Declining electricity use – will this continue?

Electricity consumption in Australia’s national electricity market continues to decline in 2014. As graphed below for New South Wale and Victoria centralised generation for the first six months of 2014 is 11% and 8% down respectively against the peak’s of 2009 and 2008.

Decline in NSW electricity generation

Half year electricity generation, NSW, 2004 to 2014. Based on data from the Australian Energy Market Operator

Decline in Victoria's electricity generation

Half year electricity generation, Victoria, 2004 to 2014. Based on data from the Australian Energy Market Operator

This decline has come despite the turmoil regarding carbon policy in Australia. Victoria had ditched its Greener Government Building’s program, and the Victorian Energy Efficiency Target (VEET) Scheme (a Utility Energy Efficiency Obligation or White Certificate scheme) will be closing shortly. Yet electricity consumption and greenhouse emissions continue to decline. There are a wide range of reasons for this, encompassing both energy efficiency and distributed solar PV generation.

But with the carbon pricing mechanism now abolished, uncertainty about whether there will continue to be support for renewable energy via the Renewable Energy Target RET, and in Victoria the shutting of the VEET scheme, will this decline continue?

Population growth is putting upwards pressure on electricity consumption. The Energy Efficiency Opportunities Program, which helped the very largest energy users identify cost-effective ways of reducing their energy consumption, has been axed. The government’s commitment to lower electricity prices will increase the payback on renewable energy and energy efficiency. The electricity retailers have withdrawn their support for the state energy saver schemes, possibly concerned about revenue loss as electricity consumption drops. Electric cars still haven’t taken off, but with a great deal of money now moving into energy storage research and development, as battery prices drop demand for electric cars – and electricity – will increase.

Yet downward pressure will continue to come from Australia’s appliance and equipment standards and labeling program. Solar installations will continue even without a RET, although at a slower rate. The NSW Energy Saver Scheme (ESS) continues to grow from strength to strength. Manufacturing decline will likely continue, with the shut down of Australian car manufacturing by 2018. The Building Code of Australia is likely to continue to tighten up its energy efficiency provisions. Lighting technology, representative of many energy using technologies, will continue to get more efficient and efficient technology more affordable. Solar PV pricing will drop further by the end of the decade. Many major corporations now have sustainability well embedded into their operations and decision making processes. And the number of engineers and tradespeople with skills in renewable energy and energy efficiency is much higher than it was at the peak of consumption six years ago.

The Australian Energy Market Operator (AEMO) forecasts that consumption will be largely flat through to 2020, with savings offset by increased electricity use in the liquification of LNG for export. But in the recent past AEMO has consistently overestimated growth in consumption, although it may now have better tuned its forecasting model.s

To the best of my knowledge never before has Australia seen six year of decline in electricity demand. But the policy environment has supported this. Now some of the key policy drivers are disappearing. On the other hand, there is now an industry, particularly the solar PV industry, that is a force in its own right, and technological progress is now strongly geared towards efficiency. Perhaps we are approaching a point where policy is not the deciding factor. That would be very exciting, a major transition, and one that provides hope for a low carbon future. If the downward trend continues, we may look back at this decade as being pivotal. The decade, where, in Australia at least, emissions abatement wasn’t totally dependent on a strong supportive EE and RE policy environment. Where GDP growth clearly decoupled from energy use, and where energy savings began to decouple from policy.

Why energy efficiency should be the first fuel – EE 101 in 176 words

EE 101: Energy efficiency (well done) is fantastic financially, excellent environmentally, and stupendous socially! If you are purchasing energy, consider energy efficiency as the first fuel that you use.

Fantastic financially

Why invest in building more more power stations when you get a better return with energy efficiency? This is especially the case with new buildings. Every dollar invested in energy efficiency through the process of conceiving, designing, constructing and commissioning a new building will yield about $15 in lifetime energy savings. That’s a fantastic 1500% ROI!

Excellent environmentally

Using less energy through energy efficiency means less greenhouse gas emissions and air pollution. Considered as a fuel source, energy efficiency produces zero ongoing carbon emissions. An excellent reason to use energy efficiency as your first fuel.

