Hume City Council Submission to the Energy Saver Incentive (ESI): Scheme Management

Hume City Council Submission to the Energy Saver Incentive (ESI): Scheme Management

Hume City Council congratulates the Victorian Government on the extension of the VEET Scheme / Energy Saver Initiative and appreciates the opportunity to provide feedback through this consultation process.

1. What should the new VEET target be?

Please indicate your preferred option:

• 5.4 million tonnes CO2-e per year for three years
• 5.8 million tonnes CO2-e per year for three years
• 6.2 million tonnes CO2-e per year for three years
• 5.8 million tonnes CO2-e per year for five years
• 6.2 million tonnes CO2-e per year for five years

Other option (please specify level of target and length)

Please outline why you believe this option is preferred.

Hume City Council notes the likely benefits for industry participants of the longer five year timeframe to allow for more time for planning and the potential offering of more complex or customised solutions to consumers. Council supports a longer timeframe.

Hume also supports a larger greenhouse reduction target provided the costs passed on to consumers, particularly low income households, are avoided or minimised. More widespread promotion of the benefits and credibility of the program to ensure more consumers are aware of opportunities to participate and benefit would be valuable.

2. Comments are invited on the modelling approach used to determine the costs and benefits of the VEET scheme.

Is there any additional data or information that should be considered?

The modelling appears rigorous.

3. Which greenhouse gas coefficient should be used to quantify the reduction in greenhouse gas emissions achieved by the VEET scheme?

• existing marginal coefficient
• updated marginal coefficient
• an average coefficient (as published in the National Greenhouse Accounts)
• other option (please specify?)

Please outline why you believe this option is preferred.

Hume supports the use of Option 2 the updated marginal coefficient being the most relevant to the Victorian context. It appears that othercoefficient options could result in disproportionate incentives between gas and electricity savings.

4. The Department has valued greenhouse gas emissions reductions attributed to the VEET scheme by adopting a carbon valuation series that was produced by the Federal Climate Change Authority as part of its 2014 Targets and Progress Review.

Is this approach appropriate for valuing greenhouse gas emissions reductions over the period 2016 to 2050?

Hume supports the valuation of carbon reductions and this source appears to be reputable and relevant.

5. Is there a case to exclude any business sector(s) from participation in the VEET scheme?

Please explain why this is your preferred option, and comment on how this should be implemented.

Hume’s Business Efficiency Network (BEN) works with SMEs and large businesses in the City to promote energy efficiency. This includes a range of programs including the Light Smart program and the Sustainable Fridge Timer project that offer financial incentives and assistance to businesses to take energy efficiency action. Through these programs Council is aware that there can be a range of barriers (including time, cost and awareness) for businesses to pursue energy efficiency and that the potential for greenhouse reductions from this sector is significant.

Humealso shares the concerns expressed in the MAV submission however around the potential for small energy consumers to be cross-subsidising emissions reductions for large businesses. There may be more appropriate mechanisms for ensuring greenhouse reduction activity in the large business sector.

Council notes that the level of participation of large businesses in the scheme and higher involvement from SMEs will depend on the technologies / emission reduction opportunities included. If large businesses are covered by the scheme and a larger proportion of certificates are generated via SME engagement, this increases the need for a separate target for low income households so that emissions reductions are not directed away from this target audience which, from Hume City Council’s perspective, should be the highest priority.

6. Should the VEET scheme be amended to better ensure support for low income households?

Please outline how the VEET scheme could better support low income households, and comment on why this option should be preferred.

There is a high level of disadvantage in Hume City and this is reflected in a range of SEIFA indices. Hume’s Social Justice Charter aims to address this disadvantage. Hume is active in working with low income households to improve energy literacy and energy efficiency including through the Hume Heatwave Help project andEnergy Smart Neighbourhoods. Hume Heatwave Help was initially funded by the Victorian Government and provides free home retrofits (external blinds, a range of draught sealing, provision of pedestal fans, insulation and heatwave kits) to Home Care Clients at risk of heatwaves. Energy Smart Neighbourhoods is engaging three community groups on an ongoing basis and providing free In Home Energy Displays, access to free energy retrofits and ongoing discussions to increase energy understanding and behaviours to help manage bills, reduce emissions and increase comfort.

