8th July 2013

Dear Sir,

Re: Review of the Energy Saver Incentive – Ecovantage response

Thank you for the opportunity to provide a response on behalf of Ecovantage. We are also members of the Energy Efficiency Certificate Creators (EECC) Group and I will keep this brief knowing that we are also preparing a group response.

Ecovantage is a Victorian based company employing approx 40 people directly and engaging another 50 people performing 'in field' activities with the schemes in Vic, SA and NSW.

We believe the state government have designed and administered a remarkably successful, effective and efficient program that has provided multiple benefits at low cost to the Victorian residential and business community.
It is fantastic to see over a million households have become more energy efficient thanks directly to the scheme. In more recent times the non residential sectors have likewise benefitted from the energy efficiency activities within the scheme.

The scheme has been effective at dealing with many of the barriers faced by these groups when moving toward energy efficiency.

Ecovantage strongly supports the continuation of the ESI and advocate that the target is maintained or increased for the following reasons:

  • Build on the success of the existing systems to maximise the return on investment.
  • Provide relief from the energy prices which are likely to remain high
  • Allow flexibility for generation and distribution by reducing the stress on supply.
  • Tap into the significant opportunities remaining for energy efficiency gains available in Victoria.
  • The target needs to be of a size to drive ongoing investment and deliver significant energy efficiency benefits.

Two of the main opportunities for further efficiency gains are in lighting and project based methodology.

Lighting – Commercial and Residential:

  • Halogen down lights are not only heavy on energy use but have been found to cause ceiling fires. LED down lights use 20% of the electricity and do not produce heat enough to cause a fire. With tens of millions of the halogens currently being used in both households and non residential buildings, this opportunity is huge.
  • Fluorescent tubes are mainly a commercial form of lighting and there are again many millions of these to be replaced.
  • Other forms of lighting (eg high bays) used in commercial and industrial applications also provide a significant opportunity to reduce electricity consumption on a mass scale.

Project Based Methodology - Commercial

- already available in NSW and has supported many compressors, chillers, HVAC systems and so on being upgraded to smarter systems with controls and variable speeds which slice costs to business.

One of the criticisms of government schemes is often that the added weight of compliance makes it an expensive delivery method. This is not the case regarding the ESI compliance calculated by NERA at about $2.60 per certificate which is quite low. This is further impressive for a scheme that has a very high level of compliance and consequently very low number of problems.

The total cost of the scheme has also been largely outweighed by the reduction in wholesale electricity prices which is partly as a result of the scheme.

Whilst Ecovantage believes that there are some aspects of the scheme that could be altered, we would advise against any large scale changes that would change the fundamental integrity of the scheme.

It is pleasing to see the positive impact of the four and a half years of reducing demand through the ESI in decreases to both wholesale and peak pricing and a reduction in investment required for infrastructure. The reduction is ofcourse, only partly due to the ESI but any reduction in demand also reduces the risk of supply from an ageing generation capability as it moves to a broader and less carbon intensive model.

Ecovantage also believes that the EREP exclusion should be removed to allow for a further broadening of both the cost base and the benefits of energy efficiency to be shared by these sites, many of which are excluded due to water use. Removal of the exclusion would further support a significant increase in the target.

The ESI has successfully:

  • Delivered a high proportion of the energy and cost savings to the more vulnerable members of the Victorian community who would are also the least able to make investment decisions in this regard.
  • Engaged the community in energy efficiency in their own homes and places of work allowing them to feel empowered and connected.
  • Started to move Victorian businesses toward energy efficiency which will make them more competitive and capable of growth.

The state government should be very proud of that achievement and excited by the potential of continuing a scheme that will deliver more significant benefits to households and businesses at a low price with high levels of compliance.

Yours sincerely

Bruce Easton


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