Australasian Science: Australia's authority on science since 1938

Energy Productivity Can Cut Costs and Encourage Growth

By Bruce Godfrey

Australia needs to double its current level of national energy productivity by 2030.

The Australian government’s Energy White Paper, released in April 2015, has recognised the importance of improving Australia’s energy productivity in order to “reduce household and business energy costs and encourage economic growth”.

Defined as the amount of economic output per unit of energy input, energy productivity aims to take into account the economic, environmental and social dividends derived from the effective application of energy resources through efficiency and conservation.

GDP growth is increasingly becoming uncoupled from energy demand and supply growth. As the White Paper notes:

From 2014–15 to 2049–50, Australia’s primary energy consumption is projected to grow at the rate of 1 % a year and GDP is expected to grow at 2.7 % a year. This means Australia’s energy productivity could improve by around 1.7 % a year, or over 25 % by 2030, under business as usual.

This level of improvement is slightly more than the average rate of 1.6% per year achieved from 2000–01 to 2012–13.

Rather than the business-as-usual improvement of 25% by 2030, the government suggests in the White Paper that a target of 40% improvement by 2030 may be achievable, although it leaves the setting of a 2030 target to be an outcome from the process that will be undertaken to develop a National Energy Productivity Plan.

The Australian Academy of Technological Sciences and Engineering (ATSE) has proposed in its recent Energy Action Statement that doubling the current level of national energy productivity by 2030 should be the goal if Australia is to grow significantly its international economic and environmental competitiveness. Whether it’s 40%, doubling or somewhere in between, the 2030 energy productivity improvement target must be set and take into account:

  • the greenhouse gas emissions reduction target for 2030;
  • the reality of Australia’s growing population – the Australian Bureau of Statistics estimates an overall total population increase of one person every 81 seconds in Australia, leading to an extra 5.8 million people in Australia by 2030 needing jobs, accommodation and transport; and
  • that GDP growth alone will not provide the energy productivity improvement, so significant improvements in the efficiency of use and supply of energy in Australia are required.

For electricity supply particularly, investment in more efficient, less emissions-intensive technologies is needed to replace the current ageing, relatively inefficient and emissions-

intensive coal power plants that dominate Australia’s electricity generation mix. High efficiency natural gas-fuelled power generation is an attractive option if there is sufficient gas available in eastern Australia at a competitive fuel cost – an issue that will be explored in ATSE’s Unconventional Gas Conference in September.

In the light duty vehicles sector, which includes passenger and small freight vehicles, it is becoming apparent that these will increasingly be electrically driven whether by stored electricity in batteries or electricity generated on-board by hydrogen fuel cells. Electric vehicles are considerably more efficient than internal combustion engines across the full driving cycle, but they are not necessarily “greener” unless the electricity stored in the batteries or used to make hydrogen has much lower carbon intensity than what is generated in most Australian states.

The Energy White Paper has recognised the potential of energy productivity to be used as a strategic tool to deliver a range of benefits for Australia. However, formidable obstacles must be overcome to realise this potential, requiring:

  • major public and private support for strengthening of energy efficiency codes for commercial and residential building stocks;
  • support of energy efficiency retrofits in buildings such as co- and tri-generation, heat recovery and lighting;
  • enhanced minimum energy performance standards for commercial and residential appliances;
  • stringent fuel economy standards for vehicles; and
  • increased use of public transport.

Energy productivity improvements can be realised in all sectors including industry, transport, power generation and buildings. ATSE’s proposed target of doubling energy productivity is achievable using currently available energy efficiency technologies and practices, and improvements continue to be developed and demonstrated.

However, without effective deployment of such technologies, the economic, environmental and social benefits of improved energy productivity will not be fully realised.

Dr Bruce Godfrey FTSE is Chair of the ATSE Energy Forum and CEO of Australian Scientific Instruments Pty Ltd. He was Chair of ARENA’s Advisory Panel and of the former Australian Solar Institute’s Research Advisory Committee, and a Board Member of the former Australian Centre for Renewable Energy. Previously he was Managing Director of Ceramic Fuel Cells Limited and of the Energy R&D Corporation.