Australia and the 2018 International Energy Efficiency Scorecard 9 Australia and the 2018 International Energy Efficiency Scorecard 9.30am – 10.30am AEST, Wednesday 4 July 2018

Today’s presentation Welcome Introduction to the ACEEE The International Scorecard Australia’s results Questions Please direct all questions through Zoom’s chat functionality; your questions will be addressed after the presentation.

Speakers Steve Nadel, Executive Director, ACEEE Shruti Vaidyanathan, Senior Advisor for Research, ACEEE Luke Menzel, CEO, EEC (Chair)

Introduction to the American Council for an Energy-Efficient Economy Steve Nadel Executive Director, ACEEE

Shruti Vaidyanathan Senior Advisor for Research, ACEEE ACEEE’s 2018 International Energy Efficiency Scorecard – Lessons for Australia Shruti Vaidyanathan Senior Advisor for Research, ACEEE

Goals of International Scorecard Present a basic comparison of energy use and efficiency policy efforts in the top energy- consuming countries Identify best practices and policies that countries can implement to take advantage of untapped efficiency potential Encourage countries to collect data on energy efficiency

Top Energy-consuming Countries in the World 25 largest energy consuming countries in the world Thought about including Iran but because of legal constraints and a lack of available data, decided we would do it in 2020 Source: IEA

Methodology Type of metric Metric 2018 points National efforts Performance Change in energy intensity between 2010 and 2015 6 Policy Spending on energy efficiency 5 Energy savings goals 3 Efficiency of thermal power plants Tax credits and loan programs 2 Spending on energy efficiency research and development Size of the energy service companies (ESCOs) market Water efficiency policy 1 Data availability Prioritize policy metrics that have significant efficiency potential and are achievable in our evaluated economies Individualized scoring system based on best practices, expert opinion, or natural cut points in the data Type of metric Metric 2018 points Buildings Policy Appliance and equipment standards 5 Residential building codes 3 Commercial building codes Building retrofit policies 4 Building rating and disclosure 2 Appliance and equipment labeling Performance Energy intensity in residential buildings Energy intensity in commercial buildings 36 different metrics 4 sections: National efforts, Buildings, Industry, Transportation Combination of POLICY metrics that rate the presence of a particular policy and PERFORMANCE metrics that evaluate energy use (59%-41% split)

Methodology Type of metric Metric 2018 points Industry Performance Energy intensity of the industrial sector 6 Policy Voluntary energy performance agreements with manufacturers 3 Policy to encourage energy management 2 Minimum efficiency standards for electric motors Mandate for plant energy managers Mandatory energy audits Investment in manufacturing research and development (R&D) Share of combined heat and power (CHP) in total installed capacity Policy to encourage CHP Agriculture energy intensity At least one country earns the maximum number of available points in each metric 59/41 split between policy and performance metrics Max. possible score = 100 Type of metric Metric 2018 points Transportation Policy Fuel economy standards for light-duty vehicles 4 Performance Fuel economy of light-duty vehicles 3 Fuel economy standards for heavy-duty tractor trucks Vehicle miles traveled per capita Freight transport per unit of economic activity 2 Energy intensity of freight transport Use of public transit Investment in rail transit versus roads Smart freight initiatives* 1

Limitations Non-EE impacts on energy use Accessible and available data Physical factors e.g. climate Economic conditions Demographics We adjust for some of these Accessible and available data Not all countries track EE data Lack of consistency in approaches Multiple approaches to evaluating EE progress Subnational policies and impact These conditions are difficult to control for, and we were not always able to account for them in our scoring methodology. In general we made only modest adjustments to raw data to enable basic comparisons across countries. Specifically, we adjusted building energy consumption for national average heating and cooling degree days and adjusted industrial energy consumption to reflect the same subsector balance between countries. Chose metrics where we knew we would find enough reasonable data to rate countries Where data was missing, we assigned estimates based on related information and expert opinion Variety of different ways to evaluate EE – this is the methodology we arrived at that we were comfortable with and felt best showed the relative achievements of each country Subnational policies – in many cases, these policies have more impact than anything that could be implemented at the national level. e.g. United States and building codes – implemented and monitored at the state level. We provide credit when the subnational policy covers the majority of the population. Likewise, with the UAE this year, Dubai and Abu Dhabi have some interesting policies at play at the city level and since they are the biggest cities in the UAE we awarded points to recognize that

2018 Results

National efforts (25 points) Australia - Results Ranked 18th, final score of 40.5 points Lowest ranked of all developed countries Down from 16th place in 2016   Total (100 points) National efforts (25 points) Buildings (25 points) Industry Transportation Score 40.5 10 17 6 6.5 Rank 18 15 22 20

Australia - Results Results are consistent with recent news that the country will fail to meet its Paris Agreement targets if the status quo continues

Australia’s Rank Over Time

Successes National efforts Buildings Ranked #15, 10 points National Energy Productivity Plan - increase energy productivity 40% by 2030 Need to improve on implementation since adoption in 2015 Buildings Ranked #10, 17 points 21 appliance and equipment energy standards in place Comprehensive residential and commercial building codes Decent retrofit policies – building stock offers substantial additional efficiency potential

Opportunities for Improvement Australia has been decent about addressing building sector energy use but there are a number of other sectors that offer opportunities Transportation Ranked #20, 6.5 points Still largely car-focused country Missing low hanging-fruit in transportation sector – passenger and freight vehicle fuel economy standards Complemented by low investment in alternative forms of transportation e.g. public transit Industry Ranked #22, 6 points Will need to address industrial sector if the productivity goal is to be met Possible options for Australia Energy management systems – ISO 50001 Voluntary agreements Transportation - Still an auto-reliant economy in many ways FE standards – Australia had passenger standards in place until 2010 and never renewed them Performance metrics – transportation energy use is heavily influenced by economic condition and fluctuations Jurisdiction – additionally, many transportation policies for system efficiency are not national jurisdiction so the role that national governments have to play on this front is smaller than those of cities, states, or provinces

Conclusion Still plenty of room for improvements in EE for all the countries in the 2018 rankings EE will be needed to meet ambitious climate goals Paris Agreement is a good opportunity to re- evaluate policies and implementation EE will not only help them meet these targets, it will also save consumers money, creates jobs, improves public health, and drives economic growth

Questions Please direct all questions through Zoom’s chat functionality

Close – climbing the leaderboard

Close – climbing the leaderboard

Close – climbing the leaderboard Working with business to drive action Guide on energy strategy for directors and senior executives. Guide on gas efficiency for manufacturers, with CEFC and Ai Group. Business delegation to California focused on smart energy solutions.

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