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THE ENERGY EFFICIENCY SUPPLEMENT 2012
THE ENERGY EFFICIENCY SUPPLEMENT 2012
Acknowledgement
This publication was funded under the National Strategy for Energy Efficiency and is a joint initiative of
Australian State and Territory Governments. The publication should be attributed to the National Centre for
Sustainability, Swinburne University of Technology.
The National Centre for Sustainability, Swinburne University of Technology would like to acknowledge the
NFEE Training Committee and industry contributions during the development of this publication.
Cover Design by Zach Bresnahan
Instructional Design and Diagrams by Justin Yong
© Sustainability Victoria 2012
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THE ENERGY EFFICIENCY SUPPLEMENT 2012
Contents
Energy Use .............................................................................................................................................. 1
World .................................................................................................................................................. 1
Australia .............................................................................................................................................. 2
States and Territories .......................................................................................................................... 2
Industry Sectors .................................................................................................................................. 4
Households ......................................................................................................................................... 6
The Case For Energy Efficiency ............................................................................................................... 7
The Business Case ............................................................................................................................... 7
The Social Case .................................................................................................................................. 10
The Environmental Case ................................................................................................................... 10
Legislation ......................................................................................................................................... 12
Some of the relevant legislation includes: .................................................................................... 12
Energy Efficiency Opportunities Across the Australian Economy ......................................................... 15
Energy Efficiency In The Industry Sector ........................................................................................... 17
Energy Efficiency In The Buildings Sector ......................................................................................... 19
Energy Efficiency In The Transport Sector ........................................................................................ 21
Energy Efficiency In The Power Sector .............................................................................................. 22
Energy Efficiency In The Waste Sector .............................................................................................. 23
Using Energy More Wisely .................................................................................................................... 25
Energy Conservation And Energy Efficiency ..................................................................................... 25
Jevons’ paradox................................................................................................................................. 26
Energy Management ......................................................................................................................... 27
Energy audits for business ............................................................................................................ 27
Home energy audit ....................................................................................................................... 28
Identifying opportunities .............................................................................................................. 31
THE ENERGY EFFICIENCY SUPPLEMENT 2012
Making changes ............................................................................................................................ 32
Cost/Benefit Analysis ............................................................................................................................ 33
Return on Investment ....................................................................................................................... 33
Change management ........................................................................................................................ 34
Eco-efficiency and resource efficiency ................................................................................................. 36
Lean enterprises ............................................................................................................................ 37
Understanding the life cycle of products and services ..................................................................... 37
Embodied energy .......................................................................................................................... 40
Waste energy .................................................................................................................................... 41
Sustainable consumption and purchasing ........................................................................................ 44
Benefits of sustainable purchasing ............................................................................................... 45
References ............................................................................................................................................ 47
THE ENERGY EFFICIENCY SUPPLEMENT 2012 1
Energy Use
World
Energy use around the world can be calculated at a per capita level or at a total level (e.g. by country
or region). Over the past two decades, total energy consumption has almost doubled (Figure 1). The
share of total energy consumption for countries in the Organisation for Economic Development
(OECD) group (which includes Australia) has declined but overall energy consumption has still
increased, and is projected to keep increasing. Non-OECD countries, of which there are around 150
(compared to 34 OECD member countries), have rapidly increased their share of world energy
consumption since 2000 (Figure 1), and now contribute the greatest share of the increased total
consumption as their economies industrialise and their populations are lifted out of poverty.
The share of total energy consumption has more than doubled in rapidly developing countries such
as China and the rest of Asia (Figure 2). This is due to the large population, growing economy and the
increasing energy-intensive lifestyle associated with such a transition. The increase in Africa and
Latin America has been much smaller to date but the larger countries of Latin America (e.g. Brazil)
have seen sustained levels of economic growth over the past decade that is increased the demand
for energy.
Figure 1: World energy consumption, 1990-2035 (quadrillion Btu)1
Source: U.S Energy Information Association (2011) International Energy Outlook 2011. © Fig 12
http://205.254.135.7/forecasts/ieo/world.cfm Accessed 14.06.12
1 Btu stands for British thermal unit, and is the energy needed to raise the temperature of one pound of
water by 1 °F at a constant pressure of one atmosphere (which equates to around 1055 joules).
THE ENERGY EFFICIENCY SUPPLEMENT 2012 2
Figure 2: 1973 and 2008 regional shares of total final consumption*2
Source: International Energy Agency (2010) Key World Energy Statistics. © p30
http://www.iea.org/textbase/nppdf/free/2010/key_stats_2010.pdf Accessed 14.06.12
Australia
Australia ranks as the world’s eighteenth largest energy consumer and fourteenth on a per capita
basis (Bureau of Resources and Energy Economics, 2012). 95% of Australia’s energy consumption
comes from non-renewable resources, and only 5% from renewables (compared to around 13%
renewables as total share of global energy supply).
Though energy consumption continues to increase, the energy intensity (energy consumption per
unit of gross domestic product) of the Australian economy has been declining. This is a result of:
energy efficiency improvements from technological change and fuel switching (driven by
Government policies at State and National level)
increased share of GDP from less intensive service sectors of the economy, compared to
manufacturing
States and Territories
Energy consumption is highest in the eastern seaboard States, followed by Western Australia (Figure
3). Tasmania, with its relatively large hydroelectricity generation, has the largest percentage (28%) of
its generation from renewable sources of energy (Figure 4). Queensland has the second highest
share of renewable generation (8%) consisting largely from bagasse (waste sugar cane).
2 Mtoe stands for one million tonnes of oil equivalent. Tonnes of oil equivalent (toe) is a unit of energy that is
equal to the amount of energy released by burning one tonne of crude oil (which is approximately 42 gigajoules, or 42 billion joules).
THE ENERGY EFFICIENCY SUPPLEMENT 2012 3
Figure 3: Percentage of total Australian net
energy consumption by State/Territory* in
2009-10
* ACT consumption included in NSW total
Source: Data from Australian Bureau of Statistics State and Territory
Statistical Indicators (1367.0) 2012.
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/
1367.0~2012~Main%20Features~Australia%20Home~1 Accessed
14.06.12
Figure 4: Share of renewable energy in
total energy supply* by State/Territory
2009-10
Source: Data from Table 4, Bureau of Resources and Energy
Economics (2012). Energy in Australia.
http://www.bree.gov.au/publications/energy/index.html
Accessed 14.06.12
* Total supply includes coal, gas & petroleum products
Why is the energy consumption of West Australia so large?
West Australia, with a population of 2,387,000, has nearly three times the energy consumption of
South Australia, with a population of 1,645,000. The main reason for the larger share of total energy
consumption is the energy used by the mining sector which forms a big part of the West Australian
economy. The mining industry uses a diverse range of energy intensive processes such as drilling and
excavation, mine operation, material transfer, mineral preparation and separation. The mining
industry is researching and identifying ways to reduce energy use and become more energy efficient.
For example, the use of remote sensing can minimise exploratory digging and drilling in the
exploration phase. There are also opportunities to improve haulage efficiency, maintenance
practices, equipment use, lighting systems, process control, waste heat recovery and use in the
operational phase of mine sites.
Source: 3101.0 - Australian Demographic Statistics, Dec 2011 http://www.abs.gov.au/ausstats/abs@.nsf/mf/3101.0/ Accessed 26.06.10;
Mining and Energy http://www.cleantechinvestor.com/portal/fuel-cells/6422-mining-and-energy.html Accessed 26.06.10; Mining Energy
Efficiency Opportunities http://www.ret.gov.au/energy/efficiency/eeo/industry-sector/mining/Pages/Mining%20Sector.aspx Accessed
26.06.10
THE ENERGY EFFICIENCY SUPPLEMENT 2012 4
Industry Sectors
Electricity generation and transport dominate the energy consumption by industry sectors in all
States and Territory except for Tasmania, where most of the electricity generation is from hydro
(Figure 5). In other jurisdictions where coal is the major fuel source for electricity generation, a lot of
energy is consumed in generating electricity. Transport consumes a lot of petroleum products.
Mining is a large consumer of energy compared to other sectors in Western Australia and the
Northern Territory. Manufacturing has the highest share of energy consumption in Tasmania.
