REPORT – 2 March 2010 – Less than 200 corporation operating in Australia account for a whopping 30 per cent of total greenhouse emissions and 44 per cent of all energy related emissions. And of those, only 20 companies are responsible for half all emissions measured through the group
Yet only the first tranche of energy savings identified by these companies equate to 1.4 million households not using any energy at all for a year.
These are some of the startling findings contained in a report released today by the Federal Department of Resources Energy and Tourism, First Opportunities, a look at results from 2006-2008 for the Energy Efficiency Opportunities Program
In response to the report chief executive officer of the Energy Efficiency Council, Rob Murray-Leach, said: “Energy efficiency in industry is the sleeping giant of climate change.
“For years we’ve neglected one of the biggest and most cost-effective sources of immediate emission cuts. This report should finally wake us up – we can slash Australia’s emissions today through energy efficiency.”
The report goes on to outline the ambit of the program and the dollar savings that could be made if the identified opportunities are taken up.
Only 6.6 per cent reduction in assessed energy use would yield savings of $736 million, it said.
So far the 199 corporations that were part of the program have applied the assessment framework to more than half, or 57 per cent, of their total energy use.
“Key industry sub-sectors that used the most energy were metals manufacturing, air transport, petroleum refining and chemicals manufacturing. These accounted for more than half of all energy use by participants (54 per cent).
“The sub-sector with the highest level of energy savings was ferrous metals and alumina production, with the most savings identified by aluminium produce.”
The report also pointed out that these industries were key to the Australian economy with “hundreds of thousands” of employees, and important in the employment of many others, as well as in Australia’s trade with other countries.
Mr Murray-Leach, said: “Energy efficiency is the biggest opportunity for cutting global emission by 2020. The International Energy Agency, the top global expert in energy, estimates that 65 per cent of global carbon cuts to 2020 will come from energy efficiency. By contrast, renewables, nuclear and clean coal together will contribute only a third of reductions to 2020.
Focusing on a few large industrial sites could deliver substantial greenhouse savings today. Santos recently found that they could reduce their energy use by 5.4 Petajoules at a single site. This is equivalent to completely eliminating the energy used of 100,000 homes.”
Mr Murray-Leach said the report showed that the Australian Government’s Energy Efficiency Opportunities Program was successful because it “forced companies to do detailed energy assessments, identifying immediate opportunities and changing the way that they managed energy.”
However, it was not enough.
“The report showed that some companies are learning how to manage energy, but others are still in the stone age.”
Australia needed a plan to help industry to transition over the next decade and keep them globally competitive.
“This must include financial support to help companies invest in energy efficiency and stringent goals to make sure that the laggards pay attention.”
Following is the executive summary from the report or see the entire report by clicking on this link
EXTRACT from First Opportunities, a look at results from 2006-2008 for the Energy Efficiency Opportunities Program:
This report presents the first detailed profile of the energy use and potential energy savings opportunities identified by corporations participating in the Australian Government’s Energy Efficiency Opportunities program.
The aim of Energy Efficiency Opportunities is to encourage Australia’s large energy-using businesses to identify and implement projects that will save energy, lower their business costs and reduce greenhouse gas emissions.
Introduced in July 2006, participation in the program is mandatory for corporations using more than 0.5 petajoules (PJ) of energy per year. Currently 226 corporations have registered for the program, with 199 of these having registered within the first trigger year of 2005–06. The program’s first five-year cycle runs from 2006 to 2011.
Corporations must use the program’s assessment framework to assess their energy use and identify energy savings opportunities. The framework takes a whole-of-business approach to energy efficiency, addressing many of the factors that influence energy use across the business.
Corporations report to both the public and to government on the results of their energy efficiency assessments, and the opportunities that exist for projects with a financial payback of up to four years.
This report – First Opportunities – provides both an analysis of the detailed energy information reported to government by the 199 corporations that were required to report by December 2008, and information on the many energy efficiency projects described by these participants in their reports to the public. (The term ‘participants’ is used at times in this report to refer to these 199 corporations.)
It examines the corporations’ energy use and savings data in aggregate, by industry sector and by energy source, and quantifies the potential benefits in terms of energy savings, financial benefits and impact on greenhouse gas emissions. It analyses the diverse range of approaches the corporations are adopting to save energy.
The aim is to give an in-depth profile of the energy use and savings potential of Australia’s largest energy users.
