Page 2259 - Week 08 - Tuesday, 4 August 2015
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It is worth highlighting that the scheme review of the EEIS reported that one-quarter of participating households also undertook further energy saving activities and improvements beyond what would have otherwise occurred in the absence of this scheme. The review has also confirmed the efficient operation of retailers in the scheme, with only four per cent of the overall scheme costs representing retailers’ overheads. The review concluded that there is advantage in continuing the scheme because of the multiple benefits in reducing cost of living pressures for households, reducing energy use and reducing greenhouse gas emissions. It also complements the government’s focus on reducing the greenhouse gas intensity of the electricity grid. Continuing to reduce energy usage will reduce the costs associated with electricity use and it will reduce the amount of renewable electricity that we will need to source in order to meet our 90 per cent renewable energy target.
The Energy Efficiency (Cost of Living) Improvement Act places a direct obligation on retailers selling electricity in the ACT to meet an energy savings target. Under the EEIS, tier 1 retailers deliver energy savings by undertaking eligible energy saving activities. The tier 1 retailers are also required to ensure a proportion of energy savings are achieved in the low income priority households. Smaller tier 2 retailers can meet their energy savings targets either in the same way as tier 1 retailers or they can pay a contribution directly to the government in lieu of that. It is worth noting that ActewAGL has consistently exceeded its energy savings obligations under the EEIS. There are also currently 10 tier 2 electricity retailers who have so far opted to pay the energy savings contribution instead of delivering the activities directly.
The amendment bill and the proposed targets in it will see the EEIS continue at a similar level of ambition. This means that it aims for similar annual reductions in electricity and gas usage as targeted in the first three years of the scheme. It also aims for a similar pass-through cost to consumers. It is worth noting, however, that the ACT’s success in proactively delivering on its 90 per cent renewable energy target means that the metrics used to calculate energy savings have changed since the act was first passed. In particular, as we reduce greenhouse gas emissions associated with electricity production, the energy savings required to achieve the same quantity of abatement increase.
The significance of this is demonstrated by the change in the number of tonnes of carbon dioxide equivalent greenhouse gas emissions attributed to the consumption of one megawatt hour of electricity. From 2013 to 2015 the average emissions factor projected for the ACT was 0.89. Increases in the level of renewable energy generated mean that the average emissions from 2015 to 2020 are expected to be 0.4. After we achieve 90 per cent renewable energy by the year 2020 the emissions multiplier is expected to be steady at around 0.1. As a result, other key metrics of the EEIS are shifting to ensure we incentivise the right activities. But the net result is a scheme with a similar pass-through cost to current levels. So households and businesses should not see any increase in energy bills as a result of extending the EEIS and they will continue, of course, to see all the savings.
It is worth highlighting this particularly in relation to the comments made by Ms Lawder. First of all, continuing the scheme is expected to deliver additional
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