Stupendous socially

Compare a large fossil fuel electricity plant. These plants are very well engineered – and accordingly don’t need much human intervention. They are lousy at job creating. On the other hand energy efficiency is dispersed, and creates jobs, lots of them. Jobs in both manufacturing and installation. Stupendous!

Policies that have lowered Australia’s electricity consumption – part 3

Bruce Rowse

This post looks at a range of other policies not covered earlier to wrap up the discussion on policies that have lowered Australia’s electricity consumption

Summary – parts 1 and 2

In parts 1 and 2 of Policies that have lowered Australia’s electricity consumption I have looked at a range of policies, including the Renewable Energy Target, the Victorian Energy Efficiency Target (VEET) Scheme, appliance standards and building standards. With a focus on the state of Victoria, I have attempted to quantify how much each of these policies have contributed to the lowering of Victoria’s electricity consumption that has occurred over the period 2008 to 2012/13.

Victoria’s electricity consumption has dropped by around 4,000,000 MWh since 2008, and in 2013 was around 8,000,000 MWh lower than had the increasing trend of 2004 to 2008 remained. As the Australian Energy Market Data referred to in Part 1 is for electricity generation for Victoria, I have assumed that consumption  matches generation, i.e. over the course of each year electricity inflows and outflows out of Victoria to other states are roughly equal.

In part 1 I identified that the RET, aided by the state feed in tariff, and the VEET scheme had contributed to a reduction of around 2,000,000 MWh annually. However there is a considerable uncertainty around the actual savings achieved by the VEET scheme.

In part 2 I identified that appliance energy efficiency standards saved roughly an additional 2,500,000 MWh annually, assuming that estimates of savings commissioned by the Equipment Energy Efficiency program are accurate. Building standards made a smaller contribution, possibly in the range of around 300,000 MWh.

Together these four policies examined (plus including the impact of the state solar feed in tariff) account for a reduction in electricity consumption of very roughly 5,000,000 MWh. Compared with the 8,000,000 total reduction (had electricity use continued to rise at the same rate it had from 2004 to 2008) this leaves roughly 3,000,000 MWh of reduction unaccounted for.

So where would the other 3,000,000 MWh of savings come from? Policies of significance could be:

  • The carbon price from 1 July 2012.
  • NABERS and Commercial Building Disclosure
  • The national Energy Efficiency Opportunities (EEO) program, complimented by the state government’s EREP program.
  • The Victorian government’s Greener Government Building’s Program

Additionally rising electricity prices, caused by rising network charges and environmental charges (including the renewable energy target, VEET and carbon pricing) could have resulted in some voluntary reduction in energy use.

Finally the ongoing decline of Australia’s manufacturing sector could have also made a contribution.

In this post I attempt to quantify these impacts.

The carbon price from 1 July 2012

The carbon price has resulted in an increase in the cost of electricity, as electricity generators have passed on their costs of compliance. This has also made renewable generators more competitive in the national electricity market, with greater renewable generation, particularly hydro, reducing emissions from electricity generation.

In Victoria the drop in electricity generation from 2012 to 2013 of 1,400,000 MWh was roughly 750,000 MWh more than the average annual drop 2008 to 2012.

So very roughly it would be fair to assume that roughly 750,000 MWh of savings could be attributed to the carbon pricing, without being specific as to how the reduction arose, with likely reasons being:

  •  Liable entities, particularly EEO participants, making additional investments to reduce their electricity consumption and thus reducing the quantity and total cost of carbon permits.
  • The carbon price was used to fund the Clean Technology Investment Program (CTIP), which awarded grants on a matched basis for energy efficiency/renewable projects in industry. EEO participants would have tapped into this funding, with projects implemented in 2013. Additionally in also funded the Community Energy Efficiency Program (CEEP) which local governments used to fund predominantly energy efficiency investments.
  • Further additional voluntary residential energy savings in response to further electricity price rises.

NABERS and Commercial Building Disclosure (CBD)

NABERS, the National Australian Built Environment Rating System, provides building sustainability ratings covering energy, water, and indoor environment quality, based on the actual performance of the building. NABERS is primarily used to rate the energy performance of large office buildings,

The Commercial Building Disclosure (CBD) Act 2010 requires that office spaces of more than 2000 m2 obtain a Building Energy Efficiency Certificate comprised of a NABERS rating and tenancy lighting assessment at the time of sale or lease.

