Monday, March 22, 2010

US EPA to test Energy Star qualified products

The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) announced 19 March a two-step process to test Energy Star qualified products. In the first step commonly used appliances, such as freezers, refrigerator-freezers, clothes washers, dishwashers, water heaters and room air conditioners will be tested from this week. In the second step procedures will be changed to require products to be tested by an accredited lab. This appears similar to the process used for the Australian Minimum Energy Performance Standards. This follows independent consumer group reports of products not meeting claimed standards. The EPA appear to be concentrating on white goods, with no indication that computers or electronic appliances are of concern.
EPA, DOE Announce New Steps to Strengthen Energy Star

Release date: 03/19/2010

Contact Information: Enesta Jones (EPA),, 202-564-7873, 202-564-4355, Jen Stutsman (DOE),, 202-586-4940

WASHINGTON - The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE) today outlined a series of steps to further strengthen the trusted Energy Star program. This action comes at a critical time for American consumers, many of whom struggle to keep up with their monthly energy bills. In addition to third-party testing already underway, EPA and DOE have launched a new two-step process to expand testing of Energy Star qualified products. This week, DOE began testing of some of the most commonly used appliances, which account for more than 25 percent of a household’s energy bill, and both agencies are now developing a system to test all products that earn the Energy Star label. The steps are part of an overall effort by the Obama Administration to improve the energy efficiency of homes and appliances to save families money.

“Energy efficiency is more important than ever to American families,” said Gina McCarthy, assistant administrator for EPA’s Office of Air and Radiation. “As our economy gets back on its feet, Energy Star is an easy way for consumers to save money and help fight climate change.”

“Consumers have long trusted the Energy Star brand for products that will save them energy and save them money,” said Cathy Zoi, DOE Assistant Secretary for Energy Efficiency and Renewable Energy. “The steps we’re taking now will further strengthen and improve the program, building on the results that consumers have come to expect.”

Consumers can feel confident in Energy Star because in 2009 alone, Americans, with the help of Energy Star, saved enough energy to avoid greenhouse gas emissions equivalent to those from 30 million cars — all while saving nearly $17 billion on their utility bills.

Taking Action: The Obama Administration Strengthens Testing and Enforcement

EPA and DOE are taking aggressive action to promote confidence in the Energy Star brand through both testing and enforcement.

Testing. EPA and DOE have launched a two-step process to expand testing of Energy Star qualified products:

· DOE began tests this week on six of the most common product types: freezers, refrigerator-freezers, clothes washers, dishwashers, water heaters and room air conditioners. DOE will test approximately 200 basic models at third-party, independent test laboratories over the next few months.
· EPA and DOE are also developing an expanded system that will require all products seeking the Energy Star label to be tested in approved labs and require manufacturers to participate in an ongoing verification testing program that will ensure continued compliance.

Enforcement. EPA and DOE have taken a series of actions in recent months to ensure compliance with both Energy Star and DOE’s appliance efficiency standards, including taking action against 35 manufacturers in the past four months. The Energy Star program helps consumers identify the products that are highly energy efficient and will save them money on utility costs, while DOE’s minimum appliance efficiency standards apply to all appliances and set a baseline energy efficiency levels for appliances.

· 2/5/09 -- President Obama ordered DOE to clear the logjam and issue long-delayed appliance efficiency standards. The Department subsequently met every deadline and issued six standards in 2009 that are expected to save consumers between $250 billion and $300 billion over the next 30 years.

· 7/23/09 -- DOE issued a subpoena to AeroSys Inc. to obtain the necessary test data to determine whether certain air conditioners and heat pumps comply with the applicable energy conservation standards.
· 9/24/09 --– DOE required AeroSys Inc., a manufacturer of air conditioners and heat pumps, to provide product samples for thedDepartment to conduct its own testing to verify whether certain models meet the federal minimum energy efficiency standards.
· 10/13/09 – DOE announced the formation of an enforcement team within the Office of the General Counsel, which is leading the department’s efforts to monitor compliance with Energy Star criteria and enforce minimum appliance standards. This includes a program to randomly review manufacturers’ compliance with DOE certification requirements and aggressively pursue any violations.
· 12/7/09 -- DOE and EPA announced they were taking steps to remove the Energy Star label from 20 LG refrigerator-freezer models that multiple independent labs confirmed were consuming more energy than allowed under the Energy Star criteria.

· 12/9/09 -- DOE announced that it would be aggressively enforcing reporting requirements that manufacturers are required to submit to the department certifying the energy use of residential appliance models and compliance with energy efficiency standards. DOE offered manufacturers a 30-day window to submit complete and accurate reports to the department. During that period, DOE received energy use reports from 160 different manufacturers, covering more than 600,000 residential products.
· 1/7/10 -- DOE announced it had signed a consent decree with Haier on four of its freezer models – including two Energy Star models - that were consuming more energy than reported. As part of the agreement with the department, Haier is required to notify all affected consumers, repair any defective units and pay $150,000 a voluntary contribution to the U.S. Treasury.
· 1/25/10 -- DOE disqualified 34 CFL models from 25 manufacturers that did not meet all of the Energy Star criteria for compact fluorescent lightbulbs.

· 1/28/10 -- DOE initiated enforcement actions against four showerhead manufacturers who failed to certify 116 product models as meeting the federal water conservation standards.
· 2/4/10 -- DOE initiated a civil penalty enforcement action against a manufacturer of air conditioners and heat pumps for failing to certify some of its products and for certifying other products when they had not been tested in accordance with DOE’s test procedure.
· 3/7/10 -- DOE initiated enforcement actions against two additional showerhead manufacturers who were suspected of selling products that do not meet the federal water conservation standards.
· 3/11/2010 -- EPA notified US Inc/US Refrigeration that their partnership with Energy Star was terminated based on a history of logo misuse, unresponsiveness, and pattern of failure to comply with Energy Star program guidelines.

Why Consumers Can Remain Confident in the Energy Star Brand

The Energy Star program already has a comprehensive system in place to ensure consumer confidence that products carrying the Energy Star label actually save energy and save them money. Specifically:

· To receive an Energy Star label, manufacturers must submit data to the federal government showing that their product meets a set of clear, measurable energy efficiency program requirements outlined on

· DOE and EPA conduct “off the shelf” and third-party testing of a wide range of products bearing the Energy Star label. For example:

o All Energy Star qualified windows, doors, and skylights must be independently tested by the National Fenestration Rating Council, an independent nonprofit organization with rigorous testing procedures monitored and supported by DOE.

o EPA regularly conducts “off the shelf” testing to verify Energy Star compliance. For example, in 2009 EPA tested 20 TV models and 16 imaging products and found 100 percent compliance with the Energy Star label.

o Residential Light Fixtures, compact fluorescent lights and Solid State Lighting systems (also known as LEDs) are all tested by accredited, third-party laboratories.

· Market driven competition also provides a valuable insurance policy on the Energy Star brand. Manufacturers know that the Energy Star label is very attractive to consumers, and often test a competing product to ensure it complies with the requirements. Suspected violations can be reported to the EPA or DOE for follow-up.

· When a violation is found, the right to use the Energy Star label is revoked, corrective measures are required and the Energy Star partnership may be terminated. For example, in 2008 under DOE pressure, LG Electronics agreed to pay back consumers for promised energy savings and provide free, in-home upgrades to improve several models of refrigerators. These cases also produce substantial unfavorable publicity for manufacturers which can be very costly and create a major disincentive for companies to violate the program requirements.

Independent Review Finds 98 percent Compliance

Violations of the Energy Star label tend to get big media attention, which is good, because it provides a strong disincentive for companies to skirt the system and risk a wave of negative coverage about their product. At the same time, consumers should be aware that in the past few years the number of violations has been quite small, especially given that more than 40,000 individual products carry the Energy Star label.

In 2009, EPA’s independent Inspector General conducted a “spot check” of the program, testing 60 Energy Star products. Fifty-nine percent of the 60 products met or exceeded the Energy Star requirements. One product, a specific model of printer, failed on one of three tests (not entering “sleep mode” fast enough).
More information on Energy Star:

From: EPA, DOE Announce New Steps to Strengthen Energy Star, Media Release, United States Environmental Protection Agency, 03/19/2010

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Saturday, September 19, 2009

Proposed national legislation for Minimum Energy Performance and Labelling

The Australian Department of the Environment and Heritage issued a "Discussion Paper on proposed national legislation for Minimum Energy Performance Standards (MEPS) and Energy Labelling" in August 2009. This is of relevance to the computer and telecommunications industries, as the legislation would cover "IT and Office Equipment", including Computers, laptops, monitors, and power supplies, as well as "Home Entertainment": Televisions, Set-top boxes, DVDs, Home theatre and "New technologies". The document is 28 pages of PDF (82 Kbytes). A public information forum will be held in Canberra on 21 September 2009.

