EEO program closed, but energy efficiency projects have never been more attractive

EEO program closed, but energy efficiency projects have never been more attractive
16 May 2014Archived News Climate Change Matters

This week participants in the Energy Efficiency Opportunities (EEO) program were advised that EEO will close from 29 June 2014.  Closure of the Program is dependent upon repeal legislation passing through both Houses of Parliament. 

The government’s announcement also expressed interest in considering options to promote energy productivity (of which energy efficiency is a central component) as part of the Energy White Paper consultation process.

The realities of continued upward pressure on energy costs make investments in energy improvement projects commercially attractive.  A focus on reducing costs and improving energy productivity contributes to a business’ overall productivity and in turn, improves competitiveness.  Furthermore, improved use of energy mitigates future risk in the broader context of Australia’s current and future commitments to reduce greenhouse emissions.

Major points in the announcement:
• The EEO Program has delivered significant financial benefits to Australia’s large energy users.  However, the planned repeal is in line with the Government’s commitment to reducing costs for business and its deregulation agenda. 

• The repeal will include all aspects of the Act and its supporting Regulations, including the recent extension of the Program to new developments and expansions.

• It is expected that the repeal process will commence prior to 29 June 2014.  If the repeal process is successful after 29 June 2014, the repeal will be retrospective.

• Participants will not have any assessment or reporting obligations in regard to the EEO Program after 29 June 2014.

• The Government will continue to cooperatively explore options for improving energy productivity through the current Energy White Paper process.

What steps should you consider to ensure that the significant benefits offered by energy productivity are a feature of your business? 
We believe the message of improved energy productivity (improving the financial outcome per unit energy spend) is vital to businesses seeking to reduce costs, improve performance and remain competitive.  Large energy users have much to gain by a continued focus on improving the use of energy and the way that energy budgets are deployed.

Immediate steps to consider:

• Continue to evaluate the opportunities that you have identified through the EEO program, ensuring that your business realises the value from investments in time and money already made.  Many of these projects will offer significant savings.

• Develop a specific agenda for improving energy productivity in your business to reduce costs and to drive performance improvements, tailoring your approach to meet your unique characteristics.  A comprehensive agenda for improved energy productivity will contain initiatives to manage energy purchase costs, use energy more efficiently, improve throughput, and collect data and measure variables more effectively for improved decision-making. 

You could also explore other ways to drive continuous improvement in energy management within your operations, particularly certification under ISO50001.  For most companies that are compliant with EEO and certified under 140001, this is a relatively small step, and can help to integrate energy management into established business systems.

• Consider the eligibility of opportunities found through EEO assessments conducted at your business to access funding from the future Emissions Reduction Fund.  Read Energetics' earlier article, "Emissions Reduction Fund White Paper: Energetics' advice to business".

• Participate in the Energy White Paper process (Green Paper due to be released in May 2014), which specifically mentions energy productivity as a key policy objective.

Energetics' advice
As proven, low cost abatement options, we expect that energy efficiency and energy productivity will feature prominently in any future national energy policy response.  However, business has an opportunity to make a submission to the Energy White Paper process to contribute further insights into the value of energy efficiency and energy productivity for specific sectors.

Energetics can help you demonstrate the value of existing energy efficiency projects, sure up a business case for new opportunities including securing highly advantageous financing arrangements, and assist with cost-effective project implementation.  

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