Whilst the CBD Act does not require energy efficiency works to be implemented, in a market place where building owners compete for tenants, the CBD Act has been effective in driving efficiency improvements. The savings in 2012 in Victoria have been estimated at 0.1PJ, or roughly 60,000 MWh based on a study undertaken by Pitt&Sherry for the Department of Climate Change.

EEO, aided by EREP

The EEO program is widely recognised as making a significant contribution to emissions reduction by Australia’s largest energy users. This program has required large energy users to identify energy saving opportunities with a payback of four years or less. As with the CBD program, there is no obligation for identified opportunities to be implemented.

The Victorian state government Environment and Resource Efficiency Plans (EREP) program, which ran from 2008 to 2012, similarly required large energy users to identify energy saving opportunities and develop an action plan. It was closed because of overlap with the EEO program.

The five year program review found that over the first 5 years of the EEO program from 2006 to 2011 the EEO program is estimated to have saved 35 PJ of energy savings. There is no state by state break down of savings or identification of the separate electricity and fuels (principally natural gas) savings, however Climate works who participated in the program review found that most of the savings attributed to EEO came from the manufacturing sector (22 PJ).

Victoria is Australia’s largest manufacturer. If we assume that 30% of the 35PJ of savings were made in Victoria, that savings were approximately 1/3rd electricity 2/3rds gas (based on energy audits I have undertaken of manufacturing facilities), this would give roughly 3.5 PJ of electricity savings in Victoria over the period 2006 to 2011. As:

  • the EEO program is on-going;
  • It is unlikely that many saving measures were implemented during the initial years of the program (2006 to 2008)
  • Year on year savings could be expected to be increasing as more measures are implemented.
  • The five year evaluation went only to 2011, and savings would have increased in 2012 and further again in 2013
  • It would seem reasonable to assume that very roughly of the total savings measured to 2011 of 35 PJ, by 2013 savings may have risen to perhaps doubled, or say around 70PJ (not including the stimulatory effect of the carbon price and CTIP).
  • On this basis annual savings in 2013 could be estimated at very roughly say 15 to 20 PJ

Then in very rough terms the Victorian electricity savings in 2013 vs 2008 would have been roughly 1.5 to 2.0 PJ, or perhaps up to around 600,000 MWh.

The Greener Government Buildings Program (GGB)

The GGB program is a program that requires Victorian state government departments and agencies to enter into an energy performance contract for buildings that represent 90% of their energy use. The N.S.W. government has now adopted a similar program.

This is a program I personally am very familiar with, as up until the end of 2013 I was the owner of CarbonetiX, one of the energy services contractors implementing energy performance contracts under the GGB program.

By mid 2012 projects delivering around 50,000 tonnes of GHG savings annually had been funded. My estimate is that nearly all of these savings would be in electricity savings, and with additional GGB projects underway since mid 2012 my estimate is that in 2013 approximately to 40,000 MWh of annual electricity savings arose from the program.

Rising electricity prices

A combination of rising network charges and environmental charges have increased electricity prices. Its believed that domestic users decrease electricity consumption in response to rising prices, whilst commercial and industrial users are relatively insensitive to price increases.

Whilst a price elasticity of electricity price for residential consumers has commonly assumed to be -0.25 (ie a 25% reduction for a doubling in electricity prices) I don’t believe this is the case. Residential electricity prices have nearly doubled since 2008, yet its highly unlikely that consumption has reduced by 25%. I believe a residential price elasticity of only -0.05 is more likely, on this basis the doubling of electricity prices would have seen a drop in residential consumption of about 5% since 2008. With residential consumption accounting for roughly 30% of total electricity consumption, this would result in an annual drop in consumption of about 800,000 MWh in Victoria. For arguments sake lets assume its a bit higher at 1,000,000 MWh.

This full amount, cannot however, be directly attributed to carbon policy, with less than half of the electricity price rises due to environmental charges.

The decline of Australian manufacturing

This has no doubt contributed to decreased electricity consumption, although its likely that future declines will be greater, as Victorian car manufacturers shut down over the next few years and the Point Henry aluminium smelter closes down later this year.