There is also a covering document describing the process. Unfortunately, unlike the discussion paper itself, the covering document and the details of the discussion forum are in the form of PDF files which have been set to prevent copying, making it very difficult to distribute the information. It seems likely that this was an honest mistake by the Department, rather than a deliberate attempt to limit public access to the information.

Here are some excerpts from the paper:
Table of Contents


What is the purpose of this discussion paper?
The Department of the Environment, Water, Heritage and the Arts (DEWHA) has released this discussion paper to provide background on proposed national MEPS
and Energy Labelling legislation to stimulate discussion and input by all stakeholders.

This paper poses a series of questions based around the high level objectives of the proposed national legislation, to encourage stakeholders to start thinking about the
proposed legislation. The list of questions is in no way an exhaustive list, and comments on other issues and matters of interest or concern are also welcome.
Feedback on this paper will be used in the development of a Consultation RIS.

What is the background to the proposed national legislation?
Standards and labelling are among the most cost effective and widely used measures to reduce energy use and reduce greenhouse gas emissions around the
world. Standards and labels for electrical appliances include:
  • MEPS which are regulated minimum energy efficiency levels that electrical products must achieve to be sold on the Australian or New Zealand markets,whether manufactured locally or imported from overseas, and
  • Energy labelling which enables consumers to compare the energy efficiency of electrical appliances on a fair and equitable basis. They also provide incentivesfor manufacturers to improve the energy performance of their appliances.
In Australia, mandatory energy labelling was first introduced for appliances by the New South Wales and Victorian Governments in 1986. Between 1986 and 1999,
most state and territory governments introduced legislation to mandate energy labelling.

Currently MEPS and energy labelling are developed under the National Framework on Energy Efficiency (NFEE), funded through the Ministerial Council on Energy
(MCE) and implemented through state, territory and New Zealand legislation. The states and territories have significant experience in successfully regulating
appliances and equipment.

The proposal to develop national legislation follows recent commitments in this area by both the Australian Government and the Council of Australian Governments
  • In October 2007, the Australian Government undertook to fast track the deployment of more energy efficient appliances as part of its Solar Schools – Solar Homes election commitment. A key element of this policy is to introduce greenhouse and energy minimum standards that ensure greenhouse benefits as well as energy savings are factored into standard setting (see Appendix I for more details).
  • In October 2008, COAG agreed to develop, subject to a RIS, national legislation for appliance energy performance standards and labelling to simplify enforcement and ensure consistency across all Australian jurisdictions (see Appendix II for more details).
  • In July 2009, COAG released the National Strategy on Energy Efficiency (NSEE) which proposes that the national MEPS and Energy Labelling legislation would be extended over time to cover greenhouse and energy minimum standards.
DEWHA has lead responsibility for progressing the national MEPS legislation in consultation with the states and territories through the MCE (see Appendices II
and III for more details).

The proposed legislation will build on the MEPS and energy labelling regime for electrical appliances and equipment that is currently managed nationally through the MCE and implemented through state and territory legislation.

Why do we need the proposed national legislation?
The current approach to MEPS and energy labelling is implemented through legislation in the states and territories. Over time, a number of issues have been
identified with the current approach, and the national legislation proposed through the NSEE provides an opportunity to:
  • provide a nationally consistent policy framework covering MEPS and energy labelling
  • streamline governance arrangements and regulatory processes
  • simplify compliance and enforcement responsibilities for all stakeholders
  • reduce transaction costs for business, and
  • give consumers confidence to make better choices.
What are the key objectives of the proposed national legislation?
The key objectives of the proposed national MEPS and energy labelling legislation are to:
  • provide a vehicle for expanding the MEPS and energy labelling program to improve the energy efficiency of appliances and equipment
  • achieve greater greenhouse gas reductions, and
  • deliver an efficient and consistent regulatory environment.
Why is regulatory impact analysis important?
Before products are included in the current MEPS and energy labelling program, a regulatory impact analysis (RIA) must be conducted to ensure that the benefits of
regulating those products outweigh the costs. A RIA takes into account the costs and benefits for industry, regulators and consumers. This process is designed to ensure that any new regulations are in the best interest of all Australians.

A RIA will be conducted for the proposed legislation and will include a comparison of the costs and benefits of different approaches to implementing the legislation. As part of the RIA, a consultation RIS will be developed and distributed so that all stakeholders can comment on it. These comments will then be addressed in a decision RIS. The decision RIS must be approved by the Office of Best Practice Regulation and is provided to Parliament with the Bill for the new legislation.

The consultation RIS for the proposed national MEPS and energy labelling legislation is expected to be released in late 2009. This will be the start of the second consultation round when stakeholders will again have the opportunity to comment on the proposed legislation. The decision RIS is expected to be finalised in March 2010.

Both the legislation itself and the inclusion of new products under the legislation will be subject to a RIA. This ensures that any new requirements, such as increasing MEPS levels or adding new products, are assessed on a case-by-case basis to ensure their inclusion is in the best interests of all Australians ...

From: Discussion Paper on proposed national legislation for Minimum Energy Performance Standards (MEPS) and Energy Labelling, Department of the Environment and Heritage, August 2009.

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Tuesday, July 07, 2009

Australian Governments commitment to energy saving

The Council of Australian Governments’ Meeting on 2 July 2009 issued a COAG Communique with a 10-year strategy of energy efficiency for Australian Governments. Unfortunately there was no mention of efficiency standards for computers, monitors or telecommunications equipment, data centres. Nor was there any reference to standards for energy saving through ICT by government agencies.

COAG also adopted a comprehensive 10-year strategy to accelerate energy efficiency improvements as a key component of the overall approach to combat climate change. It also received briefings from the Deputy National Security Adviser on the swine influenza pandemic and the Coordinator-General regarding the implementation of the Nation Building and Jobs Plan. As well, COAG asked for an international student strategy to be developed for its consideration before the end of 2009. ...

in relation to energy efficiency, the ceiling insulation and solar hot water programs are already in operation with more than 60,000 applications for rebates received, with the longer-term arrangements for ceiling insulation, with installers being paid the rebate directly by the Commonwealth, applying from 1 July 2009. ...

For the first time, Australian Governments have agreed a comprehensive 10-year strategy to accelerate energy efficiency improvements for householders and businesses across all sectors of the economy. Accelerating energy efficiency is a key plank in the strategy to combat climate change, reduce the cost of emissions abatement and improve the productivity of the economy. The strategy will complement the Carbon Pollution Reduction Scheme by addressing the barriers that are preventing the efficient uptake of energy efficient opportunities, such as split incentives and information failures.

COAG today signed the National Partnership Agreement on Energy Efficiency, which will deliver a nationally-consistent and cooperative approach to energy efficiency, encompassing:
• assistance to households to reduce energy use by providing information and advice, financial assistance and demonstration programs;
• assistance to business and industry to obtain the knowledge, skills and capacity to pursue cost-effective energy efficiency opportunities and therefore meet the challenges of a low carbon economy;
• higher energy efficiency standards to deliver substantial growth in the number of highly energy efficient homes and buildings, and provide a clear road map to assist Australia’s residential and commercial building sector to adapt;
• nationally-consistent energy efficiency standards for appliances and equipment and a process to enable industry to adjust to increasingly stringent standards over time;
• introducing in 2010 new standards for the energy performance of air conditioners and increasing the standard by a further 10 per cent from 1 October 2011;
• addressing potential regulatory impediments to the take up of innovative demand side initiatives and smart grid technologies;
• governments working in partnership to improve the energy efficiency of their own buildings and operations; and
• a detailed assessment of possible vehicle efficiency measures, such as CO2 emission standards for light vehicles. The regulatory statement will assess the impact of both voluntary and mandatory standards on the automotive industry and the complementarity of measures with the Carbon Pollution Reduction Scheme. COAG will make a final decision following thorough consultation with industry and the community.

