Energy Reduction

<html><body>
<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Companies could improve their profits by 2-10 percent each year by saving energy. That’s just one of the findings of ClimateWorks Australia’s Energy Productivity Index, a world-first attempt to assess companies' energy performance and help investors make better decisions.
Investors are increasingly engaging with companies to address the risks associated with climate change. Extreme weather events, carbon-intensive assets and greenhouse gas emissions are becoming part of a routine risk assessment on the impact of a company’s profitability.
While a company’s energy use can have a significant impact on its bottom line and environmental credentials, energy productivity and efficiency have traditionally been difficult for investors to assess. This is mainly due to a lack of tools to measure and assess energy use and poor levels of disclosure by companies.
My colleagues and I have developed a guide to help investors figure out how potential investments are performing. We assessed 70 companies across six industrial sectors: airlines, automobiles, paper, steel, chemicals and construction.
<h2>Saving energy …</h2>
Many industrial companies spend a huge part of their operating expenditure on energy – typically more than 15 percent.
Energy productivity generally refers to the amount of revenue per unit of energy, so improving energy productivity can greatly improve a business’s investment value.
We found that more than 70% of the companies analysed have significant room for improvement in their energy use. Even more startling is the wide variation between companies in the same sector.
In some sectors, the leaders are achieving energy productivity levels up to five times the levels of poorer performers.
For example, in the automobile sector, Toyota produces eight times more vehicles per gigajoule of energy used than the least productive company, Daimler.
<h2>… making money</h2>
We also found that improving energy efficiency (by using less energy) could significantly boost a company’s profit. Of all the sectors analysed, airline companies reported the largest savings.
United Continental reported annual savings of US$343 million in 2014. This was achieved through initiatives that reduce fuel use, such as improved flight planning, replacing old planes, washing engines and installing winglets.
And despite operating in an energy-intensive sector, steel company Arcelor Mittal achieved almost US$200 million in energy savings in 2014.
The analysis also shows that one-third of the companies analysed could boost their profit margins by more than 5% a year if they matched the performance of leaders in their sector.
Even accounting for upfront capital costs needed to achieve best practice, energy efficiency can still increase profits by 2-10% each year. Most energy initiatives could be paid off in less than three years.
Even a 2% improvement in profits for companies in the automobile sector would be equal to about US$100 million. To achieve an equivalent increase in profits from revenue growth, a company would need to sell an extra 90,000 cars each year.
<h2>Ranking companies</h2>
Several factors affect a company’s energy performance. We looked at three:
<ul>
<li>
Resilience to energy costs measured through how much a company spends on energy and its profitability. A company that spends less on energy and has greater profitability is more resilient to changes in energy prices.
</li>
<li>
Energy productivity measured by a company’s current ability to generate revenue or increase its production per unit of energy used.
</li>
<li>
Energy efficiency measured by a company’s efforts in identifying and implementing energy savings. We included the extra financial gain of a company matching the energy efficiency of leading performers.
</li>
</ul>
While we were able to rank many companies, we found that many others are not disclosing sufficient data on energy use to be assessed. Of 181 companies that reported in the six sectors analysed, 73 had incomplete or insufficient data for benchmarking. Much improvement is needed on data availability and data quality.
<h2>The global goal</h2>
While improving energy performance may be great for the bottom line, there’s another big reason energy use is so important. According to the International Energy Agency, energy-efficiency gains could achieve about 40 percent of the emissions reductions required by 2050 to limit global warming to less than 2℃.
Engaging with companies in their portfolios to improve their energy productivity is a measurable and profitable way to reduce emissions and avoid dangerous climate change.
Improving energy productivity has benefits not just for those investors and companies directly involved, but for all of us.
Wei Sue is business analyst, ClimateWorks Australia, Monash University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/wei-sue-269412" target="_blank">here</a>.
</body></html>

