Australia Lagging Behind in Energy Policy

The World Energy Council (WEC) has released its third annual survey of global energy policies, ranking countries on a number of criteria. Australia comes in 22^nd overall, towards the bottom of major developed countries. First is Switzerland, followed by Sweden, Germany, Canada and Norway. Australia ranks just behind New Zealand and the Netherlands, and just ahead of Russia and the Philippines.

The report looks at each country’s energy and climate policy, with a view to identifying key areas for policy improvements and to understand how successful policies can be transferred from one country to another. The WEC's definition of energy sustainability is based on three core dimensions – energy security, social equity and environmental impact mitigation. The goal of the annual Index is to understand and provide high-level insights into a country's likely ability to provide a stable, affordable and environmentally sensitive energy system.

The countries in the Index fall into three main groups. Australia is in Group One – countries where energy is highly affordable (often through subsidies), and which have weak performance on energy security and environmental factors. Other countries in this group include China, India, Libya, Saudi Arabia and Turkey.

Group 2, of mostly developing countries, has low energy usage per capita and a low impact on the environment. Group 3, which comprises most developed countries, has balanced energy policies and strong energy equity.

Clearly, Australia’s performance is very poor. But why should we care? WEC's Energy Sustainability Index ranks the energy sustainability performance of the 93 WEC member countries, and some other countries. Australia is the not a member, but it is in good company – neither is Somalia, Sudan, Mauretania or Nicaragua.

Two speeds of carbon disclosure

The Carbon Disclosure Project (CDP) has released its 2011 Australia-New Zealand report, the sixth such annual local effort. This year exactly half the companies in the ASX 200 companies responded, but 73 of these were from the ASX 100 – only 27 from the bottom 100 made the effort. In New Zealand 42 of the NZX 50 responded.

Some highlights from this year’s report:

•  The response rate in ANZ is much lower than the Global 500 response rate of 81%.

•  Total Scope 1 (direct emissions) carbon emissions (CO₂e) from reporting companies in 2010 were 114 Mt, down from 140 Mt in 2009. But the reduction does not mean ANZ companies are emitting less – most of the reduction is because large emitter Bluescope Steel reported in 2009 but not in 2010.

• Nearly half the Scope 1 emissions (47 Mt) are from just two companies – BHP Billiton and Rio Tinto.

• Scope 2 emissions (indirect emissions – almost all is electricity usage) nearly doubled from 2009 to 2010, from 70 Mt to 128 Mt.

•  Only one third (36%) of respondents have had their emissions independently verified (the CDP relies on self-reporting).

• Only 4% of reporting companies said that carbon pricing is a high impact risk. “The carbon pricing results contrast sharply with media statements made by a number of companies and industry groups about the business impacts of carbon pricing.”

The report says there is evidence of a two speed business response to climate change in Australia and New Zealand, with the financial sector improving and other sectors mostly lagging.

Early this year the CDP established an office in Australia (in Sydney) to manage its Australasian programs. These include encouraging more companies to report, and expanding its consultancy programs, in conjunction with Deloitte Touche Tohmatsu.

The results are consistent with the findings of Connection Research’s report Australian Carbon Ratings, published in August 2011 in conjunction with SuperRatings. That report looked at the carbon emissions of the ASAX 100, using some data from the CDP and modelled emissions of non-reporting companies, comparing the impact of a carbon price to companies’ profitability. Total carbon pricing liability will be less than 3% of company profits – before any compensation.

This year’s Australia New Zealand CDP results show that, with few exceptions, there is still comparatively little activity from many Australia companies when it comes to emissions reduction or preparation for the effects of climate change. But then, that can be said of the world as a whole. There is lip service, but absolutely no sense of urgency.

Household TV and Computer Usage

Last week we reported on the new Australian Bureau of Statistics (ABS) data on household energy usage. The report also contains significant data on the usage of electronic devices. The data complements the findings in Connection Research’s recent Interconnected Home report, which asked many of the same questions, though of a smaller sample size. Combining the two sets of data and analysing other responses in the Interconnected Home report, some key trends emerge:

• Television usage is universal – more than 99% of households have at least one, and the average household has two. Around 60% are old style CRT TVs, and around 40% are flat panel TVs (mostly LCD or plasma).

• About one quarter (25.2%) of homes have a surround sound home theatre system. Most homes (83.0%) have a DVD player or recorder. But the figure has declined from 87.3% five years ago. The decline is most likely due to the increased popularity of internet downloads of movies and TV show

• The proportion of homes with a desktop computer has declined from 59.7% to 54.6% over the last five years, but the proportion with a laptop computer has grown from 38.1% to 60.9% over the same period. Nearly 90% of households have at least one PC.

TV and PC technology is merging. They will always be separate devices (the “lean forward” versus “lean back” experience), but they both have flat screens, and they are both increasingly connected to the internet. That is already the norm with PCs – many applications rely on internet connection. It is also becoming much more popular with TVs, which are increasingly downloading content from the internet, often with the PC as an intermediary.

Many TV stations offer the availability of downloading or streaming from the internet shows that the viewer may have missed. The availability of devices such as Apple TV and the usage of services such as Telstra’s T-Box or Optus’s new MeTV has made “shift viewing” less important.

Watching TV via the internet, whether the content is streamed or downloaded legally or illegally for later viewing, is changing the viewing habits of millions of Australians. The trend will continue. Pay TV penetration in Australia has peaked at about one third of households, and as many people are now discarding Pay TV as are taking it up.

Digital transmission has all but supplanted analogue. Most households now have a digital TV or a set-top box, and the last analogue signals (in Melbourne, Adelaide and Sydney) are scheduled to be turned off at the end of 2013. They already have been in many regional areas of South Australia and Victoria.

The TV world is changing. In fact, it has already changed. But what is not changing is the amount of energy all these devices are using. They are becoming more energy efficient, but the number of devices is increasing, and so is their usage.

TVs and PCs and their attendant equipment already make up more than 20% of the average household’s electricity usage – half as much again as HVAC (heating, ventilation and air conditioning), nearly twice as much as refrigeration, and three times as much as lighting.

It all comes at a price.

Make them pay

As Australia struggles with the inherent contradictions in its electricity pricing policy, many European countries are putting in place policies which reward energy utilities for reducing customer demand.

