Less than two years after the Abbott Government shut down the Energy Efficiency Opportunities Program, Europe has begun a very similar scheme, requiring large companies to have energy audits every four years and report on their achievements in driving energy efficiency.
In an interview with The Fifth Estate at the Australian Summer Study on Energy Productivity in Sydney last week, Martin Bornholdt, managing director of DENEFF, the German business initiative for energy efficiency, said the new scheme had started in December. In Germany, it covers 50,000 companies.
“This is a mandatory law for the whole European Union right now,” Mr Bornholdt said. “The industry associations were not fully for it but they also haven’t been totally against it. They have been criticising in Germany how it was introduced. It was very quick and in a short period of time.
“But we did a poll and we asked companies that have introduced the audit if they were satisfied with doing it and most had a positive impression. Plus many companies not only did the audit, they even went one step further and did an energy management system.”
An initiative of the Howard Government, the Abbott Government shut down the EEO scheme in mid-2014 even though a 2013 program review by consultants ACIL found that in 2011 it was saving business $800 million a year at an average carbon cost of around minus $95/tonne of carbon avoided and with a benefit–cost ratio of 3.67.
As well as the energy audit scheme, Mr Bornholdt said Germany was setting up 500 energy efficiency networks of firms across the country as part of a voluntary program between industry and government.
“These are networks of companies from one region,” he said, “where they meet frequently and have common energy saving goals as a group – say 10 companies in one network, and then they learn from each other. ‘Okay, what did you do? Did you change the light bulbs? This worked out quite well. I had this installer.’ Or they say: ‘This did not work, you should do it this way.’
“So they come and every two to three months they exchange experiences and then it’s like an internal race to see who has saved more energy, who has a better measure in place. These kinds of networks work very well. I think they were invented in Switzerland.”
Mr Bornholdt’s DENEFF members deliver energy audits, and they’ve told him that half the clients take it seriously and half don’t. Already, suppliers of energy efficient products report that they are getting more requests for high-efficiency products.
“It is having a market impact,” he said.
For example, electric motor manufacturer SEW said before the new program it was very hard to sell high-efficiency motors, with their sales teams having to work hard to sell the better-performing product.
“And now it’s the other way around,” Mr Bornholdt said. “The customers proactively ask for these kinds of motors and I think that’s a change of push and pull for high-efficiency motors.”
Given some in Australian industry and the Turnbull Government believe programs like EEO were unnecessary regulation of industry, The Fifth Estate asked Mr Bornholdt if that’s how German industry saw such schemes.
He said German industry recognised that “there is a role for government as long as it’s not really going into the production process or limiting the growth of a company or limiting the entrepreneurial things they want to do”.
He said German industry preferred this kind of light regulation rather than waiting a few years, then delivering little efficiency improvement, forcing government to introduce tough regulations like in China “where companies get the electricity switched off if they don’t achieve their targets”.
Gavin Gilchrist is a former journalist, author, SEDA manager and clean energy entrepreneur now looking around for new opportunities.