jchancellor-FAypfDUnLy

Reducing energy use is a big winner for business and the climate

<html><body>
<img src="https://counter.theconversation.edu.au/content/65712/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Saving energy is a win-win. You reduce greenhouse emissions and you reduce your energy bills. However, improving energy efficiency is not an option for a significant number of people in Australia – renters. 
This is important not only because rental properties account for 29.6 percent of Australian houses, or 2.3 million homes, but because the high proportion of low-income households in rental properties are particularly vulnerable to rising energy prices.
<h2>Those who can, and those who need to but can’t</h2>
In Victoria, only 58 percent of private and 55 percent of public rented homes have some insulation. In contrast, 95 percent of owner-occupied homes have insulation. 
In 2009 the Victorian government found the use of electric heaters is much higher in rental properties, and that half of all rental households report difficulty heating their homes.
The relationship between low incomes and higher rates of renting is a long-term trend in Australia. More than 20 percent of long-term renters regularly pay more than half of their income on rent, and 17 percent of all private renters are on government pensions or allowances. The proportion of people with a disability, a group with higher-than-average energy needs, is also much higher in rental properties.
As energy prices continue to rise, the gap between those who can afford to improve the energy efficiency of their property and those who cannot is growing. Those who are most vulnerable to energy price increases are the people with the least capacity to improve the energy efficiency of their home.
<h2>What is getting in the way?</h2>
Internationally, split incentives (when two parties engaged in a contract have different goals and levels of information) are recognised as a key barrier to improving energy efficiency in rental properties. 
The International Energy Agency estimates that, globally each year, over 3,800 petajoules of energy (roughly 65 percent of Australia’s total energy use in 2013-14) is not saved due to split incentives.
In Australia, several additional legislative barriers prevent improvements to rental properties. 
For example, landlords can offset the entire cost of any repairs made to rental properties against their income in the same financial year. But any repair has to be like-for-like.
So if a gas hot-water system broke down in a rental property and the landlord decided to replace it with a solar hot-water heater it would be classed as an improvement, not repair. The entire cost of improvements cannot be offset in the same financial year, which deters landlords from replacing broken appliances with more efficient versions.
Many state tenancy laws require tenants to return the properties to the same condition as when they rented the property. This means even willing renters are discouraged from improving properties themselves, or engaging in energy efficiency programs offered by external parties.
The majority of leases in Australia are for six to 12 months. In Victoria you cannot get a lease longer than five years. 
Therefore, tenants who do have the income and permission to improve the energy efficiency of their properties cannot be sure they will live in the property long enough to pay off the initial investment through energy savings.
<h2>Hope for change</h2>
In our 2015 study we aimed to identify solutions for the barriers to energy efficiency in rentals. We surveyed 230 tenants and landlords and interviewed five real estate agents.
We found two possible solutions that received a high degree of support from all stakeholders. 
The first solution, which received over 90 percent support from both landlords and tenants, is to change the classification of energy efficiency improvements to repairs under tax law. This would allow landlords to offset the entire cost of the improvement in the same financial year. Real estate agents were also convinced this solution would work, with no repercussions for tenants.
The second solution that all stakeholders supported was mandatory minimum efficiency standards for rental properties. Over 90 percent of tenants and 70 percent of landlords supported this solution. 
However, fewer landlords strongly disagreed with a mandatory standard if it was combined with tax offsets for energy efficiency improvements. Real estate agents agreed that the combined solution could be effective. 
Interestingly, if the mandatory minimum energy efficiency standard were enacted, it could allow landlords to claim tax offsets for energy efficiency improvements in the same financial year. This is because spending required to make a property satisfy regulatory requirements falls into the repairs classification.
The results of this study show that despite the different goals of landlords and tenants there are combinations of solutions that could overcome the barriers to improving the energy efficiency of rental properties. 
If landlords and tenants can find some common ground, surely politicians across multiple levels of government can work together to find solutions for some of the most vulnerable people in our community.
Robert Crawford is senior lecturer in Construction and Environmental Assessment, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/robert-crawford-14921" target="_blank">here</a>.
Koel Wrigley is community engagement consultant, Capire Consulting Group, University of Melbourne and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/koel-wrigley-301797" target="_blank">here</a>.
</body></html>

Renters are being left out in the cold on energy savings: here’s a solution

<html><body>
GUEST OBSERVER
Energy efficiency is a concern for many strata schemes that we talk to with several schemes recently upgrading their common property to capitalise on new technology and the ability to save money.
This is becoming increasingly important with energy costs rising and councils signing up to carbon emission reduction programs.
For instance the City of Sydney has a Sustainable Sydney 2030 target of 70 percent carbon emission reduction.
An interesting report for the City of Sydney by Wattblock details research on schemes in the City of Sydney and provides ideas of how energy efficiency can be achieved in existing residential buildings by retrofitting existing solutions.
The report can be found <a href="https://www.wattblock.com.au/how-it-works" target="_blank">here</a>
<div class="entry-content">
Christopher Kerin is Sydney Director, Kerin Benson Lawyers and can be contacted <a href="https://kerinbensonlawyers.com.au" target="_blank">here</a>.
<h3 class="r"> </h3>
<div class="entry-meta"> </div>
</div>
</body></html>