All regulatory measures will be subject to normal regulatory impact assessment. emission standards, which international studies have indicated have the capacity to reduce fuel consumption by 30 per cent over the medium term, and significantly contribute to emissions reductions.
In addition to an $88 million commitment for joint measures, the strategy builds on the substantial investments and commitments being made by all jurisdictions to driving energy efficiency in their own jurisdictions.

The vehicle efficiency measures result from the work of the Australian Transport Council and the Environment Protection and Heritage Council and are aimed at improving the fuel efficiency of the vehicle fleet.

COAG agreed to undertake a Regulatory Impact Statement to assess the costs and benefits of introducing CO2
COAG also agreed to improve the availability of fuel consumption data so that consumers are better equipped to make informed purchasing decisions. COAG further agreed to ask the Henry Tax Review to consider the merit of financial incentives for the purchase of fuel efficient cars and assess the merits of differential stamp duty and registration regimes linked to environmental performance. ...

Australian Energy Market Agreement
COAG today signed the revised Australian Energy Market Agreement, which has been amended to specify that, where retail prices are regulated, energy costs associated with the Carbon Pollution Reduction Scheme and the Renewable Energy Target shall be passed through to end-use consumers. These price increases, together with more cost-reflective retail prices, including the phase-out of retail price caps where competition is found to be effective, will help drive more efficient use of energy and assist in managing peak energy demand growth. ...

From: COAG Communique, Council of Australian Governments’ Meeting on 2 July 2009

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Wednesday, February 11, 2009

Progress Report on a National Strategy for Energy Efficiency

The Renewables and Energy Efficiency Division of the Department of the Environment, Water Heritage and the Arts have sent me a report on consultations they have had with industry on energy efficiency. I was unable to convince the Department of the value of making this information public via their web site, so here is my own summary of it:

Council of Australian Governments (COAG) in October 2008, agreed to develop a National Strategy for Energy Efficiency. This was in preparation for the prepare for the Carbon Pollution Reduction Scheme (CPRS).A Senior Officers Group on Energy Efficiency (SOG-EE) of public servants is developing the National Strategy for COAG.

The National Strategy will focus on end-user energy efficiency in the stationary energy and transport sectors:
  • reducing the cost of greenhouse gas abatement;
  • ensuring consumers and businesses are ready to make energy efficiency decisions; and
  • removing other barriers to energy efficiency.
The SOG-EE consulted with stakeholders to seek suggestions from industry sectors:
  1. Residential and Commercial Buildings, Friday 30 January 2009, Sydney
  2. Industrial Measures, Monday 2nd February 2009, Canberra
  3. Appliances and Equipment, Tuesday 3rd February 2009, Canberra
Appliances and equipment meeting

28 stakeholders attended:
  1. Governments: Commonwealth, South Australia, Victorian, Queensland, New South Wales, and Australian Capital Territory
  2. Industry: Air Conditioning, Consumer Electronics, Information, Energy, Consumers Association, Unviersity, Consumer Electronics, Refrigeration.
A summary of the meeting were provided to the full SOG-EE at a meeting on 5 February 2009. Roundtable participants were also invited to provide written submissions.

Meeting Summary – Views raised by Stakeholders


  • Regulations (MEPS) should become more stringent over time as long as they align closely with international standards and do not get out in front (Australia is only a small part of the global market). Close collaboration between government & industry is essential to forecast longer term regulations.

  • Some stakeholders believed a MEPS roadmap which sets targets out into the future could be beneficial to industry as this allows for manufacturers to plan their product cycles.

  • Any changes to regulation should be articulated 2 years before being implemented and once standards and timeframes for regulation are agreed they should not be subsequently changed - particularly at short notice. 12-18 months can be required between placing a product design change request on an overseas manufacturer and receiving product into showrooms.

  • General dislike with the slow timeframes involved in the RIS process.

  • It was suggested that all appliances and equipment should be required to submit an energy performance statement before they are allowed to sell them in Australia. This should include measurement of consumption in all modes of operation, a statement from the designer about how energy efficiency was considered in the design process. Where standard tests exist, results using those methods should also be presented, and the statement should be publicly available.

  • Monitoring & investing in R&D may identify shifts in technology that impact on setting standards.

  • Effective enforcement of regulatory programmes is crucial to maintain credibility of standards.

National legislation

  • National legislation is preferred in order to provide consistency for industry. State-based variations to standards – particularly those brought in at short notice are very difficult for suppliers to manage.

  • National energy efficiency legislation should be consistent with (or at least cognisant of) water and safety requirements imposed on appliances/equipment to avoid unintended conflict.

  • Must be clear timeframes and processes for development and implementation. Should not be driven toward ‘lowest common denominator’ standards.


  • There would be value in some standardisation of various labelling schemes to make them even more intuitive and recognisable for consumers (ie energy, water, gas, building ratings).

  • More money should be invested by government in marketing the energy label as this has been shown to be a very effective tool to influence consumer product choice. Also, the product coverage should be broadened to include commercial equipment (eg refrigerated display cabinets).

  • Consumers are relying more on web based research and need access to trustworthy and centralised web sites. Government should promote industry tools to assist in the distribution and appropriate targeting of information (on its to-be-renamed One Stop Green Shop).

  • Information packages should be targeted to smaller firms. Family run businesses lack information on running and maintenance costs.

  • Worth considering mandating the publication of energy efficiency information when advertising products (as is WELS information).

  • Highlighted perverse outcomes in energy labelling – eg consumer focus groups revealed that consumers think TVs don’t use much energy because government has not seen fit to label them


  • Split incentives for retailers, suppliers, manufacturers and renters should be addressed to motivate better energy efficiency choices in the design, manufacture, maintenance and use of appliances.

  • Rebate schemes should be available for purchasing high efficiency products with the rebate level tied to energy rating.

  • Incentives should be developed for retiring old equipment, noting a problem exists with how to manage the retired appliance waste stream (including those that fall out of the market as MEPS are raised).

  • Consideration should be given to tax incentives for investment in energy efficiency measures/ equipment.

Government procurement

  • Procurement processes should (mandatorily) follow the principles of whole-of-life (not just up-front) costing.

Skills Development: Training and Accreditation

  • Training is needed for facilities officers in large companies & procurement officers generally to include energy efficiency requirements into requests for tenders.

  • More training is also needed for the key intermediaries who sell and install products in order for them to understand energy efficiency benefits and to communicate this message to purchasers.

  • The source of educational material must be authoritative and neutral.

  • Several industry groups noted that the skill level of their technicians is low in terms of energy efficiency understanding (re system design and installation).

  • Training initiatives should be delivered through existing training systems.

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Tuesday, February 03, 2009

National Strategy for Energy Efficiency

Greetings from Old Parliament House in Canberra, where a meeting between industry and the Environment Department is taking place on what to put in the National Strategy for Energy Efficiency agreed last year by the Council of Australian Governments (COAG).

The staff of the Energy Efficiency Futures section of the Department of the Environment, Water, Heritage and the Arts are under pressure to produce proposals for a COAG meeting in March. They will collect up the input from industry today, summarise it and invite further comment by this Thursday. There are about 25 people at the meeting from electrical industry groups, academia and the government. I am here with my "Computers Off" hat on, as one of their experts on green ICT, along with Dr Idris Sulaiman the CEO.

Before the meeting I took the organisers to task for the very limited and secret way the consultation is being handled. I only found out about the meeting the day before. The discussion paper for the meeting was not made public (text appended). The Environment Department seems to be conducing consultations in a last century way. It seems particularly inappropriate to make people fly to Canberra to discuss energy savings (I arrived on the local bus, as it was too hot to ride my bicycle). The Australian Government has stated an intention to use online consultation and make information more freely available and the Environment Department should implement this policy. They should place the discussion paper online and invite comment. The Department seems to fear they will be overwhelmed with comments. This is unlikely and there are ways to deal with it. The Environment Department happens to have some of the most expert web designers in the federal government and will be able to advise how to do this.

After introductions a slightly philosophical discussion of the role of regulation in energy reduction started. This got into the problems of the division of roles between federal and state government and the role of global standards. While all interesting, this did not appear to be problems we could solve in the next few months.

My particular interest comes further down on the agenda when we get to discuss training and certification of staff on energy saving. I have written a certification training course on Green ICT, commissioned by the Australian Computer Society and currently running globally online.