Australian distributors and retailers are required by the Australian Energy Regulator (AER) to encourage the usage of renewable energy sources like solar PV cells and reduce demand through demand side response (DSR) mechanisms. In practice they do little to encourage such practices, because their revenue and profitability is tied to increased energy consumption.

Many observers have pointed out the inherent contradictions in these perverse incentives, but little is being done about it. In Europe, things are different. McKinsey & Company, in its most recent McKinseyQuarterly, entitled “Winning the battle for the home of the future”, explains what is happening.

The report looks at changes in three factors: technology, regulation, and consumer behaviour, which it says will transform the residential energy market in the coming ten years. “To succeed in this new environment, utilities must place fine-grained bets on the segments where they can best create value for themselves and develop winning capabilities beyond their traditional business, often by seeking partnerships with companies from other sectors.”

McKinsey conducted research across four countries: the UK, Germany, Italy and Sweden. The report explores three scenarios, where each of the three factors is implemented incrementally, aggressively, and to the extent that homes become energy-neutral. These are then quantified.

The analysis shows that most of the potential energy savings will come from better building materials and the use of centralised systems such as heat pumps that will handle all heating and cooling in the home, including refrigeration. Smarter appliances are another important factor, with changed consumer behaviour through such technologies as smart meters comparatively unimportant.

But an important aspect of the analysis is McKinsey’s observation that utilities have a conflict of interest in promoting energy efficiency – which is exactly the case in Australia today. That calls for new business models, which are already being developed. The report gives some examples:

“Developing or acquiring new capabilities will be essential for utilities as they move beyond their comfort zones. They must, for example, help customers overcome the investment barrier by providing financing options through partnerships with banks or by creating internal financial units. Many players also realise that they have to join hands with other new entrants to cover the value chain effectively. The pan-European utility RWE, for example, has announced partnerships with a range of players, including Microsoft and EQ3 (for a central control unit linking all appliances) and Renault (to test the performance of electric vehicles in Germany’s commuter traffic). British Gas collaborates with the UK grocery retailer Sainsbury’s. Under their partnership, consumers can purchase energy-management products (such as solar panels and insulation) in a supermarket and British Gas installs them.”

The transition will not be easy. But it is necessary. Australian utilities should act now to pre-empt regulatory coercion that will force them to help consumers reduce energy consumption – which is bound to happen. Those that move early will reap the biggest benefits in the long run.

Household Energy Usage

Every three years the Australian Bureau of Statistics (ABS) publishes data on household energy usage. The latest data was released yesterday (24 October 2011). It is based on a detailed survey conducted in March 2011.

The ABS data has comparatively small margins of error – it has large sample sizes and uses a consistent methodology from year to year. This survey has now been conducted in 2005, 2008 and 2011, allowing for comparisons over time.

Some highlights from the report:

• The majority of Australian households had some form of insulation (69%), from a high of 81% in the ACT to a low of 44% in the Northern Territory. The figure increased from 61% in 2008 to 69% in 2011.

• Six in ten (61%) households owned at least one laptop computer in 2011, up from 38% in 2008, while those with desktops have dropped from 60% to 55%.

• Front loader washing machines are becoming more common. They are now found in 31% of households, compared to just 13% in 2005 compared to 31% in 2011

• When purchasing selected electrical appliances in the last year, around half of all households considered energy star ratings.

• Nearly half (48%) of households use mains gas. Mains gas as a source of energy inside dwellings is most common in Victoria (82%). A higher proportion of households in capital cities (63%) use mains gas compared with 23% outside capital cities, where LPG/bottled gas is more common (29% of households, compared to 10% in capital cities).

• Just over half (52%) of hot water systems in Australian households are electric, and around a third (36%) use mains gas. Less than one in ten (8%) are solar powered (8%). The Northern Territory has the highest proportion of households with solar hot water systems (46%) followed by Western Australia (21%).

• Over a third (37%) of Australian households uses electricity as the main source of energy for heating, while just under a third (32%) uses gas. One in ten households still uses wood as the main source of energy for heating (10%).

• The proportion of households with a cooler in use (either a refrigerated air conditioner or an evaporative cooler) increased from 59% in 2005 to 73% in 2011.

The figures are consistent with Connection Research’s survey data, as most recently published in The Interconnected Home report. Usage of all manner of devices and appliances is rising – a later SER posting will detail usage of electronic devices.

The Newsweek 2011 Green Rankings

Newsweek has released its third annual Green Rankings, a rating of the top 500 public companies in the world, based on their environmental credentials. Australia does very well, with National Australia Bank coming in third overall (behind Munch Re and IBM).

Actually, it is Australian banks who do well – after NAB, ANZ is number 5, and Westpac is number 18, with Commonwealth Bank on number 76. Four other Australian companies rank in the top 500 – Woolworths (146), Telstra (207) Wesfarmers (300) and Rio Tinto (322).

ICT companies also do well. After IBM in second spot are Indian companies Tata (7) and Infosys (8), then Bell Canada (12), Fujitsu (13),  HP (15) and SAP (20) all in the top 20. Companies you might think would do well are a little further down – Apple is on 117 and Google is on 134, both below Microsoft on 91. Apple, which loudly boasts of its green credentials but is also known for its secretiveness, is let down by a very low score for disclosure.



Newsweek’s article comments on the fact that while government efforts in sustainability have gone backwards in recent years (except in Australia, where the carbon price receives a favourable mention), private industry is becoming more sustainable.

“Top-ranked companies are approaching green projects with increasing tenacity, even in this weak economy. Corporate sustainability, it seems, is here for the long haul—it makes sense not just for the sake of the planet, but for business.

“For corporate executives, what matters is that waste cuts into profits, and that reducing wasted energy, for example, curbs greenhouse-gas emissions while bolstering the bottom line. We face a future in which resources that were once taken for granted—water, land, minerals, fossil fuels—will be limited and costly. Preparing now to succeed in—and even profit from—that difficult future could make all the difference.”

That is true, but there are signs, at least in Australia, that sustainability is wearing just a little thin in the corporate sector. NAB does very well overall, but it has recently outsourced many of its sustainability activities, and many other organisations have downgraded their internal sustainability function.

To produce the 2011 Green Rankings, Newsweek collaborated with leading environmental research providers, Trucost, and Sustainalytics to assess each company’s environmental footprint, management of that footprint, and transparency. Companies are ranked by their overall Green Score. This score is derived from three component scores: an Environmental Impact Score, an Environmental Management Score, and an Environmental Disclosure Score; weighted at 45 percent, 45 percent, and 10 percent, respectively. All scores are out of a possible 100.

