Carbon Training International

The NSW Independent Pricing and Regulatory Tribunal (IPART) today confirmed its decision to allow standard retail electricity prices to rise steeply from 1 July 2010. 

The decision published by IPART in its final report, means that standard tariffs which determines the retail price paid for electricity, will rise up to 64% over the next 3 years. 

When asked to comment on the scale of the approved price increase for electricity, the acting chairman and CEO of IPART, Jim Cox said "I don't think we have had anything as big as this one".[1] 

While a proportion of the price rise is for the proposed federal governments Carbon Pollution Reduction Scheme, 42% of the rise is to support the infrastructure investment requirements needed to improve network security and reliability of supply. 

Under the approved price rise, the average household electricity bill is set to increase by between $577 and $918 by 2013, taking into account the introduction of the CPRS.

Irrespective of whether the CPRS scheme eventually passes, over the first year of higher tariffs an Integral Energy customers average bill will rise by 7%, for Energy Australia customers, 10% and Country Energy customers by 13%. 

For the average small business in Sydney, the electricity price rise impact is expected to be around $1,433 a year. 

For many businesses this will have a significant impact on their bottom line, especially where they are an energy intensive business such as manufacturing. The ability to pass on the higher costs to consumers will be limited. 

Such savage increases in electricity prices are likely to be a catalyst for business investigating ways to cut down their electricity use. This will include looking for ways to implement energy efficiency practices into their operations. 

Whilst the adoption of new technology including smart metering systems, energy efficient machinery, low energy lighting and powering down office equipment will be considerations, the training of staff for the provision of skills to support the re-engineering of procedures, processes and practices around the workplace will become increasingly important. 

Newly accredited vocational education training programs in disciplines such as carbon management are likely to become vital for business looking for product and process innovation for competitive advantage in the marketplace whilst lowering energy usage.

[1] NSW electricity bills to soar, 18/03/10, Sydney Morning Herald Online

The Department of Resources, Energy and Tourism has released the first report on actions under the Energy Efficiency Opportunities (EEO) program. “First Opportunities, A Look at Results from 2006-2008 for the Energy Efficiency Opportunity program” notes the following:

• Opportunities have been identified to save more than 6 million tonnes of CO2-e per year (1.1% of Australia’s total emissions for 2006-07)
• As of December 2008 corporations reporting under the program had assessed 1,019 PJ of total energy use “identifying opportunities with energy savings of 67.7 PJ, or 6.6% of their assessed energy use….yielding a potential financial return of $736 million if these projects are implemented.[i]”

To put this energy saving in context, 67.7 PJ is the equivalent total energy consumption of 1.4 million Australian households.

It is interesting to note that the aluminium, ferrous metals and oil and gas industries who strongly opposed the introduction of the CPRS (i.e. a price on carbon) were at the forefront of those identifying substantial opportunities to save energy by way of the EEO program.

The identified energy savings are expected to deliver net annual financial benefits of $736 million from projects with a payback period of less than 4 years. Of these identified financial savings, $530 million relates to projects with a payback period of less than two years.

With energy prices continuing to increase, the argument to implement energy efficiency measures is compelling.

Whilst the EEO program is directed at large Australian businesses, the opportunity for the SME sector to improve efficiency, reduce emissions and save money should not be overlooked.

Developing the requisite skills within organisations to drive energy efficiency and other emissions strategy must be a high priority for all sectors of the business community, civil society and households.

The provision of competency based workplace training is the most efficient means of gaining these skills.

Electricity prices have, and will continue, to increase. The Financial Review today reports that Western Australian electricity prices need to increase by 75% over four years to reflect the true cost of electricity.[ii]

[i] First Opportunities Report http://www.ret.gov.au/energy/Documents/energyefficiencyopps/PDF/EEO_FirstOpportunitiesReport_2010_FINAL.pdf

[ii] Australian Financial Review 8 March 2010, page 8.