ArgentinaDecember 2016

Energy Productivity and Climate Change

Jonathan.jutsen@a2se.org.au+61 418510109www.2xEP.org.au and www.a2ep.org.auSee my Linkedin page for regular blog and newsletter

Jonathan JutsenChair of

Would you be surprised to know that

Of all the energy we dig up or collect

only 12% is effectively used to deliver end services.

88% is wasted

• EP is value produced by using a unit of energy. $value added/GJ

• Achieved by both increasing value AND decreasing energy use

• Aim to improve overall productivity using an energy focus for: • Improved business competitiveness and jobs• Improved affordability for consumers• Reduced C emissions.

2xEP= Double energy productivity by 2030 (2010 base)

Elements of EP

Driving increased total value using an energy lens

Integrates energy into core portfolios

Why we must improve energy competitiveness

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Bars indicate latest available EP (2011 or 2012) Annual EP improvement since 1995

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2xEP addresses 3 major issues simultaneously

Direct energy cost savings (and >2.5 times that in total productivity benefits). In Argentina, reduces cost of energy subsidies.

Reduces oil imports and improves energy security

Reduces C emissions while increasing GDP

Oil supply/security

Carbon emissions

$ Savings

• Not for profit company with Board of business leaders.Leading collaboration to make Australian a more productive and sustainable country

• Key role to drive change through policy + fact based communicationAnnual Summer Study.

• Support 2xEP business coalition2xEP has umbrella steering committee 30 business and energy industry associations/leaders.

• Sister organisation with US Alliance to Save Energy• Connected with energy savings organisations internationally• Member Global Alliance for Energy Productivity

Australian Alliance for Energy Productivity

2xEP Working Groups• Manufacturing (includes 2xEP Challenge)• Mining • Agriculture • Passenger transport • Freight transport • Built environment

Innovation Financing and investment Metrics, measurement and reporting Communications and advocacy

The importance of a bi-partisan, long term policyEP is something all political parties agree about!

We had divisive debate about climate change policy which continues, (though government set 26% reduction target from 2005 levels).

And we had many reversals on energy and carbon policy, which undermined business confidence and confused the public.

But, all parties AGREE to the need for action on EP.

• Liberal (current government with one seat majority): 40% EP improvement target from 2015 National Energy Productivity Plan (NEPP).

• Labor and Green Parties: 2xEP was element of election platform.

And the need for Integrated Energy/Climate policy

• Energy productivity and renewable energy are the dynamic duo for a long term competitive and sustainable economy.

• They need to be pursued in tandem as:• Energy efficiency reduces consumption which makes room for higher priced renewables

without increasing bills.

• EP including demand management and storage are critical for grid stability in a grid with high renewables penetration.

• Australian government has integrated energy and environment departments

• Germany and SA both having challenges from moving renewables out too far ahead of energy efficiency.

ARENA

• Government agency with mandate to increase renewable energy and promote innovation.

• Expanding mandate now to include energy efficiency/productivity

• Grant program for R&D and technology transfer

• Funded large scale solar round recently - $90M grant = $1B private sector investment, 500MW

California and ACT did it well

Energy/person = half rest of USIntegrated approach supports deep penetration of renewables

Can Australia achieve 2xEP by 2030?

• Climateworks modelling showed it is feasible using existing technology• A2EP sector roadmaps show that some sectors – mining in particular – will

not be able to achieve 2xEP without major technological change. • Our innovation roadmap demonstrates that we can achieve 2xEP or more

by using available and emerging technologies and business models• Australia has an economic imperative to achieve >2xEP and it is the only

way we can achieve our climate targets and enhance the economy

There is a strong economic justification for 2xEP to address falling energy competitiveness

Where does Argentina fit? Improvement in energy productivity

Relative energy price increases

Germany

Australia*

* Note that Australia had more rapid EP Improvement 2013-2015 but still behind OECD average

UK

USA

And EP is a moving target!

Double energy productivity by 2030

27% reduction in energy intensity by 2030. Likely to be increased this year to 30-40% reduction.

UN Sustainable Energy for All: Double the rate of EE improvement by 2030 (to 2.5% p.a.)

• Paris accord commits to <2OC increase - drive accelerated investment in EP

• IEA confirms EE as the priority for C mitigation

• Germany commits to $US20B EE program to have total energy use by 2050

Benefits from doubling EP - Australian numbers $100 billion

investment opportunity

Increased affordability for consumers

• Plan agreed December 2015. • Target set as 40% improvement on 2015 levels

by 2030.• (This is about half the 2xEP target of doubling EP

from 2010 base by 2030

COAG Energy Council committed to a coordinated NATIONAL ENERGY PRODUCTIVITY PLAN (NEPP)

EP Innovation is critical to 2xEP/meeting climate targets and strengthening the economy

• Consider how fast technology change is occurring:– 14 years to 2030 is a long time

• 14 years ago: 1M internet users, no commercial electric cars. • 2002 was last year film camera sales exceeded digital• CFL lamps not on market: now being made redundant by LEDs.

• There are game changing EP innovations creating completely new ways to deliver energy services e.g. Uber.

EP Learning Curve: Global LED light price, 2010-20

Ref Bloomberg

GLOBAL LED SELLING PRICE DATA AND PROJECTIONS ESTIMATES OF FIXED/VARIABLE PRICE ELEMENTS OF LED LIGHT

0

10

20

30

40

50

60

'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

fixed element projection

60W equivalent projection

40W equivalent projection

60W equivalent

prices

40W equivalent

prices1

10

100

'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

fixed element

37% per year decrease

variable element per 1,000 lumen

7% per year decrease

$ $

Plate to farm value chain overview

Farm to plate value chain: key systems for EP improvement

• Extension of shelf life by preservation/refrigeration• Dewatering/drying• Process heat/cooking• Utilisation of co-products and waste

Farm13%

Processing18%

Transport bulk8%

Wholesale & Storage10%Transport to retail

3%

Retail11%

Food prep’n - commercial14%

Transport - private/delivery3%

Food prep’n - home15%

Waste management6%

Indicative breakdown of primary energy use in 'farm-to-nutrition value chain

Farm to plate: examples of high potential innovationsIOT (real time on-line temperature tracking) and cloud applications to optimise the cold supply chain, benchmark, identify equipment faults

Precision farming (with GIS and other data, virtual paddocks, etc.

High efficiency, low GWP refrigerant refrigeration e.g. cascaded, modular

High temperature heat pumps to upgrade (recovered) heat and produce process heat/steam

High efficiency commercial cooking and food display systems e.g. effectively insulated cookware and ovens, automated lids on fryers and grillers, commercial induction cooking, Pulsed Electric Field cooking, smart management of exhaust fans

Dewatering to reduce energy lost evaporating water and downstream use for transport and processing e.g. partial dewatering of milk on farm, membrane filtration, centrifuges, ambient air, microwave etc.

Optimised anaerobic co-digestion of wastes from multiple sources for biogas production

Super high efficiency insulation materials e.g. aerogels, evacuated panels, high performance foams

Reduce food waste using IOT e.g. phone applications to assist consumers, cold chain tracking etc

Sterilisation and extension of shelf life using advanced packaging and high efficiency electric technologies e.g. high pressure processing, Pulsed Electric Fields, irradiation, sterile conditions pasteurising with high efficiency heat recovery

How to Drive Change

• Combination of carrot, stick, capacity building, recognition– Incentives for market transformation – Regulation of minimum performance standards– Education, training, support

– continuous improvement culture and systems- graduate placement

– Public recognition – Inform – actively (not on web sites)– Technology transfer and RD&D incentives