GHG Protocol Releases Scope 3 Accounting Standard

The Greenhouse Gas Protocol group has launched its new Product Life Cycle and Corporate Value Chain Standards. The standards were developed through a three year global multi-stakeholder process that included more than 2,300 participants and were road-tested by 60 companies in 17 countries.

The Corporate Value Chain Standard is the first standard that organisations can use to assess their full Scope 3 carbon emissions up and down the supply chain and identify the most cost-effective ways to reduce emissions. The Product Life Cycle Standard enables organisations to measure the greenhouse gas emissions of an individual product all the way from raw materials through use and disposal, and identify opportunities to increase efficiencies, improve product design, remove risks, and achieve emissions reductions.

The Greenhouse Gas Protocol group (GHG Protocol) is the most widely used international accounting tool for quantifying and managing greenhouse gas emissions. It is a partnership between the World Resources Institute and the World Business Council for Sustainable Development, and is working with businesses, governments, and environmental groups around the world to build a new generation of credible and effective programs for tackling climate change.

It provides the accounting framework for nearly every GHG standard and program in the world – from the International Standards Organization to The Climate Registry – as well as hundreds of GHG inventories prepared by individual companies.

The development of a Scope 3 tool is an important step. Most GHG reporting legislation around the world require only Scope 1 (direct emissions) and Scope 2 (indirect emissions, mostly as a result of the use of grid electricity) to be measured and reported upon. Scope 3 has been excluded because it is difficult to measure or calculate. Without a standardised methodology there is danger of double counting or major miscalculation.

“Scope 3 emissions can represent the largest source of emissions for many organisations,” say the guidelines. “They present the most significant opportunities to influence GHG reductions and achieve a variety of GHG-related business objectives. Developing a full corporate GHG emissions inventory – incorporating Scope 1, Scope 2, and Scope 3 emissions – enables organisations to understand their full emissions impact across the value chain and focus efforts where they can have the greatest impact.”

The Carbon Price is here

The Carbon Price, aka the Carbon Tax, aka the Clean Energy Bill, aka the Great Big New Tax on Everything, is here. It’s through the House of Representatives and will likely pass the Senate, and then it will be L-A-W.

The opinion columns, the Twitterverse and Blogosphere, the airwaves, and the letters pages are full of real and confected outrage, and not a little congratulation and relief. The vituperation from opponents is astonishing in its spitefulness. Most ludicrous of all is the opposition’s complaint that the legislation was “rushed through” (thank you, Senator Abetz) – rarely has any policy been more widely debated.

Tony Abbot’s schoolyard “blood pledge” that he will repeal the legislation shows a breathtaking disregard for the interests of the business community, who need certainty above all else so they can make realistic investment decisions. The carbon pricing legislation and its related bills should offer that certainty, as well as the opportunity to build the sort of renewable energy industry that Australia and the world will need as we wean ourselves off fossil fuels over the coming decades, but the pettiness of the opposition removes that promise.

The opposition may well win the next election, and may well repeal the laws, but it will most likely take many years and many billions of dollars in compensation – time and money and effort that would be much better spent preparing ourselves for the inevitable move to a low carbon economy.

The strongest arguments against the legislation is the oft-repeated claim that the Prime Minister broke a promise in introducing it. Circumstances evolve, as John Howard found when he introduced his “never ever” GST. John Maynard Keynes once famously said “when the facts change, I change my mind. What do you do, sir?” Most opponents of the carbon price are consistent only in their inconsistency.

But they are right in one thing. This is not over yet. The words that have been spilled – and the blood that will be, if you listen to Tony Abbot – have hardly started to spew forth. It is ugly, and will remain so for some time.

Conspiracy versus Conspiracy

It seems you just can’t keep a good conspiracy theory down. The human mind seems to have an endless capacity to invent complex and sinister plots, particularly when there is ideology or stupidity involved.

Conspiracy theories are nearly as prevalent in the climate change debate as they were about JFK’s death. A group of Chinese scientists has come out saying that the sustainability movement is a rich world conspiracy, so that American companies can sell more renewable technology, or to keep poor countries poor be denying them the opportunities to develop the cheap but polluting industries that helped make the western world so wealthy during the industrial revolution.

An article in The Sydney Morning Herald on 8 October quotes Zhang Musheng, “one of China's most influential intellectuals and a close adviser to the People's Liberation Army” as saying that

global warming is a “bogus proposition”, and that it is an American ruse to sell green technology and improve its economy. So there - climate change is a capitalist plot.

Meanwhile, back in the USA, that hotbed of conspiracy theorists the Tea Party movement is claiming the exact opposite. According to chief Mad Hatter Tom DeWeese, president of the self-styled American Policy Center and one of the movement’s most prominent spokesmen, the whole sustainability movement is a leftist plot to destroy the American Way. Recently they’ve had a go at the innocuous Agenda 21, adopted by 178 governments at the first UN climate summit in Rio de Janeiro way back in 1992. The best summary I’ve seen is from the RNI (Republicans for the National Interest) website.

“Agenda 21 envisions local communities all across our nation adopting ‘comprehensive community plans’ that have as their real, though unstated, purpose the elimination of the very middle class quality of life, that has been the bedrock of our national independence and personal freedoms. In place of the suburb, it wants Soviet-style high density housing; changes in zoning laws that increasingly make it impossible to maintain single family residences (let alone build new ones); mandated use of public transportation … and severe limitations on private food, water, and energy consumption, in return for enormously high taxes that will fund cradle to grave care by the nanny government.”

So there - climate change is a communist plot. Or a capitalist one, take your pick. There is of course a third possibility. It just might be really happening.

Climate Change Denial – Anger in Action

Connection Research conducts many surveys of consumer and business attitudes and behaviours in the field of energy efficiency and sustainability. We try hard to make our surveys as representative as possible, encompassing all demographic groups. That means we get a broad range of views from the people answering our surveys, which is as it should be.

When we ask people their views on climate change, we get representative responses from the 15% or so of the population who deny the science of climate change. This percentage has been fairly constant across our surveys and many others we have seen. Mild scepticism and outright denial is on the rise.

