GEMS: Getting serious about energy efficiency

The explanatory memorandum that accompanies the Greenhouse and Energy Minimum Standards (GEMS) Bill 2012 describes how “Australian governments have long supported policies that encourage more efficient use of energy.” This is inaccurate. Judging by the responses to several studies into the behaviour of Australian consumers, it is clear that it is the Australian population who support policies that encourage energy efficiency.

A study by GfK1 found that 100 per cent of respondents who were considering buying a TV thought that energy efficiency labels should be mandatory on new TVs sold in retail stores, and 97.5 per cent indicated energy efficiency labels would be considered in the buying process. A similar study by carried out by Artcraft Research 2 found that 88 per cent of consumers report that they refer to the energy rating during the purchasing an appliance.

GEMS seek to establish national legislation to regulate energy efficiency and labelling standards (energy ratings) for appliances and other products. Appliance labelling was first introduced in Australia in 1986 with in labelling of household refrigerators and freezers. This was followed by labelling of other products as well as Minimum Energy Performance Standards (MEPS) for a range of appliances and other equipment. Now some 18 classes of residential appliances and industrial equipment are subject to labelling or MEPS.

The success of the program is clear. Figure 1 shows the impact of first labelling, and then MEPS, on the energy used by household refrigerators and freezers. Several studies have clearly demonstrated the impact of energy ratings. For instance, one study showed that the electricity consumed by refrigerators in 2010 was approximately 50 per cent less than would have been the case if energy ratings had not been introduced.

In another study, the projected greenhouse gas reductions in 2020 due to the energy rating programs was estimated to be 4 per cent of national emissions.

Figure 1: Historical and projected energy use by household refrigerators and freezers

The results experienced in Australia mirror the international experience. This next figure shows the experience in the USA with respect to domestic refrigerators, with the energy ratings programs driving a reduction in the electricity consumption of refrigerators without imposing additional costs on consumers.

This brings us back to the GEMS Bill. The Australian constitution gives Australian states responsibility for resource management issues, including energy. So while energy labelling and MEPS are national initiatives, they are realised through state-based legislation. Despite efforts to coordinate, inconsistencies have arisen across the state-based programs over the 26 years since appliance labelling began in Australia. These inconsistencies increase the regulatory burden for businesses and governments alike.

GEMS will establish a single national regulator and a single program framework to replace seven state-based legal frameworks and four state based regulators. It will also expand the coverage of the energy rating program to cover gas and other energy sources in addition to electricity. Further, energy or greenhouse labels or minimum standards can be applied to products such as windows and insulation that influence energy use.

Into the future Australians will benefit from increased energy efficiency across a greater range of products. And the benefits are significant. Forecasts of the energy rating out to 2020 suggest a benefit to cost ratio of 2.98.

Energy efficiency continues to be the most effective way to tackle greenhouse gas emissions, as it reduces emissions and costs. The GEMS Bill will help keep energy efficiency at the forefront of Australia’s fight against climate change.

Dr Gordon Weiss is Principal Consultant, Energetics