Energy Mad

21 June 2013

RE: Stakeholder Submission on the June 2013 ESI Issues Paper

Dear David,

Thank you for the opportunity to provide input towards the future shape of the ESI. Below we have provided responses to a number of the points raised in the Issues Paper.

Barriers to the uptake of Energy Efficient Measures

It is clear that Victorian consumers have benefited from the ESI. The primary barrier to the uptake of an energy efficiency measure is the lack of will to act. A small minority of consumers will act if they are provided with information that shows how much money they will save by installing more energy efficient appliances in their homes. The majority however will simply not get around to acting. This is where the ESI has been so effective. Many of the more than 16.6 million VEECs that were created in the first four years of the scheme were created because the decision to act was made very easy for the consumer. A phone call or a home visit by a representative of an AP provided each of these consumers with a gcall to actionh. The one]on]one help and guidance provided to the consumer by the AP representative is what is needed to get a strong uptake of a wide range of energy efficient activities.

Another reason that the scheme has been so successful is because the public perception that investing in energy efficiency improvements will only shave a few cents of your power bill. The scheme has overcome this barrier by reducing or eliminating the upfront cost of the new energy efficient technologies and promoting the potential savings.

The national emissions reduction scheme is designed to provide a price signal to the market that emission]intensive products and services are more expensive then new low]emission products and services. For the typical Victorian consumer this price signal is quite weak and is unlikely to provide sufficient reason to act. The existence of the ESI can be seen as a complimentary measure to the national emissions reduction scheme because it strongly encourages individuals to make a positive change in a specific area.

The Performance of the ESI to date

The mix of activities included in the scheme has been appropriate. A strong uptake of a broad range of activities would be ideal. To some degree the scheme has failed on this account. This is because most consumers have been attracted to the low or zero cost activities that have been made available to them. This behavior is hard to avoid.

The popularity of the scheme overall, as measured by individual installations or certificate creation, is a clear endorsement of the mix of activities available in the ESI.

Looking forward: the future of the scheme from 1 January 2015

As a supplier of Ecobulb CFLs to a number of scheme APs, we at Energy Mad have seen a steady demand for product approved under schedule 21A in 2013. These CFLs are being installed in residential and commercial buildings. The steady demand for CFLs indicates that there are still a large number of incandescent light globes installed in Victorian residential and commercial buildings. Energy Mad are in the final stages of getting an energy efficient downlight approved under schedule 21C. Our AP customers keep telling us that they have a large pent up demand for good quality halogen downlight replacement products suitable for residential and commercial buildings in Victoria. This activity provides a great opportunity to replace a significant proportion of the nine million halogen lamps currently in use in residential and commercial buildings in Victoria.

Many scheme stakeholders have been surprised by the ability of the market to deliver the 5.4 million VEEC per year target set for the three]year period spanning 2012]2014. This success should encourage the scheme owner to maintain the 5.4 million VEEC per year target for the next threeyear commitment period.

The average price of VEECs over the first four years of the ESI suggests that the market is delivering the emission reduction targets in a very efficient manner. To our knowledge there is no more costeffective way to reduce emissions.

Stakeholders would require as much notice as possible if the scheme was to be stopped on 31 December 2014. The main issues that would arise from a stoppage would be the loss of the jobs held by people employed in the scheme and the lost opportunity to create many more millions of tonnes of emission reductions. There is much more to do and the ESI provides the right mechanism to help Victorians save money and reduce the size of their emissions footprint.

Kind regards

Chris Mardon

(Managing Director, Energy Mad)

Hamish Ewan

(General Manager Carbon, Energy Mad)

Page last updated: 24/06/20