Also the Environment Department commissioned a report from me in 2008 on "Personal Computer and Monitors Energy Efficiency Strategy". I was asked to write an independent report and seem to have succeeded, in that neither the department, nor industry, seemed to like my report. ;-)

Coincidently, there is a protest meeting about the environment taking place outside the building, making it more difficult to get in past the security.

Towards a National Strategy for Energy Efficiency
Appliances and Equipment Stakeholder Consultation
Main Dining Room 2, Old Parliament House, Queen Victoria Terrace, Canberra
10:00 to 1:00pm
Tuesday 3 February 2009
1. Introduction/Welcome Chair (Commonwealth, Mr Ross Carter) 10:00 – 10:20pm
a. Purpose
b. The Case for Government Energy Efficiency Interventions
c. Scope of the National Strategy
2. Measures to Improve the Energy Efficiency of Appliances & Equipment (Chair/All) 10:20 – 12:20pm
Existing Measures –
a. Regulation / strategic planning
b. National legislation
Possible Additional Measures –
c. Regulation
d. Government Procurement
e. Information
f. Skills Development: Training and Accreditation
g. Targets
3. Other Issues/Questions (Chair / All) 12.20 – 12.40pm
4. Summary of Issues / Close (Chair) 12.40 – 13.00pm

Towards a National Strategy for Energy Efficiency
Issues Paper
January 2009

1. Introduction
2. Purpose of Stakeholder Consultations
3. The Case for Government Energy Efficiency Interventions
4. Scope of the National Strategy
5. Targets
6. Measures to Improve the Energy Efficiency of Buildings
7. Measures to Improve the Energy Efficiency of Appliances and Equipment
8. Measures to Improve the Energy Efficiency of Industry
9. Skills Development: Training and Accreditation


On 2 October 2008, the Council of Australian Governments (COAG) agreed to develop a National Strategy for Energy Efficiency, to accelerate energy efficiency efforts across all governments and to help households and businesses prepare for the introduction of the Commonwealth Government’s Carbon Pollution Reduction Scheme (CPRS). COAG intends that implementation of the national Strategy will be finalised by June 2009, to ensure that programs assisting households and businesses to reduce their energy costs are in place prior to the introduction of the CPRS.

The National Strategy will build upon the Ministerial Council for Energy’s National Framework for Energy Efficiency (NFEE), which has developed and implemented energy efficiency measures since 2004. For each sector of economic activity (buildings, appliances and equipment, industry) this Paper briefly summarises current energy efficiency actions being delivered through the NFEE and developed through other inter-government processes such as the COAG’s Energy Efficiency Sub-Group of the Working Group on Climate Change and Water. States and Territories are engaged in a range of existing activities or programs (currently outside the scope of COAG), however these are not summarised here.

Measures ultimately included in the National Strategy will be subject to a complementarity assessment against the Carbon Pollution Reduction Scheme. In addition, regulatory measures will be subject to regulatory impact assessment processes.


Stakeholders’ views are being sought on the range of measures that Australia could adopt to accelerate and expand energy efficiency. Three sectoral round table discussions are being organised for late January / early February 2009 to allow stakeholders to provide their views to senior government officials charged with developing the National Strategy. The roundtables will individually cover appliances and equipment energy efficiency; buildings (residential and commercial) energy efficiency; and industrial energy efficiency. Governments are keen to streamline the processes and timeframes for establishing and implementing energy efficiency measures. An expeditious approach to improving energy efficiency – with the active involvement of businesses, community organisations, individuals and all spheres of government – will help Australia become a leader in energy efficiency. To this end, the consultation process will seek the views of industry stakeholders on how industry can contribute to expediting the uptake of energy efficiency.

It is important to note that the policy options discussed in this Paper are not endorsed by governments.

The aim of the paper is to outline the current issues being raised in the public realm as a means of providing some focus for those roundtable discussions.

Transport issues are beyond the scope of this Paper. Transport energy efficiency is being dealt with through processes established by the Australian Transport Council (ATC). This includes the ATC’s joint
work with the Environment Protection and Heritage Council on vehicle fuel efficiency, the National Transport Commission’s public consultation process on “Freight Transport in a Carbon Constrained
Economy” and work on travel behaviour change.


Energy efficiency measures provide the opportunity to achieve significant greenhouse gas emission reductions at relatively low cost. The Commonwealth Government’s White Paper on the Carbon
Pollution Reduction Scheme (CPRS) notes that while the CPRS will be the primary mechanism through which Australia will seek to meet its emissions reduction objectives, energy efficiency will also form an
important element in Australia’s emissions mitigation strategy.

The International Energy Agency (2006) has estimated that increased end-user energy efficiency could account for around 45 per cent of global emission reductions to avoid the worst climate changes. It has
also estimated (2006) that energy efficiency improvements – predominantly in buildings, appliances, transport and industry – represent the largest and least costly abatement opportunities, finding for
example, that improvements in energy efficiency involving low cost or net-cost savings over time are projected to provide more than a third of the reductions in energy-related emissions required to reduce
total global emissions by 50 per cent from current levels by 2050.

In launching the Commonwealth Government’s White Paper on a Carbon Pollution Reduction Scheme (CPRS), the Prime Minister noted there are “Three arms to this Government’s climate change policy:
One, for the first time in the history of Australia, having a carbon price set for the country. Two, actively supporting on the supply side, renewable energy and clean coal; and three on the demand side, an active agenda further to be developed on energy efficiency.”1

The CPRS addresses the absence of a price signal for carbon emissions, but other impediments to the efficient uptake of energy efficiency measures remain. The National Strategy will aim to address these other impediments to households and businesses taking up energy efficiency opportunities, and thus operate as a complement to the CPRS2. These other market failures and barriers are summarised in the following terms:

· Information Failures. Information failures occur when one party to a transaction has more or better information than the other, or both parties have incomplete information. Insufficient information could act as a barrier to the take-up of cost-effective abatement opportunities such as those provided by energy efficiency measures. In the case of energy efficiency measures, information failures are quite prevalent owing to the need to assess the reduced energy costs over a long time period compared to the known upfront installation costs. For instance property owners can be unaware of their buildings’ energy consumption, and household members can be unaware of the energy implications of their consumer choices;

· Non-Price Barriers: Non-price barriers limit the transmission of price-based incentives: These include principal-agent barriers or split incentives. The costs and benefits of energy efficiency may
accrue to different agents. For example, landlords and tenants have different incentives with respect to the benefits of energy efficiency upgrades for rental housing;

· Capital Rationing: Capital rationing is a lack of access to capital to fund the up-front costs of energy efficiency measures. Access to capital to take advantage of cost effective technologies can be a particular problem for low-income residential households, or small businesses. These groups
may trade off lower capital costs now for higher ongoing operating costs due to the relatively large opportunity costs these groups may face in accessing funds; and

· Early Mover or R&D Disadvantage – where innovation in one field leads to benefits for others who have not borne the initial investment costs (in that or another field) and the initial investor does not gain the full rewards from innovation.

The nature and extent of specific energy efficiency policies will be driven by assessment of the materiality of an identified market failure, the cost of particular policies intended to overcome such failures; the likely effectiveness of such policies; and their capacity to be implemented and administered efficiently.

1 Source: Prime Minister’s National Press Club Q &A Following the CPRS White Paper Address, 15 December 2008.

2 See COAG Complementary principles:

In discussing uptake of energy efficiency measures within a carbon trading economy, Garnaut3 concludes that ‘policies that tackle these market failures would lower the cost of mitigation across the economy’. This will be the case when the costs of policy interventions are equal to or less than the cost of carbon.


It is proposed that the National Strategy focus on end-user energy efficiency measures in the stationary energy and transport sectors. Energy efficiency should be broadly interpreted as downstream energy
management measures including energy efficiency and conservation, together with energy efficiency opportunities in the transport sector, such as vehicle fuel efficiency and travel demand management.

Key areas of focus for the National Strategy are likely to include:

· reducing the cost of greenhouse gas abatement under the Carbon Pollution Reduction Scheme (CPRS) through the adoption of energy efficiency policies with demonstrated net economic benefits;
· ensuring consumers and businesses are well positioned to make energy efficiency decisions; and
· removing other barriers that may limit the uptake of cost effective energy efficiency measures.

