Today’s Financial Review front page news was about the desperate need for more power stations in Australia. The article stated that according to the Australian Energy Market Operator electricity consumption is increasing at 2.5% per year, and we need between 700 and 900 MWh of extra generating capacity per year. And that to cope with increased demand and a carbon price, Australian power generators will have to invest up to $120 billion in new electricity assets over the next 20 years.

These comments, and the failure of the article to mention energy efficiency, clearly show that by and large most people just don’t “get” energy efficiency. Because if as a society we really got energy efficiency, we wouldn’t need any new power stations.

So if you “get” energy efficiency, tell someone. Let me give you some examples of what energy efficiency means:

• A local government client has cut electricity consumption in its office complex by 32% (2010 vs 2006). The office complex contains three major buildings, two of which are over one hundred years old and subject to heritage constraints.
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  Local government electricity consumption

• One of our earliest clients, Westernport Secondary college, used 31% less electricity in 2010 than it did in 2004. Roughly same number of students. Maximum peak demand at the college has also dropped, by39%.
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  WPSC electricity consumption

• The all-electric CarbonetiX office uses 35 kWh/m2/year – that’s everything – light, power, heating, cooling. Most comparable offices would use over 100 kWh/m2/year. We are certainly using much less than the previous tenant.

All these examples show what energy efficiency can do to reduce the demand for energy – and cut carbon emissions -whether a building be old or new, owned or leased. And the energy efficiency measures implemented at the local government office,  Westernport Secondary College and the CarbonetiX office haven’t been particularly complex or used leading edge technology. In fact some of the savings come not from technology, but from choice. Choosing to switch off, to only switch on when necessary, choosing to change the air conditioner temperature settings, choosing to be conscious of energy usage.

The example of Westernport Secondary College is particularly interesting. If every household and organisation that uses electricity could do what Westernport Secondary College has done we would need about 39% fewer power stations, not more.

I’m not the only one who “gets” it. New Scientist has recently reported on a study by Cambridge University which found that energy efficiency could cut world energy usage by over 70%.

Energy efficiency has multiple benefits:

• It reduces carbon emissions
• It saves money for the energy consumer
• It reduces peak demand
• It reduces upward pressure on electricity prices

So, if you “get” energy efficiency tell someone!

The Victorian State Government’s Climate Change White Paper – Implementation Plan, shows determination to reduce the state’s greenhouse gas emissions, with the aim of lowering emissions by 20% compared with 2000 levels, whether or not there is global agreement on greenhouse gas abatement targets.  Around the world other states and countries have also set abatement targets. California has set a target of returning to 1990 emissions by 2020. And the UK aims to reduce emissions by 34% relative to 1990 levels.

In the White Paper 10 action areas for achieving this target are mapped out, which are:

1. Climate change legislation to cut greenhouse pollution by 20% – The Climate Change Act, which passed state parliament in September .
2. Moving towards a cleaner energy mix. This includes the prohibition of the construction of brown coal power stations, and also a commitment for emissions from existing brown coal powered stations to be reduced.
3. Investment in renewable and clean energy in Australia. It has the vision of making Australia the “solar state” with 5% of our power to come from solar energy by 2020, and of bringing in a large scale solar feed in tariff. In 2010 93% of Victoria’s power comes from brown coal, by 2020 the aim is that this will be reduced to 60%, with the rest coming from wind (20%), natural gas (15%) and solar (5%).
4. Support cleaner and more efficient homes. This will be achieved via expansion of the VEET (Victorian Energy Efficiency Taskforce) scheme and by requiring all homes to be 5 star by 2020.
5. Positioning Victoria to be a global clean tech leader by 2015. This sees leadership in the area of carbon finance and in helping business reduce its carbon emissions. It doesn’t have any particular focus on a specific area (eg energy efficient buildings in a temperate climate). It sees skills developing in the areas of low energy homes
6. Creating new opportunities in agriculture, food and forestry, with a focus on carbon offsets, lower carbon agricultural practices and soil carbon sequestration. A Victorian carbon exchange will be developed whereby these offsets can be voluntarily purchased.
7. Delivering innovative transport solutions. This has a focus towards moving the transport of people and freight from motor vehicles to public transport and rail, and supporting vehicle technology with lower emissions.
8. Greening government. This has a focus on increasing greenpower purchases, reducing energy use in buildings through an energy performance contract model and installing cogeneration systems in hospitals. It also provides support to local government
9. Helping Victorians adapt to climate change, particularly in adapting to the effects of heat, floods and drought, and also in researching and understanding better the long term impacts of climate change, in particular along the coastline.
10. Strengthening “Climate Communities.” This provides grants to community groups through the Climate Communities program. The AuSSI Vic Resource Smart Schools program will also be extended to all government schools.

