“Save money and the environment through more efficient use of your energy and resources.”

Introduction

Climate change (and ever declining global resources) is widely considered to be a reality that will have a great effect environmentally, socially and economically. With the advent of the National Greenhouse and Energy Reporting System (NGERS), Energy Efficiency Opportunities Act (EEO), the proposed Carbon Pollution Reduction Scheme (CPRS), and the Renewable Energy Target (RET) it has become strategically important for businesses to address their efficiency in regards to energy, water, waste and transport. This will not only increase savings and add to the bottom line, but improve a company’s standing in a carbon constrained global economy as it will become mutually beneficial for companies to restrict their business dealings to other ‘low carbon’ businesses. In addition it will become a requirement for certain companies to monitor and audit their emissions and carbon footprint for reporting purposes in the NGERS, whilst managing their liability with the CPRS.
LGP’s Aim
At LGP we aim to provide an effective service for businesses to audit, assess and optimise their efficiency and costs in regards to energy (electricity and gas), water, waste and transport as well as their emissions and carbon footprint for the purpose of;

• Analysis and strategy development to;
• Reduce usage and improve efficiency, producing savings;
• Carbon emissions abatement opportunities or projects;
• Education and behaviour change;

The goal being the development of effective processes for the implementation of successful efficiency and energy management programs, becoming an industry leading provider of energy auditing and consulting services.

The LGP Energy Consulting Process

There are three main parts to the LGP Energy Consulting process:

Analysis, audit and assessment:

There are two key services that LGP offer as a means of analysing a client’s energy and resource use as well as efficiency and emissions, which when applied together will generate substantial savings.
The first involves a detailed analysis of the client’s actual electricity use (subject to the client consuming over 160MWh of electricity per year); as a leader in electricity retail services in Western Australia, LGP have developed a set of innovative electricity data analysis systems to provide a fast and effective assessment of the client’s electricity use. Through such an analysis, LGP can not only optimise energy costs but also pinpoint opportunities for efficiency improvements.
The second involves a level 1 or 2 audit for businesses consuming over 50MWh of electricity per year, following guidelines set out in Australian Standard AS/NZS 3598:2000, of the client’s facilities, processes and devices in regard to electricity, gas, water, waste, transport and emissions. LGP will gather data and information from the client in the form of utility billing and pre-audit surveys as well as client consultation regarding the scope of the audit. Further, more detailed data will be gathered through an onsite audit of all devices and the processes and activities that involve their use. This will give a power usage and total consumption of each device and a total consumption for the facility.
In conjunction with our in-house electricity data analysis, LGP have partnered with Village Green Environmental Solutions, a successful, Australian based and owned, global provider of sustainable environmental solutions including energy and resource auditing and carbon analysis. Through the Village Green auditing process, following AS/NZS 3598:2000, further opportunities for improvements in efficiency and reduction in energy and resource use will be found.

Reporting and advising:

Tied to any analysis or audit will be a formal report with advice for the client based on findings from the analysis and audit process. The report generated will contain two key elements; an inventory of energy and resource use and emissions with the client’s total carbon footprint and a prioritised list of strategies for efficiency improvements and reductions in energy and resource use (with resultant emissions reductions), outlining cost vs. financial and environmental benefit.
Also contained in the client’s report will be advice on any liabilities associated with Government legislation such as: NGERS, CPRS, RET, Energy Efficiency Opportunities Act, Mandatory Disclosure of Commercial Buildings; Energy Efficiency, plus advice on carbon trading and offsetting. LGP will also inform the client of any relevant funding programs for efficiency improvement projects. Lastly, LGP can advise suitable clients of opportunities for demand side management, potentially adding further substantial financial gains.

Implementation:

The last stage of the LGP Energy Consulting process is the implementation of the strategies based on results of the auditing process. This will involve a consultation with management and staff, including presentation of reports, findings and suggested strategies and advice. LGP will assist in the management of energy efficient projects such as energy efficient devices or renewable energy installations.
The Industry

The industry is young and evolving but fast emerging as a service of great demand. This demand is driven by human induced factors on a national and international level meaning there is a global emergence of the industry. The major driving forces behind this emergence are:

• Legislation/policy; in Australia we have four main policy measures in place driving the requirement of certain companies to audit, report and improve their energy and emissions;
• Energy Efficiency Opportunities Act of 2006, the object of which is “to improve the identification and evaluation of energy efficiency opportunities by large energy using businesses and ... encourage ... cost effective energy efficiency opportunities”. The Act requires businesses using more than 0.5 Petajoules of energy to assess their energy efficiency opportunities and publicly report the outcomes.
• National Greenhouse and Energy Reporting Act of 2007 designed to be “a single national reporting framework for the reporting and dissemination of information related to greenhouse gas emissions, greenhouse gas projects, energy consumption and energy production of corporations”. It was introduced mainly as a foundation for a future emissions trading scheme but also to shape policy and programs and provide information for the public and international reporting obligations while avoiding duplication.