Under the umbrella of the National Strategy, sectoral roadmaps may be developed that set out more detailed aspirations for energy efficiency improvements in the covered sectors, including setting measurable goals for improved performance.


Proposals have been made for an overall energy efficiency target for Australia. Such targets exist in several other countries. The case for a target revolves around the focus that it gives to quantifying contributions from each sector and, inferentially, to the outcomes required of various policy

The case against revolves around the fact that Australia already has an emission reduction target as prescribed by the CPRS, and this target includes the energy sector. The purpose of measures under the
national strategy is to address market failures and in so doing ensure that energy efficiency measures contribute to the achievement of the CPRS target in a cost effective way.

The use of a separate overall target for energy efficiency implies that Governments are committing to achieve that target irrespective of whether energy efficiency is the most economically efficient way to reduce emissions. However, several States and Territories have introduced or have committed to introduce energy efficiency target regimes on the assumption that time lags, market barriers and other inefficiencies may result in cost-effective energy efficiency activities not being progressed at the optimum level under the CPRS.

An alternative approach could be to focus target setting on specific areas for energy efficiency where the potential for achieving cost-effective abatement is well-established. For example, the Premier of South Australia has asked that the work on the National Strategy include an examination of Australia matching the UK’s target of zero carbon for commercial buildings by 2019.

Some examples of types of such targets used overseas are:
· zero-carbon new homes from 2016 (UK);
· zero-net energy commercial buildings by 2030 (California);
3 Final Report of Garnaut Climate Change Review (2008) p 403
· zero-net energy homes by 2030 (California);
· zero net heating / cooling demand by 2014/15 (NZ); and
· energy intensity (per gross dollar of production value) for the industrial sector reduced by 25 per cent by 2020 (California).


Stakeholders’ views are sought on:
5.1 Should targets be established overall and/or within each sector?
5.2 If targets were to be considered, what type of targets would be most suited to Australia?
5.3 If targets were to be considered, how aggressive should they be?


Residential Buildings

Residential stationary energy use accounts for around 10 per cent of national greenhouse gas emissions. Despite recent improvements in energy performance requirements for new houses, emissions in this sector have risen by 45 per cent over the period 1990 to 2005.

The increase is the result of a range of factors, including the increasing size of new homes (higher lighting, heating and cooling demand), reduction in the number of people per household (increasing the number of houses for a given population) and increasing ownership and use of energy consuming appliances.

Barriers that will need to be addressed to improve the uptake of cost effective energy efficiency measures in the residential sector include split incentives (e.g. homebuyer-builder or tenant-landlord) and information barriers. These market barriers will not be addressed by the CPRS price signal alone.

New residential buildings present a relatively wide range of opportunities to implement energy efficiency. Measures such as appropriate orientation and insulation levels are difficult, or in some cases impossible, to rectify following the completion of a building. Other efficiency measures are typically implemented at a lower cost and with fewer constraints during the design and construction phase of a building.

The National Strategy could seek to both lift the minimum performance standards (regulation) and to encourage energy performance standards and innovation (incentives and information provision).

The Building Code of Australia (BCA) prescribes requirements for residential buildings, including energy efficiency considerations. These apply to new buildings, alterations and additions that require development approval. BASIX sets the energy efficiency requirements for new dwellings in NSW.

Most residential buildings projected to be standing in Australia in 2050 are already constructed, and therefore not subject to future BCA or BASIX provisions. To deliver high levels of energy efficiency in the residential sector, energy efficiency measures must also target improvements in existing homes.

For established residential buildings there are opportunities to improve the energy efficiency (thermal performance) of the building as well as fixed appliances, such as water heaters, space heaters and space coolers. Low cost items, such as energy efficient lighting and water efficient showerheads, are likely to be suitable for broad rollout to the residential sector.

Portable energy consuming appliances in homes are discussed in the Appliances and Equipment

Section 7.

Commercial Buildings

The commercial buildings sector represents an important focus for energy efficiency and greenhouse gas abatement due to the rapid growth in this sector and the significant technical and economic potential for emissions reduction that exists. Stationary energy consumption in commercial buildings accounts for around 10 per cent of Australia’s greenhouse gas emissions. Commercial buildings include both office buildings and other non-residential buildings such as shops, car-parks, warehouses,
hospitals and schools.

Buildings designed today, informed by current policy settings, will continue to contribute to greenhouse gas emissions for many decades.
While the Carbon Pollution Reduction Scheme will help to improve the energy efficiency of the building stock over time, there are a number of challenges specific to the commercial buildings sector:

· the length and complexity of the supply chain leading to a widespread culture of minimal compliance in all except premium buildings;
· the nature of contractual obligations between the different parties in the supply chain that serve to dilute focus on and accountability for energy performance outcomes;
· the lack of awareness and market transparency with respect to the energy performance of buildings and hence limited scope for tenants to drive efficiency outcomes; and
· the extent to which architects, designers, mechanical engineers and electrical engineers have the requisite knowledge and skills to design, build, operate and maintain high-performance buildings.

The following sets out some areas for possible policy intervention:

Residential Buildings – Minimum Standards for New Dwellings
In conjunction with the Australian Building Codes Board, the NFEE has developed minimum energy efficiency performance standards (MEPS) for new buildings. Minimum five (5) star performance standards for new residential buildings and minimum energy efficiency performance standards for commercial buildings have been included in the Building Code of Australia. These have been adopted by most jurisdictions, with one jurisdiction using an alternative approach of overall energy use
benchmarking met through the use of an integrated rating tool.

The NFEE has undertaken scoping studies on the mandatory disclosure of energy performance of residential buildings and is committed to introducing mandatory disclosure of energy performance at the
time of sale or lease of residential buildings. The ACT’s House Energy Rating Scheme (ACTHERS) is currently the only scheme in Australia requiring mandatory disclosure of energy ratings for residential

A number of jurisdictions have established additional requirements for fixed appliances installed into new homes, such as water heaters and lighting.

Stakeholder views are sought on whether the National Strategy could increase energy efficiency requirements for new residential buildings to six-stars nationally by 2010 and then consider indicating an intention to progress to higher levels of stringency over a longer period (allowing industry time to adjust).

An enhanced residential building star rating system could be complemented by specific minimum requirements for individual components of a new house that are substantially permanent such as lighting while allowing flexibility for features that will be replaced several times during the life of the building such as heating and cooling, water heating and cooking.

Stakeholder views are also sought on whether the National Strategy could alternatively set overall energy targets for new residential buildings nationally by 2010 with a schedule of increased stringency
over a longer period. For example, all new residential buildings could be required to achieve a 40% energy reduction target when compared to current average performance, increasing over time.

Householders would be encouraged to innovate to achieve energy reduction targets rather than meet fixed standards for each appliance in the home.

In addition to energy efficiency requirements for buildings and fixed appliances, stakeholders are encouraged to consider whether energy efficiency requirements could also be established for building
lot layouts, in order to facilitate greater use of passive solar design, though improved orientation, to deliver low-cost energy efficiency gains.

Commercial Buildings – Minimum Standards
In conjunction with the Australian Building Codes Board the NFEE has developed minimum energy efficiency standards for new buildings and these have now been included in the Building Code of Australia and adopted by most jurisdictions. The Regulatory Impact Statement undertaken for these standards indicates a benefit to cost ratio of up to 4.9:1 from raising the standards, suggesting that there is significant scope for raising minimum standards without imposing undue cost penalties.

Through the NFEE, minimum energy performance standards have been developed for a range of equipment used in commercial buildings. Further expansion of MEPS for equipment and appliances is planned through the NFEE (refer Section 7 of this Paper).

The NFEE is developing a national regime for the mandatory disclosure of commercial building energy efficiency at the point of sale and lease. A regulatory impact statement (RIS) for commercial office buildings is currently out for consultation.

An immediate opportunity to improve energy efficiency in the commercial buildings sector would be to raise the minimum standard for new buildings. The National Strategy could significantly increase
energy efficiency requirements for all classes of commercial buildings in the Building Code of Australia from 2010, including new efficiency requirements for heating, ventilation and air conditioning systems
and for lighting. This example is provided to demonstrate the sort of policy considerations which will need to be considered in the development of the National Strategy.

