Page 2667 - Week 07 - Wednesday, 6 June 2012
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The Council of Australian Governments—COAG—has been dealing with the issue of phasing out greenhouse-intensive hot-water services, and we discussed at some length COAG’s efforts in the previous debate in 2009. In the debate in 2009 I suggested that I thought COAG was sometimes being slow and inefficient. Right now, COAG may or may not be slow and inefficient, but I have to say they have been moving faster than we have in the ACT, so I probably should take back any of my previous comments along those lines.
In December 2008 the Ministerial Council on Energy agreed to a number of important initiatives under the national framework for energy efficiency, including a national hot water strategic framework. The framework provides for reduction of greenhouse gas emissions associated with water heating through the specification of minimum energy performance standards for water heaters and phasing out of conventional electric resistance water heaters, except where the emissions intensity of the public electricity supply is low—that is, the Tasmanian exemption—together with a range of information and education measures.
This initiative will deliver lifetime cost savings to households at times of rising energy costs as well as significant CO2 reductions. This phase-out of conventional electric resistance water heaters is intended to cover all new homes and established homes in gas reticulated areas from 2010, new flats and apartments in gas reticulated areas and established homes in gas non-reticulated areas from 2012.
In December 2010 the Ministerial Council on Energy, which has now been replaced by the Standing Council on Energy and Resources, issued a communique which, among other things, stated that the ministers had agreed to a decision on the regulatory impact statement in the phase-out of greenhouse-intensive water heaters. The December 2010 meeting of the Ministerial Council on Energy also noted the need to ensure a degree of national harmonisation to avoid fragmented regulation as this imposes costs on businesses and consumers with respect to energy efficiency measures.
I will come back to this need for harmonisation, but first I want to look at the regulatory impact statement. The regulatory impact statement for the decision to phase out greenhouse-intensive water heaters in Australian homes was prepared for the national framework for energy efficiency by George Wilkinson and Associates for the National Institute of Economic and Industry Research and is dated 15 November 2010.
The RIS is very comprehensive and identified that the most effective and efficient way to phase out electric water heaters is to regulate against their installation—that is, prohibit their installation except in very restricted circumstances. It is worth noting that replacement sales comprise up to 75 to 80 per cent of the water heater market. The RIS examined the business as usual model, taking into account actual market behaviour based on observed tendencies to replace like with like, resist high capital purchases and underinvestment in more efficient hot-water heaters, the exclusion of electric hot water heaters from the entire replacement market after 2010, which is what the bill was proposing back when the RIS was done—I am just talking about the
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