Figure 5: 2009 – 10 Energy consumption by top 5 industry sectors
NSW (including ACT)
Victoria
Queensland
West Australia
South Australia
Tasmania
THE ENERGY EFFICIENCY SUPPLEMENT 2012 5
Northern Territory
Source: from Australian Bureau of Statistics State and Territory
Statistical Indicators (1367.0) 2012. © Commonwealth of Australia.
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/13
67.0~2012~Main%20Features~Australia%20Home~1 Accessed
14.06.12
THE ENERGY EFFICIENCY SUPPLEMENT 2012 6
Households
The residential sector accounts for around 11% of Australian energy consumption (Figure 6). The
main energy end uses are:
Appliances
Space heating
Water heating
There have been large increases in the energy consumption share from appliances, driven by the
large increase in demand for home entertainment and personal IT equipment, along with lighting.
Though the Australian population has grown, and the average size of homes has increased, the
average consumption per household has decreased slightly by 0.3% over the period of 1989–90 to
2009–10. Energy consumption per household is expected to continue declining, where 2020 levels
will be 6% below 1990 levels. The forecast decrease in residential energy intensity is driven by
improvement in dwelling thermal performance (reducing the need for heating and cooling) and
changes in hot water heating (fuel shift from electric to gas and solar)3.
Figure 6: Energy consumption in household end uses, 1989-90 to 2009-10
Source: Bureau of Resources and Energy Economics (2012). Economic Analysis of End-use Energy Intensity in Australia.
http://www.bree.gov.au/publications/energy/index.html Accessed 14.06.12
3 Department of Environment, Water, Heritage and the Arts (2008). Energy Use in The Australian Residential
Sector 1986 – 2020. http://www.climatechange.gov.au/what-you-need-to-know/buildings/publications/energy-use.aspx Accessed 18.06.11
THE ENERGY EFFICIENCY SUPPLEMENT 2012 7
The Case For Energy Efficiency
Energy efficiency makes business sense as it can reduce costs and therefore increase profits, as well
as improve an organisation’s reputation amongst its stakeholders, which can in turn lead to
improved market share or business opportunities. As well as the financial benefits, energy efficiency
has environmental benefits in terms of reduced greenhouse gas emissions and other pollutants
when energy is generated from fossil fuels (Figure 7). Energy efficiency can also have social benefits,
such as job creation and the development of new industries, and improved health through better
thermal conditions in buildings that reduce the need for active heating and cooling.
Figure 7: Multiple benefits of energy efficiency
Source: Campbell, N (2012). Spreading the Net: The Multiple Benefits of Energy Efficiency © OECD/IEA 2012. Presentation at the
International Energy Agency (IEA) Energy Efficiency Week, 14 March 2012.
http://www.iea.org/media/workshops/2012/energyefficiency/Campbell.pdf Accessed 18.06.12
The Business Case
There are a number of business reasons to consider energy use in business planning and decision-
making, including:
Resource efficiency and cost savings
Compliance with legislation, regulations and industry standards
Marketing and stakeholder engagement (developing a point of difference to competitors)
THE ENERGY EFFICIENCY SUPPLEMENT 2012 8
Energy efficiency can save money over the short and long term. Short term gains can be achieved
through simple measures such as switching off appliances and equipment when not in use, changing
settings, or changing behaviours to operate equipment more efficiently.
Capital investment in new or more energy efficient technology can lead to energy efficiency gains
that offset the cost of the investment over a longer period (discussed later in this supplement under
‘return on investment’). Changes in buildings can also yield energy efficiency gains, as can changes in
transportation, whether this is from more energy efficient vehicles, fuel switching, or changing
modes of travel such as using public transport, cycling, or walking.
The business case for energy efficiency is relevant to all sizes of business across all sectors, as well as
to energy utilities. The increasing demand for energy, and the temporary spikes in peak demand
means that utilities need to invest in new infrastructure or improve ageing transmission networks to
cater for the load. This is a costly exercise and the costs are passed on to the consumers.
What contributes to the cost of electricity?
The price of electricity is determined by a number of factors such as transmission and distribution
network costs, the wholesale electricity price faced by retailers, and government policies. Recently, a
major driver of rising retail electricity prices has been the significant investment in new and ageing
transmission and distribution infrastructure required to support increasing demand for electricity.
The Australian Energy Market Commission estimates that transmission and distribution network
costs represented between 44 to 53 per cent of the retail electricity price faced by households in
2009–10, with wholesale electricity prices representing a further 35 to 40 per cent.
Source: Bureau of Resources and Energy Economics (2012). Energy in Australia, page 40.
http://www.bree.gov.au/publications/energy/index.html Accessed 14.06.12
Energy efficiency can lead to economy-wide cost savings through a reduced need to invest in costly
energy infrastructure. Energy infrastructure costs are largely driven by peak demand. Peak demand
refers to the maximum energy demand that is placed on the electricity grid at any one time. Peak
demand occurs on a few extremely hot days per year when households run air conditioners, along
with the normal demand from business and industry. Electricity distributors need to invest in costly
infrastructure (poles, wires, transformers, substations) to cater for such demand that only occurs a
small percentage of the year. These infrastructure costs are passed on to consumers, and increases
in energy costs are mostly from infrastructure upgrades. Governments and electricity generators are
now investing in demand side management and energy efficiency to better manage peak demand
and to reduce or defer the need for costly infrastructure upgrades (see Figure 8 for the Magnetic
Island peak demand trial as part of the Townsville: Queensland Solar City Project).
THE ENERGY EFFICIENCY SUPPLEMENT 2012 9
Figure 8: Reduction in peak demand from energy efficiency initiatives on Magnetic
Island, Queensland
Source: Townsville: Queensland Solar City (2011). Annual Report. ©
http://www.townsvillesolarcity.com.au/Portals/0/docs/Townsville%20Solar%20City%20Annual%20Report%202011_final_distribution.pdf
Accessed 15.06.12
Energy efficiency improvements provide an opportunity for homes and businesses to source all or a
majority of their energy from on-site renewable energy generation. Households and businesses that
operate ‘off-the-grid’ (i.e. rely solely on on-site generation) need to be extremely energy efficient to
minimise their overall energy consumption needs. Reduced consumption means that their capital
investment in energy generation infrastructure (such as solar panels) can be minimised.
Example of an energy independent tourism business
Hidden Valley Cabins- http://www.hiddenvalleycabins.com.au/solar_power.htm
At a national and international level, greater energy efficiency can lead towards energy security as
countries are no longer reliant on overseas suppliers of petrol, gas or uranium. This can lead to
reduced opportunity for international conflict to secure energy sources.
At a local level, greater energy efficiency can lead to distributed generation being more viable.
Distributed generation refers to localised generation such as through small-scale solar or wind-farms
or co/tri-generation systems and fuel cells. Distributed generation, compared to centralised
generation (which is the traditional form of energy supply), has a number of benefits such as greater
reliability and security from transmission faults (e.g. where a pole or transformer a long distance
away falls down or catches fire).
THE ENERGY EFFICIENCY SUPPLEMENT 2012 10
Smart grids and energy efficiency
Energy efficiency can also be achieved by investment in smart grids. Smart grids combine the
existing electricity distribution networks with advanced communication, sensing and metering
infrastructure to improve the way energy is supplied, faults detected deducted and rectified. Smart
grids can also allow people or electricity network companies to remotely control smart appliances in
order to reduce their demand during certain periods, or turn smart appliances off completely. For
example, Ergon Energy (Queensland) has piloted load controllers on air-conditioning units that
allows Ergon to remotely send signals to adjust the temperature setting, and therefore reduce the
energy consumption of those appliances, during peak demand periods4.
The Social Case
Energy efficiency can create new jobs in maintenance and servicing of existing equipment as well as
in manufacturing of new technologies and the building sector (new homes and retrofitting existing
homes). There are also jobs in the research and development (R&D) phase. In addition, energy
efficiency can lead to increased energy affordability and poverty alleviation by mitigating the
impacts of energy price rises. Financial savings from energy efficiency improvements can lead to
increased disposable income which can lead to increased consumer spending, benefitting the wider
economy and society.
Improved thermal (temperature) conditions in buildings (residential and commercial) can also lead
to improved health outcomes as there is less need for active heating and cooling (reduced
temperature fluctuations, reduced drying of the ambient air, reduced movement of dust and other
particulates). Energy efficiency measures such as improved day-lighting can also lead to increased
productivity and improved moods.
