1. Connected Home Conference Is there an Elephant in the room? Peter Seebacher Thursday 24 th April 2008 Copper Development Centre Australia Ltd

2. Global Drivers for Change Focus is now clearly on the climate More people having access to high-energy intensity products Shortage of oil Costs of energy and water are rising

3. Copper Development Centre Australia Ltd Global Response to Climate Change R&D: Energy-efficient technologies for residential and commercial Regulation: Building codes, appliance and equipment standards Market Transformation: Educating homeowners Energy Star), builders and developers about benefits of adopting energy efficient practices and of course pricing....

4. Copper Development Centre Australia Ltd Australian Drivers for Change Focus is now clearly on the climate Population growth rate is high Costs of energy and water are rising Energy intensity is increasing

5. Copper Development Centre Australia Ltd Televisions and Pools - BAU Source: Digital CEnergy and AGO

6. Copper Development Centre Australia Ltd Bedroom numbers Source: ABS Separate Homes Medium and high-density dwellings bedroom numbers

7. Copper Development Centre Australia Ltd Australian Population

8. Copper Development Centre Australia Ltd Kyoto 108% 1990 level by 2012 60% of 2000 level by 2050 $65/tonne carbon used to reduce emissions in 2020 to 30% of 1990 levels will cost the Australia economy $2.9 billion pa in 2020 This equates to $A290 per household pa

9. Copper Development Centre Australia Ltd Carbon abatement cost curve Source: McKinsey

10. Copper Development Centre Australia Ltd Meeting the costs of reductions By 2020, 25% of carbon abatement will be met with positive returns (negative marginal costs with positive economic returns over their lifecycle) Most of these positive returns will be due to energy efficiency measures in buildings and appliances Unlocking negative costs options involves overcoming persistent barriers to market failure due to misaligned incentives such as mismatches between who pays and who gains the benefit (home builder vs. home owner) i.e. it benefits the tenant but not the builder to install energy efficient lighting. Source: McKinsey

11. Copper Development Centre Australia Ltd McKinsey Recommendations Accelerate policies to: Pursue negative cost opportunities through regulation and incentives Fast track key technologies Accelerate change in consumer behaviour Establish a national carbon scheme

12. Copper Development Centre Australia Ltd Response Climate Change Policies to: Increase prices Legislation to transform market Resulting in: Less energy per person More efficient use of assets Source: McKinsey

13. Copper Development Centre Australia Ltd Emissions by Sector Source: McKinsey

14. Copper Development Centre Australia Ltd The NEM Source: SA Government

15. Copper Development Centre Australia Ltd Load Duration Curve 0 500 1000 1500 2000 2500 3000 3500 4000 4500 020406080100 % of Half Hour Occurrences Netrwork Demand MW BAU Load Shifting Shift and reduce

16. Copper Development Centre Australia Ltd What’s on the horizon Price Signals ToU Metering Carbon Tax DSM Loads will be turned off Shifts the load ≠ not less energy

17. Copper Development Centre Australia Ltd Retail sector 28% of electricity used in residential sector Retail price about 4 times wholesale price and about 2.5 times industry price. After full impact of “climate change” in monetary terms it will probably be the most important sector.

18. Copper Development Centre Australia Ltd Impact on Devices Consumer behaviour Energy Star, MEPS Air conditioners Dryers Refrigerators Pool pumps others Device improvements Better design More efficient devices Less standby power Removal from market Incandescent lighting

19. Copper Development Centre Australia Ltd

20. It is now an energy centric world The political environment has changed The ensuing legislative framework and regulatory requirements will mandate change These will drive the demand and investment required to implement solutions for an energy centric world.

21. Copper Development Centre Australia Ltd Milestones

22. Copper Development Centre Australia Ltd Impact on Housing Design (shell) Construction (building codes) Appliances/lighting Connected devices This is not a one-off event, home owners will be reminded of this every time they pay an electricity or water bill

23. Copper Development Centre Australia Ltd Smart and Connected World Q: What is required to participate in this new energy smart and connected world? –External to the Household –Internal to the Household –Common to both worlds A: Seamless systems and devices working cost effectively together

24. Copper Development Centre Australia Ltd Connectivity and Communications Energy Management By you By your appliances themselves By your next door neighbours appliances By more remote external agent All these require connectivity and communications systems

25. Copper Development Centre Australia Ltd The Authorities Preferred Option Source: Advanced Metering Infrastructure. Minimum State-wide Functionality Specification. Prepared for the Department of Primary Industries.

26. Copper Development Centre Australia Ltd 26 Smart Devices Smart Homes Smart Communities Smart Cities Smart Country Meta Picture All fully connected as Smart Systems

27. Copper Development Centre Australia Ltd What can be done by industry? Join an association and read your trade magazines to keep informed of the changes and how they will continue to impact on you, your industry and your customers Start positioning your company to take advantage of the new opportunities and to defend against possible risks Train yourself and your staff Develop customers solutions that help them save energy and money

28. Copper Development Centre Australia Ltd Customer Empowerment Empower your customers to take control of their energy needs: Energy usage Know what is happening – metering and in-home displays Turn off unused appliances Optimise energy use Save money by controlling appliances, pools and air conditioning Make money through rebates and energy generation – solar power Help your customers take control of their energy needs and to maintain the lifestyle they demand at a price they can afford Electricity providers will take control about 15 days per year, that leaves 350 days where the resident will be left to their own devices and if they do not manage their loads they will pay dearly for it.

29. Copper Development Centre Australia Ltd This will require Equipment that can be controlled Meters and displays Control equipment Connections for control signals, see Others

30. Copper Development Centre Australia Ltd Summary Pressures for change are large We are in the middle of legislative and regulatory change that will have a rapidly increasing impact over next 2 – 5 years Customers will demand solutions as soon as costs rise significantly and their lifestyles are greatly affected – this is starting to happen now You have a role to play right now

31. Copper Development Centre Australia Ltd 31 Thank you