Australia Energy efficiency report

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1 Australia Energy efficiency report Objectives: No energy savings target Overview - (%/year) Primary intensity (EU=1)¹ % + CO 2 intensity (EU=1) % - CO 2 emissions per capita (in tco 2 /cap) % - Power generation - (%/year) Efficiency of thermal power plants (in %) % - Rate of electricity T&D losses (in %) % + CO 2 emissions per kwh generated (in gco2/kwh) % - Industry - (%/year) Energy intensity (EU=1) % + Share of industrial CHP in industrial consumption (in %) % ++ Unit consumption of steel (in toe/t) % + * and - for steel ++ Among the best performing countries + Above the EU average 1 - Below the EU average 1 --Among the worst performing countries Latest update: March The European Union, as the best performing region, is used as the benchmark.

2 1. Overview 1.1. Policies: national strategy for energy efficiency by 219 The Australian Ministerial Council on Energy endorsed the National Framework for Energy Efficiency (NFEE) in and approved the implementation of a number of energy efficiency packages. Stage 1, which came to a close in June, included nine policy packages. Stage 2 started in July, with five new energy efficiency measures: expanding and enhancing the Minimum Energy Performance Standards program for electrical appliances and gas appliances; developing a heating, ventilation and air conditioning (HVAC) high-efficiency systems strategy; phasing-out of incandescent lighting in the residential sector; providing government leadership to stimulate energy efficiency in buildings through green leases; and developing measures to improve the energy efficiency of water heaters. The National Strategy for Energy Efficiency (NSEE), released in, incorporates and builds on measures from the NFEE. It sets out 37 measures to improve energy efficiency, and is framed around four key themes: assisting households and businesses in the transition to a low-carbon future; reducing barriers to the uptake of energy efficiency; making buildings more energy efficient; and making sure the government leads the way and works in partnership with the different sectors. NFEE introduced new standards for air conditioners by increasing the efficiency requirement by a further 1 percent as of October. The Australian government has agreed to investigate a National Energy Saving Initiative (ESI), similar to the white certificate schemes currently operating in Victoria and New South Wales. The government has started the consultation and is expected to make a final decision on its adoption in 213, conditional on the agreement of the Council of Australian Governments. As a part of its Clean Energy Legislative Package announced in July, Australia has introduced a carbon pricing mechanism that started on July 1, 212. It applies to Australia s biggest emitters (<25 ktco2e/year). From mid-212 until mid-215, the price is A$23/tCO2e (US$27/tCO2e). Between 215 and 218 the price will be set by the market, with price floors and price ceilings. Thereafter, the price will be fully determined by the market, without limits Energy consumption trends: soaring energy consumption Australia s per capita energy consumption is relatively high, at 5.4 toe, ie, almost three times higher than the world average and 36 percent higher than the OECD average. Energy consumption increased regularly over the - period, at a pace of 2. percent/year, and since then has been decreasing at an average pace of 2.3 percent/year. The share of industry (including non-energy uses) in total energy consumption dropped slightly, from 27 percent in to 24 percent in, while that of the power sector increased from 26 percent to 3 percent. Out of the six states, four represent 9 percent of the total national energy consumption: New South Wales (27 percent), Victoria (23 percent), Queensland (21 percent) and Western Australia (19 percent). Figure 1: Energy consumption trends by sector Other Industry Power generation 1 Mtoe Australia Country reports 2

3 At 9,2 kwh in, per capita electricity consumption is more than three times as high as the world average and 19 percent higher than the OECD average. Total electricity consumption increased rapidly until (2.4 percent/year between and ), and has been decreasing at the slow pace of.7 percent/year since then. The share of electricity in energy consumption is increasing and was around 22 percent in. Industry is the main user of electricity, with 4 percent of electricity consumption in. Figure 2: Electricity consumption trends by sector 25 2 Industry Others TWh Energy efficiency trends: energy intensity is high, but being reduced significantly Total energy consumption per unit of GDP (primary energy intensity), measured at purchasing power parity, is slightly above the OECD average and 16 percent below the world average. It decreased by around 1.8 percent/year, on average, between and, and at a slightly slower pace before. Since, industry and the power sector have each contributed to about 4 percent of that decrease. Figure 3: Energy intensity trends.% % %/year -1.% -1.5% -2.% Other sectors : buildings, transport and agriculture Industry Power generation Australia Country reports 3