The Environmental Case
Energy efficiency and energy conservation have a number of environmental benefits, the clearest
being a reduction in greenhouse gas emissions where generation comes from fossil fuel sources. In
Australia, greenhouse gas emissions have increased by about 20% over the past two decades. The
increase is across most sectors of the economy, except for waste and agriculture (Figure 9).
4 Climate Works 2012. How to make the most of demand management.
http://www.climateworksaustralia.com/Improving_impact_measurement.pdf Accessed 26.06.12
THE ENERGY EFFICIENCY SUPPLEMENT 2012 11
Figure 9: Percentage change in emissions by sector since 1990, Australia, years to
June quarters, 1990-2011
Source: Department of Climate Change and Energy Efficiency. (2011) Australian National Greenhouse Accounts, Quarterly Update of
Australia’s National Greenhouse Gas Inventory, December Quarter 2011.
http://www.climatechange.gov.au/en/publications/greenhouse-acctg/national-greenhouse-gas-inventory-2011-12.aspx Accessed
18.06.12
NB: Stationary energy refers emissions from fuels consumed in the manufacturing, construction and commercial sectors and domestic
heating. Fugitive emissions refers to emissions associated with the production, processing, storage, transmission and distribution of fossil
fuels such as coal, oil and natural gas.
The Garnaut Review5, a comprehensive report on climate change impacts and response options for
Australia, indicated that the cost of inaction (i.e. not curbing greenhouse gas emissions) would far
outweigh the cost of a comprehensive plan to tackle emissions. In short, a failure to take action now
will mean that the environmental and social impacts of climate change will be borne by future
generations, and businesses and households in the future will have disproportionately higher costs
compared to taking action now at a lower overall cost to society.
Beyond greenhouse gas emissions, there are a number of other pollutants associated with energy
generation. For example, burning coal also releases oxides of sulphur (SOx) and nitrogen (NOx) that
are associated with acid rain, air particulates and trace elements such as mercury which is
particularly harmful to the environment and human health at certain levels. In addition, diesel
particulates, released from vehicles or diesel generators, are a potential cancer causing agent and
can also lead to respiratory ailments. This is particularly important in closed or constrained
environments such as mine sites. In such cases, energy efficiency, energy conservation, and
alternative power sources can bring multiple benefits.
5 The Garnaut Review http://www.garnautreview.org.au/
THE ENERGY EFFICIENCY SUPPLEMENT 2012 12
Environmental benefits of energy efficiency are not just from a reduced need for fossil fuel. There
are environmental benefits accrued from reducing the need to expand or build new power stations
and hydro-electric dams, which are known to have environmental impacts (flooding valleys, altered
water flows) and social impacts (displaced communities).
Legislation
A variety of legislation covering resource efficiency exists at the Commonwealth and State levels.
The legislation generally applies to the very largest companies in Australia and requires them to
report on their energy consumption and greenhouse gas emissions (NGER), and identify energy
efficiency opportunities (EEO).
Some of the relevant legislation includes:
Jurisdiction Scheme
Commonwealth National Greenhouse and Energy Reporting (NGER)6 Energy Efficiency Opportunities (EEO)7 Commercial Building Disclosure Scheme (CBD)8
6 http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/Pages/default.aspx
7 http://www.ret.gov.au/energy/efficiency/eeo/pages/default.aspx
8 http://www.cbd.gov.au/
National Greenhouse and Energy Reporting Act 2007
The National Greenhouse and Energy Reporting Act 2007 (NGER Act) introduced a single national
framework for the reporting and dissemination of information about the greenhouse gas
emissions, greenhouse gas projects, and energy use and production of corporations.
The objectives of the NGER Act are to:
underpin an emissions trading scheme
inform government policy formulation and the Australian public
help meet Australia’s international reporting obligations
assist Commonwealth, state and territory government programs and activities, and
avoid the duplication of similar reporting requirements in the states and territories.
Corporations that meet an NGER threshold must report their:
greenhouse gas emissions
energy production
energy consumption, and
other information specified under NGER legislation.
Source: http://www.cleanenergyregulator.gov.au/National-Greenhouse-and-Energy-Reporting/Pages/default.aspx
THE ENERGY EFFICIENCY SUPPLEMENT 2012 13
Victoria Environment and Resource Efficiency Plans (EREP) Program9
Victorian Energy Efficiency Target (VEET) scheme10
New South Wales NSW Energy Action Plans (ESAP)11 NSW Energy Saving Scheme (ESS)12
Queensland Smart Energy Savings Program13
South Australia Residential Energy Efficiency Scheme (REES)14
9 http://www.epa.vic.gov.au/bus/erep/
10 https://www.veet.vic.gov.au/Public/Public.aspx?id=Home
11 http://www.environment.nsw.gov.au/sustainbus/savingsactionplans.htm
12 http://www.ess.nsw.gov.au/
13 http://www.business.qld.gov.au/running/environment/energy-saving-ideas/smart-energy-saving-programs
14 http://www.dtei.sa.gov.au/energy/government_programs/rees
THE ENERGY EFFICIENCY SUPPLEMENT 2012 14
THE ENERGY EFFICIENCY SUPPLEMENT 2012 15
Energy Efficiency Opportunities Across the Australian Economy
Climate Works Australia15 has developed a marginal abatement cost curve (MACC) that covers the
Australian economy as a whole. MACCs have also been developed for specific regions and specific
sectors. In order to reach a 25% cut in emissions by 2020 (from 2012 levels), energy efficiency
opportunities have been identified as offering the least cost options that can contribute to just over
one-fifth of the emission reduction target (Figure 10). The opportunities include energy efficiency
across different sectors, land management practices (agriculture and forestry) and new energy
generation technologies in the power sector.
How to read the MACC
The width of each column represents the GHG reduction potential of an opportunity in 2020
compared to the emissions forecast under the business-as-usual (BAU) case. The height of each
column represents the average cost for that activity of abating a tonne of CO2e in 2020. All costs are
in 2010 real Australian dollars (A$), and the graph is ordered left to right from the lowest cost to the
highest cost opportunities.
Figure 10: Investor* cost curve for marginal abatement opportunities to reach 25%
emission cut by 2020
15
http://climateworks.org.au/
THE ENERGY EFFICIENCY SUPPLEMENT 2012 16
Source: ClimateWorks Australia (2011). Low Carbon Growth Plan for Australia, Impact of the Carbon Price Package. August 2011 Revised
Edition. http://www.climateworksaustralia.org/LCGP_Impact_of_the_carbon_price_package_Aug_2011_revised_edition.pdf Accessed
20.06.12
* The investor cost curve reflects the net direct cost faced by a company or consumer to implement an emissions reduction opportunity.
The breakdown of abatement potential by sector is represented in Figure 11.
Figure 11: Australian 2020 abatement potential by sector
Source: ClimateWorks Australia (2010). Low Carbon Growth Plan for Australia. March 2010.
http://www.climateworksaustralia.com/Low%20Carbon%20Growth%20Plan.pdf Accessed 20.06.12
The full list of opportunities for each sector is available from the Low Carbon Growth Plan for
Australia. http://www.climateworksaustralia.com/low_carbon_growth_plan.html
Analysis by ClimateWorks Australia suggests that the Clean Energy Package (carbon price and
associate measures) will unlock a total of 52 MtCO2e of carbon abatement opportunities from
energy efficiency across the industry, building and transport sectors (Table 1).
Table 1: Total carbon abatement from energy efficiency opportunities
Sector Associated abatement
(MtCO2e)
Industry 27
Buildings 23
Transport 2
Source: ClimateWorks Australia
THE ENERGY EFFICIENCY SUPPLEMENT 2012 17
Energy Efficiency In The Industry Sector
Opportunities in the industry sector include:
improved control systems and processes
reduction of duplicated or oversized equipment
upgrade of motor systems,
decrease of energy losses in boilers and steam distribution systems
waste heat recovery for pre-heating or other uses
building utilities.
The most affordable opportunities for energy efficiency in the industry sector occur in the cement
and food, beverage and tobacco industries (Figure 12).
