Cost — Rising electricity and gas prices mean the costs of energy are rising. If a consumer can reduce their energy consumption this can help keep their costs down.
Infrastructure — As energy demand at peak times increases, we need to build more infrastructure to deliver it to our homes and businesses. This applies to poles and wires for the electricity network; pipelines and equipment in the gas industry, plus other equipment for industrial users. The costs for this extra infrastructure are passed on to consumers. If we can slow down the growth in demand, or even reduce our energy consumption through efficiency measures, we can avoid the added infrastructure costs.
Greenhouse gas emissions (GHG) — Most energy used in Australia still comes from hydrocarbon-based sources with varying degrees of associated GHG emissions. Even though we are seeing a transition to renewables, it is expected that hydrocarbons, in particular gas, will continue to be used for many years to come. If we can use these sources more efficiently we can help Australia reach our GHG reduction targets.
So, how are we progressing with energy efficiency in Australian industry?
Historically there hasn’t been a strong focus on energy efficiency in industry, as we have been lucky enough to have low energy prices for many decades. This needs to change.
In more recent times there have been some government programs such as the Energy Efficiency Opportunities scheme which required industry to examine their energy use more closely.
This had a positive impact across the large industrial energy users, as it forced them to document their usage and report on potential options to improve their energy efficiency. However these programs are no longer operating, and without a price on carbon emissions there has been less incentive for companies to invest in improvements.
On a positive note, at the end of 2015 the Australian Government set a target to improve energy productivity by 40 percent by 2030.
At that time, the COAG Energy Council signed a new National Energy Productivity Plan to achieve this goal. Programs such as the Energy Exchange website have been set up to help businesses improve their energy use by developing strategies and sharing knowledge.
There are many opportunities across Australian industry to improve energy efficiency. For example, in large processing plants gas is used to drive large turbines for power generation or to drive compressors. This process has an efficiency of only 36 percent, which means that over 60 percent of the energy content of the fuel is wasted, usually just released to the atmosphere as heat. It is possible to capture a fair portion of this waste energy and reuse it for heating in other parts of the plant. However, in many cases historically it hasn’t been considered economically viable to install the equipment to do this.
The good news is the situation may be changing. If the gas price increases we’re seeing – from a price five years ago around $3/GJ to almost $20/GJ today –are sustained in the longer term, there will be a lot more incentive to conserve energy. There are many similar examples across the hydrocarbons, transport, power generation, mining, and water industries.
Energy efficiency is an important issue that industry could look to address. But to facilitate increased energy efficiency across industry we need to see some economic incentives. These could include a Clean Energy Target, government funding or tax breaks for companies to study opportunities to reduce energy usage, or a rating scheme which would allow energy users to publish the results of their efforts to reduce energy – this could have a positive impact on their bottom line as it may impact customer buying behaviours and help to raise Australia’s standing in energy management.