Press Release 29/04/05

From Clive Blanchard


SUBJECT: Productivity Commission draft report on energy saving a 'disappointment'.


The federal government Productivity Commission has been conducting an inquiry into energy efficiency. See . The draft report has just been released.

In my opinion the draft report is a disappointment. It takes a very hands off free market approach to the issue of energy conservation as a means to reduce greenhouse gas production. In fact of the eleven key points in the executive summary, only two (grudgingly) concede that there may be a case for taking action, the other 9 points are either observations or recommendations to stop or delay actions already under-way!

Another disturbing aspect of the draft report is that the executive summary doesn't seem to adequately reflect the actual content of the report. As the whole draft report is a 2.5cm thick A4 document. Very few people are going to wade through the whole document. (To be honest I have only read thoroughly the executive summary and those sections pertaining to building energy use). Thus most lay people will probably hear about the report (if at all) from newspaper articles written by journalists who have either just read the key points or at most the executive summary (which itself is 50 pages). Although I disagree with a fair bit in the body of the report, it doesn't totally oppose government intervention and with some clarifications and corrections could be a useful document.

One of the key weaknesses of the draft report is that the terms of reference are narrow (restricting it to report on 'improvements that are cost effective for individual producers and consumers'). This means that changes which might have a small cost but which result in substantial greenhouse gas, environmental and resource depletion are rejected as being unacceptable. Furthermore these narrow terms of reference have been interpreted in the narrowest of possible ways. This means if a small number of people would be slightly adversely affected by a policy, while a much larger number would benefit, the policy is again rejected. An even worse problem is that where one person makes a decision which has an adverse economic impact on a second person, the commission is still reluctant to allow government intervention to prevent this problem! An example is that the Commission wants proposed building regulations delayed. These would require a developer to build to a certain minimum efficiency standard in contrast to the current situation where they don't have to pay any attention to energy use. Although they argue correctly that it is difficult to predict building energy use, the proposals would generally increase comfort, reduce energy use and reduce peak electricity use, which would reduce the peak electricity demand problem that we are facing.

Dr Terry Williamson from the University of Adelaide submitted two very extensive papers. Dr Williamson raises some very pertinent questions. His main thrust is that current house rating software doesn't accurately predict energy use, if at all. He argues that other factors like occupant behaviour are more important. While agreeing that occupant behaviour is at least as important as building design, I still believe that house rating schemes are a valid approach, even though I am prepared to concede that the schemes proposed so far need modification. Williamson's work has shown significant correlations between certain house features and energy use and thus I believe it is possible to develop useful ratings. I believe that one of the reasons for the poor prediction of energy use in real houses, is that we do not tend to heat and cool the whole house. Thus our energy use for heating and cooling may in many cases be more related to the size of heaters and coolers than the house construction. Similarly a person with a ducted evaporative cooler will use substantially less energy for cooling than a person with a ducted reverse cycle air conditioner. However I believe that there is a strong trend in the marketplace to higher levels of comfort for a larger portion of the house. I recall one client saying "I want to be able to go to any room of my house, at any time of day or night and be comfortable without having to stop and switch a zone damper on." To achieve this required a 22kW unit in lieu of the 14kW unit that most people would have accepted. I believe that the energy use pattern of this client would closely follow the theoretical models. I also believe that more people will want this level of comfort in the future. Because houses are likely to last 80-100years, we need to design them now for the way we expect people to use them in the future, not as they are used now.

I am in the process of writing a detailed submission on these lines to the Commission. If you have any comments please Mailto: