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IT’S TIME TO MAKE
ENERGY EFFICIENCY
A PRIORITY

In households and businesses across Australia, climate change and energy costs are important topics of conversation.

Foreword by Mark Whelan and Luke Menzel.

Around the country, Australians are looking for opportunities to cut their energy bills and reduce their environmental footprint. To achieve these goals, a lot of the focus has naturally been on the country’s energy supply. Supported by household and business uptake, substantial amounts of renewable energy such as wind and solar have been introduced into our electricity system.

At the same time, global and local factors have increased the volatility of energy prices, raising the cost of doing business and the cost of living.
Fortunately, it turns out the best tools we have to improve energy affordability and cut emissions are also some of the most cost effective – and they are available now, to us all.¹

ENERGY EFFICIENCY AND ENERGY MANAGEMENT
Energy efficiency means getting more out of every unit of energy we use. Think modern LED bulbs delivering the same – or better – performance as old-fashioned incandescent lights while using 75 per cent less electricity;²or the insulation in your roof and walls keeping your house warm in winter and cool in summer with less reliance on the heater or air conditioner.

Energy management describes smart decision-making around energy use. For example, undertaking an energy audit to build the business case for equipment upgrades – like replacing an old boiler with an electric heat pump powered by renewable energy – can save businesses tens of thousands of dollars on their energy bills.

These are not new concepts. Around the world, forward thinking governments are treating energy efficiency as a core strategy to meet their energy and emissions reductions targets. In 2016, energy ministers from the Group of Seven countries – the United States, the United Kingdom, France, Germany, Italy, Japan and Canada – backed energy efficiency’s role as the ‘first fuel’ for decarbonising their economies, enhancing their energy security and fostering economic growth.³

It takes a moment to get your head around the idea of treating a concept like ‘efficiency’ as a fuel to power our lives. But when you consider that using and managing energy is just as critical to reducing bills and emissions as generating electricity and supplying gas, it begins to make sense.

Energy efficiency improvements not only reduce overall energy demand, they can create downward pressure on energy prices and emissions, generating employment and lowering bills for consumers.⁴

In terms of getting to net zero, it might seem as if electrification, insulation and being smarter about how and when we use energy couldn’t have the same impact as solar panels and wind farms. But it turns out the size of the prize is the same: the International Renewable Energy Agency estimates that energy efficiency will deliver a full quarter of the entire world’s emissions reductions to 2050.⁵ That’s the same proportion that is expected to come from renewable energy.⁶Electrification is anticipated to deliver a further 20 per cent.⁷

New research commissioned by ANZ and the EEC confirms these international figures hold here in Australia. They show energy efficiency and electrification can deliver 14 per cent and 26 per cent of Australia’s emissions reductions, respectively, at low cost.⁸

Despite the massive potential for energy efficiency and energy management to reduce emissions while saving money, it’s often been overlooked here in Australia. While other nations have declared energy efficiency the ‘first fuel’, here at home it is often the ‘forgotten fuel’ of our economy’s net zero transformation.

Out of the 25 largest energy using countries, Australia ranks 22^nd for policy and practice in industrial energy efficiency, hampering the productivity and competitiveness of our businesses.⁹

And whilst our houses are our shelter and places of refuge, there is an incredible opportunity to lift the energy efficiency standards of many of Australia’s 10 million homes, which will improve health, comfort and financial wellbeing.

The $1.6 billion Energy Savings Package in the 2023-2024 Australian Budget will help ensure energy efficiency is no longer forgotten by everyday Australian businesses and households.

But as this report attests, there is much more we could all do. Rolling out energy efficiency as quickly as possible will help Australia reach its net zero goal at the least cost for households, businesses and governments.

The Forgotten Fuel series of reports is the result of a longstanding collaboration between ANZ and the EEC. The three reports explore the ways in which businesses and households can benefit from using energy efficiency as a tool to supercharge emissions reduction, save money, and improve health and wellbeing.