Page 1913 - Week 05 - Thursday, 3 May 2012
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especially where there is no assurance that they will be installed—we have seen examples where light bulbs or energy saving power boards were handed out and they simply got put in a cupboard or were not used—or, alternatively, the appliances they are replacing will be retired, thereby creating uncertainty around whether the predicted savings of energy are actually delivered and, in the case of non-retirement of appliances, potentially increasing emissions if the consumer ends up with a second fridge or television.
There is also the issue of deadweight around the inclusion of low-cost measures such as these. This is where free market forces—for example, product labelling and existing energy efficiency standards—already exist to encourage the uptake of energy efficient products and, therefore, the energy savings delivered by the scheme are not additional.
In discussing these concerns with the directorate, it became apparent that the design of the energy savings targets and the assignment of low abatement scores to appliance-based activities will preclude suppliers from focusing their efforts upon such measures. To do so would risk them not meeting their targets. The requirement for annual review of the scheme also enables the targets to be revised in order to counter any over-reliance upon these what might be considered to be softer abatement measures.
We also were keen to ensure that abatement methodologies are rigorous so that the integrity of the scheme could be assured. The abatement scores for the measures are based on extensive modelling undertaken for Victoria’s retailer obligation scheme and the figures have been remodelled for the ACT’s climate. The success of the Victorian scheme provides us with greater confidence in the scoring. As for the option for suppliers to develop their own methodology, which is contemplated under the legislation, the high cost involved in doing so would preclude most from attempting this. However, where new methodologies are proposed, the scheme requires that they be comprehensively assessed by the scheme administrator, thereby reducing the risk of inconsistencies and again ensuring the integrity of the scheme.
The next issue we were interested in was the exclusion of energy audits. Our initial view was that the exclusion of energy auditing from the scheme may be unwise as to have it included could help to prioritise the uptake of eligible activities and avoid over-promotion of low-abatement measures. Auditing has certainly been a core requirement of the South Australian scheme on which our proposed scheme is modelled.
Our discussions with the directorate and our further consideration and research around the South Australian scheme revealed that the inclusion of this requirement in South Australia has been received poorly by industry, who find it overly burdensome. In some ways it counteracted the notion of the market-based model, where the most efficient and cost-effective measures were pursued. Given that the audit itself does not guarantee energy savings and given that research indicates retailers will still use audits regardless of whether it is a scheme requirement, the rationale for excluding this requirement is one that we can accept.
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