Figure 12: 2020 Industry GHG emissions reduction investor cost curve
Source: ClimateWorks Australia (2010). Low Carbon Growth Plan for Australia. March 2010.
http://www.climateworksaustralia.com/Low%20Carbon%20Growth%20Plan.pdf Accessed 20.06.12
THE ENERGY EFFICIENCY SUPPLEMENT 2012 18
Case study: Cement Australia
Cement Australia replaced a constant speed fan and damper system with a variable frequency fan at
its Bulwer Island site. The net annual energy savings were calculated at 0.426 GJ with a payback of
1.5 years.
Source: Cement Australia (2011). Energy Efficiency Opportunities Public Report 2011.
http://www.cementaustralia.com.au/wps/wcm/connect/website/cement/resources/fad8f700497cb1a7943c96efc448b82a/EEO-
PublicReport-2011.pdf Accessed 18.06.12
THE ENERGY EFFICIENCY SUPPLEMENT 2012 19
Energy Efficiency In The Buildings Sector
The Low Carbon Growth Plan for Australia outlines a number of opportunities in the building sector,
including lighting retrofits, appliance and equipment retrofits, and waste energy reduction (Figure
13).
Figure 13: 2020 Buildings GHG emissions reduction investor cost curve
Source: ClimateWorks Australia (2010). Low Carbon Growth Plan for Australia. March 2010.
http://www.climateworksaustralia.com/Low%20Carbon%20Growth%20Plan.pdf Accessed 20.06.12
THE ENERGY EFFICIENCY SUPPLEMENT 2012 20
Case study: GPT Group
The GPT Group, which owns, manages and develops commercial property, has achieved 28%
reduction in energy intensity since 2005. The cost savings in 2011(related avoided costs compared to
2005 baseline) alone equated to $10.2 million of electricity and $464,000 of gas.
Source: GPT Group. Climate Change and Energy http://www.gpt.com.au/content.aspx?urlkey=Energy Accessed 18.06.12
Video case study on the upgrade of a commercial office space by the GPT property group.
http://www.youtube.com/embed/ZafIi7ukZ70
THE ENERGY EFFICIENCY SUPPLEMENT 2012 21
Energy Efficiency In The Transport Sector
Fuel efficiency in conventional internal combustion engines provides the largest (68%) abatement
opportunity from the transport sector (Figure 14). There are also significant opportunities to reduce
emissions through behaviour changes such as increased use of public transport, car-pooling, and
cycling or walking.
Figure 14: 2020 Transport GHG emissions reduction investor cost curve
Source: ClimateWorks Australia (2010). Low Carbon Growth Plan for Australia. March 2010.
http://www.climateworksaustralia.com/Low%20Carbon%20Growth%20Plan.pdf Accessed 20.06.12
The Green Vehicle Guide rates new Australian vehicles based on fuel efficiency, greenhouse gas and
air pollution emissions. http://www.greenvehicleguide.gov.au
THE ENERGY EFFICIENCY SUPPLEMENT 2012 22
Energy Efficiency In The Power Sector
Improved coal and gas power plant thermal efficiencies and reduced transmission and distribution
losses are opportunities that offer net savings in the power sector. Switching to renewable or less
greenhouse intensive generation requires more investment, but the introduction of a carbon price
will increase the viability of such opportunities.
Case study: Smart Grid, Smart City Trial
Newcastle (NSW) along with other locations in NSW form the Smart Grid, Smart City trial that is
funded by the Department of Resources, Energy and Tourism in partnership with Ausgrid. A smart
grid combines the traditional pole and wires distribution network with communications, sensing and
metering technology to form a two-way interactive and intelligent network. The trial includes
household monitoring systems, better monitoring and measuring devices to improve the reliability
and efficiency of the electricity network, and distributed storage and generation devices, including
fuel cells and battery storage.
Source: http://www.smartgridsmartcity.com.au/
THE ENERGY EFFICIENCY SUPPLEMENT 2012 23
Energy Efficiency In The Waste Sector
The waste sector produces around 15 million tonnes of carbon pollution each year, equivalent to 3
percent of Australia’s emissions. Reducing waste to landfill through better purchasing decisions
(reducing packaging and waste) and increased reuse and recycling of material are easy and practical
steps to undertake. Practices such as reducing waste can save energy and bring environmental
benefits, as this reduces the need to transport waste to landfill (and the associated fuel use and
particulate and greenhouse gas emissions) and also reduces methane generation at the landfill (and
the associated greenhouse gas emissions). There are also flow on effects in terms of reduced land
use for landfills, and reduced impacts on ecosystems.
Energy efficiency opportunities in the hotel industry sector
http://www.ret.gov.au/energy/Documents/energyefficiencyopps/res-material/hotels-report.pdf
THE ENERGY EFFICIENCY SUPPLEMENT 2012 24
THE ENERGY EFFICIENCY SUPPLEMENT 2012 25
Using Energy More Wisely
Energy Conservation And Energy Efficiency
Energy conservation refers to activities that aim to reduce the overall use of energy, such as through
ceasing activities. For example, turning off an appliance or equipment when it is not required leads
to energy conservation. Turning off a vehicle engine rather than letting the motor idle is also energy
conservation.
Energy efficiency refers to reducing the use of energy for a certain activity, where the level of output
is maintained (i.e. doing the same with less). For example, replacing an incandescent light globe with
a compact fluorescent globe, whilst maintaining the same level of light output, leads to energy
efficiency. Replacing a vehicle with a newer more energy efficient engine that uses less fuel per
kilometre travelled leads to energy efficiency.
The International Energy Agency (IEA) has identified 25 energy efficiency policy recommendations
that include cross-sectoral and specific opportunities. The IEA provides a range of information on
energy efficiency opportunities including technical guides to assist implementing specific
opportunities. For more information, visit http://www.iea.org/efficiency/
Conservation as opposed to energy efficiency
To illustrate energy efficiency versus conservation, consider the following statements:
A fluorescent tube is more energy efficient than an incandescent light globe due to the properties of
its design. We can’t improve the efficiency of the globe ourselves, but we can buy a tube and thus be
more efficient in our production of light. We’ve reduced the amount of energy (electricity) used to
create a given amount of light.
However, if we leave that tube (light) switched on when we really don’t need it (i.e. during daylight
hours, or when we are out of the room) then no matter how efficient that tube is, we’ve wasted
100% of the energy it used.
In the former we have achieved an energy efficiency gain of around 70% because we used improved
technology. But in latter we still have a conservation opportunity because that light could be
switched off.
In other words, conservation is a human concern (i.e. employs behaviour change), whereas
efficiency is a technological concern (i.e. employs improved design of equipment/systems).
THE ENERGY EFFICIENCY SUPPLEMENT 2012 26
However, these definitions can become a little blurred. Consider that we could install an automated
light switch to fix the lighting problem above. Is that conservation or efficiency based on the
definitions provided above?
Energy efficiency can lead to energy conservation where the level of activity does not increase.
However, energy efficiency can also lead to greater use of energy if more equipment or appliances
that use energy are installed or put in service.
It is usually recommended that conservation measures should be given the higher priority since they
may often have the greatest benefits for the least cost and complexity.
Energy Savings
For energy saving tips around the home, visit the Save Power website
http://www.savepower.nsw.gov.au/households/power-saving-tips/how-to-save-power.aspx
Climate Works Australia have an Energy Efficiency Fact Sheet for opportunities across different
economic sectors http://climateworks.org.au/Energy_efficiency_Fact_Sheet.pdf
Jevons’ paradox
Jevons paradox16 proposes that increased resource efficiency may actually lead to increased
resource use. The original concept related to coal production in the late 1890’s, with Jevon claiming
technological advancements in coal-powered engines which led to more efficient use of coal did not
lead to a reduction in overall coal use, but rather an increase as the demand for coal-powered
engines increased. Essentially, this would be the opposite of the intended outcome and make
conservation futile. This is related to the similar ‘rebound effect’. The increased demand caused by
increased efficiency is named the ‘rebound effect’. If the rebound causes total demand to increase
beyond the gains made by the efficiency measures, then this becomes a ‘backfire’.
In the case of a consumer, increased efficiency brings cost savings and those cost savings may then
be used to purchase more of that same service. For example, increased engine efficiency in a car
means less fuel is used and thus money is saved. The driver may then decide to use the car more
often, or for longer journeys, because driving costs less. A similar prospect is true for manufacturing
industry, where efficiencies may be used to drive higher levels of production (for the same cost) and
thus increase profits but not reduce resource usage.
