Stop Selling Energy Efficiency. People and Business don’t want it

‘Energy Efficiency’ isn’t sexy, nor is ‘saving energy’; one sounds technical and difficult and the other sounds like you are a miser. I’ve heard a number of titbits recently that makes me realise there another part of the story to help get more buy-in from customers.

Here are a few quotes I’ve paraphrased to set the scene.

“People inherently view the Australian star rating on fridges as an indicator of the quality and it works so much better than in the US where they show the yearly dollar savings.” Rob Murray-Leach, Energy Efficiency Council

“Our vision for the factory is that it will be cool and quiet, then we’ll know it’s highly efficient.” Craig Morgan, Northmore Gordon

“We stopped selling the savings and efficiency of double glazing, LED lighting, good insulation and high efficiency heat pumps. Instead we talk about high quality apartments, which are highly liveable and very comfortable.” Rory Martin, Fraser Properties

Put simply, those of us in the industry should start talking much more about the quality that results from energy efficiency. People desire quality . Classical Economic theory says that people are rational and they aim to maximise utility; to get the best value for money. But, people don’t want something that’s cheap and saves them money, they want something that’s the best they can afford that improves their lives.

 

So back to energy efficiency.

  •  LED Lighting really is superior to traditional lighting, it lasts much longer, degrades very slowly over time and can be manufactured in a wide range of colour temperatures.
  •  Buildings with a good thermal envelope, good insulation, low-e double glazed windows, and high thermal mass are so much more comfortable to live in.
  • Temperatures change slowly and you don’t end up with hot or cold areas, draughts, or noise from outside.
  • Buildings with good HVAC control systems maintain consistent temperatures, are nice to work in, and hence again are less wasteful.
  • Producing high quality in a consistent fashion involves carefully monitoring all inputs so it is the same each time, and nearly always, this minimises waste (energy, water, raw materials) and adds to the bottom line of the business.
  • Equipment that is well-maintained lasts longer, performs better and cost less to run over its lifetime.

The list goes on, but the underlying premise is that a higher focus on quality outcomes is a great way to frame energy efficiency for customers – and perhaps without even needing to mention the technical, complex and thrifty things that only the more cost-focused amongst us think about. It’s potentially a way to engage to a much broad group of people in businesses as well as with the public. They may not care about saving money or the planet, but most people do want the best quality they can experience.

Big Business Gets It, Why don’t the Liberals

In the past five years, we’ve seen the banks backing away from funding in fossil fuel projects, financial regulators calling out risks, energy and mining companies reducing reliance on coal and oil, the state government doing their bit, yet our Federal Government continues to bow to a small number of highly pro-coal individuals.

 

Early this year Westpac joined the other banks in declining to provide finance to the Adani project.  AGL have stated that they will not be building any new coal-fired power plants and AGL is planning to retire Liddell by 2022 as the ageing station costs more and more to maintain and renewables are cheaper, and the other energy companies are all investing in renewables.  Early this year APRA board member Geoff Summerhayes warned the finance industry that climate change risks are foreseeable, material and actionable now and directors have a fiduciary responsibility to shareholders to consider and manage these risks.  The latest piece of news is that BHP has triggered the early departure of the Minerals Council of Australia CEO due to his ongoing pro-coal lobbying.  BHP Billiton has had teams working on mitigating their portfolio against climate change for over 15 years, they are under no illusions.  Mike Henry, BHP Australian Minning boss, said  BHP was a strong supporter of the Finkel Review of energy and the Clean Energy Target, which is being held up by pro-coal forces in the federal government.  We now have QLD, NSW, VIC, and SA, and the ACT all committed to zero emissions by 2050 (TAS is almost already there), they are helping to fill the gap left by the federal government.

 

The science of climate change is absolutely irrefutable, and renewable sources of power are lower cost, the state government are doing their bit, but business needs certainty at the national level.  Australian energy prices have been driven sky high, through a lack of regulatory certainty and through a continued investment in centralised generation when the reality is the future will a highly decentralised system of generation and consumption.

 

The miners, the banks, the energy companies, financial regulators, the state governments and the public all get it.  Why doesn’t the federal government?

 

VEET Schedule 34 Discount Factors – Consultation Paper & Government Gazette

The Department of Environment Land Water and Planning (DELWP) has now released the anticipated VEET Schedule 34 consultation paper with the proposed discount factors.

As required by the VEET Act they have also released the Government Gazette “Notice of Intention to Declare a Discount Factor” and hence have put everything in place to introduce a discount factor for both Highbays and T8/T12 Fluorescent Lights from the 1st of January.

As suggested by EECCA they are proposing to implement the discount factor in two stages to give businesses time to adjust.  Initial change on the 1st of January 2018 and a further change on 1st of April 2018.

  • Metal Halide, Mercury Vapour, and High-Pressure Sodium (eg highbays, floodlights, certain rectangular shop lights and some others)
    • DF: 0.85 from 1st January 2018 to 31-Mar-2018
    • DF: 0.7 from 1st April 2018
  • Fluorescent T8/T12 (retail, offices, warehouses, factories, schools, etc)
    • DF: 0.9 from 1st January 2018
    • DF: 0.8 from 1st April 2018

Given that the government released the issues paper on the 18th of August and has included some of the recommendations from submissions to the previous issues paper, it appears highly likely that once the consultation process has been completed that the government will go ahead with this change.

The discount factor is a multiplier (default value of 1.00) for the carbon dioxide equivalent emissions and hence the proposed multipliers will reduce the VEEC quantity for upgrades from the lamp types above.  EG A typical MH highbay to LED receiving 17 VEECs will receive 0.7 x 17 = 11.9 VEECs from the 1st of April.

It isn’t clear from the consultation or gazette if the dates apply to the Activity Date (ie jobs completed by the dates above) or Creation Date (jobs submitted to the VEET portal by the dates above).  In the past, the types of changes have applied to the Activity Date.  We are seeking further clarity and will let you know once we hear back from DELWP.

Please don’t hesitate to contact Wattly for more information.  Below is the table from the Government Gazette and links to the consultation paper and Gazette.

https://www.energy.vic.gov.au/energy-efficiency/victorian-energy-upgrades

*Note that this does not apply to Non-Building Based Lighting under Schedule 34

Disruption of Energy and Transportation

If you need some inspiration, Tony Seba makes an incredibly compelling case for rapid transformation of the car from petrol to electric and predicts it happening in a very short time.  Couple that with self-driving cars and we could see a lot more space in our cities in the next 20 years.  Solar PV, batteries, and powerful machine learning costs continue to fall rapidly, and this sets the stage for major disruption over the next 10 years.  Given that economics and self-interests drive change and uptake much faster than activism and concern for the planet, I’m very excited by the possibilities in the presentation and much-needed reductions in greenhouse gas emissions from the transportation sector.   The Economist predicts a slower transition but still claims “The death of the internal combustion engine” is coming. The video from Tony Seba is an hour long but definitely worth watching.

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