Energetics to play waiting game on energy efficiency target

29 Oct 2010Archived News Energetics in the News

PUBLISHED: EMN. Energetics will apply a ‘wait and see’ approach to findings in the recent Prime Minister’s energy efficiency task group report and doesn’t see the 30% energy efficiency (EE) target as a silver bullet solution.

According to Energetics, “a carbon price coupled with a revitalised white certificate scheme, and a stronger focus on energy market reform and cogeneration will make it easier for businesses to achieve the 30% EE target”.

Anne Pellegrino and Patrick Denvir from Energetics welcomed the first energy white paper since 2004.

“Depending on how fast they [Federal Government] can get that finished you can expect some significant recommendations coming out. The last time they released the white paper the National Framework on Energy Efficiency was launched,” Pellegrino told Environmental Management News.

“It is not clear yet how the proposed 30% EE target will affect businesses, because the cornerstone mechanism to achieve an EE target is a National Energy Savings Initiative, or white certificate scheme.

Thus it is not clear what sectors or end users will be most advantaged, but it is fair to say that the ones which will benefit the most will be the ones that act aggressively on the opportunities that they are given.”

Denvir pointed out the GGAS scheme in NSW saw a spread of beneficiaries and end users, such as Orica, provided a large number of demand side abatement certificates.

The consultants also suggested there were plenty of hurdles to overcome.

“Any recommendations taken up from the report findings will also have to undergo a lot of consultation and high level negotiations, especially in the three states (NSW, Victoria and SA) that have already implemented a white energy certificate scheme as they may be reluctant fold their state schemes,” said Pellegrino.

The overall view is that “there will be a lot of consultation needed, not just at the end user level but also in three states that already have white certificate schemes or an obligation placed on energy retails, which have different rules and coverage”.

Denvir also points to shortcomings in the report, which he said was still less ambitious than many others around the OECD countries.

“There are a lot of issues involved with energy market reform and embedded generation which did not get a lot of focus in the report, as they should have. Especially cogeneration, which has the potential to greatly contribute to the 30% target in terms of energy intensity at the primary level,” he said.

In August, Denvir told a Sydney conference a lot more needs to be done with renewable energy credits, with a total of 45,000GWh needed by 2020, which would amount to a subsidy of $1.8 billion by 2020 in renewables. One way to increase the level of low-emissions cogeneration is to establish a target of 16% total cogeneration by 2020 appended to the MRET, which would take Australia to the same level as other OECD countries.

He also sees the low hanging fruit opportunities or short term payback will be improved with energy efficiency systems especially in mining and transport with improved control and instrumentation systems, as well as better air conditioning and refrigeration systems, and finally new smart grid technologies and waste reduction technology.

Overall, Denvir believes Victoria is leading the way in energy efficiency schemes, mostly due to regulations such as the Energy and Resource Efficiency Plan (EREP) program.

“They are further ahead in terms of legislation requirements and greenhouse emissions targets than anyone else. Victorian large businesses are required to implement those low hanging fruit opportunities, which others are not required to do in other jurisdictions,” he said.

Energetics also welcomed the ACT Government introducing a 40% greenhouse emissions reduction target, which will see significant changes in the state.

“Obviously the ACT does not have the energy intensive industries that Victoria has, but it is good to see that they are starting to act on EE with ambitious targets,” Denvir said.

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