Good news for the industry

The Australian energy efficiency sector was poised to ratchet up the action, according to industry leaders at last week’s National Energy Efficiency Conference.

A raft of leaders to address the conference with positive messages, among them, president of the Energy Efficiency Council Tony Arnel; keynote speaker Dr Brian Motherway, head of the Energy Efficiency Division of the International Energy Agency; and Climate Council chief executive Amanda McKenzie.

As the global energy system moves towards decarbonisation, the conversation was increasingly moving beyond energy efficiency itself, to where the sector fits with the current, and necessary, disruption, the conference heard.

EEC policy officer Rob Murray-Leach said that the radical transformation of the energy grid meant people within the sector were increasingly engaging around renewable energy, microgrids and integrated packages of services wrapped up in new financing arrangements.

He said the momentum around renewables can be looked at from a perspective of asking “what preconditions would need to exist for someone to invest in a new coal-fired plant in Australia?”

“The answer is almost irrespective of policy levers – you would struggle to finance that in Australia,” he told The Fifth Estate.

One of the issues however is that while renewables were having an impact on the grid, government and the energy supply industry have so far failed to put strategies in place for managing this transformation.

Microgrids for example, were stacking up in regional areas, given the cost of upgrading networks.

The task was to manage the intermittent generation of solar and wind.

Mr Murray-Leach said that the solutions included demand-side services, peak response technologies, on-site storage and energy efficiency.

He said the market for efficiency services was growing in response to consumer demand but service providers were bringing more technologies and tactics onto the consumer radar.

“Energy users might be interested in one or two technologies, for example solar PV or LED lighting, then they get an expert into the building and find there’s a range of upgrades that can be undertaken, and that some of those can pay for the PV.

“It’s a bit of a combined story.”

Businesses were also increasingly looking at distributed networks.

Growing sophistication

Another growing trend was for energy performance contracts for larger sites and new finance offering for smaller players.

Paul Greenop, head of portfolio management, at the Clean Energy Finance Corporation told the conference that we could expect to see more green bonds, new co-finance and aggregation programs to leverage private sector dollars.

Mr Murray-Leach said that overall the sector was seeing a much more integrated approach and a more sophisticated market of products and energy services.

It’s getting broader than the “basic products and kits”, particularly in Victoria due to the revival of the Greener Government Buildings program and in NSW due to the Energy Efficiency Certificates scheme, he said.

A booming market

Key messages from the conference included that this was a booming market that according Dr Motherway was already worth $290 billion, growing at about six per cent a year.

Among the leaders was China with an energy services market worth about $17 billion a year and employing more than half a million people.

The growth globally is being driven by a number of factors. Among them is IEA’s description of energy as the “world’s first fuel”. A good example of the business case is China’s energy saving: worth more in 2015 than Germany’s total consumption.

Key drivers are big

Other important drivers were climate change policies and health and wellbeing factors, Mr Murray-Leach said.

In Australia influencing trends in energy retrofits were occupant comfort and the WELL building standard and comfort was also a driver for the residential sector.

In India and China air pollution from fossil fuels is a huge issue, and creating an incentive to reduce.

All of this creates a “huge opportunity” for Australia, Mr Murray-Leach said.

NSW wants to sell efficiency big time

NSW Minister for Environment and Heritage Mark Speakman, addressing the conference after his government’s recent announcement of a package of $500 million for environmental programs including $200 million for energy efficiency, told the conference that his government wanted to “sell energy efficiency in government, and we want to sell it to the average punter.”

He flagged that mandatory disclosure of energy performance for residential properties could be in place by 2020.

This would give people the information they require, Mr Murray-Leach said, so not just the “latest gizmo” but how comfortable it was and how much it would cost to run it.

Dr Bronwyn Evans, chief executive of Standards Australia said, “We need policy-makers and policy-takers to be innovative. If policies are not actually used there’s no benefit derived.”

Left to Right: Luke Menzel, Dr Brian Motherway, Tony Arnel

Motherhood statements no longer enough – we need a cooperative and collaborative approach

According to Tony Arnel both the NSW and Victorian governments understood that it was no longer enough to “set a target and write a short guideline.”

“Instead, we need a cooperative and collaborative approach with government and industry working together.”

He said there was shift from incremental action to transformational.

“The incremental approach of the past has helped us build a business case. Now, it’s time to push the innovation envelope.” This meant moving beyond individual landmark projects to deep retrofits across entire portfolios.

It was not just about saving money – though it does – energy efficiency “lies at the heart of many political and social objectives – productivity, profitability, health, climate change mitigation and competitiveness among them.”

Dr Motherway reminded delegates that energy efficiency was part of meeting our obligations under the Paris Agreement.

“There is no credible path to tackling climate change without energy efficiency,” he said.

“It doesn’t matter what the focus is, as long as there is a focus.”

Climate Council’s Amanda McKenzie said energy efficiency can get Australia about halfway towards its required emissions reductions.

“We need policy drivers to increase energy productivity but government is still lacking clear pathways”, she said.

“The common conception is that energy efficient is not a particularly sexy term and doesn’t attract the headlines in the Daily Telegraph or interviews on The Project,” Mr Arnel said in his closing remarks.

“But here in this room, we know that it is actually the sexiest thing possible.

“Whether it’s about the planet saving potential or the productivity, the macroeconomic gains or the health benefits, the energy efficiency movement has a compelling narrative.”

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