The Kahzzoom-Brookes postulate17 applied the paradox specifically to energy use in society. The
conclusion is that the effect may be reduced or offset when government intervention, such as taxes
(or other financial disincentives) accompany the efficiency initiative and maintain higher prices. But
behaviour or values change in people may be the key to success. If energy conservation and
efficiency measures are conducted by participants with a deeper knowledge of their benefits and
belief in the reasons why they are needed, then financial outcomes likely to be much less relevant.
16
Alcott, B. (2005) Jevons’ Paradox. Ecological Economics. 54 (1), 1 July: 9 – 21. http://www.sciencedirect.com/science/article/pii/S0921800905001084 Accessed 18.06.11 17
http://en.wikipedia.org/wiki/Khazzoom-Brookes_postulate#cite_ref-accepting_1-1
THE ENERGY EFFICIENCY SUPPLEMENT 2012 27
Energy Management
Energy is a resource that leads to the production of goods or services, and like all resources,
reducing its input leads to efficiency gains and cost savings. Australia has benefited from cheap and
abundant supply of energy, but the costs are now rising. The key to energy efficiency is to
understand one’s energy use and subsequently make decisions to better manage it.
Energy management refers to the process of understanding the demand for energy (audit),
identifying opportunities to reduce use, implement new process or technologies, or switch fuel
sources (analysis), and implementing and monitoring changes (action).
Case Studies
Energy Efficiency at Zoos Victoria - http://www.zoo.org.au/energy-efficiency
The Energy Efficiency Exchange provides information for medium and large energy users to identify
energy efficiency opportunities and take action. http://eex.gov.au/
The website includes case studies on energy efficiency opportunities implemented in different
sectors, and information on energy efficiency technologies.
Energy audits for business
Energy audits for businesses are defined in Australia and New Zealand by AS/NZS 3598:2000 Energy
audits standard. The standard is important as it defines uniform parameters which (when applied)
will ensure that audits are comparable across organisations and time.
AS/NZS 3598 defines three levels of audit:
• Level 1 Audit – an overview of energy consumption across a site. Provides an initial
benchmark. Typically in the form of a desktop study. Accuracy within +/-40%.
• Level 2 Audit – identifies energy sources, amount used and where it is used. Identifies areas
of savings. Accuracy within +/-20%.
• Level 3 Audit – provides detailed analysis of energy use, savings potential and the
costs/benefits of implementing the savings. Accuracy within +10% for costs and -10% for benefits.
The levels imply a certain ‘scope’ to apply to the audit, in other words, how ‘deep’ to go. Other
dimensions to scope include which parts of an organisation, its facilities and operations to include.
In certain contexts such as mining and other industries, an Energy Mass Balance (EMB) can be
developed to describe the energy and mass flows in a given process system. EMBs provide a
representation of where energy enters the system, where it is transformed and where it leaves the
system.
THE ENERGY EFFICIENCY SUPPLEMENT 2012 28
Energy Mass Balance case study: Iluka Resources Limited-
http://www.ret.gov.au/energy/Documents/energyefficiencyopps/res-material/Iluka-Resources-
Ltd.pdf
Sustainability Victoria’s Energy and Greenhouse Management Toolkit (in the form of a modular
suite of guidance documents) is a good online resource. Module 3 Calculating energy use and
greenhouse emissions covers much of the ground required for performing a basic energy audit.
http://www.sustainability.vic.gov.au/resources/documents/EGM_Toolkit.pdf
http://www.sustainability.vic.gov.au/resources/documents/Module2.pdf
http://www.sustainability.vic.gov.au/resources/documents/Module3.pdf
http://www.sustainability.vic.gov.au/resources/documents/Module4.pdf
http://www.sustainability.vic.gov.au/resources/documents/Module5.pdf
http://www.sustainability.vic.gov.au/resources/documents/Module6.pdf
http://www.sustainability.vic.gov.au/resources/documents/Module7.pdf
Home energy audit
Conducting a home energy audit is a useful step in understanding energy and its wide range of end-
uses. The following steps provide a guide to undertaking an energy audit.
Desktop audit
o Identify all the energy services providers or retailers providing energy to your home (i.e. gas
and electricity etc)
o Gather energy statements or invoices to review energy usage to determine daily, monthly
and/or annual consumption (Figure 15 & 16).
THE ENERGY EFFICIENCY SUPPLEMENT 2012 29
Figure 15: Copies of residential electricity and gas bills
Reading Energy Bills
Energy bills will provide information including past and present ‘reading’ dates, and the consumption
for the period. They will also provide your average daily usage (e.g. kWh per day for electricity).
It is important to note that bills can provide ‘actual’ or ‘estimated’ reading (amounts of
consumption). This type of inaccuracy can occur whether the data is provided by the retailer or the
distributor. Energy meters are only required to be physically read once a year.
Figure 16: Copy of a manufacturing business electricity bill
Note in Figure 16 the presence of consumption charges and network charges, including a peak
demand charge. The demand refers to the maximum amount of electrical energy that is being
consumed at a given time. The peak demand can cause a short spike at certain times of the day and
as electricity utilities have to cater for the peak demand and the associated large infrastructure
costs, users are assessed demand charges as part of their normal billing. The demand charge is like a
penalty and can exceed 50% of their total electricity bill (refer back to earlier in the supplement-
‘What contributes to the cost of electricity’). One way to reduce the peak demand is to stagger
turning on equipment or avoid using a number of equipment at the same time if they have a large
power demand.
THE ENERGY EFFICIENCY SUPPLEMENT 2012 30
Walk through audit
o Identify the appliances, equipment or devices which consume energy and the type of energy
consumed
o Collect data on the length of time each is used over a standardised timeframe
o Determine the energy consumption requirements for each appliance, equipment and/or
device, etc and enter that data into a spread sheet (Figure 17)
Note on data plates
It is usually possible to find power rating information for freestanding items (such as electrical
appliances) by locating the data plate, often behind or underneath the item. For electrical items the
rating will be in Watts (W) or kilowatts (kW). Sometimes it is in Amps (A). For gas appliance is may be
in megajoules per hour (MJ/hr).
Data plates for installed items (such as ceiling mounted light fittings and air conditioners) are often
inaccessible. More research will be required, so you need to gather as much data as possible (name,
brand, model etc.) at the time.
When to engage the experts
Energy assessment experts can be engaged to identify the energy demand and efficiency gains for
household or businesses. Part of their service may also include outlining the cost and benefits of
particular energy efficiency or demand-side response actions. Examples include:
o The Association of Building Sustainability Assessors (ABSA) Habitat Partners website
provides links to accredited home assessors. http://www.habitatpartners.net.au/
o The Energy Efficiency Exchange website has information about commercial and industrial
energy assessments. http://eex.gov.au/energy-management/energy-efficiency-
assessments/
THE ENERGY EFFICIENCY SUPPLEMENT 2012 31
Figure 17: An example of a home energy audit spread sheet*
Energy Audit by use (Electricity) Assume cost is $0.21 / kWh
CO2 emission: 1.31 kg / kWh (Victoria)
Source Appliance Type
Power
(watts)
Est time
use
/day
Daily
Energy
(Whs)
kWh /
year
cost /
day
cost /
year
Kg CO2
/year type
Appliance 1300 0.25 325 118.6 0.07 24.91 155
763 0.1 76 27.8 0.02 5.85 36
615 0.18 111 40.4 0.02 8.49 53
555 2 1,110 405.2 0.23 85.08 531
0 0.0 0.00 0.00 0
0 0.0 0.00 0.00 0
0 0.0 0.00 0.00 0
Light 4 x 65 Halogen 260 4 1,040 379.6 0.22 79.72 497 lighting
0 0.0 0.00 0.00 0
0 0.0 0.00 0.00 0
0 0.0 0.00 0.00 0
Microwave 1400 0.16 224 81.8 0.05 17.17 107
0 0.0 0.00 0.00 0
Refrigerator 1,650 602.3 0.35 126.47 789
0 0.0 0.00 0.00 0
Monitor plugged in
switched on 1.2 14 17 6.1 0.00 1.29 8 IT
standby 5 4 20 7.3 0.00 1.53 10 IT
operating 25 6 150 54.8 0.03 11.50 72 IT
0 0.0 0.00 0.00 0
Computer plugged in
switched on 1.2 14 17 6.1 0.00 1.29 8 IT
standby 1.4 4 6 2.0 0.00 0.43 3
operating 65 6 390 142.4 0.08 29.89 186
0 0.0 0.00 0.00 0
0 0.0 0.00 0.00 0
Total 5135 1874 1.08 393.61 2455 * An ‘active’ home audit template is available online for automatic calculations
http://www.swinburne.edu.au/ncs/energy_handbook/home_audit_template_2012_v1.xls
Identifying opportunities
o Review and analyse the information to identify energy conservation and efficiency
opportunities
o Identify and prioritise opportunities to improve energy efficiency and reduce energy demand
requirements, associated costs and GHG emissions
o Liaise with the appropriate licensed trades person and/or carry out changes to
appliances, lights, etc. and/or building shell and insulation
o Review potential behavioural changes to improve energy efficiency.