Access the Whitepaper at http://www.climatecommunities.vic.gov.au/

A zero net energy building is one that produces as much energy as it uses. Yet, to my knowledge, there is not one commercial building in Australia that has been converted to zero net energy use. Its challenging, but not impossible. I’m looking for someone who wants to take up the challenge with us and demonstrate leadership in what can be done with existing buildings.

The imperative for buildings with zero net carbon emissions exists in climate change. It is not practical to tear down all our existing buildings and replace them with new zero net energy buildings. Additionally, the embodied carbon in new buildings is high. There is a strong rationale for taking existing buildings and turning them into buildings that have zero net carbon emissions in their operation. Yet, while I believe this is achievable in many climates (such as Melbourne) with current technology, we are not yet doing it. So I’m looking for someone who wants to demonstrate leadership and start blazing the trail for other building owners to follow.

Globally there is growing support for Zero Net Energy Buildings, and a number of such buildings already exist. The Department of Energy in the US launched it Zero-Net Energy Commercial Building Initiative two years ago in August 2008. It aims to have such buildings marketable by 2025. It  hosts a database (http://zeb.buildinggreen.com/) that features eight buildings that have already achieved this status, ranging in size from 1,530 to 13,600 square meters. One of these is the IDeAs Z Squared Design Facility, a 1960 two storey office in San Jose California that was transformed into a zero net energy building in 2007.

Another example is the Zero Energy Office in Malaysia, built in 2008 and owned by PMT. This building achieves zero net energy in a challenging climate. Singapore also has a 4,500 m2 zero energy building, which was a retrofit, at an academic campus.

We have helped several of our clients achieve energy savings of 50% or close to 50%. I’m itching for the opportunity to go all the way and get a year round 100% reduction in energy imported from the grid, whilst delivering a workplace that is comfortable and healthy. This is extremely challenging, as energy use needs to be reduced to around 30kWh/m2/year for a single storey building – and even less than this for multi-storey – and then the roof covered with solar panels to generate all the energy the building uses year round. But I’m confident it can be achieved. In our existing leased premises we are using just over 30 kWh/m2/year. I know it’s possible to get energy use this low on the top storey of a building (which we are) or in a single storey building. A relatively narrow multi storey building, would also be suitable, but even more challenging.

And the economics? I think that zero net energy use could be achieved at little extra cost with an existing building that was in poor condition and due for a major refurbishment, including a complete changeover of the existing HVAC system.  It won’t be cheap, as zero net energy in Melbourne means a building that is very well insulated and sealed, has a good amount of thermal mass, and has good control over how the sun gets into the building. But if the building is in a bad state anyway, a fair bit of money will need to be spent in any case. The aim would be that anything extra spent on the refurbishment to achieve zero net energy would pay for itself in less than ten years in the energy savings.

Prerequisites are:

• Single storey, or reasonably narrow multi-storey building no more than 4 storeys high.
• Building must be a commercial building – for example, an office, library, etc – cannot be residential or industrial.
• At least 1,000m2, but preferably in the range of 2,000 to 5,000m2 in area.
• Building must be structurally sound.
• Owner who:
  • Wants to have the first, or one of the first, existing commercial buildings in Australia to be retrofitted for zero net energy,
  • Is willing to really engage actively in the process,
  • Wants to stand up, be seen as a leader, and promote the concept of zero net energy building refurbishments.
  • Is ready to start now.

Please get in touch with me if you own such a building and are interested, or know of someone who is, or, if you are an investor and are willing to buy an existing building and turn it into a showcase.

Bruce Rowse

In Australia I see essentially two political choices for taking action on climate change. Vote for a party committed to reducing greenhouse gas emissions and implementing an emissions trading scheme (ETS) or vote for a party not committed to an ETS and relying on ‘direct action’ to reduce carbon emissions. The major political parties are in essence providing these two choices to the Australian public – Labor for an ETS and the Coalition against an ETS. The two key minor, but still influential parties offer the same choice – Greens for an ETS and the Nationals against.

But what is an ETS and what is direct action? If people don’t understand the choices how are they to make an informed decision?

Direct Action

Direct action is essentially funding measures and initiatives through tax payer’s money that will reduce carbon emissions. Sounds simple enough, and of course voters can be led to believe that the government is taking control and doing something immediate to tackle Australia rising greenhouse gas emissions. The Liberal party is promoting direct action and refers to an ETS as a ‘great big tax’, but surely direct action could be termed the same – after all, direct action is still using tax payers’ money!