Property 101: Energy efficiency and strata schemes

<html><body>
<img src="https://counter.theconversation.edu.au/content/81084/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Household energy use is a significant contributor to global carbon emissions. International policy is firmly moving towards technology-rich, low- and near-zero-energy homes. That is, buildings designed to reduce the need for additional heating, cooling and lighting. They use efficient or renewable energy technology to reduce the remaining energy use.
But what about the experiences of people who live in homes of this standard? Are these homes comfortable, easy to operate, and affordable? Do people feel confident using so-called smart energy technology designed for low energy use? What support systems do we need to help people live in low-energy, low-carbon houses? 
We worked with other Australian and UK researchers to understand what it’s like to live in purpose-built low-energy housing. As part of this project, researchers from Sheffield Hallam University and the University of Salford in the UK visited South Australia to collect data from Lochiel Park Green Village, one of the world’s most valuable living laboratories of near-zero energy homes. 
Lochiel Park’s 103 homes were built in the mid-2000s to achieve a minimum of 7.5 energy efficiency stars. They’re purpose-built to be a comfortable temperature year-round, and are packed with a solar photovoltaic system, solar hot water, a live feedback display to show households their energy use, plus a range of water- and energy-efficient appliances and equipment. Combined, these systems reduce both annual and peak energy demand, and supply much of that energy at a net zero-carbon impact.
To reciprocate, we spent several weeks investigating similar examples of niche low-energy housing developments in the Midlands and the North of England. We listened to the stories of people living in low energy homes, who experience the difference on a daily basis, and from season to season. They help us look beyond the dollars saved or percentage of emissions reduced; for them the impact of low-energy homes is personal.
This research provides new insights into the relationship between people, energy technologies and low-carbon buildings. For example, one elderly householder told us that moving into a dry and warm low-energy home allowed their grandchildren to come and stay, completely changing their life, and the life of their family. 
Low-energy homes create a wide range of physical and mental changes. Several households spoke about health improvements from higher indoor air quality. Even the idea of living in a healthier and more environmentally sustainable home can prompt lifestyle changes – one woman in her mid-50s told us she gave up smoking after moving into her low-energy house because she felt her behaviour should match the building’s environmental design. She also shortened the length of her showers, reduced her food wastage, and lowered her transport use by visiting the supermarket less often.
Purpose-built low-energy homes also give economic empowerment to low-income households. One household told us that savings on energy bills let them afford annual family holidays, even overseas. This economic benefit matches our findings in other Australian examples.
As researchers, we might dismiss this as a macro-economic rebound effect, voiding many of the energy and environmental benefits. But to that household the result was a closer and stronger family unit, able to make the types of choices available to others in their community. The benefits in mental and physical wellbeing are real, and more important to that family than net carbon emission reductions.
Although international policy is firmly moving towards technology-rich, low-energy homes, our research shows that not all technology is user-friendly or easy to understand. For example, some households were frustrated by not knowing if their solar hot water system was efficiently using free solar energy, or just relying on gas or electric boosting. Design improvements with better user feedback will be critically important if we are to meet people’s real needs.
This research highlights the importance, in the transition to low-energy and low-carbon homes, of not forgetting the people themselves. Improving real quality of life should be the central focus of carbon-reducing housing policies.
<a href="https://theconversation.com/profiles/stephen-berry-7082" target="_blank">Stephen Berry</a> is research fellow, University of South Australia.
<a href="https://theconversation.com/profiles/david-michael-whaley-390397" target="_blank">David Michael Whaley</a> is research fellow in Sustainable Energy and Electrical Engineering, University of South Australia.
<a href="https://theconversation.com/profiles/trivess-moore-12580" target="_blank">Trivess Moore</a> is research fellow, RMIT University.
All are authors for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
</body></html>

Low-energy homes don’t just save money, they improve lives

<html><body>
Realestate.com.au have launched Energy Scores, which will for the first time give properties in Australia their own energy efficiency rating.
The tool will give property seekers an indication of how energy efficient their next home could be.
It allows homeowners to better understand energy usage, associated costs and where they could potentially reduce their energy expenditure.
There is also the option for Australians to ‘claim’ their own home, either as an owner or renter, and input more information about their own energy usage to refine the score.
Refined Energy Scores provide users with a more detailed breakdown and analysis of their own energy usage habits.
<img src="/images/2016/11/22/Screen%20Shot%202016-11-22%20at%2011.25.46%20AM.png" alt="">
As energy costs continue to rise across Australia, 76 percent of realestate.com.au users surveyed recently say they are concerned about the cost of electricity, while 79% state that they are actively trying to conserve energy as much as they can1.
To create Energy Scores, realestate.com.au partnered with Tendril, a global expert in data analytics and home energy modelling.
REA Group chief digital officer Henry Ruiz said they know the important of energy efficiency in the home.
"We know that being energy efficient is essential to running any household, and yet it's something we don't often think about other than when we're paying our bills," he said.
"We’re working towards providing a rich view of every property on realestate.com.au.
"Energy Scores may offer deeper insights into the energy efficiency of a property, helping Australians make more educated decisions on their next purchase or rental, or even improve the home they already live in.”
Hunter Albright, Tendril senior vice president of new markets said the company are excited to work with realestate.com.au on this global first.
"We think this approach will provide an engaging experience while educating people on how their homes use energy and the steps they can take to be more efficient," he said.
“Realestate.com.au Energy Scores will enable consumers to better understand energy usage, potential running costs and how to implement potential energy savings.”
To sign up for Energy Scores <a href="https://www.realestate.com.au/property" target="_blank">click here.</a>
</body></html>

Energy Reduction

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Energy Reduction

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News