NOW IS THE TIME TO CHANGE

Written on the 10 August 2012

NOW IS THE TIME TO CHANGE

LOW Carbon Australia (LCA) is the government-funded body charged with providing energy efficiency solutions to business and communities. CEO Meg McDonald (pictured) sees the introduction of the Carbon Tax as an exciting opportunity for change.

THE Federal Government’s new Carbon Tax marks the beginning of a larger, long-term trend towards a low-carbon economy with broad strategic implications for all businesses and sectors.

Small to medium enterprises (SMEs) should see this is an opportunity to address energy costs, reduce carbon exposure in supply chains and take carbon-pricing into account.

Although the incentive to change is highest among large businesses directly impacted by the carbon price, SMEs indirectly subject to the tax can also address flow-on effects by changing energy usage and using more eco-friendly
technology to recover rising costs.

Major savings can be made in retrofitting more energy efficient refrigerators, air-conditioners, industrial pumps and boilers. Metal fabricators, foundries, dairy producers and abattoirs have discovered the benefits of replacing electric boilers with gas-fired co-generators.

Businesses should schedule replacements towards the end of the equipment’s lifetime.

Installing a new air-conditioning system when the existing 30-year-old unit needs replacing can bring increased energy efficiency with net benefit at no additional cost.

Long-term benefits of improving energy efficiency include increased property value, greater attraction to tenants and higher rental yields due to better National Australian Built Environment Ratings (NABERS).

Organisations like LCA can help businesses achieve this by providing innovative ways to finance energy-efficient projects. Flexible solutions with longer payback periods can help businesses achieve positive cash-flow from the outset without upfront costs.

LCA has teamed with Origin Finance to provide loan packages with repayments that deduct the value of electricity returned to the power grid.

Companies can lease LED lighting, power factor correction units and other energy efficient tools to increase cash-flow positivity. More energy efficient lighting can bring a return on investment after 1.5 to 2.5 years.

Trident Corporation, which owns the Limestone Street Centre in Ipswich, carried out a $1.6 million upgrade to lighting, air-conditioning and its building management system.

The building went from a zero NABERS rating in January 2011 to a four-star energy rating today.

The organisation reduced yearly energy use by 56 per cent and saved 718 tonnes in annual greenhouse gas emissions.

Manufacturing businesses should consider securing their slice of the Federal Government’s $1.3 billion Clean Technology Program, which provides up to 33 per cent in government funding towards projects worth up to $10 million.

The $200 million Clean Technology Food and Foundries Investment Program is helping those manufacturers maintain competitiveness, while the $10 billion Clean Energy Finance Corporation is also offering tailored finance packages to
businesses.

However, 100 per cent renewable energy solutions do not necessarily produce the most economical balance. A number of businesses want to include solar in their mix, but the program funding LCA provides carries a production rate target of less than $23 a tonne – which wind and solar exceeds.

The preferred option for commercial property redevelopments is some co-generation and solar. Distributed generation is a popular option for wind, solar and co-generated energy. It involves removing businesses from the main power grid,
reducing the need for additional infrastructure during peak times.

Smart grids can also reduce infrastructure costs by removing demand for future upgrades, distributing power locally as well as modulating demand by phasing-down usage at stress points.

New buildings in Canberra have attached internet protocol addresses to each light-fitting and electrical appliance. These smart appliances can be remotely managed and controlled to turn lights on and off to stay within budget. The network
connection provides much more knowledge about how much electricity they are using.

Smart boxes are being introduced in the US and Europe with some smart meters to be rolled out in Victoria. However, the nationwide roll-out may be delayed as our electricity distribution network is not set up to handle it.

There is plenty of scope for change in Australian business and there are noticeable benefits to be reaped. Now is the time to seriously examine the available options.


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