ENERGY TRANSFORMED:

SUSTAINABLE ENERGY SOLUTIONS FOR

CLIMATE CHANGE MITIGATION

MODULE B

INTEGRATED SYSTEMS BASED APPROACHES TO REALISING

ENERGY EFFICIENCY OPPORTUNITIES FOR INDUSTRIAL/

COMMERCIAL USERS – BY SECTOR

This online textbook provides free access to a comprehensive education and training package that brings

together the knowledge of how countries, specifically Australia, can achieve at least 60 percent cuts to

greenhouse gas emissions by 2050. This resource has been developed in line with the activities of the

CSIRO Energy Transformed Flagship research program, which is focused on research that will assist

Australia to achieve this target. This training package provides industry, governments, business and

households with the knowledge they need to realise at least 30 percent energy efficiency savings in the

short term while providing a strong basis for further improvement. It also provides an updated overview

of advances in low carbon technologies, renewable energy and sustainable transport to help achieve a

sustainable energy future. While this education and training package has an Australian focus, it outlines

sustainable energy strategies and provides links to numerous online reports which will assist climate

change mitigation efforts globally.

CHAPTER 4: RESPONDING TO INCREASING

DEMAND FOR ELECTRICITY

LECTURE 4.3: DEMAND MANAGEMENT APPROACHES TO REDUCE

RISING ‘BASE LOAD’ ELECTRICITY DEMAND

Prepared by The Natural Edge Project 2007 Page 2 of 18 Energy Transformed: Sustainable Energy Solutions

© 2007 CSIRO and Griffith University

Copyright in this material (Work) is owned by the Commonwealth Scientific and Industrial Research Organisation (CSIRO)

and Griffith University. The Natural Edge Project and The Australian National University have been formally granted the right

to use, reproduce, adapt, communicate, publish and modify the Project IP for the purposes of: (a) internal research and

development; and (b) teaching, publication and other academic purposes.

A grant of licence ‘to the world’ has been formally agreed and the material can be accessed on-line as an open-source

resource at www.naturaledgeproject.net/Sustainable_Energy_Solutions_Portfolio.aspx. Users of the material are permitted

to use this Work in accordance with the Copyright Act 1968 (Commonwealth) [ref s40(1A) and (1B) of the Copyright Act]. In

addition, further consent is provided to: reproduce the Work; communicate the Work to the public; and use the Work for

lecturing, or teaching in, or in connection with an approved course of study or research by an enrolled external student of an

educational institution. Use under this grant of licence is subject to the following terms: the user does not change any of the

material or remove any part of any copyright notice; the user will not use the names or logos of CSIRO or Griffith University

without prior written consent except to reproduce any copyright notice; the user acknowledge that information contained in

the work is subject to the usual uncertainties of advanced scientific and technical research; that it may not be accurate,

current or complete; that it should never be relied on as the basis for doing or failing to do something; and that in using the

Work for any business or scientific purpose you agree to accept all risks and responsibility for losses, damages, costs and

other consequences resulting directly or indirectly from so using. To the maximum extent permitted by law, CSIRO and

Griffith University exclude all liability to any person arising directly or indirectly from using the Work or any other information

from this website.

The work is to be attributed as: Smith, M., Hargroves, K., Stasinopoulos, P., Stephens, R., Desha, C., and Hargroves, S.

(2007) Engineering Sustainable Solutions Program: Sustainable Energy Solutions Portfolio, The Natural Edge Project.

Acknowledgements

The Work was produced by The Natural Edge Project using funds provided by CSIRO and the National Framework for

Energy Efficiency. The development of this publication has been supported by the contribution of non-staff related on-costs

and administrative support by the Centre for Environment and Systems Research (CESR) at Griffith University, under the

supervision of Professor Bofu Yu, and both the Fenner School of Environment and Society and Engineering Department at

the Australian National University, under the supervision of Professor Stephen Dovers. The lead expert reviewers for the

overall Work were: Adjunct Professor Alan Pears, Royal Melbourne Institute of Technology; Geoff Andrews, Director,

GenesisAuto; and Dr Mike Dennis, Australian National University.

Project Leader: Mr Karlson ‘Charlie’ Hargroves, TNEP Director

Principle Researcher: Dr Michael Smith, TNEP Research Director, ANU Research Fellow.

TNEP Researchers: Mr Peter Stasinopoulos, Mrs Renee Stephens and Dr Cheryl Desha.

Copy Editor: Mrs Stacey Hargroves, TNEP Professional Editor

Peer Review

Principal reviewers for the overall work were Adjunct Professor Alan Pears – RMIT, Geoff Andrews – Director, Genesis Now

Pty Ltd, Dr Mike Dennis – ANU, Engineering Department, Victoria Hart – Basset Engineering Consultants, Molly Olsen and

Phillip Toyne - EcoFutures Pty Ltd, Glenn Platt – CSIRO, Energy Transformed Flagship, and Francis Barram – Bond

University. The following persons provided peer review for specific lectures; Dr Barry Newell – Australian national University,

Dr Chris Dunstan - Clean Energy Council, D van den Dool - Manager, Jamieson Foley Traffic & Transport Pty Ltd, Daniel

Veryard - Sustainable Transport Expert, Dr David Lindley – Academic Principal, ACS Education, Frank Hubbard –

International Hotels Group, Gavin Gilchrist – Director, BigSwitch Projects, Ian Dunlop - President, Australian Association

for the Study of Peak Oil, Dr James McGregor – CSIRO, Energy Transformed Flagship, Jill Grant – Department of Industry

Training and Resources, Commonwealth Government, Leonardo Ribon – RMIT Global Sustainability, Professor Mark

Diesendorf – University of New South Wales, Melinda Watt - CRC for Sustainable Tourism, Dr Paul Compston - ANU

AutoCRC, Dr Dominique Hes - University of Melbourne, Penny Prasad - Project Officer, UNEP Working Group for Cleaner

Production, University of Queensland, Rob Gell – President, Greening Australia, Dr Tom Worthington -Director of the

Professional Development Board, Australian Computer Society .

