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August 2009 Newsletter - carbon and energy update

Identifying business opportunities in the low carbon economy

Over the next 12 months business will be impacted by government policies and programs that come into effect as governments respond to climate change. There are a number of compliance programs, from National Greenhouse and Energy Reporting (NGER) requirements, Renewable Energy Target (RET) changes and the proposed commencement of the Carbon Pollution Reduction Scheme (CPRS). There is also an array of Government funding programs for eligible businesses, with additional assistance expected to become available in the coming months.

Recent research on business understanding and readiness

A survey of 151 CEOs of Australian companies with a minimum turnover of $A150million (“Carbon Ready …. Or Not”, PricewaterhouseCoopers, June 2009) found that only 23.8% of businesses were comprehensively prepared for the introduction of the CPRS; and that climate change had yet to become a priority at CEO level. More than one third of companies surveyed had not factored the CPRS into their forward corporate strategy.

Moreover, a recent survey of just under 400 companies by the Australian Industry Group and KPMG found more than 30% of businesses had no knowledge of key elements of the CPRS and found that a significant majority of businesses have no current plans to actively manage their carbon footprint (“Gearing Up: Business Readiness for Climate Change”, July 2009). Over 55% of all businesses are currently not taking steps to become better informed.

Energetics can help you access the full range of assistance for feasibility analyses and capital incentives to drive your cost saving projects and prepare for the low carbon economy. For further information, please talk to your Energetics' account manager.

New, free calculator to help with NGER reporting

To help with the task of entering information into OSCAR, Energetics has developed a tool to make it easy for our clients to calculate longitude and latitude. OSCAR requires that organisations reporting details into the system also record the longitude and latitude of each of their sites/ facilities. To download this free tool, follow the link.

Upcoming NGER deadlines

For companies that exceed the NGER thresholds in 2008/9 there is considerable work involved in preparing your data ahead of the upcoming registration and reporting deadlines. Those tasks include data collection and on-site measurement, information validation, review prior to submission to ensure data quality and the work involved in entering the data into the Federal Government's online system (OSCAR). If you need assistance to meet NGER requirements and deadlines, contact your account manager.

Energy Efficiency Opportunities’ (EEO) program

The Federal Government has confirmed that EEO will be continuing and expanding. Energetics can help you derive savings while meeting your compliance requirements. Your business should also be considering what your public reporting says about your company and its positioning. Energetics review of the first round of EEO public reports can be accessed on our website. Our review revealed that while many public reports are of a high standard, others may not meet minimum compliance standards. We can advise you on the quality of your first public report and how the next report (due December 31) can be improved. These reports are public and open to scrutiny by interested stakeholders.

For businesses reporting under both EEO and NGER, there is a requirement for information in the EEO report to align with the NGER report if your submitted your ARS after 1 July 2008 and, in any event, by 2012. Further, we strongly recommend you align reporting boundaries for both EEO and NGER to reduce your reporting burden and manage stakeholders' perception of information in the public domain. For advice and further information please contact your Energetics' account manager.

Water-related risks and opportunities

The global financial crisis, water scarcity and action on climate change are leading to investor demand for increased transparency for water-related risk.

Mining is an example of one sector for which water presents a critical underlying resource and/or liability: there are supply limitations during drought, peak flow issues during floods, disruptions to operations and ecosystem management. Traditionally water management has been considered a site based issue and limited corporate interest and transparency was required for water related challenges. However, the landscape is rapidly changing with growing concerns amongst investors about how water, and related aspects, are managed. JPMorgan (2008) states that “... corporate disclosure of water-related risks is seriously inadequate ....” and identifies the mining sector as "high risk".

Peter Holt Professional
Follow this link to read the report


All Australian businesses however, should be aware that water prices are increasing. Water charges throughout Melbourne have increased by an average of 20 percent in 2009, Sydney Water will increase it's charges by 25-34% by 2012. Price increases reflect greater investment in water infrastructure to provide reliable water supplies. The current investments encompass energy intensive treatment technologies thereby providing closer links between energy and water prices.

For your interest, follow the link to read
research conducted by the National Water Commission which examines the relationship between electricity generation and water management.

To discuss your business' exposure to water-related risks, please contact your Energetics' account manager or Dr Peter Holt on (02)9929 3911 or Peter.Holt@Energetics.com.au.

NEW DEVELOPMENTS, NEW TOOLS

David Mitchell Professional

Renewable energy - on-site wind generation
Is your business interested in exploring options for on-site renewable energy? On-site renewable generation displacing grid power avoids pass through carbon and distribution costs. On-site wind generation can be cost effective depending on the wind resource at your site. Energetics can provide an initial site assessment and business case development. To find out more, contact Dr David Mitchell on david.mitchell@energetics.com.au or (02) 9929 3911

Carbon abatement investment decision making

With strong understanding of the baseline carbon footprint and quantitative analysis of risks and opportunities, Energetics can work with clients to establish a framework for decision making around carbon abatement using enterprise-specific cost of abatement analysis (including "marginal cost of abatement curves"). This provides an understanding of the most appropriate action for the organisation to minimise carbon emissions and exposures whilst minimising the risks of poor investment decisions. Contact your account manager for more information.

One2Five® Version 2

Energetics is soon to release Version 2 of its One2Five® management diagnostic suite. The new suite offers more flexibility and incorporates a 'carbon readiness' diagnostic tool. More information will be available shortly.