Energy efficiency: the overlooked opportunity

As Australia tries to balance the need for a low emissions future with its economic reliance on high emissions industries, energy efficiency programs are an increasingly attractive option. Australian companies are already on the right track, but the research shows there is a long way to go. Candice Johnson reports.

Australia’s industry sector could be saving an extra 6.4 million tonnes of CO2 emissions a year through energy efficiency measures – the equivalent of 1.1 per cent of Australia’s annual emissions – according to a report released for the Energy Efficiency Opportunity program.

The program, established in 2006, tracks the energy use of the 119 corporations that use more than 0.5 petajoules (PJ) of energy per year, requiring the corporations to review energy efficiency opportunities. These businesses currently account for 31 per cent of Australia’s total energy use, and 62 per cent of the end use energy consumed by all Australian businesses.

The recently released report is the first detailed overview of the energy efficiency opportunities identified, and applies to the period between 2006 and 2008.

The Minister for Energy and Resources Martin Ferguson, who is overseeing the program, has said “The aim of Energy Efficiency Opportunities is to encourage Australia’s large energy-using businesses to identify and implement projects that will save energy, lower their business costs and reduce greenhouse gas emissions.”

According to the report, the 199 companies have already implemented, or committed to implement, emissions reductions equivalent to 0.7 per cent of 2006–07 levels (3.9 million tonnes of CO2-e per year). This would have the same effect as taking approximately 1.1 million cars off the road.

The energy efficiency activities undertaken include addressing fixed energy use, waste heat recovery and management, improved control systems, changing production or processing methods, and measurement and monitoring.

The sub-sector with the highest level of possible energy savings was ferrous metals and alumina production. Companies favoured energy efficiency measures with payback periods of less than two years and 80 per cent of projects that have already been implemented fall into this category.

“The 199 reporting corporations play a major role in Australia’s economy,” Minister Ferguson said.

“They directly employ hundreds of thousands of Australians in regions and communities all across the country.”

On the other hand, Minister Ferguson has said that energy efficiency is of increasing importance as we move to a carbon-constrained world.

“This report shows how rigorous assessments to identify opportunities to improve energy efficiency can lead to significant energy savings, with a commensurate reduction in energy costs and energy-related greenhouse gas emissions.”

CEO of the Energy Efficiency Council Rob Murray-Leach says that the Energy Efficiency Opportunities program has awakened a sleeping giant.

“For years we have neglected one of the biggest and most cost-effective sources of immediate emissions cuts,” Mr Murray-Leach says.

“This report should finally wake us up – we can slash Australia’s emissions today through energy efficiency.”

The International Energy Agency (IEA) estimates that 65 per cent of global carbon cuts by 2020 will be derived from energy efficiency measures. This compares to the combined savings expected from renewable energy, nuclear and clean coal.

“The recent work by the IEA reinforces what we’ve known for a long time. Energy efficiency has to be at the heart of the Australian Government’s climate change response,” Mr Murray-Leach says.

Australian industry is amongst the least efficient in the world, improving by only 0.5 per cent per annum between 1990 and 2005 while other IEA countries recorded a 1.3 per cent improvement per year.

“Poor co-ordination between departments has been a major barrier to ambitious energy efficiency policy in Australia. We hope that the newly formed Department of Climate Change and Energy Efficiency will play a lead role in co-ordinating and driving a step change in energy efficiency,” says Mr Murray-Leach.

“The Energy Efficiency Opportunities program is a very good start, but on its own it’s not enough. We need a plan to help industry to transition over the next decade. This must include financial support to help companies invest in energy efficiency and stringent goals to make sure that the laggards pay attention.”

EcoGen 2010, to be held at the Sydney Convention and Exhibition Centre from 5-8 September 2010, will include dedicated sessions on energy efficiency technology and implementation. For more information, including speakers, program and online registration, visit the EcoGen 2010 website.

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