Enquires should be directed to:

Mr Karlson ‘Charlie’ Hargroves

Co-Founder and Director

The Natural Edge Project

www.naturaledgeproject.net/Contact.aspx

The Natural Edge Project (TNEP) is an independent non-profit Sustainability Think-

Tank based in Australia. TNEP operates as a partnership for education, research and

policy development on innovation for sustainable development. TNEP's mission is to

contribute to, and succinctly communicate, leading research, case studies, tools,

policies and strategies for achieving sustainable development across government,

business and civil society. Driven by a team of early career Australians, the Project

receives mentoring and support from a range of experts and leading organisations in

Australia and internationally, through a generational exchange model.

Graphics: Where original

graphics have been enhanced

for inclusion in the document

this work has been carried out

by Mrs Renee Stephens, Mr

Peter Stasinopoulos and Mr

Roger Dennis.

Prepared by The Natural Edge Project 2007 Page 3 of 18 Energy Transformed: Sustainable Energy Solutions

The International Energy Agency forecasts that if policies remain unchanged, world energy demand is

set to increase by over 50 percent between now and 2030.1 In Australia, CSIRO has projected that

demand for electricity will double by 2020.2 At the same time, The Intergovernmental Panel on

Climate Change (IPCC) has warned since 1988 that nations need to stabilise their concentrations of

CO2 equivalent emissions, requiring significant reductions in the order of 60 percent or more by

20503. This portfolio has been developed in line with the activities of the CSIRO Energy Transformed

Flagship research program; ‘the goal of Energy Transformed is to facilitate the development and

implementation of stationary and transport technologies so as to halve greenhouse gas emissions,

double the efficiency of the nation’s new energy generation, supply and end use, and to position

Australia for a future hydrogen economy’.4 There is now unprecedented global interest in energy

efficiency and low carbon technology approaches to achieve rapid reductions to greenhouse gas

emissions while providing better energy services to meet industry and society’s needs. More and

more companies and governments around the world are seeing the need to play their part in reducing

greenhouse gas emissions and are now committing to progressive targets to reduce greenhouse gas

emissions. This portfolio, The Sustainable Energy Solutions Portfolio, provides a base capacity-

building training program that is supported by various findings from a number of leading publications

and reports to prepare engineers/designers/technicians/facilities managers/architects etc. to assist

industry and society rapidly mitigate climate change.

The Portfolio is developed in three modules;

Module A: Understanding, Identifying and Implementing Energy Efficiency Opportunities for

Industrial/Commercial Users – By Technology

Chapter 1: Climate Change Mitigation in Australia’s Energy Sector

Lecture 1.1: Achieving a 60 percent Reduction in Greenhouse Gas Emissions by 2050

Lecture 1.2: Carbon Down, Profits Up – Multiple Benefits for Australia of Energy Efficiency

Lecture 1.3: Integrated Approaches to Energy Efficiency and Low Carbon Technologies

Lecture 1.4: A Whole Systems Approach to Energy Efficiency in New and Existing Systems

Chapter 2: Energy Efficiency Opportunities for Commercial Users

Lecture 2.1: The Importance and Benefits of a Front-Loaded Design Process

Lecture 2.2: Opportunities for Energy Efficiency in Commercial Buildings

Lecture 2.3: Opportunities for Improving the Efficiency of HVAC Systems

Chapter 3: Energy Efficiency Opportunities for Industrial Users

Lecture 3.1: Opportunities for Improving the Efficiency of Motor Systems

Lecture 3.2: Opportunities for Improving the Efficiency of Boiler and Steam Distribution Systems

Lecture 3.3: Energy Efficiency Improvements available through Co-Generation

1 International Energy Agency (2005) ‘World Energy Outlook 2005’, Press Releases, IEA, UK. Available at

http://www.iea.org/Textbase/press/pressdetail.asp?PRESS_REL_ID=163. Accessed 3 March 2007. 2 CSIRO (2006) Energy Technology, CSIRO, Australia. Available at www.det.csiro.au/PDF%20files/CET_Div_Brochure.pdf. Accessed 3

March 2007. 3 The Climate Group (2005) Profits Up, Carbon Down, The Climate Group. Available at

www.theclimategroup.org/assets/Carbon_Down_Profit_Up.pdf. Accessed 3 March 2007. 4 Energy Futures Forum (2006) The Heat Is On: The Future of Energy in Australia, CSIRO, Parts 1,2,3. Available at

http://www.csiro.au/csiro/content/file/pfnd.html. Accessed 3 March 2007.

Prepared by The Natural Edge Project 2007 Page 4 of 18 Energy Transformed: Sustainable Energy Solutions

Module B: Understanding, Identifying and Implementing Energy Efficiency Opportunities for

Industrial/Commercial Users – By Sector

Chapter 4: Responding to Increasing Demand for Electricity

Lecture 4.1: What Factors are Causing Rising Peak and Base Load Electricity Demand in Australia?

Lecture 4.2: Demand Management Approaches to Reduce Rising ‘Peak Load’ Electricity Demand

Lecture 4.3: Demand Management Approaches to Reduce Rising ‘Base Load’ Electricity Demand

Lecture 4.4: Making Energy Efficiency Opportunities a Win-Win for Customers and the Utility: Decoupling

Energy Utility Profits from Electricity Sales

Chapter 5: Energy Efficiency Opportunities in Large Energy Using Industry Sectors

Lecture 5.1: Opportunities for Energy Efficiency in the Aluminium, Steel and Cement Sectors

Lecture 5.2: Opportunities for Energy Efficiency in Manufacturing Industries

Lecture 5.3: Opportunities for Energy Efficiency in the IT Industry and Services Sector

Chapter 6: Energy Efficiency Opportunities in Light Industry/Commercial Sectors

Lecture 6.1: Opportunities for Energy Efficiency in the Tourism and Hospitality Sectors

Lecture 6.2: Opportunities for Energy Efficiency in the Food Processing and Retail Sector

Lecture 6.3: Opportunities for Energy Efficiency in the Fast Food Industry

Module C: Integrated Approaches to Energy Efficiency and Low Emissions Electricity,

Transport and Distributed Energy

Chapter 7: Integrated Approaches to Energy Efficiency and Low Emissions Electricity

Lecture 7.1: Opportunities and Technologies to Produce Low Emission Electricity from Fossil Fuels

Lecture 7.2: Can Renewable Energy Supply Peak Electricity Demand?