Standby power
Standby power is that energy that is used by equipment and appliances when they are on but not
performing their intended function. Most electrical items have various levels of operation.
Take a photocopier or printer for example, they typically have modes such as:
printing (in active use)
hot standby (ready to print within a few seconds)
cold standby (ready to print within a minute) These three modes draw standby power
power saver (ready to print within a few minutes)
THE ENERGY EFFICIENCY SUPPLEMENT 2012 32
off (power off at the wall)
Gas appliances (such as space heaters and hot water heaters) may have a pilot light which is always
on. This is also a form of standby power.
Making changes
o Implement changes as prioritised (these can be based on cost neutral or low cost, easy
changes first, and working up to capital investment in the longer term)
o Monitor consumption through energy bills to evaluate the outcomes of the actions
undertaken
Energy Monitoring
Monitoring changes in energy consumption can be undertaken in various ways. One way is to keep
track of consumption data on bills. This can be done in spreadsheets or specialised software. The
introduction of smart meters for electricity metering means that users may have access to web
portals from their retailer or distributor that provides access to real-time of slightly delayed
consumption information. Smart meters may also be linked to displays that provide real time
information. Alternatively, there are a range of off-the-shelf electricity monitoring devices that can
be purchased to monitor the consumption of individual appliances or equipment. Larger energy
users may consider installing submetering, where individual circuits can be measured such as hot
water, refrigerators, lighting or air-conditioning/heating.
THE ENERGY EFFICIENCY SUPPLEMENT 2012 33
Cost/Benefit Analysis
Cost/benefit analysis (CBA) is a calculation used to evaluate the worthiness of proposed initiatives.
The calculation compares the total benefits of a proposal with the total cost of each possible
solution to determine which one shows the better financial return, often expressed as a ratio. A
starting point of the process is assessing correctly the expected costs and benefits and stating clearly
any assumptions made in the calculation.
If the expected benefits are greater than the expected costs of a proposal, then the Cost/Benefit is
greater than 1 and has positive outcomes. If the benefits are less than the cost of a proposal, then
the Cost/Benefit is less than 1 and has negative outcomes. The calculation includes many
variables/indicators in the budget for comparisons.
Calculation of Cost/Benefit
Bob Willard has provided Cost/Benefit templates to accompany his book, The Next Sustainability
Wave (2005). These can be viewed at his web site “The business case for sustainability”-
www.sustainabilityadvantage.com
Return on Investment
Return on Investment (ROI) is an approximate method to evaluate the efficiency of an investment or
to compare the efficiency of a number of different investments. The calculation provides the
payback period a particular initiative will take to pay for itself using the stream of savings. Return on
investment is a popular metric because of its versatility and simplicity, however, its application is
restricted to projects with shorter payback periods and it does not provide information about the
total return beyond the payback period. The return on investment (or payback period) is calculated
by:
Return on investment calculation for the upgrade of a lighting system
Number of CFLs = 100
Cost per unit = $9.40
Cost of labour = $420
THE ENERGY EFFICIENCY SUPPLEMENT 2012 34
Initial investment = $940 + $420 = $1,360
Annual energy saving (cost) = $2,171 per year
Therefore,
Payback Period = Initial Investment ($) / annual saving ($ per year)
= $1,360 / $2,171
= 0.6 years
For more information about ways to save energy, visit:
Victorian Save Energy website http://www.saveenergy.vic.gov.au/
Resource Smart website http://www.resourcesmart.vic.gov.au/for_households/energy.html
NSW Savepower website http://www.savepower.nsw.gov.au/
South Australian Energy Efficiency website
http://www.sa.gov.au/subject/Water%2C+energy+and+environment/Energy/Energy+efficiency
These websites provides useful information and resources such as running costs for typical
appliances, ways to save energy at home and in the workplace, and how to conduct an audit.
Change management
Change is the process of undergoing a transformation, transition or substitution from a current state
to a future state. The forces that drive change in society are complex and multidimensional.
Particularly important is the interplay between technological development and the impact on human
behaviour and perception. Human history demonstrates an ongoing process of change under the
influence of technological, environmental, and social factors. The impacts of industrialisation have
contributed to remarkable change in the economies and societies of the modern world. This process
of continual change looks set to continue.
Changing our behaviour can occur in small ways (switching lights off) or large ways (restructuring
processes and procedures or implementing new technology) or radical ways (totally changing your
lifestyle). Behaviour shifts often takes some significant event that makes people or organisations
think about what they do, think and feel about an issue or existing behaviour. In terms of businesses,
changes in legislation (such as the introduction of the Clean Energy Package, or the Energy Efficiency
Opportunities program) can be a catalyst for change.
Two types of change can be characterised- technical (one-off) and behaviour (repetitive).
Technical change– things we can ‘fix’ which create savings without any further human involvement
after the initial change. This is usually a one off action, often requiring some specialist or technical
support. For example:
THE ENERGY EFFICIENCY SUPPLEMENT 2012 35
• lighting – removing some lamps/globes from over-lit areas in reception
• hot water – replacing electrically powered hot water service with gas powered
• heating – reduce the temperature set on the thermostat in the office
• fuel switching – replacing petrol powered fleet cars with hybrid fleet cars
Behaviour change – things we can do on an ongoing basis which require staff to act appropriately in
order for savings to be made. The initiating action is to develop the means (e.g. behaviour change
programs) by which staff are engaged to act accordingly. For example (and compare with the
examples above):
• lighting – turn off lights (and other energy using equipment) in unoccupied areas
• hot water – use cold water whenever possible
• heating – wear indoor clothing appropriate to the season;
• fuel – drive vehicles in an economical manner to reduce fuel consumption
Organisational change refers to the process of restructuring resources (human and technical) to
increase efficiency and effectiveness.
Managing change is a tricky task. Change management is a systematic approach to dealing with
change at an individual and organisational level. Change management includes:
processes for initiating and responding to change
tools for implementing the change process
techniques to manage the people side of the change process
Change management is a dynamic practice that has at least three aspects; adapting to change,
controlling change and effecting change. There are many different models and theories of change
which can be used to guide change management.
THE ENERGY EFFICIENCY SUPPLEMENT 2012 36
Eco-efficiency and resource efficiency
Eco-efficiency (or resource efficiency) is defined as ‘doing more with less’. The World Business
Council for Sustainable Development (WBCSD) defines eco-efficiency as ‘the delivery of competitively
priced goods and services that satisfy human needs and bring quality of life, while progressively
reducing ecological impact and resource intensity throughout the life cycle, to a level at least in line
with the Earth’s estimated carrying capacity. In short, it is concerned with creating more value with
less impact’18.
The WBCSD have identified seven principles of eco-efficiency
Reduce the material intensity of goods and services
Reduce the energy intensity of goods and services
Reduce the dispersion of any toxic substances
Enhance the recyclability of materials
Maximise sustainable use of renewable resources
Extend the durability of products
Increase the service intensity of goods and services There are four areas that provide eco-efficiency opportunities, as represented in the diagram below
(Figure 18).
