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Energy efficiency: The unsexy solution for a Clean Energy Target

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The COAG Energy Council is supporting 49 of the Finkel Review’s 50 recommendations, including new demand response measures, which are crucial to driving down electricity prices.

It’s a big step in the right direction, but why have we stalled on a Clean Energy Target?

dead_end

The CET has become another political stick to beat the government with.

Unfortunately, the CET has become another political stick to beat the government with. To be more accurate, it’s a stick with which the Coalition beats itself.

Labor sits by quietly, biding Napoleon’s sage advice not to interrupt your enemy when he’s making a mistake.

So how can we find a middle ground and move forward? Leaving aside the “renewables kills” views and other crazies from both sides, there are three key constants in this debate:

Reducing costs to all consumers is critical; ensuring quality power supply is non-negotiable; and there can’t be many people who really think coal fired power stations are good for the environment.

It’s known as the “energy trilemma,” and a CET which includes real, hard energy efficiency targets will help us solve it quickly, at the least cost.

Let’s move the debate away from solely whether to invest billions in new coal or new solar, and let’s start investing a fraction of that amount in energy efficiency.

We can start by re-badging it as energy productivity, which sounds way sexier for politicians on both sides.

Fact of the matter is that, along with solar and storage, energy efficient technology is moving so quickly that today’s CET may soon be out of date.

Energy efficiency technologies which reduce business and residential customers’ usage by well over 10% are available today.

Improved energy productivity also benefits everyone, which will certainly be of interest if you live in an apartment, don’t own your own home or simply can’t afford a sparkling set of solar panels on your roof.

The difficulty is getting your energy company to provide energy efficient technology to you.

They’d much prefer to keep selling you more energy from newly built solar and wind projects than reduce their overall sales revenue.

No surprises there, it’s just business protecting its own market.

The convergence of new, low cost technology and continuing short-sighted price gouging by incumbent gentailers is driving more business and commercial customers to seek relief from high electricity costs through energy efficiency, solar and storage.

With just a modest effort by customers and a modicum of government support, we can easily achieve the proposed CET.

By ignoring a Clean Energy Target, our political leaders will not stop the inevitable changes which will hit the energy industry over the next decade.

Technology is already disrupting this industry. In 10 years’ time over half the large energy companies in today’s market will have failed.

Demand will be lower, solar and storage far higher, and if you haven’t embraced new technology and you are not the absolute lowest cost generator, you will have closed, replaced by low cost renewables and storage.

If energy retailers continue to refuse to offer energy efficiency and energy management technology to customers, those customers will simply walk away.

If networks continue to preside over power outages and rely on arcane regulations to protect their returns, they will lose their social license to operate.

The dye is already cast. With or without a CET, technology is disrupting our traditional energy markets with changes that will restructure the industry for the next century.

The Clean Energy Target is an important tool not in achieving that goal, but in doing so in an orderly and transition of the market.

The Government has a golden opportunity to include energy efficiency measures in the CET that will make it more acceptable to all sides and move forward from this embarrassing impasse.

They should do this now.

A clear CET with firm energy efficiency targets is a vital tool in solving the energy trilemma, and a lifeline that customers desperately need in the battle against electricity prices.

Richard McIndoe is Executive Chairman of Edge Electrons   

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  • George Darroch

    “In the average Australian home, energy is used for:
    heating and cooling 40%
    water heating 23%
    other appliances, eg laundry appliances or entertainment appliances (14%)
    fridges and freezers (8%)
    lighting (7%)
    cooking (5%)
    stand–by power (3%)”
    (Govt of SA)

    Retail and government uses are similar.

    Whenever we talk to decision makers we need a limited and simple set of asks which relate to energy waste and lost efficiency potential. So, what are they?

    • MaxG

      It is never simple… the biggest saving would be heating and cooling. However, to get there, you would need to change the building code; but the whole industry is against it — now what?!

      • Brunel

        Just put a big tax on new inefficient houses.

    • Ian

      You are so right, addressing living space air conditioning and water heating are the low hanging fruit. Roof , wall, window and floor insulation is really quite cheap and significantly reduces cooling and heating costs (with the one proviso that solar radiant heat does not enter the home in Summer!) Have you ever been in a well insulated house with a East facing window in Summer?

  • Matt Grantham

    Good article, for those people who want to find out a little bit more about how Edge Electrons technology works have a listen to the podcast we did with Richard last week where he addresses some of the points in the article.

    http://bze.org.au/podcast-technology20170720-richard-mcindoe-edge-electrons/

  • Ian

    Currently Australia externalizes the emissions generated by manufacturing energy efficient equipment.
    I sometimes wonder if natural attrition may be a better path to reduce overall net global emissions.
    Then as long as far more efficient equipment is installed….
    The main thing is to not allow swapping like for like equipment which is the easy thing for trades people to do.

  • Bruce Easton

    Good article and good luck with the CET having energy efficiency measures. The minister (Frydenberg) has already stated that he is leaving it to the states to continue with their energy efficiency schemes and he will encourage the others like QLD to follow suit.
    Interesting that the article didn’t mention the schemes whcih are currently worth about $300m in EE investment annually.

  • Tom

    “We can start by re-badging it as energy productivity, which sounds way sexier for politicians on both sides.”
    Best.

  • solarguy

    If the punters who are building a new home just educated themselves of the important design principles, before approaching a building company, their homes would perform much better. If they ignore the big ducted A/C’s and use well placed 4.9 COP splits, upgrade ceiling insulation to R5 and wall insulation to R3. Orientate the house to north where possible to take advantage of the winter sun, including maximizing north facing roof area for solar PV and SHW………running costs will be lower!

    • George Darroch

      Yeah, but people do need a bit of education, and building companies do need a solid shove in the right direction.

  • Brunel

    Efficient factories will replace inefficient factories – so no need to have the nanny state in factories. Ditto commercial buildings.

    Just put a 990% tax on inefficient goods – that would encourage people to get more efficient goods.

    I hate government bans – they belong in USSR.