Lecture 7.3: Can Renewable Energy Supply Base Electricity Demand?

Lecture 7.4: Hidden Benefits of Distributed Generation to Supply Base Electricity Demand

Chapter 8: Integrated Approaches to Energy Efficiency and Transport

Lecture 8.1: Designing a Sustainable Transport Future

Lecture 8.2: Integrated Approaches to Energy Efficiency and Alternative Transport Fuels – Passenger Vehicles

Lecture 8.3: Integrated Approaches to Energy Efficiency and Alternative Transport Fuels - Trucking

Chapter 9: Integrated Approaches to Energy Efficiency and Distributed Energy

Lecture 9.1: Residential Building Energy Efficiency and Renewable Energy Opportunities: Towards a Climate-

Neutral Home

Lecture 9.2: Commercial Building Energy Efficiency and Renewable Energy Opportunities: Towards Climate-

Neutral Commercial Buildings

Lecture 9.3: Beyond Energy Efficiency and Distributed Energy: Options to Offset Emissions

Prepared by The Natural Edge Project 2007 Page 5 of 18 Energy Transformed: Sustainable Energy Solutions

Responding to Increasing Demand for Electricity

Lecture 4.3: Demand Management Approaches to Reduce Rising ‘Base

Load’ Electricity Demand5

Educational Aim

In Lecture 4.1 the question of what was driving increasing base load electricity demand was

addressed. Over the last century in Australia electricity demand has doubled almost every 20 years. It

will be impossible to achieve 60 percent reductions in greenhouse gas emissions if base load

electricity demand continues like this. To achieve a 60 percent reduction in greenhouse gas

emissions, base load electricity demand, as well as peak electricity demand, needs to be reduced.

The aim of this lecture is to communicate how best to do this. This lecture is heavily based on the

research and papers of Adjunct Professor Alan Pears (with permission).

Essential Reading

Reference Page

1. DRET Energy Efficiency and Greenhouse Working Group (2003) Towards a

National Framework for Energy Efficiency – Issues and Challenges, Section 3

Discussion Paper. Available at www.ret.gov.au/documents/mce/energy-

eff/nfee/_documents/nfee_discussio.pdf. Accessed 15 October 2012.

pp 7-10

2. Turton, H., Ma, J., Saddler, H. and Hamilton, C. (2002) Long-Term Greenhouse

Gas Scenarios: a pilot study of how Australia can achieve deep cuts in emissions,

Australia Institute Paper No 48, The Australia Institute. Available at

www.tai.org.au/documents/dp_fulltext/DP48.pdf. Accessed 15 October 2012.

pp 55-

60, 70-

77

3. DRET (2012) Energy Efficiency Exchange – Industry Case Studies (featuring

industries which contribute to base load electricity demand). Available at

http://eex.gov.au/search/~/?post_type=eex_case_study . Accessed 15 Oct 2012.

4. Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Particularly

Energy Efficiency Victorian Government Submission, RMIT University. Available at

www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERN

ATIVESfinal1a.pdf. Accessed 15 October 2012.

pp 9-20

5 Peer review by Adjunct Professor Alan Pears - RMIT, and Dr Mike Dennis - Australian National University.

Prepared by The Natural Edge Project 2007 Page 6 of 18 Energy Transformed: Sustainable Energy Solutions

Learning Points

After twenty years as an energy efficiency consultant, our experiences have led us to conclude

that roughly 50% of the base load electricity usage we find should not be there. Of course, it

varies. It can be much higher. A part of the trap is that many facilities at first appear to be 24

hour 7 days a week such as a hospital. Hospitals run 24 hrs, 7 days a week so it might be

reasonable to expect a flat load profile. But then you ask about the areas in a hospital which

aren't 24 hrs 7 days a week (consulting rooms, admin, laundry, kitchen, x-ray, central sterilising,

maintenance, pathology) and more often than not there is still a flat load profile. Similarly, it is

easy to assume that there are factories which run 24 hours 7 days a week, but most factories

don't and most of the ones which do, run a reduced production or maintenance shift. Also I am

still amazed at the portion of base load contributed by storage based electric water heaters both

for commercial and residential buildings. A huge portion of the buildings we see have electric

water heaters inconspicuously losing heat supplied with electricity from coal.

Geoff Andrews, Energy Efficiency Consultant

1. Base load electricity demand refers to the amount of electricity used overall by an economy 24

hours a day. In Australia base load electricity use is as high as 70 percent of Australia’s peak

load6 yet in the UK it is as low as 40 percent.7 This shows that in Australia, throughout the night,

every night of the year, Australian business, commercial buildings and homes collectively are still

using 70 percent of the total peak load consumed during the day. Research by Genesis Auto8

shows that in NSW and Victoria there is very little variation between electricity base load between

weekdays (when one would expect the highest base load) and between 10pm-5am or on

weekends (when one would expect the lowest base load electricity demand). There are significant

energy efficiency opportunities overnight and on weekends in the Australian economy. If

implemented these energy efficiency initiatives can help the economy significantly, as shown by

analysis undertaken by McLennan, Magasanik Associates (MMA).9

2. Clearly there are legitimate energy requirements during the night:

- Residential homes - refrigeration, heaters/fans, humidifiers, radio/TV etc.

- Retail stores - commercial refrigeration, service stations, general stores.

- Industries that need to run through the night due to the nature of the industrial process -

aluminium, steel, paper manufacturing, coal fired power stations.

- Essential services - street lighting, the buildings and lighting for police ambulance, and fire

stations.

- Entertainment industry - nightclubs etc.

But collectively this does not add up to 70 percent of Australia’s peak electricity demand. All of

these legitimate services needed during the night can be made more efficient, a good example of

this is street lighting.

6 Private Communication with Geoff Andrews, Director of Genesis Auto. The 70 percent figure is based on analysis of NEMMCO data by

Genesis Auto. 7 Caten, T. (2006) ‘Science Chief Seeks Nuclear Power Increase’, Financial Times. The UK Chief Scientist Professor King has stated

publicly that he would like the UK to adopt nuclear power to provide all of the UK’s base load power which he states is 40 percent of the total peak load. 8 Private Communication with Geoff Andrews, Director of Genesis Auto.

9 McLennan, Magasanik Associates (2004) National Energy Efficiency target Modelling for the National Energy Efficiency Framework.,

MMA. Available at http://www.nfee.gov.au/default.jsp?xcid=41. Accessed 2 June 2007.

Prepared by The Natural Edge Project 2007 Page 7 of 18 Energy Transformed: Sustainable Energy Solutions

3. Street lighting contributes to 40-70 percent of local government’s electricity bill. Energy

consumption and running costs of public street lighting can at least be halved by a combination of:

- more efficient lamps - metal halide and compact / tubular fluorescent;

- more efficient lanterns - reflector design, less light loss in the diffuser, and more accurate light

distribution without a refractor bowl;

- more efficient ballasts - especially electronic ballasts; and

- more accurate control of lighting times - electronic photo-switch rather than the existing

cadmium sulphide cells, to reduce the burning time by at least an hour per day (9 percent).

5. There are three main reasons why Australia’s base load electricity use overnight and on

weekends is so much higher than needed:

a. Australia’s overnight off-peak electricity is so cheap that many commercial buildings,

industry and residential homes leave lights, heating/air-conditioning systems, and industry

and office equipment on overnight and over weekends unnecessarily, as there is no

meaningful penalty in doing so. Further, many years of active promotion of cheap off-peak

electric hot water and heating have meant that many households and businesses have

installed off-peak equipment that is actually very inefficient. However, recent trends have

meant off-peak electricity prices have increased significantly, so now they are not so

financially attractive.

b. Cheap off-peak electricity leads to industry, commercial buildings and residential homes

having no real incentives to ensure they use the most efficient technologies and have the

best systems to minimise energy usage overnight and over weekends.

c. In many cases there is limited awareness that systems are in fact being left on overnight

and on weekends.

All three reasons mean that the potential for energy efficiency improvement to reduce base load is

very large.

6. Energy Efficiency Opportunities in the Residential Sector: Even when most Australians have

switched off everything, many appliances, TVs and video recorders etc. stay on standby mode

overnight – which contributes to base load. Residential homes contribute to 20 percent of

Australia’s greenhouse gas emissions, and approximately 10 percent of those emissions come

from energy used by appliances, TVs and video recorders simply being left on standby at home. If

our off-peak electric hot water was switched off, which, in over half of Australia's homes is heating

water in the middle of the night, then this would eliminate the need for at least four base load

power stations. Off-peak electric hot water is also a major overnight load as around half of

Australian homes are using 2.4 to 4.8 kW in the middle of the night to heat water – and few of

them are showering at that time.

7. Energy Efficiency Opportunities in Commercial Buildings: Government energy efficiency programs

have found that implementing automated systems to turn lighting, office equipment, computers

and air-conditioning off in commercial buildings after-hours can reduce electricity usage during

after hours periods by even as much as 70 percent. And on weeknights, high cost electricity is

used for up to half of out-of-hours time, so the financial savings from improved management can

be larger than many assume.

Prepared by The Natural Edge Project 2007 Page 8 of 18 Energy Transformed: Sustainable Energy Solutions

8. Energy Efficiency Opportunities in Industry Sector: Reviews undertaken by Energetics outline the

potential for energy efficiency improvement across many parts of the industrial sector. Energetics

estimates that 18 percent electricity savings could be achieved across Australia’s industrial sector

with an average four year payback on investment. It is also critically important to recognise that

much of the potential for reduction in energy use in industry comes from measures beyond the

plants themselves; through improving efficiency of material usage, switching to less energy

intensive materials, and recovery and recycling of materials. Industries in Australia like aluminium,

steel, paper manufacturing, and coal plants are investing in co-generation which converts wasted

heat into significant onsite energy thus reducing these industries’ dependency on base load

electricity from the grid as well as reducing their exposure to cost risks as emissions trading is

introduced.

9. Energy Efficiency Opportunities in the Service Industries: Energy efficiency can reduce electricity

demand by up to 70 percent in the service sector. The services sector generates over two thirds

of Australia's economic output and uses less than a quarter of its electricity. But it is a sector with

enormous energy efficiency saving potential. As energy efficiency expert Alan Pears points out,

‘based on experience to date in Australia, we could cut through energy efficiency energy demand

in the services sector by two thirds easily.’10

10

Pears, A. (2007) ‘Difference of Opinion’, ABC. Available at http://www.abc.net.au/tv/differenceofopinion/content/2007/s1869268.htm. Accessed 2 June 2007.

Prepared by The Natural Edge Project 2007 Page 9 of 18 Energy Transformed: Sustainable Energy Solutions

Brief Background Information

As pointed out in lecture 4.1, base load electricity demand refers to the level of electricity demand for

an economy 24 hours a day. Over the last century, base load electricity demand has doubled every

20 years or so. Building more supply to meet this trend involves investing large amounts of capital in

generation and distribution network assets. Typically, base load plant tends to have higher capital

cost, lower fuel cost, and less flexibility than peak or intermediate load plant. Hence energy efficiency

initiatives or demand side management can reduce base load electricity demand significantly and

thus delay or avoid the need to invest in new capacity. This can help the economy, as shown in

analysis undertaken by McLennan Magasanik Associates (MMA) (under business-as-usual

assumptions):11

1,000 MW of new capacity per annum is required across the electricity supply sector from

about 2009/10 onwards. Although not all of this capacity will be base load, about 500 MW to

700 MW is likely to be required for high load duty. Energy efficiency initiatives, which target

base load sources, will delay the need to invest in this new capacity... Benefits were estimated

to range from $2.4 billion to $6.6 billion. Energy efficiency initiatives that both reduce running

costs to business and delaying the need to invest in new capacity can provide between $2.54

and $6 Billion in benefits to Australia.