Figure 18: Navigating eco-efficient opportunities
Source: WBCSD (2000) Eco-efficiency- creating more value with less impact. © WBCSD 2000.
http://www.wbcsd.org/web/publications/eco_efficiency_creating_more_value.pdf Accessed 27.06.10
Many organisations are now looking at eco-efficiency opportunities across their operations. For
example, Ikea introduced flat-pack furniture as a way to more efficiently transport goods, reducing
fuel consumption and costs, and lowering emissions. Other Ikea eco-efficiency initiatives across the
product life cycle can be found at:
http://www.ikea.com/au/en/ts_dynamic/dynamiclist/filt_nel_glob?filter=-1
18
World Business Council for Sustainable Development (2000). Eco-efficiency- creating more value with less impact (p4). http://www.wbcsd.org/web/publications/eco_efficiency_creating_more_value.pdf Accessed 26.06.12
THE ENERGY EFFICIENCY SUPPLEMENT 2012 37
Eco-Efficiency
For learn more about eco-efficiency, the WBCSD have a learning module that can be accessed online
http://www.wbcsd.org/pages/EDocument/EDocumentDetails.aspx?ID=13593&NoSearchContextKey
=true
The EcoBiz programme run by the Queensland Government assists business to identify eco-
efficiency opportunities http://www.derm.qld.gov.au/ecobiz/
The Victorian EPA has Hints and Tips for Improving Resource Efficiency in your Business
http://www.epa.vic.gov.au/bus/resource_efficiency/default.asp
Sustainability Victoria has a Simple Guide to Reducing Waste for the Resource Efficient Builder
http://www.sustainability.vic.gov.au/resources/documents/Waste_Guidelines1.pdf
Lean enterprises
Lean enterprises (or lean production/manufacturing) refer to the practice of reviewing current
operations to consider how operations and processes can be optimised to reduce waste and
increase efficiency and worker productivity. This is undertaken by reviewing processes at a high level
view (systems approach), and subsequently working towards more detailed views to identify
opportunities for improvement. This can include minimising the movement of workers or machinery
within a workplace, minimising storage requirements and minimising waste production.
Understanding the life cycle of products and services
Prior to the industrial revolution, goods and services had generally been produced at the local level
by local people, near where they are consumed. Only goods and services of extraordinarily high
value were traded over large distances. As faster more efficient forms of transport developed, more
goods and services could be provided from greater distances. The industrial revolution also brought
greater urbanisation and the capacity for mass production through the harnessing of a variety of
formerly unavailable sources and forms of energy, in particular fossil fuels:
coal to power the steam engine
the internal combustion engine to power transport and many other processes.
the steam turbine to produce electricity
Modern production processes have reduced in real terms the cost of virtually all consumer items
and many commodities as well. One of the consequences of this has been the devaluing in the eyes
of the consumer, the goods, and less often, services purchased. This ‘devaluing’ has, in turn, lead to
the tendency to dispose of, rather than preserve or repair the newly depreciated goods, and the so
called ‘throw away mentality’. Competitive pressures on profit margins, particularly in areas where
THE ENERGY EFFICIENCY SUPPLEMENT 2012 38
the goods or services have been commoditised, have resulted in the need for producers to
encourage disposal and replacement and discourage preserve and repair in order to maintain
profitability. This is loosely what is known as consumerism.
Modern production processes found their genesis in the early 20th century, typified by the advent of
the production line. The production line generally refers to a system by which individuals or
machines repeat the same part of the manufacturing process many times as the product makes its
way from raw materials or parts at one end to completion at the other. It can also be extended as a
metaphor for a linear process, where, in the overall scheme, raw materials are extracted at one end,
and the finished product is disposed of at the other end after it has ceased to serve its original
purpose. In some senses this could be considered to be the birth of consumerism. The linear nature
of this process tacitly assumes an infinite supply of raw materials, and infinite capacity to dispose of
waste. In the early 20th century, on a global, if not local scale, this appeared to be the case.
Increasing development and consumption multiplied by increasing populations has brought into
focus the reality, that both supply of raw materials and the ability of nature to assimilate waste are
definitely finite.
Life Cycle Assessment (LCA) seeks to identify the true environmental impact of a product by
considering its environmental effect at every stage of its ‘life cycle’.
Raw Materials Manufacture Use Disposal
The concept of conducting a detailed examination of the life cycle of a product or a process is a
relatively recent one which emerged in response to increased environmental awareness on the part
of the general public, industry and governments. LCAs were an obvious extension, and became vital
to support the development of eco-labelling schemes which are operating or planned in a number of
countries around the world. In order for eco-labels to be granted to chosen products, the awarding
authority needs to be able to evaluate the manufacturing processes involved, the energy
consumption in manufacture and use, and the amount and type of waste generated.
Assessing designs in terms of their environmental impact can be complex. There may be cases where
one option is better in terms of resource use, while another has a better emissions profile.
Assessing products from a life cycle point of view can be difficult, given the wide range of possible
impacts - both positive and negative. For example, if plastic is recycled, the process eliminates the
negative impacts associated with oil extraction and refining, as well as the manufacture of virgin
polymers. At the same time, the recycling process can have negative impacts, in this case relating
particularly to the collection of a bulky material, and to polymer separation and processing.
The use of energy and water are examples of environmental impacts that need to be considered
over the whole of a product’s life. As with waste, and issues about replacement, such concerns can
be analysed particularly effectively using two inter-related techniques:
The product life cost. In the past this has been primarily a way of assessing ‘cost of
ownership’ throughout life, which totals capital cost, running costs, servicing and
maintenance, and eventually disposal. The concept can however be extended to cover the
THE ENERGY EFFICIENCY SUPPLEMENT 2012 39
product’s impact on the environment and/or the energy involved in the activities,
remembering that all purchased materials will have consumed energy at all stages from the
extraction of raw materials to final manufacture.
The product life cycle approach looks at the total interrelationship from raw materials,
through manufacture of the product, to its use, and disposal through to recycling to create
new raw material. LCA is a potentially powerful tool which can assist regulators to formulate
environmental legislation, help manufacturers analyse their processes and improve their
products, and perhaps enable consumers to make more informed choices. However, many
LCAs have reached different and sometimes contradictory conclusions about similar
products. There are many assumptions that are made, and variables which can be given
different weightings. Even if these are accounted for, there are difficulties in comparing the
results. How does one, for example, compare water use with energy use, and will this
comparison vary from place to place? It seems likely that, in the case of manufactured
goods, the most important time for LCA information to be taken into consideration is at the
design stage of new products. Where LCA is used to evaluate procedures rather than
products, the information can help ensure appropriate choices are made.
Case study: Life cycle thinking at The Gordon Culinary School
The Gordon Culinary School, part of The Gordon TAFE, applied a Life Cycle Thinking and
Management approach across all of its hospitality and cookery operations to form the foundation of
a best-practice sustainability model - a first in this type of service industry. Since the sustainability
initiatives have been in place, initial environmental measurements indicate The Gordon Culinary
School is on track to meet expected targets. Across May and June 2011 alone, waste to landfill
decreased by 40% compared to the same time in 2010 and comingle (glass and plastics) increased by
82%, demonstrating a significant shift in waste disposal behaviour across the Culinary School in a
short period of time.
To view the full case study, visit
http://www.resourcesmart.vic.gov.au/documents/The_Gordon_sustainability_case_study.pdf
THE ENERGY EFFICIENCY SUPPLEMENT 2012 40
Embodied energy
Embodied energy is the sum of all the energy required to produce goods or services, from the mining
and processing of natural resources to manufacturing, transport and product delivery. The term
‘embodied’ refers to the analogy that all the energy from the production process is encapsulated
within the product itself. Embodied energy differs from LCAs in that it does not refer to the
operation or disposal of products. It is important to consider the embodied energy of materials or
products as it can guide choices in the design and manufacture or construction phase.
Embodied energy is most often associated with building materials. Building materials differ widely in
their embodied energy. For example timber has a much lower embodied energy than aluminium
(Figure 19). Materials with low embodied energy (e.g. timber, bricks, concrete) are typically used in
larger quantities than materials with higher embodied energy (e.g. copper, aluminium, stainless
steel). As a result, the share of total embodied energy in a building can be either from low embodied
energy materials such as concrete, or high embodied energy materials such as steel19. A more useful
approach in comparing embodied energy may be to consider the final components or assemblies
rather than individual materials.
A note of caution in using embodied energy data
The actual embodied energy of a material manufactured and used in Melbourne will be very
different if the same material is transported by road to Darwin.
Aluminium from a recycled source will contain less than ten per cent of the embodied energy of
aluminium manufactured from raw materials.
