Australia

Australia Energy Efficiency Opportunities Program

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Program Summary:

The Energy Efficiency Opportunities (EEO) Program is a mandatory program for energy intensive companies aiming to encourage large energy-using businesses to improve their energy efficiency by requiring them to identify, evaluate and publicly report on cost-effective energy savings opportunities.

Corporations with an annual energy use above 0.5 PJ are required to participate in EEO and must undertake an energy efficiency assessment using an energy management system known as the EEO Assessment Framework to energy saving opportunities. Implementation of the identified opportunities is not mandatory, but publication of the results of the assessment and the company’s response is. Public reporting is intended to affect the extent to which companies implement the identified opportunities.

Program information

Program Type:
Energy Management
Target Group - Size:
Large
Target Group - Industry Focus:
Cross Sectoral
Target Group - Description:

Businesses with annual energy use >0.5PJ. If/when the energy consumption participation threshold is surpassed, the company must register with the Department of Resources, Energy and Tourism (DRET) and within 18 months of surpassing the threshold, an assessment plan must be submitted.

Currently there are around 320 companies, which make up 65% of Australian energy use [1]. Electricity sector has been included since July 2011, and distribution and transmission since July 2012, which has increased the coverage. On a sector basis, EEO covers 78% of energy use in the mining sector, 92-93% of manufacturing, 15% of transport and 25% of the service sector [2] (*1).

Energy-intensive:
Yes
Year:
2005 to 2014
Ongoing:
No
Status:
completed
GHG emission source covered:
All Energy Sources
Objective:

To encourage large energy-using businesses to increase their energy efficiency by improving the identification, evaluation and implementation of worthwhile energy savings opportunities

Program Funding Source:

Australian Government

Total Program Funding:

Not available

Implementation details

Operating Mechanism:

Corporations with an annual energy use above 0.5 PJ (*2) are required to participate in the EEO program. Under the program, companies must undertake an energy efficiency assessment using an energy management system known as the EEO Assessment Framework to identify cost-effective energy saving opportunities (< 4 year payback). Implementation of the identified opportunities is not mandatory, but publication of the results of the assessment and the company’s response is. Public pressure is intended to affect the extent to which companies implement the identified opportunities.

The assessment follows a 5-year cycle, and outlines the corporate structure, current (baseline) energy use and existing energy savings projects, an assessment schedule (how and when assessments will be conducted) and a reporting schedule (how, where, and when the Department and the public will be informed).

Within the first two years of the assessment cycle, either each member of the corporate group scheduled to conduct assessments must complete its first assessment for at least one site, key activity or business unit, or 40% of the group’s energy use must be assessed. At least 80% of the corporation’s total baseline energy use must be assessed (including all sites that use more than 0.5 PJ per year) within the first (5-year) assessment cycle, and at least 90% must be assessed or re-assessed in the second and subsequent cycles.

The outcome of the first assessment must be published within 30 months after passing the participation threshold, followed by annual updates thereafter. Public reports must be readily available to investors, shareholders, other key stakeholders and interested members of the public, e.g. by including them in existing public reports, such as annual, sustainability or financial reports.

Energy Management System:
EnMS standard
The EEO Assessment Framework. The Assessment Framework sets out minimum standards to ensure assessments are rigorous and comprehensive, distinguishing six key elements: 1. Leadership support for the assessment and the improvement of energy use; 2. The involvement of a range of skilled and experienced people, and people with a direct and indirect influence on energy use, during the assessment process; 3. Information and data that is appropriately, comprehensively and accurately measured and analysed; 4. A process to identify, investigate and evaluate energy efficiency opportunities with paybacks of four years or less; 5. Business decision making and planning for opportunities that are to be implemented or investigated further; 6. Communicating the outcomes of the assessment and the business response to senior management, the board and personnel involved. For each of the six key elements, key requirements are defined in the Assessment Framework (19 in total), and the type of evidence required to show compliance is detailed.
Program Offerings for Industry:

Industry Support Officers to assist companies (*3)

Provision of information, tools and learning opportunities such as:

  • Training and seminars
  • Case studies
  • Industry Guidelines
  • Energy saving measures guide
  • Assessment Handbook and an electronic template assessment plan
  • Template for government and public reporting including an online EEO module (and streamlining reporting requirements with NGERS (*4))
  • Verifiers Handbook, Checklist and Information Request Form
  • Website, newsletter and FAQs

Recognition of achievements of leaders in energy efficiency (in case studies, on workshops, newsletters and government publications)

Financial support measures such as the Clean Technology Program (CTP) and the Clean Energy Finance Corporation (*5), in the form of grants and government-backed financial instruments such as loan guarantees.