Such large economic gains are possible because as the Intergovernmental Panel on Climate Change

(IPCC) in 2007 stated, ‘It is often more cost-effective to invest in end-use energy efficiency

improvement than in increasing energy supply to satisfy demand for energy services. Efficiency

improvement has a positive effect on energy security, local and regional air pollution abatement, and

employment.’12 Market benefits from implementing and achieving the energy efficiency program are

detailed in Table 4.3.1. In Australia base load electricity use is as high as 70 percent of Australia’s

peak load, yet in the UK it is as low as 40 percent. Research by Genesis Auto shows that in NSW and

Victoria there is very little variation between electricity base load between weekdays (when one would

expect the highest base load) and between 10pm-5am on weekends (when one would expect the

lowest base load electricity demand).

11

McLennan Magasanik Associates (2004) National energy efficiency target Modelling for the National Energy Efficiency Framework, MMA. Available at http://www.nfee.gov.au/default.jsp?xcid=41. Accessed 2 June 2007. 12

IPCC (2007) ‘Mitigation of Climate Change’, Working Group III contribution to the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report Climate Change, IPCC, Geneva.

Prepared by The Natural Edge Project 2007 Page 10 of 18 Energy Transformed: Sustainable Energy Solutions

Table 4.3.1. Net present value of national savings from different energy efficiency targets

Source: McLennan Magasanik Associates (2004)13

Clearly then there are potentially significant energy efficiency opportunities overnight and on

weekends that are currently being missed in the Australian economy. While there are legitimate

energy requirements during the night to maintain key industries, services, certain retail stores, the

entertainment industry and key services in residential homes collectively this does not add up to 70

percent of Australia’s peak electricity demand.

Figure 4.3.1. Victoria’s summer electricity demand (GW) Saturday 22 January 2005 to Friday 28

January 2005. Includes Australia Day public holiday showing much higher load than the Saturday

and Sunday

Source: Genesis Auto14

13

McLennan Magasanik Associates (2004) National energy efficiency target Modelling for the National Energy Efficiency Framework, MMA. Available at http://www.nfee.gov.au/default.jsp?xcid=41. Accessed 2 June 2007.

Prepared by The Natural Edge Project 2007 Page 11 of 18 Energy Transformed: Sustainable Energy Solutions

In Lecture 4.1 we showed that base load in Victoria is dominated by the industrial, commercial and

residential sectors. Most assume that the commercial and residential sector would not contribute

significantly to the base load demand compared to industry, hence it is worth discussing further how

is this the case. Government energy efficiency programs have found that implementing automated

systems to turn lighting, office equipment, computers and air-conditioning off in commercial buildings

after-hours can reduce electricity usage during after-hours periods by over 70 percent.

These programs have found that there can be a range of reasons why commercial buildings leave, for

instance, computers on overnight. Since IT services have been increasingly outsourced, some IT

companies which service the computers through an off-site network connection are the only ones that

automatically turn off all the computers. They often refuse to do this citing security reasons. IT

companies scan and protect computers from viruses overnight and some seem to believe they need

to have computers left on every night of the week to do this. When in fact it would be possible to

assign one night a week to do this adequately and automatically turn the computers off after a certain

time on the other nights of the week. Issues such as this are leading to commercial buildings using far

more electricity than they need to around the clock, leading to a significant base load. Figure 4.3.2 is

an example of a large Melbourne office building with a high proportion of base load.

Figure 4.3.2. Daily load profiles for Melbourne Central

Source: Ostoja, A. (2003)15

In the case shown in Figure 4.3.2, the base load consumption of over 600 kW per hour all week (168

hours) comprises around two-thirds of the total consumption, as most of the additional daytime

demand occurs for only 55 hours per week. Also note that weekend energy consumption is almost

half of weekday daytime demand, even though most of the building is unoccupied.

14

Private Communication from Geoff Andrews Director of Genesis Auto who has analysed these daily electricity demand profiles using NEMMCO date. See NEMMCO website at www.nemmco.com.au/. Accessed 3 March 2007 15

Ostoja, A. (2003) Existing Buildings: 360 Elizabeth Street, Melbourne, Australian Building Greenhouse Rating Second National Case Study Seminar, Sustainable Energy Development Authority, Sydney.

Prepared by The Natural Edge Project 2007 Page 12 of 18 Energy Transformed: Sustainable Energy Solutions

Through analysing load duration curves, Professor Alan Pears provides further proof that commercial

and residential buildings currently use significantly large quantities of base load.

[Figure 4.3.3] shows load-duration curves for Victoria in recent years. While such curves are

usually used to highlight the peakiness of demand, they can also tell us a lot about other

aspects of demand. For example, from ABARE data it is possible to estimate the average

demand for all agriculture, mining and industry at 2180 MW and average demand for the

electricity supply industry is 980 MW for 2001. So, if it is assumed that all industrial activity

and electricity industry usage were pure base load (an extremely conservative scenario),

these sectors would comprise 3,160 MW of base load demand. It can then be inferred that

more than two-thirds of average commercial and residential annual load of 2420 MW, that is

over 1,600 MW, exists for more than 80% of the time, and could be described as base load. It

is likely that, in reality, at least 200 MW of industrial load is peak-intermediate, so that

commercial-residential base load is at least 1,800 MW.16

Figure 4.3.3. Victorian electricity load-duration curve relative to base load generation capacity, not

including the Hazelwood plant

Source: McLennan Magasanik Associates (2004)17

Energy efficiency measures and switching to either solar or gas heating and hot water in both the

residential and commercial sectors offer substantial potential for reducing base load electricity

demand, in addition to the substantial potential that also exists in industry, agriculture and mining.

The potential to reduce base load electricity in industry and the commercial and residential sectors is

overviewed in Lecture 4.2. In this lecture, we focus on opportunities in the commercial, residential,

and industrial sectors that relate to reducing base load electricity demand.