High monetary value, high embodied energy materials, such as stainless steel, will almost certainly
be recycled many times, reducing their lifecycle impact.
Source: Your Home Technical Manual. http://www.yourhome.gov.au/technical/fs52.html
19
Your Home Technical Manual.5.2 Embodied Energy. http://www.yourhome.gov.au/technical/fs52.html Accessed 26.06.12
Blue Box = Embodied Energy
Green Box = Product / Service Produced
THE ENERGY EFFICIENCY SUPPLEMENT 2012 41
Figure 19: Embodied energy (MJ/kg) for some common materials
Source: Data from table in Your Home Technical Manual. http://www.yourhome.gov.au/technical/fs52.html
Examples of opportunities to reduce embodied energy
Design for long life and adaptability, using durable low maintenance materials.
Ensure materials from demolition of existing buildings, and construction wastes are reused or
recycled.
Avoid building a bigger house than you need. This will save materials.
Modify or refurbish instead of demolishing or adding.
Use locally sourced materials (including materials salvaged on site) to reduce transport.
Avoid wasteful material use.
Ensure off-cuts are recycled and avoid redundant structure, etc. Some very energy intensive finishes,
such as paints, often have high wastage levels.
Source: Your Home Technical Manual. http://www.yourhome.gov.au/technical/fs52.html
Waste energy
A sustainable business (i.e. one that reduces its use of natural resources, and also uses resources
efficiently) and business sustainability (i.e. one that is profitable and viable over the long term)
requires costly inputs to be used efficiently in order to minimise waste. As noted earlier in this
THE ENERGY EFFICIENCY SUPPLEMENT 2012 42
resource, energy costs will continue to rise due to a number of factors, so reducing energy waste
makes business and environmental sense.
Energy can be wasted in many ways in different sectors of the economy. Some of these are outlined
below.
Compressed air: Compressed air contributes approximately 10% of industrial energy consumption.
There can be significant wastage from leaks and system inefficiencies in compressed air systems
(Figure 20). Improving the energy of the system or redesigning the system can reduce energy waste.
Figure 20: Compressed air usage and potential savings for the typical compressed air
user
Source: Energy Efficiency Best Practice Guide Compressed Air Systems.
http://www.resourcesmart.vic.gov.au/documents/BP_Air_Manual.pdf Accessed 26.06.10
Waste heat: Many pieces of industrial (and some household) equipment and some industrial
processes produce heat which is not used. Some of the waste heat can be recovered to be used in
new processes (Table 2). The Energy Efficiency Exchange website provides information on reducing
heat waste and heat recovery- http://eex.gov.au/technologies/process-heating-and-steam-systems/
THE ENERGY EFFICIENCY SUPPLEMENT 2012 43
Table 2: Examples of heat recovery in the food processing industry
Source: Eco-efficiency toolkit for the Queensland Food Processing Industry.
http://ww2.gpem.uq.edu.au/CleanProd/food_project/Food%20Manual.pdf Accessed 26.06.10
Fuel use in transport: There are many ways to waste energy in daily transport activities, whether
this be personal transport, or in commercial applications. Unnecessary vehicle idling, such as trucks
waiting to be loaded or unloaded, wastes energy. Unnecessary driving, or poor route planning can
also waste energy. Network mapping applications and fleet tracking provides opportunities to
reduce such transport wastes. Other smaller changes, such as ensuring tyres are at the correct
pressure (too low a pressure increases fuel use), and avoiding hard acceleration, also reduces energy
waste.
Reusing and recycling material: As the section on embodied energy noted, new products can have a
significant amount of embodied energy from the production process. Reusing or recycling products,
whether they be building material (e.g. bricks, tiles, steel etc) or household items such as plastic or
aluminium containers can reduce the energy waste resulting from simply disposing of such material.
THE ENERGY EFFICIENCY SUPPLEMENT 2012 44
How much energy is saved from recycling?
Producing one aluminium can from raw materials requires the same amount of energy as producing
20 cans from recycled materials.
Using recycled steel cans to produce new steel (rather than raw materials), uses up to 75% less
energy.
Recycling PET bottles saves 84% of the energy it takes to make PET bottles from raw materials.
Source: SITA Facts about recycling. http://www.sita.com.au/media/fact_sheets/AL_Facts_24.1.12.pdf
Ecorecycle Plastics Recycling: www.ecorecycle.sustainability.vic.gov.au/.../Info_6_-_Plastic.doc
Electricity supply waste: Our centralised electricity generation, where power generators are often
located far from end users, leads to a considerable amount of energy waste during the process of
generation and transmission to the consumer.
“Nationally, according to published data, some 7% of electricity generated is
consumed in internal losses and auxiliaries consumption at the power station,
with the balance being net ‘electricity sent out’. Losses following in the national
transmission system are also substantial, typically another 7% through the step-
up transformers, switching stations and the nearly 40,000km of high voltage
overhead and underground transmission lines and cables (220kV up to 500kV)
that interconnect and span Australia’s states. A further 7% - 9% or more,
depending on numerous local factors, is lost in lower voltage more scattered
customer distribution systems, typically from 132kV down to 240V single phase
at the average domestic customer’s meter.”
Source: Thomas, M. Electricity Losses- do they matter? http://www.eesa.asn.au/sites/default/files/articles/electricity-losses-martin-
thomas-am/Electricity_Losses_Article_-_Martin_Thomas.pdf
In addition to the energy waste during supply and transmission, there is energy waste at the
consumer end, through standby power, waste heat from lighting, heat loss from hot water systems
and piping etc.
Sustainable consumption and purchasing
Purchasing decisions can have big impacts on energy, from the energy used to produce a product or
deliver a service, to the energy consumed during a product’s operation, and the energy that can be
recovered from reuse or recycling at the end of its life, or whether it needs to go to landfill.
The Story of Stuff
The Story of Stuff [http://www.storyofstuff.org/movies-all/story-of-stuff/] is an animated
documentary that tracks the production process for consumer items, from extraction of raw
THE ENERGY EFFICIENCY SUPPLEMENT 2012 45
material to the disposal. The Story of Stuff Project [http://www.storyofstuff.org/]now provides a
number of short animations on different consumer subjects such as bottled water and electronics.
Many government departments and organisations have sustainable procurement guides to advise
staff on purchasing or procuring goods and services.
Supermarkets and other large retailers can influence energy efficiency and wider sustainability
through their supply chain. See http://www.ecosmagazine.com/?paper=EC156p18
Organisations like ECO-Buy can also assist organisations in implementing sustainable procurement
and building a green supply chain. http://www.ecobuy.org.au/
Benefits of sustainable purchasing
Sustainable purchasing has a number of benefits20:
Reduce energy and water consumption (which can reduce costs)
Improve resource use efficiency
Reduce waste (which can reduce waste disposal costs)
Reduce environmental health impacts of products and services
Reduce pollution
Provide markets for new environmentally preferable products
“Close the loop” on recycling, improving the viability of recycling
Provide leadership to the community
20
Australian Government Environmental Purchasing Guide.
http://www.environment.gov.au/settlements/publications/government/purchasing/purchasing-guide/pubs/purchasing-guide.pdf
THE ENERGY EFFICIENCY SUPPLEMENT 2012 46
Encourage industry to adopt cleaner technologies and produce products with lower
environmental impacts
Considerations when purchasing
In thinking about your next purchasing decision, consider the following questions:
Is the product needed? Could it be purchased second hand, or can a current product be serviced or
reconditioned?
What is the product made from? Was it (part or fully) made from recycled material, recyclable
material, or raw material that was sustainably sourced?
Can the product be recycled, or does the manufacturer have a ‘take back’ policy?
Does it have an environmental certification?
Does it have labelling providing advice as to its operational energy and water consumption use and
costs?
What is the embodied energy in the product?
Will the product last? Is it well made? Does it come with a warranty?
Eco-labelling helps guide consumer choices
Good Environmental Choice Australia (GECA) provides a life-cycle based ecolabel to encourage the
development of sustainable goods and services. There are over 2000 certified products on the GECA
website. http://www.geca.org.au/
There are a wide range of eco-labels in the marketplace covering environmental and social
sustainability claims. See http://www.greenbeings.com.au/tips/Eco-Labels.aspx for a list and links to
other eco-labels.
THE ENERGY EFFICIENCY SUPPLEMENT 2012 47
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