Hume is also in the process of negotiating an agreement with Energy Makeovers, a VEET accredited installer, to widely promote their free home retrofit to Hume residents. Council believes that local government can play a key role in adding value to the VEET scheme through partnerships, promotions to the community, engagement of key target audiences and through adding credibility by working with and endorsing VEET accredited installers.

As indicated above, Hume City Council believes that low income households should be a priority target audience for the VEET scheme and this could be achieved via a separate target for this sector (with an obligation on retailers to purchase a target proportion of concession certificates), as per schemes in the UK and South Australia. Such an approach would need to be appropriately monitored and managed however to avoid rorting and to ensure that cost implications passed on to energy users (particularly non-participating low income households) are not prohibitive. There are also risks around overly aggressive marketing to low income households. Avenues for consumer complaints should be well promoted and installers that infringe guidelines penalised or excluded from the scheme.

Hume also believes that given the scale of need in the community and the multiple benefits from energy efficiency retrofits, the VEET scheme should not be the only mechanism to facilitate energy efficiency for low income households – other programs and support is also required. Hume is a signatory of the One Million Homes campaign and strongly supports a broad-scale roll-out of holistic energy efficiency retrofits for low income households.

7. In addition to expanding the range of energy efficiency activities available in VEET, should any other action be taken to target participation by certain groups?

As above, consider a target for low income/ concession card households and support with effective communications to ensure that a proportion of greenhouse reductions is guaranteed to come from this high priority sector.

8. Please suggest up to five activities that should be prioritised for revision or introduction to the VEET scheme.

Please outline why you believe these activities should be prioritised.

Insulation – is the single most effective means of improving comfort and reducing heating and cooling energy bills for Victorian homes. Many Victorian households still have no insulation or old or inadequate insulation that is no longer effective. Through the Hume Heatwave Help project Hume has identified and covered the costs for insulation installation for around 15 Home Care Clients with no or inadequate insulation. This was from a sample of around 100 households.

High Efficiency Reverse Cycle Air – as a more effective heating and cooling option than many systems in common usage.

Window treatments – draught sealing and appropriate blinds/ curtains.

Street-lighting – Councils are committing significant amounts of capital funding in street lighting upgrades, despite not owning the street lighting assets. As per the MAV submission there are significant opportunities for upgrading Major Road lighting if there is more of a financial incentive to do so.

LED Flood Lighting (for indoor use such as pool halls and outdoor use such as sports grounds/ reserves). This is a new technology that is yet to be well tested in Australia and VEET accreditation and associated financial incentives could assist and add value in ensuring this technology is bought into the mainstreamd sooner rather than later.

Hume has some concerns about the following products for households:

• TV/ printer standby controls – may not be well installed, residents commonly find them frustrating and remove them.

• Door strips with self-adhesive tape – concerns about longevity of the stick on solution. Screw-in is more robust and should be considered.

• Chimney balloons – high VEET value for a low value product; risk of inappropriate use/ installation.

9. Please suggest up to three changes which should be made to improve the VEET scheme.

Please outline why you believe these changes should be a priority.

Ensuring installers are doing the right thing – both through rigorous random auditing and promoting consumer awareness and reporting of bad practice. Council continues to hear from residents of installers that hand over products in exchange for a signature without installing them.

More broad-scale promotion of the scheme to increase consumer awareness, credibility of the scheme and uptake and as above, encourage reporting of bad practice. This will be particularly worthwhile if insulation is introduced into the program to allay any consumer fears/ perceptions still existing following the Australian Government program. Through the implementation of the Hume Heatwave Help project it is evident that these perceptions still exist amongst frail elderly/ low income households that could most benefit from insulation.

Ensuring the approval process for new products is a good balance of timeliness to encourage innovation / support business investment and ensuring quality.

If you would like further information about the Hume projects listed or the submission please call Michelle Bennett, Coordinator Sustainable Environment on 9205 2378.