16

Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, RMIT University. Available at http://www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1a.pdfEnergy. Accessed 2 June 2007. 17

McLennan Magasanik Associates (2004) National energy efficiency target, MMA. Available at http://www.nfee.gov.au/default.jsp?xcid=41. Accessed 2 June 2007.

Prepared by The Natural Edge Project 2007 Page 13 of 18 Energy Transformed: Sustainable Energy Solutions

The potential for energy efficiency improvement in the commercial sector is very large. For example,

the average Melbourne office building consumes around 275 kilowatt-hours per square metre per

year, compared with 77 kWh/sqm for the 60L Green Building in Carlton18 which could be further

reduced quite easily.19 The potential for improving the efficiency of lighting in the commercial sector is

very large, with cost-effective savings of up to 85 percent being achievable using high efficiency

lamps and fittings, as well as movement and daylight sensors. Potential reductions in electricity use of

20-30 percent of total sector consumption are feasible from lighting alone. There are a number of off-

peak lighting loads with significant energy efficiency opportunities, including:

- Street and outdoor lighting (street lighting uses around 230 GWh pa, of which half can be saved).

- Aesthetic lighting of buildings, which could be switched off at say midnight or, in many cases,

eliminated.

- Security lighting, which can be reduced by using movement sensors to switch on lighting for short

periods when movement is sensed, rather than widespread continuous lighting that effectively

provides sufficient light for potential intruders to operate.

- Safety lighting in buildings, such as ‘Exit’ signs: these commonly use 12-17 watts but can be

replaced by units using less than 3 watts.

- Overnight lighting in shops and offices.

Italy has brought in laws that require all lighting of commercial buildings to be turned off automatically

after 12am at night. This NASA photo of the Earth at night highlights the potential to reduce overnight

usage of lighting around the world.

Figure 4.3.4. The Earth at night

Source: NASA20

18

Pears, A. (2000) Saving Energy in Commercial Buildings: How Much Scope is There?, Proceedings of the Annual Conference, of the Sustainable Energy Industry Association, Melbourne. 19

Mailer, A. (2004) personal communication, Project Manager 60L Green Building, Carlton. 20

See NASA - The Earth at Night at http://nssdc.gsfc.nasa.gov/planetary/image/earth_night.jpg. Accessed 2 June 2007.

Prepared by The Natural Edge Project 2007 Page 14 of 18 Energy Transformed: Sustainable Energy Solutions

WWF’s Earth hour campaign to turn off the lights of Sydney demonstrated the potential to save

significant amounts of energy simply by turning off the lights at work and in the home overnight.

More than 2 million Sydney residents joined Earth Hour on Saturday March 31 between 7.30

and 8.30 by flicking the switch, turning appliances off stand-by and enjoying an hour of quiet

darkness, according to a poll conducted by AMR Interactive. Residents and businesses

across the city showed their support for Earth Hour resulting in an impressive 10.2% drop in

energy usage across the usually glittering CBD, according to Energy Australia.21

Even when most Australians have switched off everything, many appliances, TVs and video

recorders etc. are still left on standby mode overnight – which contributes to base load. Residential

homes contribute to 20 percent of Australia’s greenhouse gas emissions, 10 percent of which come

from energy used by appliances, TVs and video recorders simply being left on standby at home. This

is pure base load. Most of this could be eliminated by appropriate product design.

After addessing the standby power issue, a focus on hot water can yield even greater savings if the

residential sector shifted to use gas or solar, as well as adding insulation to the tanks and nearby

pipes. Hot water systems with automated controls which switched them off from say 1am to 5am

would eliminate the need for about four base load power stations. In Victoria, residential off-peak

electricity use, mainly for hot water, comprises around 1,400 GWh per year, 30 percent which is heat

loss from storage tanks.22 Professor Alan Pears writes that,23

Around three-quarters of Victorian electricity used for hot water could be replaced by gas,

solar or heat pump electric Hot Water System units. Minimum Energy Performance Standards

MEPS requirements for improved insulation of electric storage tanks will reduce total water

heating electricity requirements by around 10% - but this will be reduced to the extent that

other energy sources replace electricity. Refrigeration is a significant load, and is largely a

base load. Recent work by the Moreland Energy Foundation has found that a significant

proportion of refrigerators are wasting energy due to undiagnosed faults. New Zealand

research by BRANZ24 has indicated that 18% of all NZ refrigerators are using 50-100% more

power than they should, due to faults. Identification and replacement of faulty refrigeration

appliances therefore offers potential for substantial electricity savings. Further, since modern

refrigerators use 70% less electricity than properly operating refrigerators of the mid-1980s,25

so replacement of old refrigerators, including faulty units, could cut household electricity usage

by 5-10%.

Household refrigeration is another base load activity that will soon decline as high efficiency MEPS

compliant refrigerators replace old inefficient models. A typical existing refrigerator uses around 1000,

kWh pa. While its demand overnight (in cooler conditions and without door openings) is around 80

watts, which adds up to approximately 800 MW around Australia. New refrigerators are cutting this by

about two-thirds

21

Sydney Morning Herald/WWF (2007) ‘Earth Hour: What is Earth Hour?’, Sydney Morning Herald. Available at http://earthhour.smh.com.au/what-is-earth-hour.html. Accessed 2 June 2007. 22

Wilkenfeld, G. and Associates and Energy Strategies (2002) Australia’s National Greenhouse Gas Inventory 1990, 1995 and 1999 end use allocations of emissions, vol 1, Report to Australian Greenhouse Office, Canberra. 23

Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, RMIT University. Available at http://www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1a.pdf. Accessed 2 June 2007. 24

Isaacs, N. (2004) Supply Requires Demand: Where does all New Zealand's energy go? BRANZ Conference Paper 110. Presented at the Royal Society of New Zealand Conference 2004, Christchurch. 25

Marker, A. (2004) Minimum Energy Performance Standards Presentation, on behalf of Australian Greenhouse Office at ACRE Energy Efficiency Workshop, UNSW.