Emissions Trading Scheme (ETS)

What is an ETS and what advantage does it offer over direct action? The Department of Climate Change refers to its ETS policy as a Carbon Reduction Pollution Scheme (CPRS). An ETS is also commonly referred to as a cap and trade system or simply carbon emissions trading. What this means, is that the Government basically sets a cap or limit on the amount of pollution (carbon emissions) that can be emitted. This cap is sold to participants (the big polluters) in the form of carbon emission permits, which each are worth a specific amount of specified pollutant – in the context of tackling climate change, carbon dioxide. Holders of the permits are then allowed to trade the permits within each trading period set by the Government. The total amount of permits cannot exceed the cap, which over time is reduced by the Government, forcing the market to adjust and carbon emissions reductions to be achieved.

Essentially, participants of the trading scheme are allowed to pollute a certain amount within each period. If they exceed this amount (the cap), then they must purchase permits to allow them to pollute. So participants below the cap can choose to sell their permits to participants who require them. This puts a price on carbon pollution and if well designed, provides an incentive for participants to reduce their emissions.
The Labor Government came very close to passing an ETS, however it was blocked in the Senate twice in 2009. The Greens Party played a key part in the failed policy adoption of a ETS as they viewed the scheme as watered down, with a target to reduce Australia’s net carbon emissions by only 5 percent. To some degree I agree that the targets need to be much higher if Australia is to really move towards a low-carbon economy, however being too ambitious too early must have implications for our economy.

Labor is still committed to implementation of an ETS, but has postponed any commencement until 2013, claiming a divide on the issue due to a lack of consensus on climate change. They are offering direct action initiatives in the short-term, and a so called Citizens Assembly to form consensus for a future ETS. I get the feeling the lack of consensus is within the political realm, because I get the feeling most Australian’s want action on climate change, but just aren’t sure what the best action is.

Are you for an ETS or against?

I see the choice as simple – vote for a potential ETS or vote for no ETS. So what’s the advantage of an emissions trading scheme over direct action? An ETS is market-based, which from an economic perspective is more efficient and results in reducing carbon emissions at lowest cost. So the claim by the Liberal Party that an ETS is a ‘great big tax’ is not directly true. The problem lies in Government intervention in the form of subsidies and other exemptions, which are funded through tax payers’ money. Australia is a carbon emissions intensive nation, due to key sectors including the energy sector and aluminium smelter industry. An ETS without government intervention would mean these sectors would be the hardest hit, such that they would need to invest dramatically to improve energy efficiency and where above the cap, pay to pollute. This is argued to impact Australia’s global competiveness and will most likely increase the cost of commodities affected.

So, the argument against an ETS is that participants will have to spend money to reduce their carbon emissions and this expense will partly be passed on to consumers. While this may be true, at the end of the day, someone needs to foot the bill and if climate change is everyone’s problem then we should all be contributing.

Getting the balance right

The question is, do we contribute through direct government expenditure, or indirectly through a market-based scheme? Governments do not exactly have a good reputation for spending tax payers’ money efficiently so I would argue an ETS is the way to go. However, the success of an ETS really comes down to its overall design. Yes, we want to reduce emissions, but we don’t want to endanger Australia’s economic competitiveness. Like anything, it’s a balancing act, but if we get so bogged down in analysis paralysis, we’ll never achieve any real outcomes.

The Australian Conservation Foundation (ACF) has released its scorecard for the forthcoming federal election, and will update it weekly. With only 3 weeks to go, the three major political parties have clearly put entirely different emphases on the importance of the world in which we live. Which best suits you?

As the ACF states: “Unfortunately, the scorecard shows that to date the ALP and the Coalition are failing on cutting pollution and protecting the environment. Check out how the environmental policies of each of the parties rate, and what work needs to be done…”

These have all been calculated from the publicly stated policies of the political parties. Some of the criterion for the results above included:

Question 1 – Pollution and a Clean Economy:

• Deliver science based greenhouse gas pollution reduction targets with the urgency required?
• Reduce fossil fuel subsidies and re-invest the proceeds into the clean energy economy?
• Embed environmental sustainability into decision making processes of government?

Question 2 – Clean Energy:

• Boost renewable energy at the scale needed by 2020?
• Put Australia on track to be a leader in energy efficiency in the developed world by 2020?

Question 3 – Sustainable Cities:

• Result in world leading, better planned, resource efficient and sustainable cities by 2020?
• Boost federal transport spending to achieve world class public and active transport systems for Australian cities and regional centers?

Question 4 – Healthy Environment:

• Build resilience of ecosystems to climate change, protect carbon stores and significantly reduce land use emissions?
• Bans the importation of illegally logged timber products and helps achieve effective forest protection in the Asia pacific?
• Protect the cultural and natural values of the Kimberley with Traditional Owner consent?

For more detail on how the four scores were assessed, go to http://www.acfonline.org.au/default.asp?section_id=374 .

As you decide what you’re going to use your vote for, consider the consequences of voting for each of these parties. Some cultures plan for sustainability many generations ahead – the Iroquoi up to seven generations. Can enough Australians see beyond the next election?