I have no figures to substantiate any estimate, but on balance with other figures put the decline at around 500,000 MWh annually in 2013 vs 2008.


This analysis has shown that a range of policies have contributed to reduced electricity consumption in Victoria since 2008. My estimates of the electricity savings attributed to each policy are tabled below.

Driver Savings (MWh)
Policy with the intent of reducing electricity use/ emissions
Appliance standards 2,500,000
Renewable Energy Target (plus feed in tariff) 1,000,000
Victorian Energy Efficiency Target (VEET) 1,000,000
Carbon Pricing 750,000
Energy Efficiency Opportunities Program 600,000
Building standards 300,000
Commercial Building Disclosure / NABERS 60,000
Victorian Greener Government Buildings 40,000
Measures where policy has had a partial, indirect effect
Higher electricity prices 1,000,000
Factors which are largely unrelated to policy
Decline of manufacturing 500,000
TOTAL 7,750,000

As I have indicated through the discussion, the numbers above should largely be considered as approximations only.

So what has been the economic efficiency of achieving these outcomes? Which policies are more cost-effective than others? This will be examined in another posting.

Policies that have lowered Australia’s electricity consumption – part 2

Bruce Rowse

Standards for the energy efficiency of both equipment and buildings have contributed to a reduction in electricity consumption. This posts attempts to quantify the contribution to reduced electricity consumption these policies have made, with a focus on the state of Victoria, Australia

Equipment energy efficiency standards

Many countries have equipment energy efficiency standards, encompassing labelling and minimum efficiency performance standards (MEPS). For computer users perhaps the most famous of these is the voluntary U.S. Energy Star Label.

In the USA the Building Technologies Office regulates minimum standards for over 50 categories of appliances and equipment. By 2030 its estimated that this program would have cumulatively saved 6.5 billion tonnes of GHG and $1.7 trillion.

Equipment energy efficiency labels have existed in Australia since 1986 and MEPS since the 1990s with national legislation enacted in 2012 pulling together state standards. Australian minimum efficiency performance standards now cover the following:

  • Domestic fridges and freezers
  • Air  conditioners
  • Electric storage hot water heaters
  • Gas hot water heaters
  • Flouresent lamps
  • Incandescent lamps
  • Power supplies for halogen lighting
  • Televisions
  • Set top boxes
  • External Power supplies
  • Computers
  • Computer monitors
  • Electricity distribution transformers
  • Three phase motors
  • Refrigerated display cabinets

The estimated impact of the Australian equipment energy efficiency program by 2020 is the saving of 32,000,000 MWh annually below a business as usual scenario, roughly equivalent to 32 MT of GHG. Roughly 80% of these savings are expected to come from MEPS, with the remainder from the labelling programs, or labelling combined with MEPS.

Validating these savings claims is beyond the scope of this posting. Taking the estimated savings of the equipment energy efficiency program at face value, and with a focus on Victoria, this program has saved over 4,000,000 MWh in 2013, with 2020 savings of around 7,000,000 MWh expected (compared with BAU from a 1990 baseline). Compared with 2008, where annual savings were slightly over 1,500,000 MWh, the additional annual savings over and above 2008 levels in 2013 were around 2,500,000 MWh. This is roughly equal to the savings achieved in Victoria by the combined effect of the national Renewable Energy Target and the energy efficiency white certificate (VEET) scheme.

Building Standards

Building energy efficiency standards are also widespread. In Australia these regulations are embedded in the National Construction Code, which encompasses the Building Code of Australia (BCA).

These codes apply to the construction of new buildings.Each year approximately 2% of Australian building are new.

In Victoria the residential energy efficiency building provisions began in 2003,and have been progressively tightened since then. They have had a focus on improving the thermal performance of buildings. Only one study has been undertaken to measure the impact of national energy efficiency standards for new homes, undertaken by CSIRO and published in December 2013. The study had a focus on measuring and comparing the energy use of 5 star homes building from 2005 on with 3.5 and 4 star homes built from 2003. For the 116 homes in Melbourne that were examined it found that the 5 star provisions were effective in reducing winter gas consumption (the vast majority of Victorian new homes are heated by gas) by around 100 MJ/m2, but there was no discernible impact on reducing electricity consumption in summer.

