Dr Mary Stewart

The most obvious first question to ask Dr Mary Stewart, chief executive officer of Energetics who has just been anointed to replace Tony Arnel as president of the Energy Efficiency Council is, how is she going to juggle the additional workload given the sector is on fire and her company is growing at a rapid rate?

On the company side she says it’s definitely “boomtimes”. Last year during Covid it was busier than anyone could have anticipated and the organisation is now turning over more than $15 million on a gross annual basis.

Staff numbers are now at “about 80” but hard to quantify more specifically thanks to flexible working arrangements, but the growth rate of three new people last week, two this week and another next week, is a signal that’s clear as bell and a tad challenging, she admits.

Industry wise, energy is transitioning to cleaner sources faster than anyone could have expected; companies are increasingly signing up to big power purchasing agreements (PPAs) for clean energy (many of which Stewart’s company negotiates), and at the global scale much of the known world is bent on rapid transition to net zero targets while Australia’s federal government saunters along in no particular rush, threatening to throw a spanner in the works of major business opportunities for Australian companies.

So next question is, what are the priority goals for her company and the EEC, amid so much to choose from?

“We absolutely have to meet net zero by 2050 or earlier. The natural environment has been impacted by people and energy efficiency has a seminal role to play to help us deliver on that goal,” Stewart says.

“At the moment companies are taking big decisions and while they may be a little more expensive a lot of companies going down the route of the PPAs.”

In a way it’s an easier decision, she says, “a single decision through procurement and you can manage your price for 15 years”.

“Energy efficiency is more challenging, because it’s often a lot of much smaller projects and quite a lot of it is about behaviour change.

“A lot of energy wastage is about how you use equipment, for example, when you slam your foot down you are going to drive up our petrol consumption.”

UPDATE 4 JUNE 2021: “But in aggregate energy efficiency adds up – the International Energy Agency says we need it to do over 40 per cent of the heavy lifting when it comes to decarbonising our energy system, and that we need to triple our historic rate of improvement. We’re doing a good job in Australia in commercial buildings – NABERS is a world leading program – but it’s absolutely essential we build on that momentum, and roll up our sleeves to unlock this massive chunk of abatement in other parts of the economy.”

Demand management

Stewart says the remit of the council these days stretches beyond energy efficiency to energy management and demand response to deliver net zero. It’s working towards this on the advocacy side and on building skills to be better use the technology that’s available.

“We need to match our demand to our supply; looking 15 years down the track we will be using our processes as storage and not just batteries.”

For instance, when clean energy is cheap and abundant you might turn down freezers to minus 10 degrees instead of the usual minus 4 then allow the temperature to creep up as energy becomes less abundant and pricey.

The market is already primed for demand response, Stewart says especially through aggregation of services, which offers big opportunities.

But while these services are used most often by premium properties and businesses what of the smaller B and C grade buildings and second tier businesses?

Stewart says there is a big opportunity for the industry to aggregate services for the smaller end of town.

Australia the laggard

So how is Australia going – on a score of say, 100?

Stewart hesitates to nominate where Australia might stand but certainly it’s “far behind G7 countries some of whom have already legislated their commitment to net zero”.

And yet all the Australian states and territories have net zero commitments or aspirations, she points out. And the delivery of achievements against those goals from the private sector, is “extraordinary” and that’s where the “real bulk of activity is”.

“It’s the private sector understanding that if we carry on in this policy vacuum we will get to a catastrophic transition point sooner rather than later. There is a point at which we will have to change.”

Carbon border adjustments (or taxes) are underway in the EU, for instance.

“What will happen to us as a result of other countries taking action could be catastrophic”

Under Article 6 of the Paris Agreement that deals with the global carbon market, it would appear we are unlikely to get a single multi-lateral agreement. A range of bi-lateral agreements are possible, but Stewart thinks it could be problematic for Australia trading with countries ­that have mandated net zero targets by 2050 as well as interim targets.

She finds it hard to see how Australia won’t be forced to take adequate action at some point.

Energy minister Angus Taylor has technology solutions for net zero, she says, and we already have the technology available to meet the majority of our emissions reduction obligations to 2030.

There’s “no question we need the technology innovation for the 2030 to 2050 period, but we also need innovation in business models and in financial structures.”

“We’ve got the IOT the data structures and the analytics”, she says; “It’s a jigsaw puzzle. All that’s needed now is to let the pieces fall into place.”

“It’s a challenging place for our private sector to find itself in because so many companies in our private sector are at global best practice, however lack of progress at a federal level means they do not necessarily get credit for this performance.”

It’s a problem her company experiences directly.

“We’re world’s best practice with climate resilience and helping companies with the risk associated with the changed natural environment but because we are consultants operating in Australia, it can be difficult to prove our credentials on a global stage.”

Risk based work

Among some of the work that her company is increasingly taking encompass wider climate risk concerns that reach the attention of the C-suite.

An example is a project included in the Commonwealth Bank’s 2019 financial report which looked at the potential of climate impact on the bank’s agricultural loan book.

This involved mapping the location of agricultural loans on a 5 x 5 kilometre grid and overlaying on that climate models to 2060 to understand the impact of changes rainfall and temperature patterns on on-farm productivity; this can then be used to infer the ability of farms to pay back their loans.

“When people talk about energy and climate risk, I’m concerned that a lot of the time they are just looking at emissions reductions, but we are looking at this world of changed natural environment and it should not be underestimated.

“There is going to be a lot of work in adaptation and resilience even if we get to the point that there is not a lot of work in energy management.”

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  1. Great article Tina – Fagerhult & Eagle Lighting Australia are tackling this issue from a lighting manufacturing perspective so that we can support these environmental challenges and initiatives, in our case with a world first innovation; Multilume Rethink.