Prepared by The Natural Edge Project 2007 Page 15 of 18 Energy Transformed: Sustainable Energy Solutions

Residential lighting contributes significantly to the late afternoon-evening peak, and is a significant

part of evening electricity usage. Recent trends in the installation of large numbers of low voltage

halogen lamps has increased lighting energy use. A range of strategies can be applied, ranging from

replacing 50 watt lamps with 35 and 20 watt units (for existing installations), to replacing these lamps

with energy efficient lighting such as micro- and compact fluorescent lamps. In the short term, 50

percent savings are achievable, while long term savings of 80 percent are feasible. Almost a third of

Victorian household electricity usage is by miscellaneous equipment, including home computers, TV,

VCRs, stereos, swimming pool pumps and chlorinators, and other equipment. Very little attention has

been paid to the development of programs that address these areas of electricity usage, and virtually

no information on energy efficient options is publicly available. Yet the savings potential is large. The

most efficient 68 cm TVs on the market use less than half as much electricity as some other models,

and consume less than some 34 cm TVs,26 and high efficiency pumps and motors could halve energy

use for pool filtration.27

In Lectures 5.1-5.3 energy efficiency opportunities for major industry sectors will be discussed which

can help reduce base load electricity demand. The lectures will discuss how industries in Australia

like aluminium, steel, paper manufacturing, and coal plants are investing in co-generation which

converts wasted heat into significant onsite energy thus reducing the industry’s dependency on base

load electricity from the grid. In Western Australia, for instance the alumina refineries are now

spending hundreds of millions of dollars on co-generation. If off-peak electricity overnight was not so

cheap then this would have provided greater incentive for such an industry to invest in more co-

generation decades ago in Australia. It is also critically important to recognise that much of the

potential for reduction in energy use in industry comes from measures beyond the plants themselves,

through improving efficiency of material usage, switching to less energy intensive materials, and

recovery and recycling of materials. In almost every case, simply switching from existing average

plant to best available new plant delivers substantial improvements in energy efficiency. For example,

at the 2003 SEAV/BCSE Energy Efficiency Conference, the CEO of the Plastics and Chemical

Industries Association (PACIA) commented that new plastics manufacturing equipment was 40

percent more efficient than the plant/equipment commonly used in Australia. The evidence in the

marketplace is that industry using new, more efficient equipment is competitive with existing industry,

so presumably the higher cost of new plant is offset by higher productivity, lower running costs and

maintenance costs, including reduced labour.

An important question to ask, therefore, is why does Australian industry have so much old

equipment? Part of the explanation for this seems to be the structure of the Australian taxation

system. A presentation by Johnson and Mangion28 at the recent SEAV/BCSE Energy Efficiency

conference highlighted the tax structures that work against investment in efficient new equipment.

Australia’s depreciation rules were changed in September 1999, so that much industrial plant that had

previously been eligible for accelerated depreciation (that is, higher rates of tax deduction in the early

years of ownership) was reclassified. The way in which this change is now interpreted by the Taxation

Office is that the cost to upgrade pre-1999 equipment is still eligible for accelerated depreciation. But

if new equipment is purchased, it is not eligible for accelerated depreciation. In summary, from the

perspective of the Finance section of a business, the best thing to do from a cash flow perspective is

26

Sustainable Solutions (2003) A Study of Home Entertainment Equipment Operational Energy Issues Report for National Appliance and Equipment Energy Efficiency Program, Australian Greenhouse Office, Canberra. 27

Pears, A. (1998) Strategic Study of Household Energy and Greenhouse Issues, Report for Environment Australia (now Australian Greenhouse Office), Canberra. Available at www.energyrating.gov.au. Accessed 2 June 2007. 28

Johnson, B. and Mangion, M. (2003) Financial Incentives and Barriers to Energy Efficiency: Use of Taxation Policy Measures to Benefit Energy Efficiency Investment The Business of Energy Efficiency Conference, Sustainable Energy Authority of Victoria and Business Council for Sustainable Energy, Melbourne.

Prepared by The Natural Edge Project 2007 Page 16 of 18 Energy Transformed: Sustainable Energy Solutions

to repair old plant. The second best thing to do is to upgrade pre-1999 plant. The most costly thing to

do is buy new plant. So the structure of taxation applied to industrial plant and equipment creates a

significant disincentive to adopt the most energy-efficient new technologies, particularly for managers

and businesses that wish to look good to superiors and/or shareholders in the short term. This

discussion is summarised in the following table.

Table 4.3.2. Estimates of cost-effective potential electricity efficiency improvement for Victoria

Source: Pears, A. (2005)29

The services sector generates over two thirds of Australia's economic output and uses less than a

quarter of its electricity. But it is a sector with enormous energy efficiency saving potential, possibly

up to 70 percent. As energy efficiency expert Alan Pears points out: ‘based on experience to date in

Australia, we could cut through energy efficiency energy demand in the services sector by two thirds

easily.’30 The retail sector is a very large electricity user, comprising 36 percent of commercial sector

electricity consumption, yet there have been no significant programs targeting energy savings to date.

This means the opportunities are enormous. A pilot project by the Commonwealth Government’s

Energy Efficiency Best Practice (EEBP) program was able to cut energy use by 32 percent and

greenhouse gas emissions by 48 percent in a hot bread shop,31 and the scope for additional savings

was only limited by the lack of availability of high efficiency equipment.

29

Pears, A. (2005) Potential for Replacing Hazelwood with Alternatives, Victorian Government Submission. Available at http://www.naturaledgeproject.net/Documents/REPLACINGHAZELWOODWITHALTERNATIVESfinal1a.pdfEnergy. Accessed 2 June 2007. 30

Pears, A. (2007) ‘Difference of Opinion’, ABC. Available at http://www.abc.net.au/tv/differenceofopinion/content/2007/s1869268.htm Accessed June 2007. 31

Department of Industry Tourism and Resources (2003) Case Study: Achieving Results in the Bread Baking Sector Energy Efficiency Best Practice Case Study, Department of Industry Tourism and Resources, Canberra.

