Report: Why Australia needs to double energy productivity

Australia could double its energy productivity by 2030, a new ClimateWorks report has found, and energy efficiency measures in homes, commercial buildings, cars and industrial settings could get us halfway there.

According to the report, there are numerous benefits to increasing energy productivity – the amount of GDP created for each megajoule of energy consumed – including increased energy security, international competitiveness and overall productivity, as well as a decrease in carbon emissions.

Australia needed to employ a strategy and target now, the report said, as it currently lagged behind most OECD countries, who were also improving energy productivity at a faster rate.

The US has already enacted a target to double energy productivity by 2030, thanks to a campaign by the US Alliance to Save Energy.

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Its target is expected to save the country US$327 billion annually in avoided energy costs and create 1.3 million jobs.

According to ClimateWorks, if Australia were to adopt a similar national energy productivity target, it could increase its economic output from 24.3 cents of GDP per megajoule in 2010 to 47.9 cents of GDP in 2030 – a 97 per cent improvement.

“The report shows about half of the potential increase in energy productivity can be achieved through energy efficiency activities in our homes, offices, buildings, vehicles and industries,” ClimateWorks executive director Anna Skarbek said.

Examples include improvements in data collection and analysis, improved controls and automation systems, advanced manufacturing such as 3D printing, heat pumps and geothermal, innovative building design and LED lighting installations and retrofits. Additional benefits from these measures include reduced exposure to energy price increases, reduction in attraction and retention costs for offices in high-performance buildings, reduced health costs from improved indoor air quality, increased property value, reduced maintenance for LED lights and reduced exposure to emissions-related cost.

“A further 36 per cent of the potential can be realised by switching from old fossil fuel generation to more efficient technologies such as gas co-generation and renewables and reducing energy losses that occur through the energy distribution process,” Ms Skarbek said.

“The remaining potential can be achieved through electrification in the transport and industry sectors. For example, switching to electric cars or using electric conveyors instead of mining trucks to move materials.”

Ms Skarbek said it was important for Australia to commit to a national energy productivity target as it currently lagged behind many other countries and risked its global competitiveness. The improvements, she said, could be made using technologies that are already available or in development.

ClimateWorks head of research Amandine Denis said Australia in 2011-12 was spending $120 billion a year on energy across the economy, equivalent to 8.2 per cent of GDP.

Decreasing this percentage – particularly through energy efficiency means – would help homes and businesses that had been hit with rising energy costs.

“Improving energy productivity would also help reduce Australia’s increasing reliance on oil imports, which constitute over 90 per cent of our oil use today,” she said.

• Read Australia’s Energy Productivity Potential