On this basis, comparing 2012/13 with 2008, residential thermal energy efficiency provisions are assumed to have had little discernible impact on reducing Victorian electricity consumption.

From 2010 the BCA has also included energy efficiency provisions for residential lighting. Up until 2010 most new homes made extensive use of inefficient halogen downlights. Whilst no study has been done yet to estimate the savings arising from these lighting provisions, assuming on average a halving in lighting power use, and approximately 25% of home electricity use (before the BCA 2010) being in lighting, the 2013 savings in Victorian homes would equate to roughly 100 to 150 MWh compared with 2008, growing at roughly 50 MWh/year.

For commercial buildings a report commissioned by the Department of Climate Change and Energy Efficiency, published in March 2013, estimated that the commercial energy efficiency provisions first introduced in the Building Code of Australia in 2006 and tightened in 2010, had reduced electricity consumption in Australian commercial buildings by 3.1 PJ (860,000 MWh) in 2012 compared with 2008.

Taking this estimate at face value, on a per capital basis this would correspond to a saving of a little more than 200,000 MWh in Victoria in 2012 compared with 2008.

In summary, equipment energy efficiency standards appear to have contributed substantially to reduced electricity consumption, with building standards making a small contribution to date.


Trends driving the smart grid

Bruce Rowse

The following six trends are driving the development of smart grids globally.

  1. Growing and substantial investment in lowering the cost of energy storage. Example: $7.3b US government investment in energy storage.
  2. Continued global growth in the demand for solar PV. Installed global capacity by 2020 is expected to reach 500 GW.  In 2013 global installed capacity reached 100 GW.
  3. Major economies investing in smart-grid infrastructure. Example Chinese investment in electric car charging infrastructure.
  4. Smarter metering and demand management solutions becoming more prevalent. Demand management examples from the U.S. and Japan.
  5. Increasing private investment, which is much more agile than central government controlled investment. This trend dates back a few years and is continuing.
  6. Decentralised lighting systems jumping ahead of rural electrification in developing countries. Spin-off technologies could contribute to a much cheaper smart grid.

Policy around electricity networks should take these trends into account.


Smart grid – how soon can it de-carbonise our energy supplies?

Bruce Rowse

In ten years time the bulk of central coal fired generation in Australia will be close to redundancy, provided we regulate to make way for the technological and financial superiority of the smart grid based largely on distributed solar PV generation of electricity and distributed energy storage.

Whilst you pick yourself up off the floor after laughing at this ludicrous prediction, reflect a little on the history of solar PV in Australia.

Whilst solar PV technology has been around since the 1970s, not in 2006, not 2008, but as recently as 2009 less than 1% of Australian dwellings had solar PV systems. It was still uneconomic, and based on the previous 30 years there seemed little likelihood of that changing.

Back in 2008, if I had said to you that by 2012 10% of Australian dwellings would have a PV system on their roof you probably would have laughed, and told me to dream on. And I wouldn’t have believed it either.

But by the end of 2013 14% of Australian dwellings have solar power on their roofs. In South Australia over 20% of households had a solar PV system on their roof. Costs have plummeted, there has been strong policy support for PV, and Australia became one of the most competitive solar markets globally. Over one million householders have been willing to make a significant investments to get their own clean energy powerplant on their roof.

While we aren’t going to see the price drops we have seen in the past,  the costs of solar panels and inverters will continue to drop, and there will be ongoing innovation in gradually reducing the costs of installation.So many would agree with me that by 2024, solar PV as a form of electricity generation will be cheaper than coal based generation, sans subsidies.

Smart Grid Schematic – from

But then we come to storage, the great enabler that enables solar energy to be delivered night and day. The  key barrier however is the cost of storage.

A December 2013 US Department of Energy report on Grid Energy Storage outlines a plan for the US to develop grid energy storage capacity.  Over the period 2009 to 2012 around USD $1.3b was invested in battery and energy storage initiatives and funding obligations.

Lux Research states that the US Senate has now introduced a program to fund $7.5b in energy storage projects. This sort of stimulus will contribute to cost reductions in storage technology.

