The glacial pace of Australian energy efficiency and electrification reform has left millions of households and businesses exposed to the current global energy shock, says Energy Efficiency Council (EEC) chief Luke Menzel.Â
Some 5 million Australian homes are still connected to reticulated gas networks, and another 2 million rely on the delivery of LPG canisters, according to EEC data.
Menzel says it’s a situation that could be remedied with state and federal policy actions to supercharge efficiency and electrification – efforts which would achieve a double goal of improving business productivity while insulating consumers from volatile energy costs.
“Energy productivity is front and centre for business and has gone up the agenda for energy intensive businesses in the last couple of years,” Menzel says.
“A number of price shocks across gas and electricity markets… is making business more alive to the things they can do to manage their own energy cost.
“[For] families around the country that are living in homes that are inefficient, that do have exposure to the gas markets, they are more vulnerable to these global shocks when they come along.”
The EEC is pitching ideas for federal and state governments to take to budget discussions, from a national retrofitting program coordinated by the federal government to expand the Small-scale Renewable Energy Scheme (SRES) to include efficient electrification and flexible demand and extend it past 2030.
There’s an idea for a $650 million federal fund to help small and energy intensive businesses install tech such as energy management systems (EMS), better metering, and upgrade equipment so it can connect to an EMS.
And the EEC is prompting states that haven’t yet taken up policies to phase out gas use in homes to do so, and to make housing energy performance standards mandatory and create energy efficient rental standards, as the ACT and Victoria have done.Â
New South Wales (NSW) is considering a gas decarbonisation roadmap for 2027, akin to that underway already in Victoria.
Menzel says the federal government, too, could step in and take an overarching leadership role, as it did with the National Construction Code.
“It would be ambitious and a big step forward from the government to do that, but that is the kind of ambition that we need from the federal government if we are going to get anywhere near the renovation rate we need,” he says.
Calls for the $650 million fund, at a time when the federal government appears to be doing all it can to avoid spending, is a direct response to what it is also saying about driving productivity across the country, Menzel says.
“One of the biggest areas where we can drive improvement is in energy,” he says.
“Energy is a drag… It means businesses are more exposed to volatile energy markets, so we do think there is a case for judicious spending to help business improve.
“These sorts of investments are ways of demonstrating the value of these sorts of energy efficiency, electrification, fuel switching, getting the ball rolling in industries.”
And they don’t need to cost much, DETA Consulting’s Jonathan Pooch told Solar Insiders last week.
Just doing the maintenance jobs to fix steam or compressed air leaks can save $2000-3000 a year, he says.
Economically, it’s also low-hanging fruit as households spend less on energy via energy efficiency appliances, and to the economy more generally.
Energy productivity has grown by 48 per cent in the last two decades in Australia, according to the Department of Climate Change, Energy, Environment and Water (DCCEEW).
That means the country has managed to create that much more GDP per gigajoule of energy used in that time, thanks to a mixture of improved demand side energy efficiency, the shift to more efficient supply (renewables in place of fossil fuels) and structural changes in the economy.
A range of sources now show that households save when they get off gas and invest in consumer resources such as solar, with the Smart Energy Council last year putting these at $1500 and $3039 respectively, and IEEFA saying not long after these actions could cut bills by 90 per cent.
Menzel does not expect businesses and households to use the current energy crisis to take immediate action, but says it’s another lesson that legacy technologies expose people to higher prices and adds to people’s energy literacy.
“We are not suggesting that there is some kind of silver bullet,” he says.
“The point is we should take these opportunities. Whether you’re a householder, a business or a policymaker, this is a reminder that we should be working on this task, improving the resilience of our economy… So we’re in a better shape to work through future crises.”
