Human Settlements Theme Report

Australia State of the Environment Report 2001 (Theme Report)
Lead Author: Professor Peter W. Newton, CSIRO Building, Construction and Engineering, Authors
Published by CSIRO on behalf of the Department of the Environment and Heritage, 2001
ISBN 0 643 06747 7

Emerging issues (continued)

Energy (continued)

Development of sustainable energy solutions

The vision of a sustainable energy future will be fulfilled by a mix of energy-efficient end-use technologies and sophisticated renewable energy supply systems, combined with restructuring of business activity towards lower environmental impact activities and responsible user behaviour. It will also involve a lengthy transition period from fossil fuels, and from fuels and technologies that have higher environmental impacts. We are beginning to see this transition, with developments such as:

  • high-efficiency appliances, equipment and buildings;
  • grid-interactive renewable energy systems which draw power from the grid when there is insufficient renewable energy and feed power into the grid when the power generated is greater than the local requirement; and
  • integration of renewables with existing conventional energy technologies. For example, Queensland's Stanwell power station will use a solar thermal steam production system to replace some of the coal it now uses.

The amount of energy required for our urban economy depends on the service required, the technology used, and the behaviour of the user. So, instead of assuming that ever-increasing quantities of energy will be needed to achieve economic growth, or accommodate more population, business and households increasingly aim to make energy more productive by doing more with less. For example, businesses and households are becoming more sophisticated in their comparisons of energy options. Instead of just comparing the initial costs of equipment, analysis increasingly includes comparison of savings in future operating costs against higher initial costs of environmentally preferable solutions. At a basic level, many decision makers will now invest in environmentally preferable solutions if the additional cost can be recouped within three or four years. Even this trade-off approach leads to decisions biased against sustainable energy. For example, investing in a solution with a three-year payback effectively requires more than a 30% rate of return each year. This is much higher than the return expected from most other investments. As the perception of risk declines with increasing familiarity, costs decline and performance improves, sustainable energy solutions are gaining increasing market share. Life-cycle environmental analysis techniques are being rapidly developed to underpin environmentally sound decision-making. Energy is incorporated into such analyses, so wider use of such techniques will support greater adoption of sustainable energy solutions. Life-cycle analysis also facilitates consideration of the energy embodied in materials, and the energy used for inputs from a range of activities, such as transport and the manufacture of components.

The economics of these new approaches to delivery of energy services are improving every year, as is their reliability and effectiveness. However, many barriers remain. The emerging competitive energy markets are dominated by traditional energy supply solutions, and more work is required to provide fair access to customers and grids for small independent energy suppliers, and to create incentives for energy companies to promote energy efficiency. Incentives and/or regulations are needed so that designers, manufacturers and builders incorporate energy efficiency into their products. And decision-makers must be provided with sufficient information to make informed decisions, as well as incentives to consider the long-term consequences of their decisions.

Programs run by agencies such as the New South Wales Sustainable Energy Development Authority, the Sustainable Energy Authority of Victoria, agencies in other states, and the Commonwealth Government's Australian Greenhouse Office and Department of Industry Science and Resources are all contributing to the development of sustainable energy products and services, as well as to the growth of the industry itself. We are also seeing increasing interest at the local government level. More than 85 councils now participate in the Cities for Climate Protection Program, which involves them in the preparation of greenhouse inventories, action plans and targets, as well as the implementation of emission reduction measures.