The following sets out some of the other specific issues that have been identified for further consideration:

· The overall objective would be to set a minimum standard of 4.5 stars for new commercial buildings from 2010.
· Under the present NABERS Energy, rating applies only to commercial office buildings and hotels. Consideration could be given to setting standards for other forms of commercial buildings.
· How to address the technical, commercial and regulatory challenges that may prevent the significant ramp-up of co-generation and tri-generation facilities as key measures for improving building energy efficiency?

Rating Tools

Residential Buildings

The Commonwealth Government, on behalf of all jurisdictions, oversaw the development of AccuRate (a computer program that can determine the thermal performance of residential buildings), the second generation version of the National House Energy Rating Scheme (NatHERS). A national training framework and registration process for AccuRate assessors has been established and launched.

The NSW Government has developed the NABERS Home Rating System to rate the operational performance of households and BASIX to assess the energy efficiency of the building shell and fixed appliances such as water heaters, heating and cooling systems, lighting and cooking. These tools also incorporate contributions from on-site renewables in reducing energy use.

Clearly the National Strategy offers the most important opportunity to date to agree a national approach to ratings tools. There is then a separate consideration which needs to be given to establishing a national minimum standard for building regulations which could deliver a more predictable and lower cost outcome for industry. However, it needs to be recognised that achieving that standard could cause more difficulty for some jurisdictions than others, particularly those in tropical and sub-tropical areas.

Finally, there are the issues of whether a national standard for building regulations should prescribe a maximum level of performance as well as a minimum standard and whether they should be the same.

Industry has expressed concerns about Local Governments’ capacity to impose standards over and above State/Territory/Commonwealth standards. BASIX sets a maximum and has generally been supported by industry.

Commercial Buildings

Two rating systems, NABERS Energy and GreenStar, are most widely used in Australia. NABERS Energy deals specifically with energy use, based on building operation. GreenStar deals with energy as one of nine categories that contribute to an overall ‘green’ rating. It is a ‘predictive’ tool, based on
building design, The two scales are not currently comparable due to the different scope and methodology of the rating schemes. Both NABERS Energy and Green Star distinguish between the performance of buildings and tenancies for office buildings. NABERS uses a 5 star rating scale reflecting the measured performance of the building in comparison to the market while GreenStar uses 6 stars, based on the number of “credit points” met by the design elements of the building. .Both schemes are based on best practice benchmarks, which may be revised as practices improve.

Measuring and rating the energy efficiency performance of commercial buildings underpins the implementation and evaluation of many potential policy responses. The National Strategy could advance national agreement on the application of energy efficiency ratings tools for commercial


Residential Buildings

Many jurisdictions offer a range of incentives to encourage improved energy efficiency in existing dwellings. These include:

· free household sustainability assessments and green loan subsidies through the Commonwealth Government’s green loan scheme (currently under development);
· free household sustainability assessments available in several jurisdictions; and
· rebates and other forms of financial support for energy efficient appliances and fittings, such as solar water heaters and insulation available in several jurisdictions.

In some jurisdictions, these incentives are supported by obligations on energy retailers to deliver quantified outcomes, focussing particularly on low-income households.

All jurisdictions have agreed to review their initiatives in this area to assess their complementarity with the CPRS. For these purposes, complementarity is defined as whether they address certain market failures. Once again, the underlying principle is that governments will refrain from implementing initiatives with outcomes that the CPRS would be expected to better deliver. A copy of the complementarity principles agreed by COAG is included at Attachment 1.

Even where there is a market failure and a case for action identified, by definition the cost of the action would need to represent a cost of abatement below that of the carbon price for it to be cost-effective.

Decentralised Energy

Looking beyond the immediate term there is a significant potential for decentralised energy to play a much greater role in providing the energy needs of all forms of the built environment. Australians are
familiar with decentralised energy because of the proliferation of solar water heaters, particularly in rural areas.

The new agenda is around the deployment of new photovoltaic technologies, micro-wind turbines and co-generation and tri-generation facilities. The last of these presents significant challenges for policy
makers, particularly where those power generators are supplying more than one building.

There are isolated examples of public authorities addressing these challenges, e.g. City of Melbourne.

The National Strategy could be a major contributor to accelerating development of decentralised energy generation by taking a national approach to removing or mitigating regulatory barriers as well as
sponsoring the development of technical standards and providing templates for commercial agreements for shared use of facilities.

New and innovative technologies and processes that could support the achievement of zerocarbon/ zero net energy commercial and residential buildings are continually in development, both in Australia and overseas. Low-emission distributed energy systems, such as cogeneration or combined heat and power systems are considered one component to achieving energy efficiency outcomes.

Stakeholder feedback is requested on ways to overcome the range of financial, technical and regulatory barriers that currently limit their broader uptake.

Government Procurement

Commercial Buildings

‘Green leases’ are being progressed through the NFEE. The rationale for this policy is that Commonwealth, State and Territory governments are major lessees accounting for approximately 35 percent of total commercial office space, and have the potential to use this market power to generate
improvements in energy efficiency (by agreeing to only lease office buildings that exceed a specified energy performance level). Currently, several jurisdictions have policies or guidelines for leasing only 4.5 or 5 star (NABERS Energy) buildings.

Australian, State and Territory governments are owners of a range of commercial buildings, such as healthcare, education and correctional facilities, and have the potential to demonstrate leadership by significantly improving the performance of such buildings. This can also stimulate further development of the energy services industry, and embed the use of energy performance contracts as a means of facilitating low-risk energy efficiency improvements in commercial buildings.

Stakeholder views are sought on government procurement policies in this area and how these policies might better support cost effective investment in energy efficiency.

Behaviour Change

Residential Buildings

Several jurisdictions have programs in place to provide home sustainability assessments and associated incentives. Stakeholder views are sought on the effectiveness of these programs.

Consideration could also be given to the merits of coordinating these into a coherent national system of assessments, possibly with a focus on low income households.

Such a program could encompass recommendations for specific behaviour change, home, appliance and equipment upgrades and referral to sources of assistance. It could also provide support for lowcost energy efficiency measures such as high efficiency showerheads and lighting. Further, a National Strategy could support innovative financing arrangements for higher-cost energy efficiency improvements in households. Building on existing schemes, this could be through low interest loans available through partnering financial institutions.


Stakeholders’ views are sought on:

6.1 The measures proposed to improve the energy efficiency of buildings?
6.2 Any other measures that could be included in the National Strategy.
6.3 What opportunities exist to develop an integrated national residential rating tool to assess the energy efficiency of the building shell as well as fixed appliances such as water heaters, heating and cooling systems, lighting and cooking?
6.4 Should the National Strategy include a commitment from all governments to improve the performance of the buildings they own or occupy?
6.5 How to establish energy efficiency requirements for building lot layouts in order to facilitate greater use of passive solar design;
6.6 What minimum standards for new commercial buildings and major refurbishments should be set in the BCA?
6.7 Should energy efficiency requirements for new residential buildings be raised to six-stars nationally by 2010 and then progress to higher levels of stringency over a longer period (allowing industry time to adjust)?
6.8 What are the merits of coordinating multiple sustainability assessments and associated incentive schemes into a coherent national scheme?
6.9 What opportunities are there to improve the range, targeting and delivery of government incentive measures, and
6.10 How to overcome the financial, technical and regulatory barriers to systems such as cogeneration or combined heat and power systems in commercial buildings.


The principal regulatory means to improve end-use product energy in Australia is currently through the Ministerial Council on Energy’s Equipment Energy Efficiency (E3) program. The E3 program seeks to
improve energy efficiency by establishing minimum energy performance standards (MEPS) and rewards best practice through product energy labelling.

MEPS levels are generally set at the equivalent of world-best levels, with implementation dates set so as to allow sufficient time for industry to adapt. The MEPS and energy labelling program has been successful in achieving significant improvements in the energy efficiency of electrical appliances and equipment. There are some views that the rate of progress could be more aggressive, for example regarding increased minimum energy performance standards for air-conditioners.

One advantage of Australia’s MEPS system is that new product groups are regulated, or regulatory requirements are strengthened for product groups which are already covered, following a national Regulatory Impact Statement (RIS) process and MCE sign-off in accordance with the requirements of the COAG “Principles and Guidelines for National Standard Setting and Regulatory Action by Ministerial
Councils and Standard-Setting Bodies. An appliance or equipment model only needs to be registered for MEPS and/or labelling in one Australian or New Zealand jurisdiction to be legally able to be sold throughout Australia and New Zealand. As a result, there are no significant additional compliance costs for businesses operating in more than one jurisdiction.
Existing Measures – Appliances and Equipment Regulation / strategic planning A number of specific measures have already been undertaken through the National Framework for energy efficiency (NFEE) process. Thirteen products currently have regulated MEPS and/or labelling
requirements, with a range of additional products scheduled by 2012 (refer Attachments 2 and 3).

