Tuesday, August 25, 2009

Queensland inquiry into energy efficiency

The Queensland Parliament is holding an inquiry into energy efficiency. The Environment and Resources Committee is to report to the Legislative Assembly by 30 November 2009. Readers may find my Submission on Sustainable ICT Procurement to the ACT Legislative Assembly of relevance. The Queensland committee has held two seminars (Townsville 24 July and Brisbane, 7 August) and invited submissions. There is a Media Release, Issues Paper and List of energy efficiency policies and initiatives available. Here are excerpts from the issues paper:
This paper provides background information about the committee and its inquiry into energy efficiency improvements. It also flags the issues that the committee would like people to comment on.

The Committee
The Environment and Resources Committee is a select committee of the Queensland Parliament appointed to monitor and report on issues in the policy areas of: environmental protection; climate change; land management; water security;
and energy.

Inquiry Terms of Reference
On 23 April 2009, Parliament resolved that the committee will examine and report on the economic and environmental potential provided by energy efficiency improvements for households; communities; industry; and government.

For this inquiry, the committee will consider:

• The economic and environmental costs and benefits arising from energy efficiency improvements;
• Potential barriers and impediments to improved energy efficiency;
• Potential policy options for energy efficiency improvements, with an emphasis on initiatives that are cost effective for individual producers and consumers; and
• The role of the Carbon Pollution Reduction Scheme and other Commonwealth Government initiatives in encouraging energy efficiency.

The committee is required to report their findings to Parliament by 30 November 2009.

What is Energy Efficiency?
The term ‘energy efficiency’ and what might be considered an energy efficiency measure or improvement has come to mean different things to different people. For this inquiry, the committee has drawn a clear distinction between energy efficiency improvements and other initiatives to conserve or limit energy use by simply doing less.

Energy efficiency measures, unlike energy conservation, aim to reduce energy consumption while at the same time maintaining or increasing the level or useful output of outcome delivered using less energy input. Examples of energy efficiency improvements include energy-efficient lighting, heating and cooling systems as well
as improved energy management practices.

Choosing to travel less by car or turning down the thermostat on air conditioners are examples of energy conservation measures, which are not part of this inquiry.

Energy in Australia
Energy is vital to our economy both as an input to production across industry sectors and for consumption by households. It is also a driver of economic growth and wealth creation contributing to the general economic and social wellbeing of all Australians.

Of the member nations of the International Energy Agency (IEA), Australia has the fifth-highest energy intensity (that is, energy use per unit of Gross Domestic Product) behind only Canada, Finland, the United States and Belgium.

Despite a general slowing of energy consumption growth in recent decades compared to previous trends, energy consumption continues to grow in Australia at an average of 2.3 percent annually. ...

Energy in Queensland
Twenty-three percent of Australia’s energy consumption during 2006-07 was consumed in Queensland.7 The state’s major energy-consuming sectors were electricity generation (29 percent), manufacturing (24 percent), transport (24 percent), mining (7.9 percent), residential (7.7 percent), and commercial and services sectors (4.4 percent). ...

Queensland’s total energy consumption almost trebled over the thirty years. Consumption for energy generation, transport and manufacturing accounted for over 85 percent of all energy use. Residential energy use as a proportion of total energy use
actually fell over the period from 5.5 percent in 1976-07 to 4.5 percent in 2006-07.

The Benefits of Energy Efficiency Improvements
Improving energy efficiency is widely accepted as the least-cost approach to reducing greenhouse gas emissions. According to the IEA, energy efficiency offers a powerful and cost-effective tool for achieving a sustainable energy future.

Improvements in energy efficiency can reduce the need for investment in energy infrastructure, cut fuel costs, increase competitiveness and improve consumer welfare.
Environmental benefits can also be achieved by the reduction of greenhouse gases emissions and local air pollution. Energy efficiency policy and technology in buildings, appliances, transport and industry, as well as end-use applications such as lighting can be realised through best-practice, highlighting the possibilities for energy efficiency improvements and policy approaches.