4 2. Power generation: slight increase in energy efficiency since thanks to gas The efficiency of the power sector showed a decreasing trend marked by strong fluctuations until, and has stabilized since then. Since, the additional thermal capacity has been made up of gas turbines and, more recently, of gas combined cycles. At approximately 36 percent, the average efficiency of thermal power generation is not very high, mainly because of the important role played by coal in the country s fuel mix. Figure 4: Efficiency of power generation and thermal power plants Figure 5: Thermal electricity capacity by technology Steam Gas turbines Combined cycles % Total power generation Thermal power plants GW The rate of transmission and distribution losses (T&D) stood at 6.5 percent in, ie, below the world and OECD averages, and on a par with the European Union average. Figure 6: Electric T&D losses % Australia Country reports 4

5 3. Industry 3.1. Policies: investment incentives and standards Since, the Energy Efficiency Opportunities (EEO) program mandates large energy-using businesses (with a consumption above.5 PJ/year, ie, 11.9 toe/year) to improve their energy efficiency. It requires businesses to identify, evaluate and report publicly on cost-effective energy savings opportunities. The Continuing Opportunities Report shows that, over the past five years, the 252 companies involved have saved around 89 PJ (2.1 Mtoe), which represents around 1.5 percent of Australia s total energy use. As from July 1, 212, medium businesses are able to commit to the program on a voluntary basis. The Clean Energy Future (CEF) plan announced in July by the national government has introduced several programs to promote energy efficiency, mainly in industry. The CEF plan provides financial support to businesses and industry through the Clean Technology Program (A$1.2 billion (US$1.4 billion) over a six-year period from -12 to ). This program is divided into three sub-programs: the Clean Technology Investment Program (A$8 million; US$94 million), the Clean Technology Food and Foundries Investment Program (A$2 million; US$23 million) and the Clean Technology Innovation Program (A$2 million, started mid-212). Each sub-program provides grants for investments in energy efficient capital equipment and low emissions technologies, processes and products in manufacturing industries. Since May 1, 212, the Steel Transformation Plan (A$3 million; US$35 million) aims to assist the steel industry transition to an efficient and economically sustainable industry in a low carbon economy. The Minimum Energy Performance Standards (MEPS) program aims to increase the energy efficiency of products used in the manufacturing sectors (eg, three-phase electric motors) Energy consumption trends: stabilization of industrial energy consumption Industrial energy consumption increased at the pace of 2 percent/year between and, and decreased by.4 percent/year, on average, over the period -. Figure 7: Trends in industrial energy consumption Mtoe Natural gas is the main energy source in industry. Its share has increased slightly since and has remained stable at around 33 percent since. Electricity use has grown slightly over the period: in it accounted for 27 percent of the sector s energy consumption. The share of coal dropped from 26 percent in to 16 percent in. Meanwhile, the shares of oil and biomass have increased slightly, and currently stand at 16 percent and 9 percent, respectively. Australia Country reports 5

6 In, energy-intensive industries accounted for around 4 percent of industrial energy consumption, compared with 43 percent in. The shares of the non-metallic minerals and chemical industries have increased slightly over the period, reaching 11 percent each in. The steel industry s share showed a substantial decrease, from 17 percent in to 12 percent in. The share of the paper industry is around 5 percent. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Figure 2: Energy consumption of industry by source % Biomass Heat Electricity Gas Oil Coal/Lignite 1% Figure 9: Energy consumption of industry by branch 9% 8% 7% 6% 5% 4% 3% 2% 1% % Other Paper Non metallic minerals Chemical Steel 3.3. Energy intensity trends: larger improvements achieved in recent years Industrial energy intensity decreased at the rapid pace of 2.7 percent/year between and. Energy efficiency improved in all energy-intensive branches and especially in the steel and cement industries, which achieved a 2 percent/year reduction in their specific energy consumption. The decrease in the specific consumption per ton of paper was even higher, at slightly over 4 percent/year, but had a smaller impact. The chemical industry showed the poorest performance over the period, with a.6 percent/year reduction in the energy consumption per unit of value added. Figure 1: Trends in the energy intensity of industrial branches % % %/year -2% -3% -4% -5% Total* Steel Chemical Cement Paper *Incl uding construction and mining Australia Country reports 6

7 Combined heat and power generation represents about 6 percent of the sector s electricity consumption, which is equal to the world level but only half the OECD country average. Figure 3: Share of industrial CHP in industrial consumption 8% 7% 6% 5% 4% 3% 2% Australia Country reports 7