Staggering savings, increased productivity, reduced carbon footprint and better reputation are just some of the payoffs for businesses that decide to go down the road of energy efficiency. Yet convincing Kiwi companies to go green is still monstrous challenge.
It seems businesses, large and small, have the best of intentions but, when push comes to shove, talk of lowering our carbon footprint might just be lot of hot air.
The Energy Efficiency and Conservation Authority (EECA) is mandated to educate businesses on the benefits of saving energy. It does this by focusing on what corporates tend to value most – their bottom line.
Last year, the Government launched its Energy Efficiency and Conservation Strategy, part of which involves assisting businesses to improve their energy productivity.
EECA chief executive Mike Underhill says Kiwi companies have more to gain than they think.
“To be frank, most businesses haven’t read the strategy,” says Underhill. “Most see energy as such small part of their total operating costs that they think there are more important things to focus on.
“At the other end of the spectrum, some companies pay well over $2.5 million year on energy consumption, but it’s mainly those in export-driven markets because they see the value in having green reputation overseas.”
Underhill says the real challenge lies in getting SMEs to look beyond the initial cost and see the ongoing cost-effectiveness and myriad other benefits of saving energy.
“Commercial buildings alone eat up around $2 billion year on energy. If you save 10 percent of that it’s an awful lot of money, so there are some really significant savings to be made. We find it useful to talk about the dollar savings because it goes straight to company’s bottom line.”
A study carried out by EECA in mid-2011 found the majority of New Zealand businesses consider their brand and reputation to be their most important business driver, with relationships coming in second, profitability third and managing energy use down at number eight.
Underhill says energy efficiency isn’t top of mind for businesses that are only just coming out of recession. EECA is promoting subsidies for energy audits and will be launching number of other schemes in an effort to change such thinking.
“If I were running small business in New Zealand, the sad fact is I probably wouldn’t be aware of the opportunities,” says Underhill. “But even if I were, I’d be more worried about how I’d survive next year so I wouldn’t want to waste time and money on energy efficiency.”
Underhill says EECA is about to launch new schemes looking at how to give energy management advice to the owners of buildings. The schemes will also look at part-funding energy consultancy to new buildings and part-funding energy-savings projects in existing buildings that wouldn’t otherwise go ahead.
“We will use third parties to go out and promote that and offer the services,” he says.
Energy audits are now subsidised by the Government, but Underhill says few SMEs are aware of this.
“What we’re trying to do is tell people they don’t need to be an energy expert – someone can come in and say, ‘Here are the energy gains you can make’, and they’re authorised by EECA so you can have confidence in them.”
EECA research shows that switching to energy-efficient lighting is one of the best returns on investment available for businesses looking to reduce their energy use.
Over the past 15 months Philips has sold over 16,000 energy-efficient light fittings for commercial offices. Combined, the switch to this lighting product results in 610 fewer tonnes of carbon emissions and provides energy savings of $554,000 (based on 15c/KWh).
When energy efficient lighting is combined with lighting controls like occupancy sensors and daylight controls, Philips says energy savings of up to 70 percent on lighting costs can be achieved.
“The technology has been around for quite some time and it’s only just starting to take off in New Zealand. Only small number have realised the benefits,” says Philips Lighting NZ commercial manager Gordon Wiffen. “There are several reasons for this, the main one being that lot of buildings are owned by developers and companies are just tenants, therefore they get what they’re given. The developer is obviously looking for their best return on investment and, because they don’t pay the power bill, of course they don’t care.”
Philips tries to involve building owners in its next-generation lighting presentations and convince them that new technology attracts higher rental fee.
A recent Australian Property Institute study found that for higher energy rated ‘green’ buildings, owners could charge up to nine percent premium and value the tenancy based around having energy-efficient lighting.
“For tenants on longer term lease the reduction in their energy bill will be paid well before their lease is up and therefore the overall cost of the upgrade will pay for itself.”
And it’s not just money that businesses can save on.
A study commissioned by Philips found that improved lighting design increased worker productivity by up to 23 percent.
“Our research has shown that investing in workplace lighting can contribute to greater employee wellbeing and performance, as well as reducing employee stress, absenteeism and industrial accidents,” says Philips NZ marketing manager Dave Procter. “So far only very small percentage of companies here have adopted new lighting technology so there’s lot of potential.”
There are, of course, good examples out there. The New Zealand banking sector, in particular, has embraced energy efficiency with open arms.
Westpac started project in 2008 called ‘Our Tomorrow’, which comprised four-year sustainability plan. One of the goals was to reduce carbon emissions by 20 percent by 2012. There was also four-year initial target to reduce energy use by 10 percent.
Westpac commissioned Smart Power to develop an energy management plan which found that 93 percent of the company’s energy use went to power HVAC, lighting and signage, and office equipment.
In the programme’s first two years, energy use fell by 21 percent and CO2 emissions declined by 28 percent. Last year, Westpac was named winner of EECA’s Energy Management Award.
Similarly, ASB Bank is saving around $1 million year with new energy initiatives and Kiwibank is saving $20,000 with energy-saving software.
But since this doesn’t look to be becoming the norm anytime soon, group of business leaders have taken it upon themselves to target New Zealand’s corporates.
“New Zealand businesses consume about 73 percent of the country’s total energy consumption so it’s pretty significant proportion,” says Pure Advantage campaign manager Duncan Stewart.
To help combat the problem, Pure Advantage will establish its Corporate Leaders Group (CLG) next year, comprising 15 to 20 large businesses, iwi, NGOs and local government organisations.
“The CLG members will be focused on making low-carbon and sustainability changes both within their own enterprises and throughout their supply chains,” says Stewart. “We are also discussing the possibility of including transformational project which would see each leader select their own initiative to make low-carbon leap forward in their industry. For example, bank might choose to roll out finance product which funds the capital cost of solar panels or energy-efficiency projects in business.”
The CLG has EECA’s full support.
“We have plenty of fresh water, plenty of renewable energy and some of the most fertile land on earth and when you look around the world at the problems of getting water, energy and food, we have some real advantages here,” says Underhill.
“Pure Advantage is saying corporates can have very profitable business exploiting New Zealand’s environmental opportunities.”
Only time will tell if they do. M
Hayley Barnett is Mediaweb’s writer-at-large.