Supervising Entity:
Australian Department of Resources, Energy and Tourism (DRET)
Implementing Entity:
Australian Department of Resources, Energy and Tourism (DRET)
Implementing Entity Type:
Public Institution or Agency
M&V requirements on industry:

Two types of verification are undertaken. Desktop verification is carried out for all companies in each five-year assessment cycle on the basis of a questionnaire on the key requirements of the Assessment Framework completed by the companies. A smaller number of companies are then selected for a full verification process, which involves site visits, interviews and a review of documentary evidence (*6). Each year approximately 100-120 corporations are chosen to be subject to a desktop verification, in which corporations are required to submit an online form to allow for an assessment of the non- compliance risk. The results will contribute to the selection of companies to undergo a full verification and site visit.

Formal verifications commenced in early 2010 to ensure companies are complying with the requirements of the legislation. The verification will validate corporations' compliance with EEO legislation (in conducting assessments, identifying opportunities and reporting outcomes), monitor whether a corporation has carried out its assessment in line with the approved Assessment and Reporting Schedule and ensure the company meets the coverage requirements.

Evaluation of Program:
The program is evaluated in the middle and at the end of each five-year assessment cycle.

Program flow chart

Program Flow Chart

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Impacts and Results

Target/goal:
None. Report on energy use, the number of opportunities identified according to payback period, and their status of implementation (e.g. the number implemented, under investigation or to be implemented).
Savings (recent year):
207 corporations identified 141.9 PJ in energy savings in 2010 [2] and adopted or are adopting measures that will results in savings of 75.5 PJ
Savings (program total):
75.5 PJ since 2007, as of 2010 [2]
Savings (share of overall demand):
Energy savings in 2010 represented 9.8% of EEO corporations’ total assessed energy and 2.5% of total Australian energy use. Energy use by EEO Corporations is 1701 PJ and total Australian energy is 5773 PJ.
Average unit cost of energy saved:

These include other business costs and benefits attributed to energy saving projects:

The total financial benefit of the above-mentioned savings for EEO participants is estimated to be AUD 1.2 billion per year [3].

All industry average approximately $12/GJ

Metals manufacturing: $5.41/GJ

General manufacturing: $7.47/GJ

Mining: $15.32/GJ

Services sector: $28.18/GJ (*7)

Non-energy benefits (co-benefits):

Included in estimates above (financial benefits have not been separated by energy and non-energy benefits).

Other useful information

Footnotes:

(*1) Electricity generation is responsible for 28% of national GHG emissions in Australia. Figures are not yet available for EEO coverage in the electricity generation, distribution and transmission sectors.

(*2) At corporate group level (operation control as defined in NGERS)

(*3) Each company is assigned an Industry Support Officer (ISO), who acts as a single point of with the government. ISOs review the company’s documentation, respond to any questions of concerns the company may have and informs it of programme changes or new resources. In more recent years, ISOs are allocated to companies in the same industry sector. This arrangement has helped the ISOs to better understand the specific needs of a sector and to share best practices and lessons learned across companies.

(*4) See NGER, http://www.climatechange.gov.au/government/initiatives/national-greenhouse-energy-reporting.aspx

(*5) See Clean Technology Program at http://iepd.iipnetwork.org/policy/clean-technology-program-ctp and the Clean Energy Finance Corporation at http://iepd.iipnetwork.org/policy/clean-energy-finance-corporation-cefc-funding

As part of the AUS$1.2 billion CTP, an AUS$800 million Clean Technology Investment Program (CTInvP) provides grants to manufacturers to support investments in energy-efficient capital equipment and low-pollution technologies, processes and products.

The CTP also include the Clean Technology Innovation Program (CTInnP), which supports business investment in research and development in the areas of renewable energy, low pollution technology and energy efficiency.

The Clean Energy Finance Corporation provides (government-backed) investments in the commercialisation and deployment clean technologies. The Corporation will leverage private funding by using instruments such as commercial loans, concessional loans, loan guarantees and equity.

(*6) On verification, the program indicates ‘Where corporations are genuinely committed to the program, the approach for verification is to encourage cooperative learning and improvements in conducting effective assessments and publicly reporting on outcomes. However, more stringent mechanisms are available under the legislation to ensure participation in all steps of the program by those corporations which are required to do so.’

(*7) Care should be taken in reading these dollar-per-gigajoule figures because of the differences in the energy pricing, fuel types, production technologies, other business costs and benefits attributed to energy saving projects. These factors mean that not all industries will report the same degree of financial benefit from their energy savings opportunities. Large-scale manufacturers such as aluminium or cement makers, for instance, will have a far higher level of energy use and will access energy at lower prices than a services company such as a retailer or financial institution. The type of fuel used in different industries will also vary and this too will affect the potential financial benefits. The cost of diesel fuel, used in the mining and transport industries, is far higher per gigajoule than that of gas and electricity.