The NFEE process has also developed a number of long term strategic plans:
· Greenlight Australia – A Strategy for Improving the Efficiency of Lighting in Australia 2005- 2015;
· Switch on Gas – Australia’s Strategy to Improve the Energy Efficiency of Gas Appliances and Equipment;
· Money isn’t All You’re Saving – Australia’s Standby power Strategy 2002-2012; and
· HVAC High Energy Efficiency Strategy. National legislation

On 2 October 2008, COAG agreed to develop, subject to a regulatory impact statement, national legislation for appliance energy performance standards and labelling to simplify enforcement and ensure consistency. COAG has directed officials to develop this option for consideration as part of the National Strategy for Energy Efficiency.

An important part of this work will be an examination of opportunities for process reform. Innovation in energy efficiency in appliances is accelerating nationally and internationally. Australia needs to be in a
position to respond with a regulatory environment that removes obstacles to the rapid take-up of innovation and imposes new standards where this is justified economically.

This needs to be progressed on timeframes reasonably capable of being met by domestic manufacturers and distributors and which see Australia taking a leading position among developed countries.

This has to be achieved within a federated state where the legitimate interests of all jurisdictions are recognised.

The national legislation agreed to by COAG can be expected to provide the overall government arrangements. An important issue will be how it operates in practice, particularly in respect of resolving the sometime competing demands of transparency, information dissemination, business certainty and expeditious turn around times.

Views of stakeholders on these issues are welcome.

Possible Additional Measures – Appliances and Equipment

Specific measures that could be included in the National Strategy are:


The National Strategy could accelerate the introduction of new MEPS and labelling to cover a wider range of appliances and equipment and to streamline regulatory processes. In addition, the introduction date for MEPS could be brought forward. For example, the E3 Committee is undertaking a Regulatory Impact Assessment on bringing forward the next set of MEPS for air conditioners to October 2009, and introducing more stringent MEPS for air conditioning in 2012.

The current MEPS and labelling arrangements only apply to energy consuming equipment, and more specifically only electricity and gas consuming equipment. The National Strategy could expand coverage of the current scheme to include:

· Equipment that consumes other fuel types, e.g. wood, fuel oils.
· Products and equipment that do not consume energy in their operation, but impact on the amount of energy used by other equipment. Products such as air conditioning ductwork, ceiling and wall insulation, windows (including glazing and frames) and the way they are installed can all have a large influence on energy use of equipment such as air conditioners
and gas heaters.
· Industrial equipment. The E3 is currently preparing a 10 year strategy to increase the range of products covered by MEPS in the industrial equipment sector. Items that could be covered include compressors, boilers, industrial chillers, heat exchangers and refrigeration equipment.
Stakeholders are invited to comment on products which could be assessed for MEPS or labelling by E3 but which have not yet been raised and on what should be considered in determining whether a ‘base case’ can be made for introduction of MEPS. Stakeholders are also invited to consider what actions can be taken to streamline the development and introduction of new MEPS.


The current product labelling scheme is an important information provision tool to assist consumers to choose more efficient energy consuming products. However, labelling is only required for a relatively
small number of consumer product types. As has recently emerged with televisions, there is scope to provide voluntary information provision tools before a mandatory regime is introduced. A voluntary registration scheme could be established which would allow for suppliers of products not covered by mandatory labelling to provide information on the energy performance of their products. This would allow suppliers of efficient products to differentiate their product from less efficient models. Web based tools could be used to assist consumers access this information.
Government procurement Government procurement policies and standards could be reviewed to specify minimum energy efficiency requirements for items such as office equipment refrigerators and single phase air conditioners.


Stakeholders’ views are sought on:

7.1 The measures proposed to improve the energy efficiency of equipment and appliances.
7.2 Any other measures that could be included in the National Strategy.
7.3 What actions can be taken to streamline the development and introduction of new MEPS?
7.4 What products could be assessed for MEPS or labelling by E3 but which have not yet been raised?
7.5 What parameters could be established to determine the “base case” for new MEPS?


According to International Energy Association (IEA) data, Australian industry is more energy intensive compared to the majority of other developed countries. This is largely due to the high levels of energy
intensive raw material production. Engaging with the industrial sector offers potentially large benefits given the significance of emissions from this source. It is noted that, even under a strong carbon price signal from the CPRS, a range of factors may combine to cause the industrial sector to under-invest in energy efficiency. These include:
· a lack of relevant information relating to the diverse situations of industrial energy users, such as the effective life of energy efficiency investment, especially where technological change is rapid (information failure);
· the opportunity costs of capital and managerial focus in the business, leading to available capital budgets being devoted to capital and labour productivity improvements rather than energy cost savings (even if these offer high rates of return) (capital rationing);
· potentially limited consideration of wider, systemic changes in processes within individual businesses, and a tendency to confine innovations to marginal changes (outside of major plant reinvestment); and
· a lack of appropriate skills in industrial design and process engineering within industrial firms and the supporting energy services sector (information failure).

Existing Measures - Industry


Approximately 210 corporations are registered for the Energy Efficiency Opportunities (EEO) program.

These companies are required to identify, evaluate and report publicly on cost effective energy savings opportunities. Participation in the program is mandatory for corporations that use more than 0.5 petajoules (PJ) of energy per year. In addition, New South Wales, Victoria and Queensland have implemented energy efficiency programs that mandate the implementation of identified energy efficiency opportunities under a certain threshold of pay back periods or are otherwise defined as cost-effective.

Other jurisdictions are investigating similar programs.

Minimum Energy Performance Standards (MEPS) have been developed for 3 phase electric motors and distribution transformers.

The Australian Government has recently established the five year $2.15 billion Climate Change Action Fund (CCAF) to provide targeted assistance to business, community sector organisations, workers, regions and communities to smooth the transition to a low carbon economy. Under the CCAF, a small business capital allowance sub-program will provide small business with assistance to invest in energy efficiency equipment. Investments will need to meet established energy saving criteria. Eligible
applicants will be partially reimbursed for the capital and installation costs of energy efficient equipment.


An Energy Efficiency Exchange (EEX) website was designed and constructed to disseminate best practice information and to increase the availability of best practice information and expertise. The National Framework on Energy Efficiency (NFEE) also developed guidelines to assist in designing and implementing energy efficiency demonstration programs.


Several states manage programs that provide support and incentives for the uptake of energy efficiency in small businesses.

Possible Additional Measures – Industry

Measures that could be included in the National Strategy:
· Extend the capacity and knowledge-building aspects of the EEO program to companies that use between 0.1 and 0.5 PJ per annum;
· Provide competitive grants to assist companies that are representative of specific industrial sectors with the identification and evaluation of energy efficiency opportunities using the EEO methodology.
The intention would be to make information from investigating energy efficiency opportunities widely available through dissemination of case studies across similar businesses;
· Provide support to implement energy savings projects with long pay back periods for companies having to buy permits under the CPRS that are not eligible for other support from the CPRS;
· Develop a package of information-based measures that assists the industrial sector to adjust to the Carbon Pollution Reduction Scheme. The package could include:
· an enhanced Energy Efficiency Exchange (EEX) website as a national portal for industrial energy efficiency information. Possible enhancements could include an energy services directory and an energy efficiency technology database;
· supporting information that provides industry with best practise case studies and (where available) business case information that address issues and barriers to the uptake of opportunities using the experiences developed by companies under the EEO and state programs;
· regular national ‘state of industry’ energy efficiency reporting for industry
(benchmarking) and government that draws on the findings of the NFEE energy efficiency data project;
· a guide to facilitate cogeneration partnerships between businesses;
· Undertake a coordinated review of industrial energy efficiency research and development and innovation opportunities in consultation with the State and Territory Governments; and
· Activities to address skill shortages in energy auditing and advisory services including reviewing the Australian Standard for Energy Audits (AS/NZ 3598:2000)


Stakeholders’ views are sought on:

8.1 The measures proposed to improve the energy efficiency of industry.
8.2 Any other measures that could be included in the National Strategy.
8.3 What timeframes would be required to implement these measures?