The IEA concluded that between 1990 and 2004 energy efficiency improvements in IEA countries avoided around 1.2 billion tonnes of greenhouse pollution being emitted in 2004. They also saved at least US$170 billion in fuel and electricity costs in the same year. In the past, the IEA has noted that Australia compares poorly to other OECD countries in the uptake of technical energy efficiency. Over the period from 1990 to 1998, Australian energy efficiency improved at an average annual rate of 0.3 percent, while the average in other OECD countries was 0.7 percent per year.

In late 2007, the Australian Government committed Australia to cutting greenhouse gas emissions by sixty percent from 2000 levels by 2050. Modelling by the IEA shows that as much as half the savings in greenhouse gas emissions required by 2050 can be achi eved by adopting energy efficiency measures.

Better energy efficiency is also good for the economy.
By reducing energy costs, businesses, households, communities and governments can realise savings in their energy spending and spend more on non-energy goods,
equipment and services.

Policies to Promote Energy Efficiency
All Australian Governments have committed to implementing measures to improve energy efficiency. Government policy has largely focused on three areas: the establishment of energy efficiency provisions for the Building Code of Australia;
labelling standards and minimum energy performance standards (MEPS) for appliances and equipment; and financial incentives and rebates for the implementation of energy efficient and renewable energy technologies and the phasing out of old technologies.

The Federal Government released a Green Paper in July 2008 outlining its proposal for a national Carbon Pollution Reduction Scheme (CPRS) to commence in 2010 as the primary mechanism to encourage activities and investment to reduce emissions. At the time of writing, the Federal Parliament had not considered the legislative amendments necessary to establish the proposed CPRS. The reporting deadline for this inquiry may limit the committee’s consideration of the impacts of the CPRS scheme.

Current Queensland Government energy efficiency initiatives

• Four-star energy efficient commercial buildings by 2010 and improved standards for energy efficiency in residential homes;
• Phase out of electric storage hot water systems with greenhouse-friendly alternatives from 2010.
• ClimateSmart Homes rebates and ClimateSmart Living education campaign;
• Home EnergyWise tools – energy efficiency self-audit tools and materials; and
• Energy Choices Program – complementary incentives that includes residential gas installation rebates, energy audit service, school energy efficiency action plans and an
Energywise off-peak campaign.

Information on Energy Efficiency Initiatives
The committee’s website http://www.parliament.qld.gov.au/erc includes links to information about major Australian Government and Queensland Government energy efficiency policy initiatives and the CPRS.

1. What have been the economic and environmental costs and benefits of energy efficiency initiatives affecting households, industries/businesses, governments and
communities in Queensland?
2. In economic and environmental terms, what energy efficiency initiatives have been effective in Queensland?
3. What role do Commonwealth Government initiatives, including the proposed Carbon Pollution Reduction Scheme, play in encouraging energy efficiency?
4. What additional policies should the Queensland Government implement to encourage energy efficiency improvements?

Barriers and Impediments to Energy Efficiency Improvements
A range of barriers and impediments can delay or impede the full implementation of energy efficiency enhancements.

They include:
• A lack of awareness and understanding of costs and savings;
• Resistance to change;
• The lack of energy efficient alternatives;
• Expectations of low returns and high risks;
• The initial cost of the enhancement;
• The likely payback period to realise a financial return from the enhancement;
• The long lifespan of pre-existing vehicles, equipment and appliances;
• The relatively low cost of energy versus the high cost of change;
• The lack of expertise and advice; and
• Market failures due to insufficient information and the corporate risks associated with research and development.

5. What barriers and impediments to energy efficiency enhancements exist in Queensland?
6. What policies should be considered to overcome these barriers and impediments?
7. How can governments make information on energy efficiency improvements more accessible?

From: Issues Paper, No. 1, Environment and Resources Committee, Legislative Assembly, Queensland Parliament, June 2009

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