Navigant Research sees the grid scale battery energy storage market reaching $30b by 2022 , with the market size now under $1b. If the economies of scale are similar to that of PV, where prices drop by 20% for every doubling of capacity, we can expect storage prices to be approaching one quarter of what they are now by 2022.

Shai Aggasi of the now defunct Better Place electrified investors with his vision of electric vehicles, typically only driven for one hour a day, providing storage to the smart grid for part of the other 23 hours a day. The key constraint on the electric vehicle market is the battery, specifically battery costs and capacity (limited range). As battery costs come down and capacity improves, we will see a fuel switch for vehicles to electricity, countering the trend of decreased national electricity consumption. Shai was ahead of his time, but the genie appears to be now out of the bottle.

And as storage costs come down, rapid charging infrastructure will become more prevalent.


So am I really that crazy to be predicting the demise of centralised coal generation?

However to enable this – and the tremendous reduction in carbon emissisons that will result we need appropriate enabling policy. Elements of this may include:

  • Recognising the long time frames associated with distribution network planning, typically in excess of five years, and the need to therefore act now with considerable foresight. Plans made now will only likely be implemented from 2019.So we need to start planning now.
  • Developing tariff regimes that assign value to the network cost savings (avoided investment) provided by solar PV and energy efficiency. Peak demand in the national electricity market in  w the summer of 2014 was similar to that of 2008, and lower in all intervening years. Yet over this period demand should have gone up considerably due to population and economic growth, and indeed was forecast to do so by the Australian Energy Market Operator (AEMO).
  • Developing network tariffs that take into account the benefit provided by distributed generation and storage of decreased loads on inter-connectors.
  • Simplifying the connection arrangements for larger distributed generation systems.
  • Providing open, transparent, fair and reasonable standards and connection arrangements to facilitate the addition of storage and distributed generation and the appropriate monitoring, control and communication networks needed to operate the smart grid. Make no doubt, whilst over the next 20 years we are likely to see large scale fossil fuel centralised generation being relegated to the history books, there is plenty of opportunity for distribution businesses in a decentralised smart grid.
  • Providing stimulus for storage or other demand management solutions that better match demand to varying supply from renewables, with the aim of developing economies of scale and competition in design and installation. Hydro Tasmania has a valuable demonstration of how storage and demand management solutions can greatly increase the availability and utility of intermittent renewables at King Island.
  • Appropriate voltage regulation to both manage an increasing number of PV systems on homes and businesses (PV systems tend to push up network voltages), but also to reduce the variation in network voltages.
  • Metering and control systems that can effectively manage distributed storage systems (such as parked cars), the inflow and outflow of energy from such storage systems and the financial valuation of storage. This could represent valuable Australian IP suited to export.

The Rocky Mountain Institute are also seeing major changes to the grid over the next ten years in a 2014 report entitled “Grid Defection”.

Policies that have lowered Australia’s electricity consumption – part 1

Bruce Rowse

Since 2008 electricity generation in Australia’s National Electricity Market (NEM) has declined. The graphs below, showing generation from the two most populous states in the NEM – N.S.W. and Victoria – illustrate the extent of the decline.


This sustained decline has never occurred before in Australia’s history.

This post has a focus on the state of Victoria, and looks at the contribution the national Renewable Energy Target (RET) – aided by the state Feed in Tariff –  and the Victorian Energy Efficiency Target scheme have had to reducing electricity consumption. Both these schemes require electricity retailers to purchase and surrender a prescribed number of certificates each year.

Renewable Energy Target

Since 2011 the RET has had two types of certificates, Large Generation Certificates (LGCs) and Small Technology Certificates (STCs). For electricity generation LGCs represent generation plants in excess of 100 kW, with these generators joining the NEM. They are therefore already accounted for in the generation figures graphed above. Well over 80% of STCs have come from solar PV systems.

STCs enable an upfront discount by deeming the forward generation by 15 years. Taking this into account, by analysing the data in the REC registery, the amount of actual electricity generation each year from solar PV in Victoria is graphed below from 2004 to 2012. (2013 data not yet finalised).