Recently we sent respondents to our Interconnected Home survey a summary of the results, as promised. We received back an angry email from a climate change denier who we shall call AD (Angry Denier). The short note drips with vitriol, and is full of profanity, bad grammar and spelling mistakes. It accused us of manipulating the survey to get the answers we wanted – “I will waist (sic) no time in your pathetic manipulated and dishonest surveys” (full text below).

The email is indicative of the mindset of many of those who deny the reality of a warming planet. They believe the science to be a conspiracy, but are unable to counter with facts of their own. Instead they resort to foul language and personal abuse. Even in his survey response (he did “waist” his time completing it), he referred to us as “you bastards”. The anger is palpable.

Now, this fellow is not representative of all climate change deniers. Many of them are decent, if deluded, people. But they are not, generally speaking, the sharpest tools in the shed. They do not understand scientific method, nor the discipline of risk analysis.

We were glad to receive this email. It demonstrates the existence of a mindset impervious to reason, logic and fact. Such people exist, and they live among us.

Carbon Capture and Storage (CCS) is the technology that aims to reduce CO2 emissions by capturing it when it is produced and storing it so it won’t enter the atmosphere. The technology is unproven and highly contentious, but it has attracted a lot of attention and funding.

The Australian Government has taken a significant lead on CCS, setting up the non-profit Global CCS Institute in 2008 with $100 million in funding. The Institute is also receiving funding from other governments and from corporations with an interest in developing and publicising the technology

Yesterday the Institute published its Global Status of CCS report, an annual exercise intended to summarise CCS efforts around the world. The report is, as you would expect, bullish about the prospects for CCS. It identifies 74 large-scale integrated projects (LSIPs) around the world, of which 14 are operating or under construction. This is down from 77 last year, due to a number of cancellations of previously announced projects. The number at the primary “indentify” stage has halved over the last two years, from 19 to 8, indicating that the number of new projects is declining.

Large Scale CCS Projects, 2009-11

Source: Global CCS Institute

The Institute dismisses these numbers as unimportant – the report says it is not because of the technology, but because of weak economic conditions or the failure of many governments to put a price on carbon. CCS has attracted much criticism as an ineffective solution to reducing carbon emissions. It requires CO2 to be compressed and transported to a storage facility, both of which are themselves carbon-intensive processes.

The Global CCS Institute report has a section outlining the relative costs of CCS with other technologies such as solar. The report concludes that the “avoided cost” of CCS technology in power stations when the technology matures will be in the range of $US68 to $US123 a tonne, compared to more than twice that for PV and other solar technologies.

These prices are purely speculative – no-one knows until the technology matures. By that time the world will be a very different place. But is does show that whatever technology is used, there is a price to pay for reducing carbon emissions. It is one of the great tragedies of the modern world that so few people are prepared to pay this price.

Energy Prices cop a lot of flack

The price of energy is not valued in the same way as other costs of living. Rising energy prices have Australian consumers blaming utilities for everything, from unfairly increasing prices to not investing enough in renewable energy. It seems they can’t catch a break.

Connection Research’s recent report Interconnected Home 2011 reveals customers believe the number one priority for electricity retailers should be keeping prices affordable. But at the same time, nearly a quarter of customers believe the energy utilities’ investments are causing rising energy prices. They can’t do both.

Energy Networks Australia (ENA) CEO John Devereaux believes the key to repairing the somewhat battered image Australians have of their energy company is changing people’s attitudes. He points out that householders are happy pay for other comparable services, but think energy prices are too high.

“Given the focus on the size of electricity bills and the capacity for some households to cope with any increase, it is interesting to think about the services which most households now choose to access and pay for which were not available 15 years ago, including the Internet, mobile phones and pay television, which average in total around $150 per month, a sizeable portion of the average electricity bill.”

Consumers are comparatively happy to pay for internet and TV because they appreciate the value of these technologies more than electricity. Household access to electricity has been around for nearly a century now, so householders do not realise the difference it makes. Results from the Interconnected Home indicate only 21.7% believe they are getting value for money from their energy supplier. Australians need to change this attitude. It seems this change will happen slowly, with many continuing to blame the utilities for outages and price hikes, while ignoring the convenience that people take for granted.

Australia Falling Behind on ICT Sustainability

Australia performs poorly compared to many other countries when it comes to ICT Sustainability (often called “Green IT”). Australia’s overall ICT Sustainability Index (ITSx) is 52.8, compared to the global average of 54.3. Canada does best, on 60.3, followed by the United Kingdom on 58.3 and the USA on 52.8. Australia is ahead of only New Zealand, India and China of the countries surveyed.

The findings are contained in Fujitsu’s annual Global ICT Sustainability benchmarking report, researched by Connection Research. The benchmark is based on a survey of 1,000 international ICT departments conducted by Connection Research over May and June 2011, and since supplemented by further research and analysis. The survey quantifies an organisation’s ICT Sustainability attitudes, policies, practices and technologies, in each of five areas: Lifecycle and Procurement, End User Efficiencies, Enterprise and Data Centre, ICT as a Low Carbon Enabler, and Metrics.

Australia’s worst performance is in End User Efficiencies, where it is last of all the countries surveyed. This indicates that Australian ICT departments are comparatively poor at implementing such end user sustainability technologies and practices as PC power management, printer consolidation and end user training programs. It seems many of the “low hanging fruit” of Green IT have grown back.

An analysis by industry shows that Australia does comparatively well in Government and Professional Services, but worse than average in other industry sectors. Australia has a long way to go in ICT Sustainability.

Green and Gold goes Green

The Australian Rugby Union (ARU) website has announced on Wednesday that the Wallabies will “go green” for their World Cup campaign in New Zealand. What does this mean? It means they will try to offset their entire carbon footprint for the trip.

The campaign is officially called ‘Qantas Wallabies Go Green’, and is in partnership with long term naming rights partners Qantas and Lexus, as well as the Carbon Offset Program. Qantas will offset the flights to and from NZ, Lexus will offset all ground transportation, and the Carbon Trade Exchange will offset any other footprints that may appear. All offsets will be compliant with the Australian National Carbon Offset Standard (NCOS). The ARU claims the Wallabies are the first Rugby World Cup team attempting to offset their campaign. ARU Managing Director and CEO John O’Neill says he hopes other teams will follow suit.

Perhaps they can make Rugby Union the first carbon-neutral sport on the planet.

