On laughing all the way to the cliff, the EEO – the pros and cons

22 May 2014 – There’s good news and bad news. Again.

The ditching of the Energy Efficiency Opportunities program last week was joined in beheadings this week by Victoria’s axing of the Victorian Energy Efficiency Target and the Western Australian government’s weird and unspecific cuts to resources in the Public Utilities Office that manages NABERS, and other water and energy programs. But trying to get information out of the department on what that means is like sliding down the rabbit hole. We’ll keep you posted.

It’s all starting to get a bit hysterical. Like an outbreak of the fevers – and catchy, like the excitement General Custer must have stirred up among his loyal troops as he led them triumphant into their finest hour [okay already, another war analogy]. Or like the delirium of lemmings as they tumble joyfully and victorious over their cliff [insanity: is this better?]

So what’s the good news?

Well, all of the above, actually, as it transmogrifies from shocking, to devastating, to laughable, all in a few winks… oops, we mean weeks. And we don’t even have to mention the laughs the international community is getting at Australia’s expense, including from G20 members who have been told that climate will be banned for discussion at the meeting in Australia later this year.

The backlash – to the budget’s anti-poor and anti-climate agenda – is growing faster and more fulsome by the day. Students have finally broken out of their career-grooming turpor of the past 40 years, and taken to their sometimes-rightful place, in the streets, with a few in jail. There was enough shaking of fists and loud hailers to frighten the poor prime minister Tony Abbott into avoiding a visit to Deakin University this week, which is strange because he is such a bloke. One newspaper letter said it was such a shame he couldn’t demonstrate the courage that allowed his forebear John Howard to front a pack of angry pro-gun lobbyists after the Port Arthur massacre, after being advised to wear a flak jacket, and call to get rid of guns.

Also a sign of good things to come were tables published on Thursday that showed that the budget will mean that people on $34,000 a year or less will contribute $4.5 billion more to the public purse in the next four years while those on $200,000 an additional… nothing.

Well that’s going to work, isn’t it? Oh and the AFR headline on the same day was that this was indeed a fair budget.

So what’s the property industry doing?

Diving into the deep end it turns out. There was a load of fun this week when we saw the Property Council get smitten with some of the fevers taking over Canberra and some of the states, and send out a media release praising the Feds for ditching the Energy Efficiency Opportunities program. Say what?

Oh yes. While their initial lobbying efforts were just to exempt the property industry from the EEO program – because it is already the most brilliant and successful industry on the planet in terms of energy efficiency and doesn’t need anyone to tell it how to suck its carbon-free eggs – no sir-ee, they got a smidge carried away. In the victory blast media release that positioned them right alongside their new best friends in the mining and manufacturing industry, they claimed green tape, duplication and compliance costs – a scheme imposing costly and needless reporting requirements on energy users.

“Layering duplicative reporting requirements on the property industry through EEO was a mistake from the start,” chief executive Peter Verwer said, with the program costing $17 million a year in red tape and compliance.

He didn’t mention the savings.

As we showed last week the EEO saved $808 million net, with 40 per cent of improvement in industrial energy efficiency due specifically to the program, according to a program review released in mid-2013 by ACIL Tasman.

EEO was also responsible for “improved focus and management and a reduction in nearly all barriers to the uptake of cost effective energy efficiency opportunities between 2005 and 2012”.

Alan Pears writing in Fairfax newspapers on Thursday did not hold back.

“Some big industry associations moaned and the Abbott government has listened, shutting down the globally recognised Energy Efficiency Opportunities scheme,” he said.

“Big industry lobbying – from the likes of APPEA, the oil and gas lobbying association now chaired by former energy minister Martin Ferguson, the Property Council of Australia, and little-known Manufacturing Australia – has led the demolition effort.”

Some of the people we contacted in the energy efficiency elite of the industry agreed with Verwer and said it was true about compliance costs and duplication – their companies were already subscribed to NABERS and Green Star and even global benchmarks. There was not much the EEO could teach them, said one.

Even so, it was saving masses of energy in the industrial sector, and it’s not a good look to congratulate throwing the baby out with the bathwater, especially at times like these.

Another source agreed that reporting and compliance were indeed a pain and he recalled standing in a queue to get the chairman to sign off on the interminable streams of reports and certification.

But that was exactly the point of the EEO. To get the issue of energy in front of the C suite – the chief financial and executive officers, and chairs.

Our source said the EEO was very good for initiating programs. As well as for the mining and manufacturing industry, where he had previously worked and where, in the past at least had been more focused on big ticket items such as equipment and people than energy. To a large extent that’s changed, he said, and at least partly because of the EEO.

But oh, how a few months can change the mood in corporate marketing land.

On the record

A quick Google revealed a very different picture from behemoths such as AMP and DEXUS on the incredible value in energy/dollar savings that the EEO had brought.

AMP in its 2013 Public Report said its first five year cycle of EEO to 2011 resulted in discovering 499 opportunities with about 203,220 gigajoules of energy savings a year.

“As of 1 July 2011, AMP Limited entered into the second five year cycle of reporting under the Energy Efficiency Opportunities program and having completed a new Assessment Plan (AP) for this period, AMP Limited had also undertaken nine assessments (18.44 per cent of total energy consumption as at 30 June 2013) across the group to date, with an energy savings potential of approximately 44,055 gigajoules”.

The second cycle identified 147 opportunities and about 19,264 gigajoules of energy savings.

DEXUS in its 2013 EEO report said:

“The Energy Efficiency Opportunities (EEO) program has been a highly beneficial and timely program which DEXUS has embraced and actively implemented. The core principles within the EEO program strongly align with DEXUS’s broader sustainability aims and provide added impetus and opportunity to demonstrate tangible action to employees, tenants, investors and the wider community.”

We’ll leave the last word to Craig Roussac, in the US right now on his Fulbright Scholarship at Stanford University, and considered one of the brightest sparks in the energy matchbox, who sent this note in response to our email request for his view on EEO:

“I don’t think people who criticise EEO are irrational [okay, we might have implied something along those lines – ed]. I just don’t think they understand industrial processes that well. Energy is invisible whether it’s used productively or wasted and in a sense EEO is to energy waste what Clean Up Australia is to rubbish. There’s an awful lot of it lying around – if it had a colour, texture or smell we’d have a national emergency on our hands!”

One reply on “News from the front desk: Issue No 192”

  1. What puzzles me about the PCA position on EEO is that only firms using over 0.5 petajoules of energy per annum must comply. If that’s all electricity at around $100/MWh, that’s close to $15 million pa energy bill before they even have to worry about EEO. If they can’t save more than $40,000 pa to cover compliance costs they can’t be trying very hard.

    Thefifthestate’s examples show big benefits. Even the 20,000 GJ saving estimate from AMP for the second cycle would be worth an additional $500,000 pa saving on top of cycle 1 savings.

    And if PCA helped its members to take advantage of the streamlined approaches, compliance costs could be even lower. So why has PCA aligned itself with the greenhouse mafia when the property industry does have good story to tell, but can benefit even more?

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