National Energy Savings Initiative

The National Energy Savings Initiative Working Group has invited interested people and organisations to make a written submission in response to topics raised in its Issues Paper. (Department of Climate Change and Energy Efficiency Media release 21 December 2011)

• Submissions in response to the Issues Paper close at 4 pm AEST, Monday 27 February 2012.
• Submissions in response to the Modelling Assumptions Report close at 4 pm AEST Friday 17 February 2012.

An Energy Savings Initiative is to place obligations on energy retailers to find and implement energy savings in households and businesses.

Senator Milne said in a press release on 21 December 2011:

The discussion paper and call for submissions into a National Energy Savings Initiative released by Minister Combet today is another great Greens idea coming to fruition.

"Energy efficiency is not only the easiest and fastest way to cut pollution, but it actually saves us all money while we're doing it," said Acting Leader of the Australian Greens, Senator Christine Milne.

"For too long, governments, businesses and householders haven't tackled our hugely wasteful use of energy because there has been no clear and urgent driver to do so.

Just a few of the topics raised in the Working Group's Issues Paper are:

Chapter 3: Major design elements

3.3 Sectoral coverage

27. The Australian Government has committed to investigating a broad-based national Energy Savings Initiative, that is, one that allows activities to be undertaken in the residential, commercial and industrial sectors. Are there sectors, or sub-sectors, that should or shouldn’t be excluded from undertaking activity in a national Energy Savings Initiative? Why? What costs would inclusion or exclusion of certain sectors impose?

Chapter 4: Improving energy efficiency in different sectors

4.2 Small and medium enterprises (SMEs)

71. For different SME types, what is the opportunity and scope to improve energy efficiency?

72. What are the barriers that currently prevent SMEs from taking up available energy efficiency opportunities? To what extent could these be addressed by a national Energy Savings Initiative? Is there evidence that other policies or programs would be more effective in achieving this objective?

73. Are there particular Energy Savings Initiative design features that would increase the uptake of energy efficiency opportunities by SMEs? Are there design features that would impede such opportunities from being unlocked?

4.3 Commercial, government and community buildings

75. Can you provide evidence or examples where barriers limit uptake of cost-effective energy efficiency in the commercial, government and community sectors? Would these be impacted by an Energy Savings Initiative? If yes, how? Is there evidence that other policies or programs would be more effective in achieving this objective?

4.4 Industrial and mining operations

78. Can you provide evidence of where barriers limit uptake of cost-effective energy efficiency in the industrial sector? How would these be impacted by an Energy Savings Initiative?

4.5 Energy generation and networks sectors

83. Should activities which save primary energy be credited in a national Energy Savings Initiative? If so, what approach or methodology should be used to credit these activities and why?

84. Have barriers that could be addressed by an Energy Savings Initiative been effectively addressed by other policy mechanisms? Can you give specific evidence or examples as to why covering generators under a national Energy Savings Initiative would or would not produce positive outcomes?

85. Given the monopoly nature of energy networks and their unique regulatory environment, can you provide evidence that an Energy Savings Initiative is or is not an appropriate policy tool to encourage greater energy efficiency? Can you provide any evidence to suggest that the incorporation of energy networks will or will not provide a net benefit?

Chapter 6: Peak demand

6.3 Energy consumers’ response to peak demand reduction incentives

98. Do you see risks in implementing incentives designed to reduce peak demand outside of energy market frameworks?

99. Do you have evidence or examples to forward the case that certain activities should or should not be incorporated in a potential Energy Savings Initiative peaking component? In particular:

a. active demand response mechanism (such as load control)

b. passive mechanisms that change the load profile overtime (such as high efficiency air conditioning)

c. load shifting (where there may be no energy saved and greenhouse gas emissions may increase)

d. distributed generation or fuel switching (and which fuels), or

e. network management activities?

6.4 Design considerations for a national energy savings initiative that explicitly targets peak demand

104. Of the above examples of scheme designs, which, if any, are likely to drive greater benefits and uptake of demand response activities? Which options have higher risks and complexity? Please provide supporting evidence.

From Energy Savings Initiative Working Group Issues Paper, at page 5:

Projected composition of future electricity price rises

		2010-11	2011-12	2012-13	2013-14
X	other state-based schemes	0.22	0.22	0.20	0.21
X	energy efficiency & demand management / state schemes	0.55	0.60	0.68	0.75
X	Small renewable energy scheme	0.21	0.53	0.32	0.15
X	Renewable energy target / large-scale renewable energy target	0.22	0.42	0.51	0.54
X	Retail	3.36	3.80	4.18	4.37
X	Feed-in tariffs	0.02	0.07	0.19	0.26
X	Distribution	8.35	9.57	10.61	11.15
X	Transmission	1.73	1.92	2.08	2.23
X	Carbon price impact	0	0	1.65	1.74
X	Wholesale	7.74	7.63	10.39	11.09
	TOTAL (cents / kWh)	22.40	24.76	30.81	32.49

Source: Australian Energy Market Commission, ‘Possible Future Retail Electricity Price Movements: 1 July 2011 to 30 June 2014’ (2011). These projections relate to regulated electricity tariffs and prices have been weighted by the number of residential customers and the average residential electricity price in each state and territory. The Treasury estimates that the impact of the carbon price mechanism on average household weekly expenditure on electricity would be $3.30 per week in 2012–13.

NOTE: The "Possible Future Retail Electricity Price Movements" are for RESIDENTIAL customers only. Many large business customers have long-term fixed electricity price contracts.