The current shortage of skills and expertise in energy efficiency in (and available to) the commercial and industrial sectors has a significant impact on the potential for these sectors to respond appropriately to policy signals. Demand from industry for these services will continue to increase in the
lead up to, and after the commencement of the Carbon Pollution Reduction Scheme.

Similarly, improving the energy efficiency in new and existing homes will require industry trades and professions with the necessary skills, knowledge and tools.

Existing Measures – Skills and training

There has been work undertaken in many individual jurisdictions to address the green skills shortage.

Further existing cross-jurisdictional programs, such as the EEO have already sparked increased levels of demand for these skills. Through the NFEE Trades and Professional Training and Accreditation Project there has been progress on incorporating energy efficiency training into a number of trade and professional courses to improve the skills of practitioners to deliver energy efficient outcomes.

NFEE is also undertaking ongoing research to identify:
· current availability of energy efficiency training;
· demand for energy efficiency accreditation from professional energy service providers and consumers; and
· gaps in skills development, training and accreditation.

NFEE has also developed modules for electricians and HVAC professionals as well as a long term training strategy to develop industrial energy efficiency skills.

Possible Additional Measures – Skills and training

Residential Buildings

The National Strategy could accelerate a nationally coordinated education and training program across the trades and professions involved in residential building design, construction and renovation.

Commercial Buildings and Industry skills

The National Strategy could address skills shortages by supporting a comprehensive strategy to increase the commercial building industry’s capacity to deliver more energy efficient buildings. This measure would deliver specific and comprehensive energy efficiency training to all applicable commercial building professions and trades. Activities to address skills shortages in energy auditing and advisory services, including reviewing the Australian Standard for Energy Audits (AS/NZ
3598:2000) could also be included.


Stakeholders’ views are sought on:
9.1 What measures could be included in the National Strategy to improve energy efficiency skills and training?
9.2 What timeframes would be required to implement these measures?

Attachment 1


Complementarity Principles

1. The measures are targeted at a market failure that is not expected to be adequately addressed by the Carbon Pollution Reduction Scheme or that impinges on its effectiveness in driving emissions reductions. For example, research and development failures, common use infrastructure issues,
information failures and excess market power.

Complementary measures should adhere to the principles of efficiency, effectiveness, equity and administrative simplicity and be kept under review. They may include:

a) measures targeted at a market failure in a sector that is not covered by the Carbon Pollution Reduction Scheme.
b) measures for where the price signals provided by the Carbon Pollution Reduction Scheme are insufficient to overcome other market failures that prevent the take-up of otherwise cost-effective abatement measures.
c) measures targeted at sectors of the economy where price signals may not be as significant a driver of decision making (e.g. land use and planning).
d) some measures in (a) or (b) may only need to be transitional depending on expected changes in coverage or movements in the carbon price.

2. Complementary measures should be tightly targeted to the market failure identified in the above criteria that are amenable to government intervention. Where the measures are regulatory they should meet best-practice regulatory principles, including that the benefits of any government intervention should outweigh the costs.

3. Complementary measures may also be targeted to manage the impacts of the Carbon Pollution Reduction Scheme on particular sectors of the economy (for example to address equity or regional development concerns). Where this is the case, in line with regulatory best-practice, the nonabatement objective should be clearly identified and it should be established that the measure is the best method of attaining the objective.

4. Where measures meet the above criteria, they should generally be implemented by the level of government that is best able to deliver the measure. In determining this, consideration should be given to which level of government has responsibility as defined by the Constitution or convention/practice, the regulatory and compliance costs that will be imposed on the community, and how the delivery of the measure is best coordinated or managed across jurisdictions.

Attachment 2

Products currently regulated for MEPS and labelling Source: E3 Committee, September 2008, Achievements 2007/08 – Report 2008/03

[Note: Image not reproduced]

Attachment 3

List of products proposed for MEPS and/or labelling by 2012

[Note: Image not reproduced]

Source: E3 Committee, September 2008, Achievements 2007/08 – Report 2008/03

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Friday, October 03, 2008

Australian Governments Agree on Energy Efficiency

The Council of Australian Governments (COAG) has agreed to develop a National Strategy for Energy Efficiency, to be implemented by June 2009. This will commence with a regulation impact statement, then national legislation for appliance energy performance standards and labelling. In my "Personal Computer and Monitors Energy Efficiency Strategy" commissioned for the environment department, I recommended some additional measures to speed the process.
COAG has agreed to develop a National Strategy for Energy Efficiency, to accelerate energy efficiency efforts across all governments and to help households and businesses prepare for the introduction of the Commonwealth Government’s Carbon Pollution Reduction Scheme (CPRS). Streamlined roles and responsibilities for energy efficiency policies and programs are to be agreed by end December 2008, and implementation of this Strategy will be finalised by June 2009, to ensure that programs assisting households and businesses to reduce their energy costs are in place prior to the introduction of the CPRS.

As a first step towards establishing a truly national approach, COAG has agreed to develop, subject to a regulation impact statement, national legislation for appliance energy performance standards and labelling to simplify enforcement and ensure consistency, and to direct officials to develop this option for COAG consideration as part of the National Strategy for Energy Efficiency. This will reduce transaction costs for business and accelerate the rollout of new standards and labels for products.

From: Communiqué, COAG, 2 October 2008

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Friday, September 26, 2008

Personal Computer and Monitors Energy Efficiency Strategy

The Personal Computer and Monitors Energy Efficiency Strategy, was prepared at the request of the Australian Environment Department. It recommends a 50% reduction in computer energy use by 2020, using voluntary industry programs, mandatory use by Government, and web education programs. The report has been mentioned in "Government Should Adopt US Energy Scheme" (Sue Bushell, CIO Magazine, 18 September 2008) and "Call to cut to the core" (Simon Grose, Canberra Times newspaper, September 22, 2008).

The purpose of this document is to propose a strategy for the Australian ICT industry, in conjunction with government, to improve the energy efficiency of PCs and Monitors in Australia.

This strategy proposes voluntary use of the US EPA Energy Star program by the Australian ICT industry and web based industry and consumer education programs on energy efficiency. It is proposed that Australian federal and state governments encourage this voluntary program by government purchasing Energy Star products and by government using the web based information in product selection. While the program would be voluntary, those companies which did not offer Energy Star rated products and did not provide details of them on the web would be excluded from government tenders.

It is proposed that industry work with government on consumer and professional education on sustainability, using the Internet as a delivery mechanism. International initiatives on ICT energy efficiency should be encouraged in Australia, along with locally developed programs. A government sponsored free e-learning package for universities and professional bodies to train ICT professionals in sustainability is proposed.

It is proposed that Australia set a target of a 50% reduction of greenhouse gas emissions from ICT by 2020. This will contribute a 1% overall reduction in Australia's greenhouse gas emissions.


  1. Mandatory Energy Efficiency in Government Procurement: Require Energy Star conformance for federal government procurement and for federally funded programs, such as computers in schools. Use a simplified version of US Government procedures. Require energy efficiency product specifications to be on the web in the standard format.

  2. Develop Sustainable ICT E-learning Modules: Sponsor a free e-learning package for universities and professional bodies to train ICT professionals in sustainability. Focus the content on energy efficiency and draw on case studies of real world energy saving projects.

  3. Audit ICT Energy Use Annually: Demonstrate the efficacy of ICT energy saving by regular audits of ICT energy use. Develop an annual ICT energy audit, based on previous ICT audit and analysis used for greening whitegoods.

  4. Voluntary Energy Star Standard for Industry: Adopt the US Energy Star Program as the basis of a voluntary standard for efficient PCs and monitors.

  5. Standard Web Format for Environmental Product Data: Develop a standard format to display energy efficiency data and other environmental data on the web, suitable for both consumers and corporate users. In Australia. Propose the format as an international standard.

  6. Promotion and Market Information, Finding Shared Incentives: Promote and support energy saving to consumers. Encourage international consortia to expand their programs to Australia. Encourage the ICT industry to support local initiatives.

Next Steps for Industry and Government

  1. Decide which measures to adopt

  2. Cost and schedule the measures

From: Executive Summary, Personal Computer and Monitors Energy Efficiency Strategy, Report and Recommended Plan of Action, Tom Worthington, Version 1.0 of 23 September 2008

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