Which raises the question: Just how big is sporting industry’s carbon footprint? News website France24.com worked out a few key figures to give an idea of just how energy hungry sporting is:

·         The Soccer World Cup in South Africa produced 2.5 million tons of C0₂.

·         15 million litres of water are used every year to produce artificial snow on the ski fields of France alone.

·         An estimated 880 tons of C0₂ was emitted by the racers in the 2010 Dakar Rally. This does not take into account assistance cars or helicopters.

·         A 40 hectare golf course requires up to 127,000m³ of water to keep its lawns healthy.

Efforts are being made by some sporting bodies to reduce their code’s carbon emissions. The 2012 London Olympics have created 45 hectares of wildlife habitat within Olympic Park to safeguard the wildlife against construction of the park (and to provide a picturesque setting for the games), and all of the food packaging at the games will be biodegradable. It was originally planned that 20% of the power generated for the games would come from renewable sources, but that has since dropped to 9%.

Sport is a big part of society, but its carbon footprint can’t be ignored forever. We will soon see all sporting codes join in as the Wallabies have, cutting down or offsetting carbon emissions wherever possible. It is just another aspect of our life that we are going to have to bring into the environmentally-conscious 21st century.

Australia – The Dumb Solar Country

Remember Bob Hawke’s idea that Australia would become known as the “clever country”? Can anyone really say that we have come close to living up to it? The mess we are making of solar energy is a good example. Consider a few simple facts: 

Fact: Australia has abundant capacity for solar energy. We’re a sunny country. The world leader in solar energy, Germany, gets only half as much energy from the same solar PV panel that we do in Australia. 

Fact: The recently elected conservative state governments in Australia’s two largest states, NSW and Victoria, have reduced incentives for households to install solar panels. Federal and state strategies to encourage Australians to install solar panels are a mishmash of conflicting and uncoordinated programs. 

Fact: Solar panels cost more in Australia than in Germany or the USA, where prices are dropping, despite Australia’s high dollar and low import tariffs. Prices in Australia are not falling. 

Fact: Even at these high prices, the cost of electricity from solar panels has now reached parity with the cost of electricity off the grid. That assumes a 25 year lifespan for a PV panel. 

Fact: Australia was once a world leader in the development of PV panels. Virtually all that expertise is now offshore, as are the manufacturing facilities. 

Add it all together and it’s a sad tale. If Australia had any sense we would be making massive use of solar power. As it is, solar is a miniscule proportion of what we’re getting from coal-fired power stations. The energy industry is wedded to old models that are scarcely affected by attempts at reregulation. 

Australia is missing the boat. We need a national solar strategy, coordinating incentives for consumers, manufacturers, researchers and energy companies.

Trouble in the Wind

There is trouble brewing in the wind generation industry in Victoria. On 30 August AEMO (AustralianEnergy Market Operator) published its annual “Electricity Statement of Opportunities”, which summarises announced and planned investment in Australia’s electricity generation capacity. The document, and a 30 page Executive Briefing, is available on AEMO’s website.

“Committed” and “advanced” projects are 44.2% wind, 45.3% natural gas, and only 10.5% black coal or fuel oil. Over 16,000 MW of capacity is proposed for wind, with around one third of that in Victoria. Victoria has the best wind potential in Australia but current capacity is less than 500 MW. AEMO’s data has this increasing tenfold once announced projects are completed.

But even while the AEMO report was at the printers, the Victorian Government announced major restrictions on wind farms in Victoria. They include a two kilometre buffer zone between wind turbines and houses, and a requirement that they be at least five kilometres from major towns. The restrictions are at odds with many of the projects that have already been approved.

The announcement has already forced wind generators to move their attention from Victoria to other states. The government’s decision does not affect announced projects, but it remains possible that the planning rules that allowed these projects to be approved may yet be overturned, and that some projects may not proceed. Yet AEMO projects that Victoria’s generation needs will be significant over the next few years. 

The Victorian Government’s aversion to wind power is not based on the state’s electricity needs. It seems to be ideologically driven, with a strong dose of populism. Wind farm opponents are particularly vocal in Victoria, and have a political voice in the local branch of the National Party. Its policies are unfortunate, but the real test will be whether the projects already approved will proceed, or whether ideology will triumph over common sense.

NABERS goes Six Star

The widely used NABERS rating scale has been extended to six stars, which means it now uses a similar scale to the Green Star rating used by the Green Building Council of Australia (GBCA). The extended rating will be given to buildings that exceed the existing five star rating by a significant margin.

Buildings currently rated at 5 stars that are performing at a 5.5 or 6 star level will be issued new certificates reflecting their new rating. This change does not affect other ratings, as the existing 0-5 star scale has not changed. New 6 star ratings are now available for NABERS energy and water ratings for offices, hotels and shopping centres. Other NABERS ratings will be extended by mid 2012. A 6 star rating is awarded for “market leading performance”, and represents a 50% reduction in greenhouse gas emissions or water use from a 5 star rating.

NABERS (National Australian Built Environment Rating System) has been in use for many years to rate the environmental performance of buildings on a 1 to 5 scale, in four key areas: energy consumption, water consumption, waste management and the built environment. They key difference between Green Star and NABERS has been that Green Star rates a building’s design and construction , while NABERS rates a building’s operation once constructed. Green Star is voluntary and run by the industry, NABERS is mandated in many cases (such as when office space changes hands) and run by the government (the NSW Office of Environment and Heritage on behalf of all Australia governments).

Both systems are in widespread use. They are unlikely to be amalgamated, because of their different purposes, but the tweaking of NABERS to an extra star does as least mean some level of alignment. It will still be the case that when someone talks of a “six star building” it will be necessary to ask whether it’s a six star Green Star or a six star NABERS, so we will probably start to hear terminology like “double six star”.

Environmental building standards in Australia remain a hodgepodge of competing and confusing systems operated by various levels of government and private industry. This is not about to change – but at least there is some agreement on the number of stars that represents peak performance.

How would Australia cope with severe electricity cuts?

The recent earthquake and tsunami in Japan, and the subsequent severe cuts in the nation’s electricity output, have led to extensive mandatory and voluntary energy-saving measures across the country.

Large corporations in Japan have been ordered to cut their peak electricity load by 15%, and small and medium corporations and households have been asked to make the same level of cuts voluntarily. The entire Japanese car industry has switched its weekend to Thursday and Friday to help lower peak electricity.

