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.