6 October 2022
Today, attendees at the National Energy Efficiency Summit welcomed the Albanese Government's announcement of its forthcoming National Energy Performance Strategy. The announcement is an important first step to harness the power of energy efficiency in reducing emissions, lowering energy bills, and improving productivity.
As part of the new Strategy announced by Assistant Minister Jenny McAllister at the Summit today, delegates called on all governments to consult and develop an ambitious national energy efficiency target to 2030, backed in by a robust, fully funded set of policies and programs to deliver it to help address the energy affordability, climate change and health crisis.
An energy efficiency target, supported by practical programs to improve energy efficiency in homes, businesses, and industry, will help us shore up our energy supply, lower energy bills, address poverty and inequality, and reduce emissions faster and cheaper.
Australia's energy efficiency target for 2030 needs to deliver all the electricity and gas savings already assumed - but not yet locked in - through the Integrated System Plan, as well as targeting further cost effective opportunities to cut bills and emissions. To do this, we need a rapid review of state and national policies, and a new economy-wide framework for energy efficiency supported by focused plans that target the opportunities and challenges in each sector.
There is an opportunity to work together to bring the benefits of energy efficiency to the nation. By setting our sights on an ambitious target and doing the work necessary to meet it, the benefits to people, our economy and environment will be substantial and ongoing.
The case for energy efficiency has never been stronger
As bills mount in the wake of surging global energy prices, and the climate change crisis worsens, the case for energy efficiency has never been stronger. Too many households and businesses are struggling under the pressure of unnecessarily high energy bills, and too many of our most vulnerable live in dangerously cold or hot homes. A rapid uptake of energy efficiency and management will:
• Immediately reduce energy bills and prevent energy hardship;
• Slash emissions at least cost and accelerate the transition to a net zero economy, keeping open a pathway to limiting global warming to 1.5º;
• Reduce our reliance on fossil fuels and improve energy security;
• Improve health and wellbeing, and reduce poverty and inequality.
Energy efficiency is critical to our energy security
Around the world, we see the fragility of today's energy systems. At home, the Integrated System Plan relies on reducing gas consumption by at least 101 PJ and electricity demand by at least 21TWh by 2030. Market bodies are warning of potential domestic gas shortages in the coming years. Energy efficiency can help bridge this gap, without losing the industry and services that use gas today - but we don't yet have the policies in place to achieve it at the scale required.
Energy efficiency underpins the transition to net zero
Australia is accelerating the transition to a prosperous net zero economy. Over the next 27 years we can make our nation a clean energy superpower, leveraging our immense renewable energy resources. However, we need ambitious deployment of energy efficiency technologies to achieve the clean energy transformation at least cost, in the fastest possible time.
Global bodies like the International Energy Agency and International Renewable Energy Agency see energy efficiency and electrification alone achieving more than 40% of emissions reductions by 2050. Modelling by Climateworks Centre points to a 16% reduction in total energy use by 2030 in a 1.5ºC pathway - which can only be achieved through energy efficiency.
The opportunity is huge, but there are challenges before us. This winter has given us glimpses of what a disorderly transition looks like - energy price spikes, supply shortfalls, and fears of widespread energy poverty.
It's time to get on with it
The solutions to our energy challenges are in our hands - right here, right now. Not only will they save us money, but they'll make the nation a better place to live and work. There's a lot that is outside of our control right now, but there's also a lot we can do:
• We can retrofit poorly performing homes, prioritising low-income households, today.
• We can build high-quality, climate-safe new homes, today.
• We can audit, monitor and improve energy efficiency in businesses, today.
• We can start to upgrade our industry with new, efficient clean technologies, today.
• We can change how we use energy to align with renewable energy production, today.
Today, we can start with simple, straightforward solutions while we rework our energy frameworks to drive deeper savings. There some clear initial priorities for federal, state and territory governments to achieve the target:
Deeply embed energy efficiency into the economy by reforming the National Energy Objectives and energy market regulation to promote an efficiency-first approach, supercharge equipment energy efficiency standards and implement vehicle fuel efficiency standards.
Address Australia's poor housing stock by prioritising the deployment of energy efficiency upgrades in low-income housing, adopting 7 star new housing by 2023 nationally and working towards zero carbon ready homes quickly, implementing mandatory energy performance disclosure of existing homes and minimum energy efficiency rental standards by 2025.
Enhance hard-won gains in commercial buildings by expanding coverage of NABERS and the Commercial Buildings Disclosure program and rapidly incentivising electrification and retrofit of existing commercial buildings.
Jump start the industrial transformation by extending business energy efficiency education and advice, and creating an industrial decarbonisation strategy that includes R&D, innovation support, deployment, finance and assistance to businesses to invest in clean technology.
Quotes from convening CEOs
Edwina MacDonald, Acting CEO, Australian Council of Social Service:
"ACOSS welcomes the Government's commitment to develop a national energy performance strategy to help address the energy affordability, health and climate change crisis, and reduce poverty and inequality.
"We are looking forward to working with the government on strategies to address the needs of low income households.
"The strategy should prioritise energy efficiency upgrades in low-income housing, including dwellings in the social and private rental sectors and those owned by low-income homeowners. Support cannot come soon enough for the millions of people on low-incomes who are living in dangerously hot or cold homes, already depriving themselves of energy and going without food or medicines to afford their energy bills."
Innes Willox, Chief Executive, Ai Group:
"The Government's energy efficiency strategy is an opportunity to put energy demand and energy users at the heart of Australia's energy security. The closer we look at energy reliability the more worrying it is, on both electricity and gas. The global ramifications of the war in Ukraine, our ageing generation fleet and an Eastern gas market transformed by exports all increase our vulnerability.
"Supply side options are important but face many hurdles, from choked supply chains to fragile social license. Action on the demand side is just as important. Lifting energy efficiency, improving energy management and promoting sensible fuel switching can make our supply side task much easier."
Luke Menzel, CEO, Energy Efficiency Council:
"The Energy Efficiency Council is delighted that the Government has recognised the importance of energy efficiency as a critical tool on our journey to net zero. Energy efficiency is the superpower of emissions reduction - it reduces bills and cuts emissions at one fell swoop."
"Today, we see the beginning of a new chapter in energy efficiency. The combined efforts of the organisations represented at today's summit stands a strong chance of achieving a triple win - lowering bills for consumers, reducing emissions, and making the Australian economy more productive and competitive."
Ken Morrison, Chief Executive, Property Council of Australia:
"Today marks a critical and welcome milestone with the Government's commitment to a national energy efficiency strategy. Australians are facing skyrocketing energy bills and cost of living pressures and policies that will reduce energy bills and slash emissions are a no brainer."
"Australia's residential and commercial buildings account for a quarter of Australia's emissions and around half of Australia's electricity consumption. If we can make buildings far more energy efficient, we'll reduce greenhouse emissions faster and more cheaply than many other options, and it will also mean we need to spend less on expensive network infrastructure which will be good for consumers."
