Victorian Treasurer Michael O’Brien: what’s in store for the May budget?

25 February 2014 — What’s happening in the Victorian government? Has the private sector soaked up all the talent and left it stranded, unable to do a bit of maths, or even add up? And who, by the way, is advising it?

According to sources in the clean and efficient energy industries, there’s certainly a gaping hole in the logic that for the 6 May budget the government is considering scrapping some of the very things that stimulate jobs, economic activity and save money. Such as the Victorian Energy Efficiency Target, for instance – just “for instance”.

You’d think that after all the dreadful ravages of manufacturing closures, in car making and the Geelong aluminium smelter (albeit on the cards for a long time) and fears of wider closures, such as of the SPC Ardmona fruit factory, there’d be a golden fence put around anything that works to create jobs, enhances productivity and saves money.

Sources in the industry are furious about what’s mooted, and suggest maybe the cuts don’t stop at the VEET. But they want to remain off the record.

President of Energy Efficiency Certificate Creators Association Bruce Easton isn’t off the record.

In a media statement on Monday he called on the Victorian Government to strengthen the VEET scheme, not weaken it or axe it altogether. He said a strong VEET scheme could create more jobs and soak up some of the skilled capacity now flooding the market from manufacturing – perhaps in retrofitting of commercial lighting, refrigeration or airconditioning.

“We are not sure the government has got the message that the VEET scheme has been responsible for growth and job generation,” the strictly measured Easton said.

When the government sets the VEET target, it also creates the market – the demand for energy efficiency activities and the level of the target has a direct impact on jobs, he calmly pointed out.

They’ve invested in developing their energy efficiency businesses, with accreditation, compliance, purchase and supply of products, recruiting and training, he said. Above all, they’ve provided jobs, estimated at more than 4000 over the life of the scheme.

Now these jobs and businesses are up for grabs beyond 2014, depending on the decisions of the state government, as it reviews the VEET.

Uncertainty, Easton pointed out, was a major negative for any business, especially those in the small to mid range.

“Like all businesses, uncertainty is a killer. Our businesses are particularly at risk and substantially dependent on the existence of markets and the demand for energy efficiency activities.

“As the target for this phase of the scheme (which ends in December 2014) is substantially met, VEET businesses face uncertainty about the future. Some of our members have ceased residential installations and others have been forced to cut back operations.

“We are waiting on the outcome of the scheme review now to see whether we have a business for 2015 and beyond.”

Easton said the industry was a “real area of job opportunity, particularly for skilled technicians moving out of the manufacturing sector”.

These could include retrofitting of commercial lighting, refrigeration and airconditioning.

“It’s a win-win,” Easton says. VEET is “providing real benefits for businesses and providing potential jobs people transitioning from other sectors”, and is “one of the few initiatives the government has to address peak power, rising energy costs and climate change”.

VEET costs are about 0.26 cents a kilowatt-hour and the benefits are estimated at $158 per person, Easton says.

According to Austgrid during 2011-12 the average annual Victorian household electricity use was 5700 kWh, equating to a total average VEET cost of $14.82 a year per household.

The VEET scheme provides incentives for the installation of numerous energy efficiency products, ranging from high efficiency hot water systems, air heater/coolers, lighting, draught proofing and window treatments through to the purchase of high efficiency appliances like refrigerators and televisions.

For the commercial sector, products such as high efficiency motors, refrigerated display cabinets, refrigeration fan replacement, commercial lighting upgrades, efficient low flow trigger nozzles and water efficient prerinse spray valves are eligible to create certificates.

4 replies on “Comment: Victorian government in panic mode on energy programs”

  1. Totally agree Geoff. Governments need to understand the flow on effects of these programmes and the long term benefits they provide.

    Structure the programme in such a way that both the ESCO & property owner/tenant has some skin in the game and the Government will see great returns on its money.

  2. Totally agree Geoff. Governments need to understand the flow on effects of these programmes and the long term benefits they provide.

    Structure the programme in such a way that both the ESCO & property owner/tenant has some skin in the game and the Government will see great returns on its money.

  3. Over the last 2 years there has been significant private investment in energy efficiency, by Energy Service Companies (ESCO) developing services & products & by Building Owners and Tenants in implementing solutions and installing technology.

    Significant economic, environmental & jobs growth has been achieved, government incentives and awareness programs have greatly assisted.

    Why then consider cutting them, we should be expanding incentives and further promoting energy efficiency, Commercial solar, LED lighting and other energy efficiency strategies.

  4. Over the last 2 years there has been significant private investment in energy efficiency, by Energy Service Companies (ESCO) developing services & products & by Building Owners and Tenants in implementing solutions and installing technology.

    Significant economic, environmental & jobs growth has been achieved, government incentives and awareness programs have greatly assisted.

    Why then consider cutting them, we should be expanding incentives and further promoting energy efficiency, Commercial solar, LED lighting and other energy efficiency strategies.

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