The rapid decline in the installed cost of PV in Australia, supported by the RET and the Victorian Feed in Tariff, has caused a rapid growth in the number of PV systems installed, so much so that by 2012 small scale PV contributed to slightly more than 2% of state electricity generation.

The RET had a stimulatory multiplier attached to it for systems under 5 kW in size up until June 2013. Similarly Victoria’s feed in tariff’s started off high, then have twice dropped substantially. Once complete 2013 STC data is available I will preparing a post which examines the impact of the RET and the FIT policies in detail and examines their efficiency and effectiveness.

Victorian Energy Efficiency Target (VEET) Scheme

The VEET white certificate scheme has been in place since January 2009. By analysing the data in the VEET registry the amount of electricity saved as a result of the VEET scheme is graphed below.


Whilst there is reasonably high certainty of the amount of electricity generated by a PV system, there is generally less certainty about the savings achieved by energy efficiency measures. The key technology that has produced the greatest number of certificates in the VEET scheme has been Standby Power Controllers, for which I believe that the deeming values used have been excessively high.

Nonetheless, even if the VEET scheme has only achieved half the savings it has deemed to, it has also contributed to reducing Victoria’s electricity consumption by more than 2% since it started in 2009. In another post I’ll be examining the effectiveness of the VEET scheme in more detail.

Together the REC certificates (with feed in tariff support) and energy efficiency white certificates in Victoria appear to have reduced electricity consumption by over 2,000,000 MWh. However with 2013 electricity consumption around 4,000,000 MWh lower than in 2008, and around 8,000,000 MWh lower than had the increasing trend of 2004 to 2008 remained, there have clearly been other factors that have contributed to Victoria’s declining electricity consumption.

These include national equipment energy efficiency standards, building efficiency standards and carbon pricing. Additionally increases in electricity costs may have driven voluntary decreases in electricity consumption, as would have the gradual decline of Victoria’s manufacturing sector. These will be examined in the next part of this discussion on policies that have lowered Australia’s electricity consumption.



Climate policy – why is it so complex? Help!

Bruce Rowse

As I’ve researched the field of carbon policy over the last few months I’ve been daunted by the complexity of this area. Huge effort has gone into developing climate policy, but it can be so complex that its hard to make sense of.

Below I briefly outline the big picture I’m developing.

Firstly, whilst the terms carbon policy and climate change policy may be used interchangeably, climate policy generally has more of a government or international focus, whereas the term carbon policy may apply at the governmental area, it also can apply to the policies of large organisations. So the capabilities of organisation’s offering carbon policy services can differ quite a bit from those offering climate policy services. A carbon policy consultant may offer to help an organisation develop its own carbon abatement policies, a climate policy consultant will generally be more focussed on advice to governments.

The real interest of this blog is in government policy, and it would be better named as rather than Unfortunately the actual website is now going a little stale.

Secondly its clear that in terms of the big picture climate policy isn’t kicking too many goals yet, and there would be very few people who would disagree with this. By that I mean that climate policy isn’t having much impact on slowing emissions such that we don’t go beyond 2 degrees of warming. Whilst emissions intensities, in terms of tonnes of carbon per unit of GDP may be falling now in many countries, absolute global carbon emissions aren’t.

Third, tremendous intellectual effort has gone into reports and papers on various aspects of carbon policy. Enormous numbers of highly educated people are very strongly committed to emissions reduction and making a contribution to policy. Surely this effort and passion will result in more goals being kicked in the future! But if not, what are the barriers?

Invariably any climate policy discussion seems to end up discussing barriers. And perhaps one of the major barriers is the very complexity of the topic, discussion and solutions put forward. And its not ordered complexity, like the ordered complexity of the computer this is being written on and the world wide web that is serving this web page. Rather its chaotic, seemingly all over the place, and often compromised, and even counter-intuitive. At least that’s my impression to date.

What I would like is:

  • A guide to unravelling the complexity; and
  • Real data, real information, that can see through the complexity and identify what works and how effective and efficient different policies are.


Carbon policy guides USA, China energy efficiency

The American Council for an Energy Efficient Economy has recently released guides on building and industrial energy efficiency policies in the USA. This follows up from a guide on building energy efficiency policy in China.

These guides can be accessed at: