Page 1919 - Week 05 - Thursday, 3 May 2012
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predict that this may result in a doubling of wholesale gas prices, flowing through to the cost of heating and cooling our homes and our business, at the cost of generating electricity.
Inefficient use of energy compounds these costs and drives up wasteful generation and network investment and results in increased emissions at the point of generation. The best way to address these issues and decrease our exposure to increasing energy bills is to provide households and businesses with greater options to decrease their energy use. That is what this bill does. It does so through a tried and tested means, building on the lessons of other jurisdictions in Australia and abroad. It does so whilst striving for national consistency and minimising the regulatory burden on participating businesses. This is a practical reform.
As the Assembly is aware, the government, in response to community demand, has committed to the most ambitious greenhouse gas reduction targets in the nation. With our high per capita energy use, it is not surprising that electricity use, at 63 per cent, represents the largest single source of greenhouse gas emissions in the ACT. Tackling this single, biggest contributor is therefore a logical step in our emissions reduction strategy. It will also be among the most cost-effective measures we undertake.
What is the role for government? Despite the abundant savings and climate benefits associated with energy efficiency, experience demonstrates that a broad range of market failures prohibit the uptake of economic energy efficiency activities. Government intervention is required. The market failures that prevent ACT households and businesses implementing energy saving initiatives include a lack of information, split incentives and a lack of access to capital to cover implementation costs, especially for low income households and small businesses.
While the commonwealth government’s price on carbon goes a long way to address many of the negative externalities associated with the emission of greenhouse gases in Australia, the barriers I have outlined will exist even after the price on carbon is introduced. For this reason, South Australia, New South Wales and Victoria continue to operate market-based, energy efficiency schemes and the commonwealth government is investigating the development of a national scheme. It is also for these reasons that this government’s sustainable energy policy, adopted late in 2011, identified the implementation of an energy efficiency scheme as a priority.
But how will households benefit? There is a vast range of simple but effective ways of reducing energy use in territory homes and businesses. A schedule of eligible activities determined to save energy will be determined under the legislation, through a notifiable instrument. These activities will be largely based on activities currently available under the Victorian energy efficiency target scheme and they will grow and adapt.
Based on the modelling underpinning the scheme, I can provide some examples of the kinds of activities various households may undertake and the indicative savings, contrary to what you heard earlier this morning. A rental tenant who installs one standby power controller and a water efficient showerhead may achieve current savings, of $287 per annum for an up-front cost of $140 after incentives. A further
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