Energy-smart appliances cut Australian power bills by billions | RenewEconomy

Energy-smart appliances cut Australian power bills by billions

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The value of energy saved in Australia last year alone was around A$3.2 billion. Of this, some A$2.7 billion was saved by households.

Better appliances and energy-efficiency rules saved Australians more than A$3 billion on electricity last year alone.
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The Conversation

Better appliances and energy-efficiency rules saved Australians more than A$3 billion on electricity last year alone.
Better appliances and energy-efficiency rules saved Australians more than A$3 billion on electricity last year alone.

The latest review of Australia’s energy-saving appliance scheme has delivered a rare trifecta: a good news story for the economy, the community and the environment.

According to my estimates from data in the Department of Industry review, the value of energy saved in Australia last year alone was around A$3.2 billion. Of this, some A$2.7 billion was saved by households.

The Equipment Energy Efficiency (E3) program aims to reduce energy use by household and business appliances, through the use of energy labels and enforceable standards for energy use.

This latest review found that in 2013, the E3 program reduced Australia’s greenhouse gas emissions by 13.5 million tonnes at a cost of minus A$119 per tonne: in other words, itsaved money to cut emissions. Overall, the savings delivered by embracing efficient appliances were three times greater than the costs.

The savings in energy use were equivalent to 7% of all Australian electricity consumption – a fact that certainly helps to explain the recent declines in electricity consumption.

By 2030, the program is forecast to be saving 34.4 million tonnes of greenhouse gas emissions per year, at a cost of minus A$118 per tonne and a benefit/cost ratio of 4.6. That means for every A$1 we spend, we get A$4.60 of benefits back.

Not a bad result for a program with little political commitment and a low public profile. Imagine what it could achieve if it was taken more seriously.

Energy efficiency can cover a carbon price

An average Australian household saves about A$6 per week from appliance energy efficiency.

When Australia’s carbon price was announced in 2011, Treasury modelling estimated that a A$23-per-tonne carbon price would cost households A$9.90 per week, of which energy and water was A$4.60. So even without the financial compensation given out by the government, the energy-efficiency program has offset more than 60% of the estimated impact of carbon pricing on households.

What’s more, Treasury estimates suggest that moving from the fixed carbon price to a globally-linked trading scheme (assuming a carbon price of A$6 per tonne) would reduce household weekly carbon costs by A$7.30. On this basis, Australia’s appliance efficiency program would already more than offset the total cost impact of an ongoing emissions trading scheme, even if international carbon prices doubled.

Of course, appliances have been growing more efficient all the time, but the savings estimated here are on top of the “business as usual” trend. Without the incentive provided by the program, households would be using more energy and paying higher bills.

How much money, energy and emissions are estimated to have been saved since 2000, thanks to better energy standards for appliances. Department of Industry, CC BY


The case for going further

Since 1986, when the first energy labels began to appear on refrigerators, the program has provided a steady incentive for replacing inefficient appliances with better-performing ones. But given the huge savings and emissions cuts on offer, there is a strong case for a more aggressive program.

Star performance: rating stickers first began appearing on Australian appliances in 1986.
Star performance: rating stickers first began appearing on Australian appliances in 1986.

The new report estimates that accelerating the program could deliver further net savings worth A$1.5 billion. But this is a very conservative figure, based on past studies that have consistently underestimated the benefits.

The estimates of savings to date are also conservative, because they use 2000 as a baseline, despite the fact that the program has been around for much longer.

Between 1986 and 2000, the average efficiency of new refrigerators purchased by Australian consumers improved by around 40%. Similarly, dishwashers became 23% more efficient between 1993 and 2000 – savings that are not captured in the report’s figures.

Are there more savings to be made?

There certainly are. One option is to expand efficiency programs to include a wider range of products.

A typical ceiling fan, for example, uses about 80 watts, whereas the most efficient models use less than a quarter of this. Energy labelling and minimum standards could drive large savings, especially in tropical areas.

Stronger measures could be introduced sooner. For example, swimming pool filter pumps are large energy consumers, and the existing voluntary energy labelling scheme shows savings of up to 80%. But the present schedule will not see mandatory labels and minimum energy performance standards until 2017.

Replacing old, inefficient appliances offers big benefits. For example, many old refrigerators are faulty, and use up to eight times as much as a modern fridge, so replacing them brings disproportionately large savings. This could be encouraged by offering trade-ins for specific models, or offering home audits to identify appliances in need of replacement.

The program could also be expanded to include funding the development of new energy-efficiency technologies.

In a recent conference presentation to the Australian Alliance to Save Energy, I compared the energy performance of market-leading appliances against average ones. Replacing appliances with the best ones on the market can deliver power savings of 30-80%.

Then there is the potential to improve performance through the use of “smart” technology and design, such as load-sensing motors in washing machines. You can then take that further by encouraging changes in user behaviour, such as buying low-temperature detergents, cutting down on household bills and power use for hot water.

My research suggests that for most appliances there seems to be potential to improve effiency by another 30-60% beyond the current best available performance.

Smarter choices for the future

Australia’s appliance energy efficiency program (which New Zealand also joined a few years ago) has already cost-effectively cut greenhouse gas emissions, helped to reduce peak energy demand, reduced energy bills, and offset much of the cost associated with Australia’s fixed carbon price.

If, rather than scrapping carbon pricing, Australia were to shift to a globally-linked emissions trading scheme, carbon costs would be significantly reduced and the benefits from appliance efficiency would outweigh household carbon costs. That would effectively give us a climate policy that actually makes money.

Expanding and strengthening our energy efficiency program would deliver even more savings for Australian households, businesses and for the environment. But that’s if our government chooses to act.


Source: The Conversation. Reproduced with permission.

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  1. John Silvester 6 years ago

    I recall reading some time ago of a proposed way to speed up the adoption of energy efficient appliances by using a fee and rebate scheme. Appliances would be ranked according to efficiency. Appliances with less than average efficiency would attract a fee which would increase the less efficient the appliances are. That pool of money would then be used to pay a rebate towards the cost of purchasing more efficient appliances, the greater the efficiency of the appliances the greater the rebate.

    This approach would incentives manufacturers to increase the efficiency of their appliances. Manufacturers of efficient appliances will want to increase efficiency to get a greater share of the available rebates, manufacturers of less efficient appliance will want to increase appliance efficiency to reduce the fee levied on their appliances.
    Over time, with inefficient appliances becoming more expensive and high efficiency appliances becoming cheaper the average efficiency of appliances will increase. Manufacturers who don’t improve the efficiency of their products will either see the rebate they receive decline or the fee paid increase depending on their efficiency ranking.
    The information needed to do the rankings is already available as it would be the same information used now for energy star rating. Some thought would need to be given to the fee/rebate structure to balance fees paid with rebates received.

    • Catprog 6 years ago

      Sounds similar to my idea of making people pay for an average year usage of power when they buy an appliance.

      • John Silvester 6 years ago

        The approach you suggest would make efficient appliances relatively cheaper but would raise the price on all appliances. The fee/rebate approach would make efficient appliances cheaper in real terms. Your approach is all stick no carrot.

        • Catprog 6 years ago

          I may of missed a step. When they pay for the power they get it as a credit on their bill.

          • wideEyedPupil 6 years ago

            Similar ideas but John’s point stands. Point of purchase price will still be higher for all appliances if power consumption is included. And the admin will cost more dealing with power companies and individual energy contracts. Maybe that’s good or bad if it deters purchases of new appliances depending on the efficiency of their current product. Fee & rebate scheme would potentially increase the incentive beyond even what you are suggesting (if setting calibrated correctly).

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