• Carbon Pollution Reduction Scheme. The CPRS is an emissions trading scheme currently being revisited in the Australian Parliament and it seems inevitable that there will be some form of Emissions Trading Scheme (ETS) in Australia to commence on 1 July 2011. The CPRS is considered by the Australian Labour Party (ALP) to become the “primary policy tool to drive reductions in emissions...” It is designed to be a cap and trade system where greenhouse gas (GHG) emitters will need to acquire permits for each tonne of GHG they emit. Their emissions will be monitored, audited and reported through the NGERS and will need to surrender a permit for every tonne of emissions they produce for the year. There will be a limited number of permits issued each year, forcing businesses to compete for permits through an auction system or secondary trading market. Emissions abatement may be cheaper than purchasing permits.
• MRET/RET; The Mandatory Renewable Energy Target (MRET) and the recently passed Renewable Energy Target (RET) will continue to encourage the development and installation of renewable energy and energy efficient technologies whilst encouraging large energy users to purchase “green energy” through the trade of Renewable Energy Certificates (RECs).
• Government funding; for eligible businesses there are regular funding or rebate opportunities, predominantly through departments such as the Department of Environment, Water, Heritage and Arts, Sustainable Energy Development Office (SEDO), Department of Environment and Conservation (DEC) and the Department of Climate Change (DCC). These programs are aimed at innovation in energy efficiency as well as sustainable energy projects.

• Financial savings; there is money to be saved by reducing and improving energy use and even money to be made through such things as demand side management and renewable energy installations such as solar PV.
• Climate change and the environment; this is the overarching factor driving all activity in this area in respect to three issues; pollution and environmental degradation, global climate change, reduction and exhaustion of resources. Through increasing levels of awareness of these issues has arisen a sense of global responsibility at all levels. This means that in addition to financially induced action there is an increasing amount of voluntary action in regards to energy and emissions reduction, monitoring and reporting and efficiency improvements. The reasons why a business might act voluntarily may be:

• Altruism; a genuine responsibility to the environment and global good.
• A green perception of the business is becoming an important success factor.
• Voluntary reporting programs and databases such as the Carbon Disclosure Project.
• Increases in electricity prices; proposed increases in electricity prices for all consumers will be a driving force behind energy use reduction, demand management and process efficiency improvement. Price increases not only apply to electricity but also to water, gas, transport fuels and waste disposal.

Industry Trends and Outlook

Parallels can be drawn with the current state of the industry to that of the solar PV industry in recent years. Originally there were only a few “pioneering” companies delivering solar PV to a select market until global issues brought about the introduction of legislation in the form of rebates as well as the above mentioned MRET. This caused the rapid emergence of a large number of (mostly small) solar PV installation businesses as well as suppliers. With a focus on small residential customers based on a generous rebate, the solar PV industry has been shown to be fragile, greatly affected by changes in legislation such as the ending of the rebate. While generous grants are available for larger scale PV projects, uptake from business has been minimal due to a lack of feasibility through long payback periods and little return from high capital investment.

The energy efficiency industry has developed in much the same way, with the few “pioneer” service providers quickly multiplying with the introduction of government legislation and funding. The key difference being that the success of the PV industry hinges on financial incentives in the form of reduced cost on investment whereas the energy efficiency industry will largely be driven by financial liabilities of what are set to be long-term policies, in addition to incentives in the form of rebates and grants. A further difference is that energy efficiency has a relatively low cost with short payback periods, making it an attractive course of action for businesses.

There will come a time when government funded incentives will end, at which time the industry will need to be self sustaining. However, the long term outlook for the industry is positive as there will always be a market for efficiency, financial savings and electricity demand management. The short term will see a rapid growth phase with the introduction of funding programs and the uncertainty and threat of financial liabilities brought about by the NGERS and proposed CPRS. This uncertainty is a double-edged sword as with uncertainty comes a “wait and see” attitude but at the same time a lack of knowledge opens the door for service providers.

Outline of market needs derived from market drivers.

Conclusion

It is apparent that there is an increasing awareness amongst businesses of (global) climatic and environmental issues caused by human activity and their implications to them. These implications come in the form of; financial and legal liabilities based on legislation, market forces, whereby markets are driving demand for sustainable and environmentally friendly products and services, increased cost of energy and also a general community responsibility, locally and globally. This clearly outlines a stronger than ever need for a triple-bottom-line approach to business.

With this in mind it is clear that there is growing demand from businesses to act and reduce their energy and resource use and in turn their emissions. The first and best step in achieving this is to have an audit of energy and resource use and emissions to compile an inventory and better understand any liabilities they may have as well as opportunities for reductions in consumption and emissions through efficiency improvement. Following this will be financial benefits from savings on energy and resource use as well as reductions in emissions liabilities. In addition to the financial benefits will be the benefits to the environment which ultimately is the underlying reason for government and business action regarding reduced resource use and improved efficiency.