A fortnight after Prime Minister Kevin Rudd made boosting economic productivity one of his top priorities, political rivals have blasted the government for burying a research report that found potentially large energy savings for households and businesses.
The government report, Investigation of a National Energy Savings Initiative, found that extending energy efficiency programs now running in NSW and Victoria could save the economy as much as $5.26 billion if converted into a national scheme.
It found participating households could cut annual electricity bills by 10 per cent by 2020, or about $180 in 2012 terms.
With rising energy bills a concern for many families and firms, the government’s posting of the report on a ministry website late on Friday afternoon with only some industry groups informed surprised energy experts and drew criticism from the Coalition and Greens.
Energy Minister Gary Gray said: “The government is currently considering the final paper and will respond to the outcomes of the investigation in due course.”
But Ian Macfarlane, the Opposition’s energy and resources spokesman, said the paper had been deliberately released with little fanfare.
“Kevin Rudd isn’t interested in governing and the attention to detail that comes with it. He is only interested in campaigning,” he said.
Greens leader Christine Milne said the government committed to examining an energy savings scheme nearly two years ago, and had produced only an information paper.
“It is very concerning that progress in designing and implementing a National Energy Savings Initiative has taken so long and that the government seems disinclined to draw attention to the matter,” she said.
Using modelling by consultants SKM MMA, the study looked at the benefits of extending the energy efficiency scheme that, in NSW’s case, aims to cut energy use by 4 per cent from business-as-usual levels. Companies are required to pay a penalty unless they can meet the energy reduction target, which they can do so by implementing efficiency steps or paying specialist firms to undertake them.
Gavin Gilchrist, managing director of Big Switch Projects, which advises on commercial energy use, said the proposed scheme “hits all the right buttons” by cutting energy use while generating a net economic benefit for the country.
“It focuses on people’s bills, not electricity prices,” Mr Gilchrist said. “What really matters is the bill and if this sort of scheme encourages people to be more efficient and use less they can be better off even if the price does go up.”
Rob Murray-Leach, chief executive of industry group the Energy Efficiency Council, said the savings could be much larger than predicted and that the report was based on conservative savings estimates.
“Energy efficiency is just common sense … I think that both sides of politics are going to look at this very seriously once the sound and fury of the election is over,” he said.
What’s next?
Hopes for early action, though, may be disappointed.
“The government will first consider stakeholder feedback, the current energy market context, and further advice of the (energy saving initiative) Working Group,” Mr Gray said.
“The government has clearly stated that any decision to implement a national scheme would be conditional on the agreement of Council of Australian Governments and all existing states schemes being abolished,” he said.
The Coalition, too, won’t commit to acting on the report’s findings.
“If elected to Government, the Coalition would consider the modelling and information contained in the report relating to a National Energy Savings Initiative,” Mr Macfarlane said. “Until that process was complete the Coalition wouldn’t rule in or out specific energy saving proposals.”
“We are, unfortunately, a long way from finalising the design of the scheme,” said Senator Milne, adding that the Greens would prefer a stronger target than a 5 per cent reduction.
The Greens recently announced plans to set up an independent Energy Savings Agency, whose role would include designing the scheme. The outline would also have to include features to ensure low-income households did not end up with higher electricity bills if they were unable to participate, Senator Milne said.
The report’s modelling indicated that households not participating in the scheme would face marginal increases to their electricity bills of about $10-$15 a year in 2020, or less than 1 per cent.
States’ view
For its part, NSW energy minister Chris Hartcher said the government remains committed to increasing the “consistency” of the state’s scheme with Victoria’s while it awaits moves on a national program.
“The NSW Government will only consider supporting a national scheme if it achieves the same outcomes and is not burdened by an expensive bureaucracy or wasteful programs as most of Labor’s national schemes have proven to be,” Mr Hartcher said.
Victoria, meanwhile, said it is undertaking a detailed reivew of its Energy Efficiency Target to determine how much greenhouse gas abatement had resulted, and the costs and benefits for the state.
“The Victorian Coalition government will not support a national scheme which sees Victorians subsidise other states,” the state’s energy minister Nicholas Kotsiras said. “Victorians must benefit from any national scheme before it will be considerered.”
Australian Industry Group, Innes Willox, said more work was needed before the scheme “is anywhere near ready for a decision by COAG”.
“A National Energy Savings Initiative would be a complex exercise and while we will study the information paper in detail, it is clear that there are risks as well as potential benefits,” Mr Willox said.