Air conditioners across the country (which gets very hot and sticky in the summer) have been set at 28 degrees, which has meant shirtsleeves and no ties for Japanese businessman, normally the most conservative of dressers. Business people everywhere are sporting “Super Cool Biz” badges to show they have embraced the energy-saving mantra.

The effect has been dramatic. Peak electricity demand has dropped 30% compared to last summer. There is a real feeling of national solidarity as the company copes with the problems of reduced energy capacity.

How would Australia cope in similar circumstances? I was asked by a Japanese colleague to suggest what we might do if, say, some natural disaster took out a similar amount of our generating capacity.

My feeling is that Australia would cope rather well. Nearly 90% of our electricity generating capacity is covered by the National Electricity Market (NEM), which covers all of Australia except Western Australia and the Northern Territory. Capacity can be switched around the NEM, so a local problem would allow a national response. The Australian Energy Market Operator (AEMO), which manages the NEM, would be able to apply and enforce any rules it deemed suitable, including mandating the sorts of cuts that have been made in Japan.

I believe Australian consumers would also embrace voluntary cuts. When faced with a crisis or a national call to action, Australians respond well – the Sydney Olympics were a triumph of organisation. Daylight saving time was extended, Sydney’s traffic patterns were altered, and the population made a genuine effort to make things happen. Australians can be a cynical lot, and we certainly lack the social cohesion of Japan, which is one of the world’s most homogenous societies, but we also have a community spirit that is missing in fragmented societies like the USA and the United Kingdom.

Cutting 15% off Australia’s peak load would be relatively easy to implement and enforce. We have the regulatory framework, the infrastructure, and under appropriate circumstances we would have the national will. It is unlikely a tsunami will roll up the Hunter Valley, or an earthquake shatter the vast brown coal generators of Gippsland, but if that were to happen I’m sure we’d cope.

The real challenge, which we are facing right now, is how we deal with incremental change. Australia will have to wean itself off coal generation at some time in the future. We are making half-hearted moves in that direction, but in the absence of a compelling event our efforts are feeble. Perhaps we need something like the scale of the Japanese emergency to force us to act.

Cisco withdraws from REM market

Cisco has followed in the recent footsteps of Google and Microsoft by announcing that it is withdrawing from the Residential Energy Management (REM) market. The details and rationale were explained in a blog from Laura Ipsen, Senior Vice President in Cisco’s Smart Grid business.

“Over the past two years the home and building energy management markets have evolved in such a way that we believe we can provide more value to our customers and the industry by enabling interoperability through our core networking products and solutions as part of our integrated architecture within the broader Smart Grid effort.

“For building energy management, this means we are actively pursuing several strategic options for Cisco’s Network Building Mediator and Mediator Manager product line, with an emphasis on minimising the impact on current customers, partners and employees. For energy management in the home, we will transition our focus from creating premise energy management devices to using the network as the platform for supporting innovative applications and architectures that will improve our customers’ value proposition in the consumer energy management market”.

Cisco has had an end-to-end approach to Smart Grids through its Connected Grid strategy, with REM one of the building blocks. There were a number of announcements a year or so ago, including a touch-screen in-home display (IHD) and energy management software for monitoring and controlling energy use. The IHD connects to smart meters, with Ethernet and WiFi connectivity to a home network.

Cisco’s withdrawal from the market is less of a surprise than Microsoft and Google’s withdrawals (see SER blog, July 2011). Cisco is well placed to provide the network and connectivity capabilities across the Smart Grid infrastructure, but REM is a more specialised area and clearly not core business for the company.

REM will be a significant market in the long term, but it is currently fragmented and immature. That is likely to be the case until smart meter and Smart Grid technology is more settled. Already there are many specialist companies offering a range of solutions. It is possible Microsoft and Google will re-enter the market through acquisition, when the dust has settled, but it doesn’t really make much sense for Cisco to be there at all, except to provide the connectivity.

A version of this article first appeared in The Green IT Review (www.thegreenitreport.com)

Climate Scepticism on the Rise

Most Australians believe that climate change is a major problem to the planet, but an increasing number of people are sceptics or denialists. The chart shows the responses to the question “Do you agree or disagree with the statement that climate change is a major problem to the planet?” over the four years Connection Research has been asking the question in surveys.

The results shows a steady increase in denialism (“strongly disagree”) and scepticism (“disagree” and “neutral”). The number who “agree” has remained about the same, while the number of those who “strongly agree” has declined sharply. The most recent results are from Connection Research’s Interconnected Home survey, which polled 5,333 households. All the surveys were of at least 2,000 people.

The results indicate the success of the denialist campaign. It is led by News Limited media, many on the conservative side of politics, and populist radio shock jocks. Even media organisations such as Fairfax and the ABC have contributed, by giving equal coverage to loony antiscientists like Christopher Monckton.

Connection Research has commented elsewhere on the psychology and politics of climate change denialism. The debate, which should not be a debate at all, is a classic example of how obfuscation and double-think can drive out science, facts and rationality. The is room in science for scepticism, indeed that is one of the scientific method’s defining characteristics, but the methods being employed by those who refuse to believe the evidence goes way beyond that.

There is some good news. There are still many more “warmists” than denialists. Two thirds of people still agree climate change is a problem, and the number who strongly agree has stopped declining. But that still leaves many denialists – enough to give the semblance of a balanced debate.

Is UCG the answer?

Brisbane company Carbon Energy (www.carbonenergy.com.au) has announced it has started generating electricity at its 5MW Bloodwood Creek facility near Dalby, using underground coal gasification (UCG) technology. The company has a contract with Ergon Energy to start supplying electricity to the grid in October of this year.

Carbon Energy’s technology is very different from the better known coal seam gas (CSG) method of extracting energy from the gas deposits which accompany all coal deposits. CSG recovers gas held in fractures of underground coal seams by water and ground pressure, and involves drilling into the coal seam and pumping groundwater in to force the gas to the surface. It often involves the controversial process of “fracking” – fracture stimulation – which fractures underground coal seams in order to increase the flow of gas and water.

UCG, by contrast, transforms solid coal into gas on site. A small amount of natural gas is pumped down ta well to heat the coal and initialise the gasification process. Air, or a combination of oxygen and steam, is then pumped into the coal seam, which initiates a reaction that converts the coal into gas. The technology was used in Soviet Russia in the 1930s, but never achieved large scale production because of the difficulty in maintaining a consistent quality of gas throughout the extraction process.

