Energy Efficiency: Saving $billions for NZ business

A few weeks ago the Government released its new Energy Efficiency and Conservation Strategy.
If you’re like two thirds of New Zealand business managers, this is the point at which you’ll switch off. Because energy isn’t your core business – it’s fixed cost, something you pay every month to make the fleet run and the photocopiers work, right?
Actually, your day-to-day energy waste is probably an untapped source of revenue.
In every business – be it in financial services, manufacturing or tourism – energy is fundamental input cost. And if you’re like most Kiwi businesses, one fifth of that monthly bill will go straight back into the coffers when you take steps to run more efficiently.
There are immense bottom line benefits to energy efficiency. We estimate staggering $2 billion per annum in savings are achievable in time across the business sector, cost effectively.
Energy efficiency is also one of the cheapest ways to reduce business carbon emissions – and the value of lowering our carbon footprint, particularly in export markets, can’t be overstated.
All of this is why improving the energy intensity of New Zealand’s business sector is one of the key planks in the Government’s strategy – strategy that EECA is charged with helping deliver.
Renewable energy will play vital part in creating low carbon, secure energy future for New Zealand. The strategy emphasises our potential wealth in renewables, specifically using bioenergy and geothermal energy to provide business with the heat it needs. We’re aiming for up to 9.5 additional petajoules of bioenergy or geothermal energy above 2005 levels, by 2015. That’s the same amount of energy used every year by 250,000 homes.
With the bottom-line and environmental benefits being so clear, one might expect reducing business energy intensity to be walk in the park. It isn’t.
Our research shows that managers are most concerned with customer and supplier relationships, brand, reputation and business growth. Unsurprisingly, you’re busy people focused on pressing priorities. Most managers haven’t been convinced that energy efficiency is an enabler to help boost productivity and competitiveness, and strengthen business.
Helping make that case is EECA’s job. We know the main barriers are time, knowledge and finance. So we’re designing our programmes to tackle those barriers and make it as easy as possible for business decision-makers to improve energy use without having to become experts in kilowatt hours or energy use benchmarks.
A key part of our strategy involves working with New Zealand’s growing base of energy service providers – such as energy auditors – who can come into your company and advise on where the savings opportunities are. Supporting strong energy services sector is key focus for EECA, and this will increase in the next few years.
We know where the biggest potential for business energy savings is. Transport fuel, process heat and motorised systems are the big industrial opportunities. little-known fact is the amount of energy used by commercial buildings – with the bulk of that in lighting and heating, ventilation and air conditioning. We’ll be working on developing voluntary building performance ratings that enable tenants and owners to differentiate energy-conscious buildings from others. And we’ll be investing in the capability of the building and construction sector to bring the expertise needed.
The Green Growth Advisory Group set up by Government will report on ways for small to medium businesses to move to lower carbon economy while growing productivity – and those findings are likely to have bearing on EECA’s work with business.
The great news is that energy efficiency usually comes with very attractive payback.
Typically, every dollar invested in an energy audit brings return of $7.50 in savings. We’ve worked with many businesses that have gained competitive edge by saving energy. We’re working closely with our export-driven sectors – such as dairy and wine production – that need to prove their carbon credentials in global markets.
But there are benefits across all industries.
In the banking sector, Westpac reduced energy use by 21 percent and CO2 emissions by 28 percent. ASB is saving around $1 million year with its energy initiatives, while Kiwibank is saving more than $20,000 each year with new software alone. In industry, Pernod Ricard redesigned its warehouse lighting and cut electricity use by 90 percent, worth around $150,000 year. Goodman Fielder saved $45,000 year at its Christchurch Meadow Fresh plant with simple boiler tune-up.
There are many more companies doing innovative things with energy. We know that businesses are usually far more influenced by other businesses than by what Government says. So we’re aiming to make more use of these ‘energy champions’ to help sell the benefits to the wider business community.
The New Zealand Energy Efficiency and Conservation Strategy poses some big challenges, but the payoff will be more than worth it. More competitive Kiwi companies, helping create more competitive New Zealand. Let’s seize the opportunity. M

Clean Energy Expo, October 13-16, 2011
New Zealand Clean Energy Centre (NZCEC), Taupo
The Clean Energy Expo is part of the REAL New Zealand Showcase – programme being coordinated by the NZ2011 Office to present the best of New Zealand business, innovation, expertise and excellence to the world during Rugby World Cup 2011. The Expo will feature workshops on geothermal and biomass aimed at businesses and industry, followed by public expo and tours. EECA will be exhibiting with range of information on energy efficiency and renewable energy.

EECA chief executive Mike Underhill
Mike Underhill joined the Energy Efficiency and Conservation Authority as chief executive in May 2007.
He has extensive management experience in the gas and electricity sector in New Zealand and overseas and has been chief executive of WEL Networks, TransAlta, and Energy Direct.
He has also had significant governance experience in this sector, and has been chairman of Pacific Energy, EECA, and Katolyst, the Waikato Regional Development agency.
Underhill has Bachelor’s degree in engineering, Master’s degree in economics, has completed the Advanced Management Program at Harvard, and is Fellow of the Institution of Professional Engineers.

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