Prepared by The Natural Edge Project 2007 Page 17 of 18 Energy Transformed: Sustainable Energy Solutions

EEBP has also worked with a supermarket chain to improve energy efficiency, and a new proposed

supermarket in Gisborne is expected to achieve substantial electricity savings through a range of

strategies. The EEBP program found that for a supermarket, off-peak electricity usage is comparable

to that during peak periods throughout the year, thus around 80 percent of total electricity usage is

base load. This reflects the high refrigeration load and long opening hours. So efficiency

improvements, particularly in refrigeration systems, offer the potential for substantial base load

energy savings. One US study32 has shown that simply adding glass doors to open refrigerators

reduces electricity consumption by 70 percent - but this would probably need to be mandated via

Minimum Energy Performance Standards (MEPS), as open cabinets are seen as a key marketing

strategy by retailers.

Other Opportunities to Reduce Base Load Electricity Demand – Public Street Lighting

This lecture has shown that there is a significant percentage of current base load overnight energy

usage that can be reduced simply through better management to switch off what does not need to be

left ’on’ overnight. Clearly there are legitimate energy requirements during the night, but it can be

shown that even here, essential overnight energy services can be made significantly more efficient.

Consider the example of street lighting. Studies show that it is possible to improve the energy

efficiency of street and public lighting by at least 50 per cent .33

ICLEI, through their Cities for Climate Protection program, provides numerous resources to assist

councils assess, audit and implement more energy efficient public lighting.34 ICLEI Australia/New

Zealand runs a major program on public street lighting which provides information on what councils

are doing all around the country in this area,35 as well as a comprehensive overview of the

technological options and where these have been trialled around Australia.36 Many councils in

Australia have already done trials on the following activities to reduce greenhouse gas emissions.

Details about each are provided on the referenced web sites.

1) Replacing existing globes on main roads with energy efficient lights such as metal halides37 and

high pressure sodium lamps.38

2) Replacing globes on residential streets with T5 Fluorescent s39 or high pressure sodium lamps.

3) Replacing globes for parks and car parks with LEDs,40 metal halides or T5 Fluorescents.

4) Replacing traffic lights with LEDs.41

5) Removing unnecessary lights.

32

Faramarzi, R. (1999) Efficient Display Case Refrigeration, ASHRAE Practical Guide – Refrigeration, USA. 33

Genesis Automation and Lablight International (1999) Report on Energy Saving Opportunities in Streetlighting. Available At http://www.iclei.org/fileadmin/user_upload/documents/ANZ/CCP/CCP-AU/EnergyToolbox/1999NSWVICStreetLightingFullReport.pdf. Accessed 4 September 2007. 34

See ICLEI Sustainable Public Lighting Program website at http://www.iclei.org/index.php?id=publiclighting. Accessed 4 September 2007. 35

See ICLEI Sustainable Public Lighting Program - State and Local Information at http://www.iclei.org/index.php?id=6471. Accessed 4 September 2007. 36

See ICLEI Sustainable Public Lighting Program - Technologies at http://www.iclei.org/index.php?id=6666#c23763 Accessed 4 September 2007. 37

See ICLEI Public Street Lighting - Technologies and Trials Metal Halides at http://www.iclei.org/index.php?id=6666 Accessed 4 September 2007. 38

See ICLEI Public Street Lighting - Technologies and Trials High Pressure Sodium at http://www.iclei.org/index.php?id=6664 Accessed 4 September 2007. 39

See ICLEI Public Street Lighting - Technologies and Trials. T5 Fluorescent at http://www.iclei.org/index.php?id=6667 Accessed 4 September 2007. 40

See ICLEI Public Street Lighting - Technologies and Trials. Light Emitting Diodes at http://www.iclei.org/index.php?id=6665 Accessed 4 September 2007. 41

Ibid.

Prepared by The Natural Edge Project 2007 Page 18 of 18 Energy Transformed: Sustainable Energy Solutions

Optional Reading

1. Australian Greenhouse Office - At Home: Tips for Reducing Greenhouse Gas Emissions at

www.greenhouse.gov.au/education/tips/home.html. Accessed 2 June 2007.

2. Australian Greenhouse Office website - Your Home Directory 4.0 Energy Use at

www.greenhouse.gov.au/yourhome/technical/fs40.htm. Accessed 2 June 2007.

3. Canada's Office of Energy Efficiency website - Energy Efficiency Opportunities – By Sector at

http://oee.nrcan.gc.ca/publications/infosource/home/index.cfm?act=category&category=07&PrintV

iew=N&Text=N. Accessed 4 September 2007.

4. Contact Energy Pty Ltd website - Energy Saving Tips (No Cost, Low Cost, Some Cost) at

www.contactenergy.co.nz/web/view?page=/contentiw/pages/energyefficiency/forhome&vert=ee&o

nlineMode=oh. Accessed 2 June 2007.

5. Department of Environment and Heritage and RMIT (2005) ESD design guide for Australian

Government buildings (2nd ed.) DEH and RMIT - Centre for Design, Sustainable Built

Environments. Available at www.deh.gov.au/settlements/publications/government/esd-

design/pubs/esd-edition2.pdf. Accessed 12 May 2007.

6. Department of Industry, Tourism and Resources website - Energy Efficiency Best Practice

Program Publications at

www.industry.gov.au/content/itrinternet/cmscontent.cfm?objectID=69A09DCD-03EE-4BD0-

A4468F7C59A56A13. Accessed 4 September 2007.

7. Energy Efficient Appliances website at www.energyrating.gov.au/productmenu.html. Accessed 2

June 2007.

8. ICLEI Sustainable Public Lighting Program website at www.iclei.org/index.php?id=publiclighting.

Accessed 4 September 2007

9. Industrial Energy Analysis website – Sector Assessments Related Publications at http://industrial-

energy.lbl.gov/node/96. Accessed 4 September 2007.

10. Rocky Mountain Institute website - Home Energy Briefs at www.rmi.org/sitepages/pid119.php.

Accessed 2 June 2007.

11. UK Carbon Trust website - Energy Efficiency Opportunities in Industry – By Sector at

www.carbontrust.co.uk/energy/startsaving/sectorselector/. Accessed 4 September 2007.

Key Words for Searching Online

Energy Efficiency, Energy Efficiency Opportunities, Reducing Base Load Demand, Demand

Management.