News

Energy Efficiency Expo Update Continued…

Incumbent Technologies

Last week we explored the potential that DELWP could re-consider lighting in the 2021-2025 target setting for the VEU, based on the ‘business as usual’ (BAU) theory. Today, we further explore the BAU case in more detail.

Technology options and redundant products

It’s proposed under the BAU case that if there are only energy-efficient lighting options available to replace or upgrade incumbent lights, energy-efficient lighting upgrades will occur naturally. It is important to note what options are available to customers.

  1. Residential: all incumbent technologies are still available to purchase except incandescent lighting technology. This technology was generally used in traditional light bulbs and was banned for sale in Australia in 2017. BAU does apply to A-bulb replacements and we accept that this should be considered in setting target methodology. All other traditional technologies are still available.
  2. Commercial: all traditional technologies are still available.
Propose ‘E3 Report’ COAG recommendations

It is important to note that the outcomes of the Regulation Impact Statement (RIS) are reliant on the guidelines that will be released from the European Union (EU) findings due out on the 5th December 2019. 

The Council of Australian Governments (COAG) Energy Council agreed to examine the case for the next phase of lighting energy efficiency regulation in December 2015, as part of the Equipment Energy Efficiency (E3) Programs Prioritisation Plan. This RIS considers policy proposals to improve the energy efficiency across residential and commercial lighting in Australia and New Zealand. It is important to note that representation of this working group included DELWP (represented by Jack Brown) and the Energy Savings Industry Association – ESIA – (represented by Stuart Edgley).

The key focus, relevant to the VEU, is the phasing out of halogen downlights. The proposal to phase out halogen lighting was postponed after fierce debate within the group. It was agreed that the outcome of the EU’s decision on the same debate should therefore be used as a directive. The results of the EU’s RIS will be available on the 5th December 2019. At this stage, COAG will be guided by this decision; whether to or not to consider applying a phase-out of halogen downlights. This phase-out, if implemented, will be imposed on the importers only and not the retailers. The importers will not be able to import halogen downlights after September 2021. There will be a grandfather clause applied to manufacturers who can sell existing stock; however, the detail of this clause has not been defined. 

Don’t miss next week’s article where we will continue to explore the topic of BAU in more detail.

Claire DayEnergy Efficiency Expo Update Continued…
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WEEKLY NSW ESS ANALYSIS WE 10TH NOVEMBER 2019

ESS Certificate Creation Report – creation between 03/11/2019 and 10/11/2019.

Results

  • Weekly creation was 206,977 ESCs created compared with 82,152 ESCs created in the previous week.
  • The average for the last 4 weeks is 116K ESCs.
  • Commercial Lighting contributed 64,738 ESCs (31%) compared to 17,128 ESCs (21%) created in the previous week .
  • HEER contributed 59,049 ESCs (29%) compared to 43,916 ESCs (53%) created in the previous week.
  • The ESC spot price was at $22.60 up from $22.50 COB last Friday.

Analysis

Certificate Creation Breakdown

Weekly: Total ESC Creation Pie Chart

Bibek RegmiWEEKLY NSW ESS ANALYSIS WE 10TH NOVEMBER 2019
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WEEKLY VEU ANALYSIS WE 10TH NOVEMBER 2019

VEU Certificate Creation Report- creation between 03/11/2019 and 10/11/2019.

Results

  • 143,861 certificates created were created for the period between 03/11/2019and 10/11/2019.
  • Commercial Lighting contributed 33,419 VEECs (23.23%) compared to 39,233 VEECs (23.04%) created in the previous week.
  • Updated 21A contributed 76,172 VEECs (52.95%) compared to 89,370 VEECs (52.48%) created in the previous week.
  • The VEEC price was at $23.30 down from $23.40 COB last Friday.

Target Tracking

  • The 2019 target is 6.3M with currently 9,615,927 VEECs already Registered or Created.
  • The 2020 target is 6.5M.
  • This means in total, the scheme needs to create 3,184,073 VEECs between today and the end of 2020. (60 creation weeks)
  • To achieve the 2020 target we need to average 53k certificates per week.
  • The average creation for 2019 to this point has been 106k VEECs/week.

Please note, this is creation – not all VEECs created are registered.

Analysis

Certificate Creation Breakdown

Weekly: Total Certificate Creation Pie Chart

Bibek RegmiWEEKLY VEU ANALYSIS WE 10TH NOVEMBER 2019
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VEU lighting target setting 2021-2025

On Thursday 24th October 2019 at the Energy Efficiency Expo in Melbourne, Jack Brown from the Department of Environment, Land, Water and Planning (DELWP) stated in his address to the conference that DELWP are re-considering lighting in the 2021-2025 target setting for the VEU. DELWP are basing their decision on the ‘business as usual’ (BAU) case. However, it was not clear if DELWP are planning on applying this to both commercial and residential activities and to what levels this could be applied.

It is also important to note:

–          the DELWP ‘Regulation Impact Statement’ (RIS) is due out soon,

–          there will be a consolation period to follow, and;

–          the carbon abatement target for VEU needs to be set by May 2020.

‘Business As Usual’ (BAU) case explained

The BAU case is made up of a number of factors. These factors should be applied independently when considering their impact across energy efficiency schemes such as the VEU. This is based on the economies that apply to the VEU and in particular the basis that the VEU is an energy efficiency upgrades program.

Factors that apply to BAU

1 – New builds: BAU does apply to new builds. Most states and local governments apply requirements to new builds or renovations that a percentage of their lighting must be ‘energy efficient’.

2 – Natural upgrades: the ‘natural upgrade’ factor assumes consumers are upgrading their lighting ‘naturally”, as a matter of course without the support of an energy efficiency scheme.

For example:

– Residential lighting upgrade: the average Australian home has 37 Lights. At an average of $65per LED light installed, this is a total cost of approximately $2,000.

– Commercial lighting upgrade: office scenario – 100 fluorescent troffers to be replaced with LED panels. At an average of $80.00 per LED light installed, this is a total cost of approximately $8,000.

– Commercial lighting upgrade: warehouse scenario – 100 metal halide high-bays to be replaced with LED high-bays. At an average of $400 per LED light installed, this is a total cost of approximately $40,000.

On this basis, the BAU case should not be applied to lighting ‘upgrades’

In a struggling economic climate, residentially and commercially, these types of ‘BAU’ upgrades have very low take-up without financial support (via government energy efficiency schemes). This is often due to the payback periods being too long and the capital outlay being too high. This is evidenced in Queensland, a state where there is no deemed energy efficiency scheme and very low take-up in lighting upgrade activity. Furthermore, in South Australian’s Retailer Energy Efficiency Scheme (REES), customer contributions are higher. The Essential Services Commission of SA (ESCOSA) are proposing the removal of the 900Gj cap on commercial installations to help stimulate lighting upgrade activity by removing the barrier of the initial capital outlay.

More details to follow next week…

Claire DayVEU lighting target setting 2021-2025
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