Carbon Energy was spun out from the CSIRO in 2007 to commercialise the process, which CSIRO had been working on for ten years. They key was to ensure a consistent flow of gas, necessary to bring the technology to commercial reality. That has been done. The technology creates “syngas”, a mixture of carbon monoxide and hydrogen, which can be used to generate electricity by conventional means. Carbon Energy has pilot projects in the USA, Turkey, Chile and India. The company is listed on the ASX (CNX), with Incitec Pivot as its biggest shareholder.

UCG shows promise. It cannot be used on all coal seams, but has few of the environmental problems of CSG. The commercialisation of the technology through Carbon Energy’s relationship with Ergon is extremely promising, and may lead to large scale production across Australia.

Smart Meters in Texas – Lessons for Australia?

The US State of Texas is often mentioned as having the most similar electricity market to Australia’s. Since 2002 most of Texas has been a single partially deregulated market, similar to eastern Australia’s National Electricity Market (NEM). Each market serves a population of about 20 million people.

So what is happening in Texas with smart meters may be a good indicator of what might happen in Australia. A recent survey in Texas of 500 participants in a smart meter and in-home display (IHD) pilot program showed that 71% of customers reported changing their electricity consumption behaviour as a result of having access to their energy use data.

The survey was carried out on the back of the implementation of smart meters and smart grid technology, partly funded with a $200m Smart Grid Investment Grant from the US Department of Energy. The survey responses showed that:

• 83% of respondents reported turning off lights at night or when not in the room
• 51% adjusted the temperature on their thermostat
• 93% reported they are satisfied with their in-home display, and 97% reported they will continue using it.

To date, wholesaler CenterPoint Energy has installed nearly 1.5 million smart meters in its 2.2 million have a smart meter can get detailed information on their electric usage by visiting the SmartMeterTexas.com website. In the future they will have the option of purchasing an IHD, providing them with up-to-the-minute usage information.

There is some scepticism about the use of smart meters, particularly if all they do is provide information about energy use, as in this case. Many customers obviously find it interesting to see how and when energy is used and the impact changes in use can have, but there is no guarantee that the novelty will not wear off. This survey confirms that this would show if it has had any long term effect on behaviour.

Smart meters may have some impact on their own, but they are likely to only really come into their own when they are combined with other Smart Grid technologies that offer differential pricing, so customers can actively manage energy use to save money. Without that, the best bet to reduce usage is to provide online analysis that shows the customer’s electricity use compared with figures for neighbours. Wanting to do better than others (and save more money than they do) is a powerful incentive.

A version of this article first appeared in The Green IT Review (www.thegreenitreport.com)

Green IT – Out of Sight, Out of Mind

Australian IT departments are not taking Green IT seriously. Most CIOs say they want to be green, but they are doing very little about it. And the main reason is that do not have to pay for the power their computers use – it is hidden away in the corporate electricity bill.

Less than one percent of Australian IT departments include the power consumption of IT in their IT budgets. And guess what – those few that do are on average much more energy-efficient than those that don’t.

The cost of Green IT
is hidden in the IT budget

Connection Research has devised the IT Sustainability Index (ITSx – formerly known as the Green IT Index), which rates organisations’ effectiveness in five different areas of IT Sustainability –Lifecycle, End User, Enterprise, Enablement and Metrics. The average ITSx in Australia this year is 52.8, down a little from 53.9 in 2010. But the average rating for those who include the cost of IT energy consumption in the IT budget is a whopping 82.3 – nearly 30 points higher.

For those who have no idea how much power IT is consuming, the figure is just 46.1. And for those who know who much power IT is consuming, but do not include it in the IT budget, the figure is 60.3.

The conclusion is obvious. The higher the visibility of IT’s power consumption, the more effective an organisation’s IT Sustainability strategy will be. And that’s across the board, not just in energy efficiency. It shows up in such areas as green procurement and using IT as a low carbon enabling tool.

The Carbon Price and Why We Need it

The government has released its draft carbon price bill. The proposed legislation is actually contained in 14 separate bills, which the government refers to as its “Clean Energy Legislative Package”. The most important are:

•  The Clean Energy Bill 2011, which sets up the carbon price mechanism.
• Clean Energy Regulator Bill 2011, which establishes a regulatory body to administer the mechanism – the so-called “carbon cop".
• The Climate Change Authority Bill 2011, which establishes a new authority to advise the government on the future design of the carbon price mechanism.
• The Clean Energy (Consequential Amendments) Bill 2011, amending existing legislation in the area to align it with the new bills.

The government is seeking comments on the draft bills until 22 August. It will then finalise them and attempt to get them through both houses of parliament later this year, so they can take effect from 1 July next year.

There have been the predictable howls of outrage from the opposition and the usual suspects. They have relied on their favoured tactics of obfuscation and downright lies to discredit the bill’s aims. Few of their arguments stand up to close scrutiny – the consensus of economists, scientists and most of those in the business world is that Australia needs a price on carbon, and that the community needs the certainty that such a price will bring.

The government is attempting to use – shock horror – facts and logic to counter these arguments. Number one salesman is Climate Change Minister Greg Combet. He has been travelling the country explain the legislation to whoever will listen. His, and the government’s, arguments are nowhere better put than an address he gave to the Sydney University Law School on 27 July.

“It is important to note that the Government’s clean energy future policy is a classic example of evidence-based policy,” he said. “In this case, the evidence is the science – another feature of the current debate that has also sadly attracted an extraordinary amount of mindless opposition. Climate change is on the national and international agenda because of the strong scientific consensus.”

Combet then outlined the arguments contained in the Climate Commission’s recent report “The Critical Decade”, which are worth repeating because they are a superb summary of the reasons action is necessary:

• There is no doubt that the climate is changing. The evidence is overwhelming and clear. 

• It is beyond reasonable doubt that human activities - the burning of fossil fuels and deforestation - are triggering the changes we are witnessing in the global climate.

• With less than 1 degree of warming, the impacts of climate change are already being felt in Australia and around the world.

• The risks of future climate change – to our economy, society and environment – are serious and grow rapidly with each further increase in temperature.

• Minimising risks requires deep and ongoing transformational shifts to reduce greenhouse gas emissions.

• We need to begin now to make these transformations; to decarbonise our economy and move to clean energy sources.

It’s really that simple. Time to cut to the chase and get on with the job.