The 199 corporations have applied the program’s assessment framework to more than half, or 57 per cent, of their total energy use. Under the program this first tranche of corporations have until 2011 to assess 80 per cent of their total energy use and the energy use of all sites that use greater than 0.5 PJ of energy.
The corporations participating in the Energy Efficiency Opportunities program have already identified opportunities to save 6.4 million tonnes of carbon dioxide equivalent emissions (MtCO2-e) per year. This is equivalent to 1.1 per cent of Australia’s total 2006–07 greenhouse gas emissions. Companies have already implemented, or have committed to implement, savings that will reduce greenhouse gas emissions by 3.9 MtCO2-e per year – 0.7 per cent of Australia’s total 2006–07 greenhouse gas emissions.
Committed reductions have the same environmental effect as taking approximately 1.1million cars off the road.
Given that companies are still assessing their energy use, further savings will be identified.
The analysis shows the 199 corporations formed a significant portion of Australian energy use, as seen in Figure 1 [not shown in this extract]. The businesses accounted for 31 per cent of total energy use and 62 per cent of the end use energy consumed by all Australian businesses. This was larger than the net energy use for electricity generation in Australia and all the energy used by Australian households.
Energy use by participants was concentrated among 20 or so corporations and a small group of key industries.
The industry sub-sectors that used the most energy were metals manufacturing, air transport, petroleum refining and chemicals manufacturing. These accounted for more than half of all energy use by participants (54 per cent).
As of 31 December 2008, corporations had assessed 1,019 PJ of their total energy use.
The corporations had identified opportunities with energy savings of 67.7 PJ, or 6.6 per cent of their assessed energy use, as a result of the energy efficiency assessments, yielding a potential financial return of $736 million if these projects are implemented.
The 67.7 PJ of energy savings represents 1.7 per cent of Australian energy end-use and
2.4 per cent of the energy end use of Australian business. It is the same as 1.4 million households in Australia not using any energy for a year.
The energy efficiency opportunities described by the corporations were many and varied. As the global economy recovers from the financial crisis, as energy measurement systems develop further, and as energy efficiency is built into purchasing programs, it is anticipated that identified opportunities will be progressively implemented.
Most of the energy savings identified through the assessments were concentrated among a small number of entities from a handful of industries. Generally the large energy-using industries identified large energy savings, particularly metals manufacturing and mining.
The sub-sector with the highest level of energy savings was ferrous metals and alumina production, with the most savings identified by aluminium producers. Oil and gas extraction, air transport and petroleum refining also identified large savings opportunities. Together these accounted for nearly 58 per cent of all energy savings identified in the program.
About 61 per cent of the identified energy savings have been, or were in the process of being, implemented. This represented a reduction in energy use of 41.6 PJ. A further 36 per cent of the savings opportunities were still under investigation.
The opportunities being adopted by the corporations will lead to the combined financial benefits and reductions in greenhouse gas emissions shown in Table 1.
Corporations favour projects that have financial paybacks of less than two years when choosing to implement energy savings opportunities. Just over 60 per cent of all energy savings identified were in the less than two year payback category; and among the projects already completed around 80 per cent were in this payback group.
The 199 corporations produced 178.8 MtCO2-e in 2007–08 as a result of their energy use. The corporations report energy use and savings by fuel type under the program. These energy figures have been converted to energy-related greenhouse gas emissions, that is, emissions from the combustion of energy and the consumption of purchased electricity.
The energy-related emissions associated with the corporations’ energy use accounted for about 30 per cent of total Australian greenhouse gas emissions and 44 per cent of Australian energy-related emissions.
In summary, the First Opportunities report provides a detailed picture of Australia’s largest energy-using businesses and industries.
The 199 reporting corporations play a major role in Australia’s economy. They directly employ hundreds of thousands of Australians in regions and communities all across the country. They also support the employment of many other Australians by providing goods and services vital to other businesses’ operations. At the same time they supply our trading partners with valuable goods and services they need. A significant contribution to Australia’s national income and the standard of living of all Australians is made through the large proportion of Australia’s exports that these corporations produce.
Energy efficiency is of increasing importance as we move to a carbon-constrained world. This report shows how rigorous assessments to identify opportunities to improve energy efficiency can lead to significant energy savings, with a commensurate reduction in energy costs and energy-related greenhouse gas emissions.