Cuts to save now leave future in better shape too
Though it may not be enough to stop the tide of unemployment rising in Australia’s automotive-manufacturing sector, one expert has a suggestion for way energy efficiency can boost local industries.
Australia’s energy use is considered fairly wasteful, with reports indicating improving efficiency by just one per cetin could bring up GDP by 0.1 percentage points, or about $1.5 billion per year.
Manufacturing was one of the leats efficient industries highlighted in a ClimateWorks Australia report in 2012, which found at the time that CEOs were reticent to make the sometimes costly changes, despite evidence that they would be better in the long-run.
With the recent abolishment of the Innovation Investment Fund (IIF) and Commercialisation Australia – two bodies in charge of helping facilitate such changes – it appears now that improvements are even less likely.
But authorities say there may be some ways within the Federal Government’s new Direct Action, Emissions Reductions Fund (ERF) to bring about better energy efficiency, improving Australian manufacturing and related trades along the way.
Robin Archibald, COO of Ecosave, Australia’s largest independent Energy Services Company (ESCO), has spoken to major industrial news outlet Sourcable about how the new ERF policies might affect energy efficiency.
Mr Archibald was at a recent briefing by Greg Hunt to the Energy Efficiency Council (EEC).
“Under the ERF scheme, businesses will be offered a contract by the government to purchase Carbon Credit Units (CCUs) for five years,” Archibald told reporters.
“The scheme administrator will run a series of Reverse Auctions to determine the price the government is prepared to pay for CCUs. Pricing information will be announced after each Reverse Auction and market expectations for the value of CCUs will be set accordingly.
“The CCUs will initially come from the Carbon Farming Initiative. We are looking forward to seeing the outcome of the first ERF Reverse Auction process, but have some concerns over whether value attributed to CCUs will provide sufficient incentive to stimulate activity in the energy efficiency space.”
Mr Archibald says some of the fear of change raised by CEO in the 2012 ClimateWorks report can be allayed by good planning and finance.
“Some ESCOs now offer project financing, new technologies that provide greater savings, full project management services and guarantees that savings will be delivered,” he said.
Most ESCOs have an obligation to conduct rigorous management of a client’s energy consumption, before during and after upgrades.
This means that if savings are not up to expectations, it is expected that an ESCO will review the entire project.
Nearly every major industry has some areas crying out for energy efficiency improvements, most often in refrigeration plants, HVAC and voltage optimisation, lighting upgrades, boiler, steam and hot water upgrades, and waste heat recovery.
There has been some criticism that the ERF fund is too small and too limited in scope. With a possible plan to remove emissions reduction target obligations entirely, it may be difficult to tell how effective the new green policy will be.