CEFC, CBA target Vic manufacturers for energy efficiency loans

Manufacturers in the Victorian regional centre of Shepparton will be shown how to use a specially designed funding mechanism to as much as halve their energy costs, at a seminar hosted by the Clean Energy Finance Corporation (CEFC) and the Commomwealth Bank on Tuesday.

The seminar will demonstrate how the Energy Efficient Loan (EEL) program – a joint venture between the CEFC and CBA – co-finances Australian businesses to upgrade operations, equipment and enhance energy productivity and competitiveness, leading to savings of between 15 and 50 per cent on energy costs.

The $100 million program, announced in May this year and available nationwide for projects that meet CEFC eligibility criteria, specifically targets Australia’s highly energy intensive manufacturing sector, which has seen electricity price rises in the order of 115 per cent in some cases.

According to Climate Institute estimations, potential savings from untapped energy-efficiency measures in Australia’s manufacturing sector would be worth $2.4 billion in 2020.

The CEFC-Commonwealth offering fills the breach created by state and federal governments, which are increasingly winding back and canning their own energy efficiency support schemes.

In May this year, Victoria’s Napthine government announced it would close the state’s highly successful energy efficiency target scheme (VEET) in 2015 – cutting the target from 5.4 million tonnes of CO₂ abatement to 2 million – after a government-commissioned review of the program deemed it had cost more, and delivered less benefit to the environment, than projected.

Introduced in 2008 by the Labor Brumby government to make it cheaper for households and businesses to install energy-efficient products, and doubled in size by the newly elected Coalition in 2010, VEET is estimated to have saved participating households and businesses an average $109 a year on electricity bills.

And in March, the Victorian state government announced it would radically cut back its Greener Government Buildings program – a loan mechanism that won the Premier’s sustainability award just two years ago, when the government said it could save the state $2 billion over 25 years.

The move was roundly criticised by energy efficiency experts at the time, who said the move would jeopardise energy efficiency upgrades to schools and hospitals around Victoria – including in Frankston, Monash, Footscray and Geelong – putting them on indefinite hold.

Meanwhile, the fate of the CEFC also hangs in the balance, with the Abbott government aiming to repeal it as part of its climate and renewable energy legislation clean sweep.

Last month, Clive Palmer said his 3-person Senate team would vote against the repeal of the Clean Energy Finance Corp, and would not support any change to Australia’s renewable energy target.

CEFC chief Oliver Yates, who was among presenters at Tuesday’s Shepparton seminar, said the EEL had already helped local food processors and manufacturers to save on energy costs.

“Shepparton East’s own Radevski Coolstores is among businesses that have accessed finance through us to improve refrigeration, and reduce their energy costs by about a quarter,” he said.

The loan has also been used by Wandiligong apple and chestnut supplier Nightingale Bros, to upgrade its refrigeration system and cut energy costs by about 40 per cent.

“Refrigeration accounts for up to 85 per cent of energy consumption in cold storage businesses, so savings have a significant positive impact on the business’s bottom line,” Yates said.

“We’ve also helped Wodonga Rendering install a gas-fired trigeneration plant to supply electricity hot water and steam, reducing its reliance on grid-supplied electricity and plastic products manufacturer Global Roto-Moulding, in Irymple, is using CEFC and Commonwealth Bank finance to upgrade its rotational moulding ovens, and is expected to halve oven energy use.”

The seminar will also provide insights into the outlook for the Australian economy from CommSec economist Savanth Sebastian and on the outlook for energy prices and energy efficiency investment from Energetics Executive Director Jon Jutsen.