229 Seaford Rd
Seaford Victoria VIC 3198
18 May 2015
Department of Economic Development, Jobs,
Transport and Resources
Energy Saver Incentive (ESI) – Stakeholder Contribution
I am one who takes seriously the advice and recommendations of the IPCC to take urgent credible action to mitigate the dangers of climate change. The research that scientists have presented appears compelling.
I have listened first hand at the recent address by Christiana FigueresUNFCCC Executive Secretary to the 2nd Australian Emissions Reduction Summit.[1] And from reading Stern’s reports, Ross Garnet’s reports and listening to many of his presentations, ClimateWorks reports and a presentation by Anna Skarbek on ‘Pathways to Deep Decarbonisation in 2050’ and how Australia can prosper, and Beyond Zero Emissions many reports and presentations, as well as reading the reports and recommendations by the Climate Change Authority, it seems as though we need to use all the tools and instruments available to us for a comprehensive response.
I ask the Department to look more broadly and with more ambition, to include the efficient use of electricity to reduce greenhouse gas emissions by assisting a transition from vehicles that use fossil fuels. ABS energy accounts reveal that the greatest home energy consumption is in the use of petrol and diesel. Better town planning and greater use of walking, cycling and public transport have a role to play in reducing greenhouse gas emissions, but where vehicle transport is needed, clean renewable energy powered transport should be encouraged. The electricity sector would be a beneficiary and potentially the unit price of electricity could be reduced through added volume over the largely fixed cost network. With some changes the ESI/VEET scheme appears to be a capable mechanism to manage and provide incentives.
As anESI/VEET submission, I ask that the Departmentseek from Government an amendment of the Victorian Energy Efficiency Target Act 2007, to embrace a different perspective within the Objects definition to make the Act more powerful for its intended purpose and objectives:
‘The purpose of this Act is to promote the reduction of greenhouse gas emissions by establishing the VEET scheme which—
(a) provides for the creation and acquisition of energy efficiency certificates; and
(b) requires the surrender of energy efficiency certificates.’
and
‘The objects of this Act are to—
(a) reduce greenhouse gas emissions;
(b) encourage the efficient use of electricity and gas;
(c) encourage investment, employment and technology development in industries that supply goods and services which reduce the use of electricity and gas by consumers.’
The Act’s Purpose and Objects should also encourage the increased consumption of renewable sourced electricity where this drives a directly related reduced consumption of petroleum sourced products, for which energy efficiency certificates are created and surrendered.
I have researched electric vehicle incentives employed around the world and have noted that in most markets where electric vehicle sales have reached around 1% of the total market, incentives often exist for installation of home charging solutions. This might also be seen as a precautionary measure for safety reasons.
The vehicle fleet in Victoria includes 3,519,491 Vic passenger vehicles and 616,579 light commercial vehicles[2], making a total of 4.136 million vehicles. This equates to a little over 12 m t CO2eemissions [3] plus significant upstream, refining and distribution supply chain emissions not included in this tailpipe emissions estimate. This market is addressable technically and also in ‘fit for purpose’capability for a transition to clean renewable electricity.
Minister Hunt speaks of reviewing “vehicle efficiency”.[4] There is a role for introducing regulated vehicle efficiency to reduce greenhouse gas emissions.
‘Of all the opportunities identified in ClimateWorks’ Low Carbon Growth Plan for Australia, reducing emissions from cars and light commercial vehicles through improved fuel efficiency presents the lowest cost opportunity to reduce emissions across our economy, and could deliver reductions of 4 Mt CO2e in 2020 and 8.7 Mt CO2e in 2024, equivalent to taking 2.2 million cars off the road in 2024.’[5]
However, there are other levers that should also be pursued to create an early and permanent transition of vehicles to clean energy that sets the foundation for later more rapid decarboning of the vehicle market, and which uses Victorian energy rather than imported energy. This would seem consistent with the Government’s objectives for the Renewable Energy Action Plan in development and emphasis on growing new Victorian jobs for a modern economy. I recall that the Victorian Energy Plan published under the previous government made no mention of transport fuels. This needs addressing, and particularly with respect to renewable energy displacing fossil transport fuels.
With electric vehicle ownership there is much research that reveals that over 80% of charging is done at home or on residential premises. Significant barriers to electric vehicle ownership identified in Victorian Government EV trial[6] include:
- dedicated electrical circuits for electric vehicle charging, and
- cost of charging equipment.
Electric vehicles sold in Australia generally require for home charging either a 15A general purpose power outlet (GPO) for a portable charging device (EVSE)[7], or a greater than or equal to 30A wired in circuit for an installed EVSE.
Dedicated home 15A GPO or wired in 30A or greater electrical circuits might generate VEET certificates as an incentive for electric vehicle owners to safely use electric circuits for home charging, rather than using ad hoc workaround solutions. Retrofitting a modern home garage for a 15A GPO can be as little as $200 in cost, but for an older home with more difficult routing this cost can be over $1,000 as reported by the Victorian Government EV trial. New building regulations should be changed to avoid costly retrofit actions.
In the Australian market EVSEs, either OEM or 3rd party, cost in the range of $1500 -$2000, plus installation. The US market price is sub $400 for a basic solution. To date there is not sufficient competition, diversity of supply, and sales volume in the Australian market to mitigate supply chain costs and Australian specific compliance requirements. The sub $400 retail price for a Holden Volt 10A EVSE is noted, but this appears to be a market anomaly compared with every other offering, and might not be considered by Holden to be a supply source for everyone.
Electricity retailers are a beneficiary of increased electricity consumption by electric vehicles and should from these benefits have the capacity to surrender certificates that is a win winfor a growing market. A typical electric vehicle owner travelling 15,000 km per year will consume around 2,500 kWh, or about $400 of renewable electricity.
In the long term 4 million Victorian electric vehicles might require 10,000 GWh, or about 23% of AEMO’s forecast Victorian NEM needs in 2015 (42,000 GWh). This is not an insignificant potential to address the popularly cited ‘death spiral’ and ‘ducks disease’ phenomenon affecting the electricity market. It helps mitigate the electricity unit price rise challenge of decreasing demand over a largely fixed price network, a matter that large electricity consumers are critical of, something the objectives of the VEET scheme exacerbates albeit only a small amount.
The ESI/VEET scheme should be extended to mitigate greenhouse gas emissions from home consumption of petrol and diesel as a transport fuel, and should include certificate generation for dedicated circuits for home charging, and for a determined time or electric vehicle fleet size, portable or wired in EVSEs might also be included to establish a self-sustaining vibrant market.
Yours sincerely
Malcolm Scott
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[1]
[2]ABS 9309.0 - Motor Vehicle Census, Australia, 31 Jan 2014
[3] Derived from
[4] Address by Minister Hunt at 2nd Australian Emissions Reduction Summit 2015
[5]
[6]Creating a Market Victorian Electric Vehicle Trial Mid Term Report 2013 (final report due 2014, not released – yet)
[7] Electric Vehicle Supply Equipment (EVSE) – commonly called ‘charging station’, but definitely not a ‘charger’ as that component is on the vehicle for AC charging.