A Green Wave at Swinburne

Swinburne University of Technology in Melbourne has opened an Energy Management Research Centre (EMRC). “The facility will be pioneering in intelligent management of home energy use, and will be an international showpiece of technology, education, and collaboration,” says Professor Leon Stirling, Dean of Swinburne’s Faculty of Information and Communications Technologies.

The EMRC will contain an R&D centre, a demonstration and training facility, and a seminar and conference hall. It will feature energy conservation demonstrations showcasing energy efficiency technologies from Australia and around the world. The showpiece of the centre will be a 3D “tele-immersive” Energy Efficiency Demonstration Room that will be used to demonstrate the real-time impact of energy conservation measures and technologies. The centre will be located at the university’s Hawthorn campus.

greenwavereality.com

Swinburne has partnered with Danish-American residential energy management (REM) vendor GreenWave to open the centre. GreenWave has developed a range of REM products, including in-house displays (IHDs), energy monitoring devices, and an Internet energy management platform.

GreenWave does not sell direct to consumers, but intends to partner with energy suppliers to find larger markets for its products. Many of its senior executives, including CEO Greg Memo, and board members come from Cisco. Given Cisco’s interest in the REM market, and its track record of acquisitions, it would not surprise to see Cisco make a bid for GreenWave when the time is right.

Meanwhile, GreenWave has a beachhead in Australia with the EMRC at Swinburne. No deals with Australian energy distributors have been announced, but you have to ask yourself why a start-up REM company based in Irvine, Calfornia, with manufacturing operations in Singapore and marketing out of Denmark, would make the effort.

Expect to hear a lot more of GreenWave (or will it be Cisco?)

The Brave New World

The Carbon Price has been announced. Everything since then is predictable – the wails of doom from the denialists and cynics, the shrill tones of outrage from the selfish and short-sighted, the promises of a bright future from the optimists and hopeful, the cries for more from the environmentalists and primitivists.

And the calls for calm from the realists. Climate change is happening (average global temperatures are now up nearly one degree Celsius), and the predicted severe weather events are more frequent. Climate change is caused by human activity – we continue to belch carbon dioxide into the atmosphere. Australia is not “leading the world” in anything other than per capita emissions. And the tax will add less than 1% to prices, will cost the government money in the short term, and will reduce the profits of Australia’s top hundred companies by less than 3%.

It is an unfortunate fact of life that those adversely affected by change make a much greater noise than those who benefit. Their noise is even louder when it is encouraged by fear mongering from self-serving politicians (and yes, we’ll name names – Tony Abbott, Joe Hockey, Greg Hunt, Barnaby Joyce and more than a few others). They complain even more when their selfishness is abetted by ignorance and outright lies.

Connection Research is no fan of Julia Gillard and this government’s atrocious handling of the Climate Change debate. But the upshot is a much needed price on carbon – the main reason the planet finds itself in its current precarious state is the lack of any linkage between the damage caused by carbon emissions and the cost of repairing that damage.

It is likely the public debate will become even uglier, if that is possible. It is even more likely that it is already too late to do anything that will halt the planet overheating, with dire consequences.

But if we do not try we will stand condemned by history.

Powermeter and Hohm are no more

Google has pulled the plug on its PowerMeter residential energy management (REM) platform. A few days later, Microsoft – ever the copycat – did the same to its Hohm product.

These two initiatives never made any impact in Australia, but in the USA they were hailed as harbingers of things to come in this important space. Now they are no more. What went wrong?

The main reason is that it was simply too early. REM is a very immature market, with very few users. Indeed, very few consumers are even aware of the concept. Connection Research believes this will be an enormous market in coming years, but as our 2010 report on the subject (Residential Energy Management in Australia) found, there is currently very little interest in or knowledge of the subject.

Google’s PowerMeter and Microsoft’s Hohm, while good ideas, also didn’t really measure up technically. They didn’t report on appliances individually, the data was not in real time, and they did not stand alone – they relied on alliances with utility companies. Only one such company used PowerMeter on any sort of scale at all – San Diego Gas & Electric (SDG&E), which had a large scale trial with 11,000 users. Microsoft had a few pilots, mostly with utilities in its local Seattle area, but they never achieved critical mass.

Many SDG&E customers complained about the inaccuracy of data available on PowerMeter, and their inability to use it in any practical way. Here’s some comments from SDG&E customer “Susan C”, on GigaOm’s Cleantech blog:

“It was generally very inaccurate with frequent gaps in data and large errors compared to the actual bills. It did not reflect SDG&E’s complicated tiered billing structures and had no proactive notification mechanism so consumers had no idea how much they were spending or how to avoid advancing to higher billing tiers. Finally, it had no way of letting users know what was causing spikes in usage because it only monitored the whole home. Going out of one’s way to access old, inaccurate, incomplete energy usage data was a complete waste of time.”

Which is not to say it didn’t have promise. It is in the nature of new technologies that some variants of it fail. Often this because they are technically not up to scratch, but more often it is because the business model doesn’t work. In PowerMeter’s case, and in Hohm’s case, both were a problem.

Google and Microsoft’s withdrawal from the market does not indicate any problems with REM as a concept. It is simply a minor stumble for a technology which will become all pervasive within a few years.

Australian Carbon Ratings Report

The impact of the Carbon Price on the ASX100 will be felt mainly by those companies involved in the materials sector, such as Rio Tinto and BHP Billiton. But even the profits for these companies will be largely unaffected.

Australian Carbon Ratings is a new report released by Connection Research in association with SuperRatings, which compares the carbon emissions of the ASX100 with their revenues and net profit. The report shows that the financial impact of carbon pricing overall will be comparatively small, amounting to between 2.95% and 5.08% of net profit per tax subject to the economy's performance. 

Report author William Ehmcke believes the report is needed to help Australian investors understand the impact of the Carbon Price on individual businesses. "The Australian Carbon Ratings report will provide significant details about the companies and sectors best positioned for a Carbon Tax future. 

"Many of the ASX100 companies implemented carbon reduction targets as a risk management effort in response to the CPRS white paper announced in December 2008. For those with reduction plans in place, the effect of carbon pricing will be further reduced." 

The data was obtained from research into reports released by the Carbon Disclosure Project, reports to the Australian Government's NGER scheme, and information published by the companies themselves. 

To obtain a copy of the report or view the extract summary, visit www.carbonratings.com.au