the potential abatement opportunities in the building sector, it is worth investigating any market failures that SV may have a role in addressing — for example, there may be information failures that prevent the market from operating efficiently.

There is an opportunity for SV to deliver cost savings to households and SMEs to help offset electricity price rises. This could include supporting innovation across product development, installation technology and performance monitoring standards.

Moreover, there may be advantages in programs that improve energy efficiency at precinct level rather than focusing on individual buildings, particularly industrial precincts where SV’s programs could include local energy supply or waste to energy facilities.

Renewable energy

SV and before it, SEAV, has been involved in supporting strategic renewable energy demonstration projects in support of the development of this sector of the Victorian economy.

Bioenergy projects and their intersection with waste programs and landfill management/remediation could be an area of particular interest for SV in the future as these complement its statutory role in waste. Commercial solar hot water systems support has been raised within SV as an area that may benefit from government attention (through SV).

Ensuring renewable energy projects align with whole of Victorian Government direction and strategy is a priority.

SV’s work in wave resource assessment (discussed in 2.2.11) should be finalised and wave mapping undertaken once data collection is complete to provide an information resource for future wave energy development. SV should work with DPI to determine the future of wave energy development and transition from the sector.

Support for business

Support for businesses, particularly SMEs who have limited capacity and time for broader sustainability issues and to consider how they could become more efficient or competitive, requires a broader view than a single element such as waste, energy or water. There are opportunities in such businesses to reduce both water and energy use. For this reason it makes sense for SV to have an understanding of the water industry but not seek to replicate its expertise or to compete. Close collaboration with DSE and water authorities could allow SV to act as a broker to bring expertise to projects where it has a focus.

Environment and Resource Efficiency Plans are an innovative regulatory program adopted by EPA requiring larger businesses to reduce energy and water use. The program applies to large energy and water using sites.

These businesses are required to identify resource efficiency opportunities to save water, energy and waste, which consequently provide environmental benefits and cost savings. Actions that would realise a positive return in three years or less must be implemented. Through EREP, industry can realise business opportunities presented by resource efficiency by implementing actions that achieve environmental benefits and direct cost savings in a short time frame.

There have been substantial resource-use reductions as a result of the program and its innovative nature, leading to it being considered in other jurisdictions.

Businesses were complimentary of the EREP program in consultations. The nature of the program, based clearly on economic efficiency and environmental benefits, makes good business sense and is therefore compelling.

SV should consider working with EPA to consider the approach to water and energy efficiency underpinning that program and consider a voluntary program based on similar principles of return on investment. Such a program could build on the success of the EREP model by supporting a broader population of businesses to overcome information barriers to businesses reducing costs from energy and water usage.

Water

Although water issues attracted little comment during the consultations, a number of respondents expressed support for consideration of water as a key component to holistic sustainability programs.

There are also synergies between the water industry and SV’s involvement in waste and waste to energy where water authorities have had an interest (and in some cases lead) in exploring options to capture methane or use biosolids for energy. A number of authorities are also located in areas of high industrial and waste industry concentration. This could provide opportunities for learning from the water industry and collaborating with it on projects. It would be important to avoid and manage any overlap and duplication with existing bodies involved in water issues, and consider the appropriate role for SV in light of the Government’s consideration of the Living Victoria Ministerial Advisory Council Review.

Support for low-income households

Stakeholders were generally supportive of SV’s energy efficiency and liveability programs for low income households even though they have tended to focus on a single response action such as retrofitting or behaviour change.

To be effective, SV needs to better understand why low income households use resources in the way they do. Developing programs that combine approaches such as home retrofitting, appliance upgrades and advice would be the optimum solution to reducing utility costs, cost of living expenses and improving environmental outcomes.

Education and skills development

SV remains well placed to continue many of its current Education for Sustainability (EfS) programs.

Central to SV’s effectiveness is its understanding of emerging and long term education, industry and workforce needs, and taking a holistic approach to EfS across curriculum and product development, delivery of relevant programs and supporting partnership with government and non-government partners and inputting into policy.

SV’s work with schools will continue following the Victorian budget announcement in 2011 to expand ResourceSmart Schools over 2011-2015.

There is a demand for integrated sustainability curricula and modules, but SV’s educational programs could be better aligned to support its programs and strategic objectives for instance to improve waste education.

The Sustainability Fund

Where grants form part of an allocation from the Sustainability Fund, they may be better promoted and targeted through a long term investment strategy that addresses particular sustainability needs and stakeholders. A forward plan of regular funding rounds, targeting particular needs, sectors and stakeholders could provide greater certainty, improve the quality of applications and support better planning for stakeholders, particularly where they are required to set aside funding for co-investment. Historical funding rounds have operated as a single application competitive grants process.

Greater stakeholder engagement, including across-government, should be undertaken when developing each funding round to ensure the particular needs of the relevant stakeholders and government are considered and that market intelligence informs the targeting of future funding rounds.

The Sustainability Fund’s governance is integral to good management and the integrity and effectiveness of the Landfill Levy. This is particularly so as SV manages the Sustainability Fund on behalf of the Minister but also receives funding allocated to it by the Premier and Minister from the Sustainability Fund.

Governance could be improved by the SV Board clarifying its role in oversight of the Sustainability Fund as part of its overall governance and financial reporting responsibilities and its interactions with the Advisory Panel.

Further improvements to governance could be contemplated but would require DSE to provide independent advice to government and ensure appropriate administrative arrangements and protocols are established.